Moody's July 4 Bomb: Rating Agency Finds 10% Of Chinese GDP Is Bad Debt, Claims "China Debt Problem Bigger Than Stated"

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Mon, 07/04/2011 - 22:35 | 1425556 malek
malek's picture

The Chinese quickly need to change their accounting rules!
Then officially and openly mark to model and everything is fine.

Mon, 07/04/2011 - 23:21 | 1425708 bankrupt JPM bu...
bankrupt JPM buy silver's picture

Ah yes...the currency war is in full swing like the bears warned.

Mon, 07/04/2011 - 23:26 | 1425719 IQ 145
IQ 145's picture

 If you type "the tragedy of the Euro" into the Google search bar, you'll find on the first page a result which says {PDF} mises institute, something, something; and surprisingly this is a download of the whole book; which is an excellent treatise on the Euro and it's travails by a brilliant young economist. Hopefully this will be of interest to someone here; at least it's not entirely off-topic.

Tue, 07/05/2011 - 00:33 | 1425810 Yen Cross
Yen Cross's picture

 Hey ! I jumped off a tin can @ 42k, and staggered into a town car.  I took one of those "IQ " tests for the fun of it.  It was like teaching a Chimp to birth Beluga Whales. I clipped a good score, 16 hours and some single malt. 


       Point being. Wisdom [ ALWAYS } Supersedes IQ!    Think/postulate about that thought!             


Tue, 07/05/2011 - 01:09 | 1425843 nope-1004
nope-1004's picture

This is part of the fascist propaganda policy the US gov't does by using the TBTF banks as their medium to control the financial world.

Eat it up people.  First, "rare earths" are all of the sudden not that rare.  Second, China is hiding bad debt.

Ummmm...... doesn't Morgan Stanley have more toxic interest rate derivatives than 10 Chinas?

This gov't makes me sick.

More "strong dollar" policy leaked by way of the blogosphere, so that the USD rallies and QE3 gets the green light.

See it for what it is.


Tue, 07/05/2011 - 02:19 | 1425916 macholatte
macholatte's picture

Is everthing a conspiracy theory or false flag? Are Americans the only group of dipshits or are there others? Are the Chinese, Indians, Ruskies pure as the driven snow angels? Or are they all up to the games of deception and bluff?

Even a paranoid can have enemies.
Henry A. Kissinger

Tue, 07/05/2011 - 02:26 | 1425920 Popo
Popo's picture

Yes everyone is as bad as everyone else:   But one can't help noticing that the last two stories on ZH have involved US ratings agencies essentially saying "You're more f*cked than we are" -- once to China,  and once to the ECB.

Coincidental timing?  Or part of a policy approach to supporting the USD?

We mere mortals never get to know the answer to these questions -- but it's worth watching how the ratings agencies become increasingly politicized on the global arena.   In a world swimming in bad debts -- it's certainly notable that the arbiters of debt-quality are American.

Tue, 07/05/2011 - 02:29 | 1425924 macholatte
macholatte's picture

I could feel his muscle tissues collapse under my force. It's ludicrous these mortals even attempt to enter my realm.
Mike Tyson

Tue, 07/05/2011 - 03:00 | 1425951 Problem Is
Problem Is's picture

All the words in the quote were spelled correctly... Tyson is not only a (non)functioning illiterate...

Mikey is a rummy punch drunk incapable of speaking or spelling correctly...

Tue, 07/05/2011 - 05:42 | 1426060 AnAnonymous
AnAnonymous's picture

but it's worth watching how the ratings agencies become increasingly politicized on the global arena.   In a world swimming in bad debts -- it's certainly notable that the arbiters of debt-quality are American.


If boat A sinks, they dont sink.

If boat B sinks, they dont sink.

If boat C sinks, they sink.

Dont know if it is politics but it is a real test of faith to think that the rating agencies will take decisions that could endanger their future.

The market is not ethereal. It is made of people with physical ties. Contrary to what economists claim.

When somebody starts to nuke the world, safest place is just aside that person, it is going to be the last place to be nuked.

Tue, 07/05/2011 - 03:09 | 1425957 macholatte
macholatte's picture
Chinese men have more of a penchant for male handbags partly because they need to carry so much cash.
China’s women show taste for fast cars and whisky


Tue, 07/05/2011 - 06:51 | 1426105 Popo
Popo's picture

Isn't that everyone's penchant?

Tue, 07/05/2011 - 09:09 | 1426240 Cole Younger
Cole Younger's picture

I don't doubt governments are conspiring to give BS economic news and stats. Governments are self serving and do not want to lose control of their citizens.

Tue, 07/05/2011 - 01:55 | 1425888 Yen Cross
Yen Cross's picture

  You are a pussy Junkster. Nothing more. There is no such thing as a "Brilliant" Young economist Timmah!

Mon, 07/04/2011 - 23:42 | 1425742 infotechsailor
infotechsailor's picture

well,, , I was wondering what was going to be the catalyst to force an RMB revaluation.


is that debt measured in RMB or USD? this raises a whole new series of issues. 

Tue, 07/05/2011 - 00:02 | 1425773 johngaltfla
johngaltfla's picture

It won't force it, they'll monetize the debt. Moody's is a tad, well, a wee bit behind the curve as usual:


More Risk Ignored: Local Chinese Government Debt now over $1.65 Trillion
Tue, 07/05/2011 - 00:03 | 1425774 Xibalba
Xibalba's picture

look!  SHINEY!!!  


bait is shiney.

Tue, 07/05/2011 - 00:34 | 1425814 angelsand
angelsand's picture

Listen up.  You can espouse all this bull euro shit and all the China will overtake the US as the largest superpower, and the US is so corrupt and off base on foreign policy in the middle east, and off base on financial policy, you can do all that bullshit, but the bottom line is china is a motherfucking communist country, they are fucking bastards that regulate the genetic evolvement of the human race through government policy, they have Tibet on their resume, they don't give a fuck, and we might be sucking their economic tit, but the bottom line is China and Russia will NEVER be a safe haven for investment, NEVER, for in the end, it will be realized that as fucked up as the US is, it is no where near China.  We should have let Japan wipe China out, now our only hope is to play another superpower like Russia against China, but bottom line, this is all a cherade, when the shit hits the fan, and it will, the US will still be the best play.  It may take 10, 20, 30, 40, or 50 years for me to be proven right, but proven right I will be. 

Tue, 07/05/2011 - 03:07 | 1425851 Mad Cow
Mad Cow's picture

Absolutely. Still, it should be pretty obvious by now, that the next step in the game is a global currency with the US on the chopping block.

Tue, 07/05/2011 - 01:52 | 1425887 Yen Cross
Yen Cross's picture

 +1 (and I minus the 2 commie junks.

Tue, 07/05/2011 - 02:22 | 1425918 macholatte
macholatte's picture

tell us how you really feel.... go for it.


Tue, 07/05/2011 - 05:37 | 1426057 Yen Cross
Yen Cross's picture

  I love to 'hate' you! You are well spoken, and do have valid points.

Tue, 07/05/2011 - 01:39 | 1425871 bankonzhongguo
bankonzhongguo's picture

I guess Moody's is not interested in being active in the Chinese market going forward.

Until anybody sees an indictment on someone or something from the vaulted rating agencies for all the BS AAA MBS, these lack-legged CFAs and their sanctioned reports have zero credibility on any topic.



Mon, 07/04/2011 - 22:35 | 1425558 traderjoe
traderjoe's picture

Paper buying paper. All to thieve and enslave...

Mon, 07/04/2011 - 22:39 | 1425582 Bansters-in-my-...
Bansters-in-my- feces's picture

Debt is mmm...mmm good...

Benny bernanke told me so.

Mon, 07/04/2011 - 22:39 | 1425584 mo gotti
mo gotti's picture

I find it very interesting that Mr. Dohmen has gone on record (McAlvany weekly commentary) as saying that China's blow up leads the next significant leg of the unfinished secular bear market.  Perhaps we shall see this sometime soon?


Go figure......Moody's......"doing God's work" apparently.

Mon, 07/04/2011 - 22:56 | 1425667 Dolemite
Dolemite's picture

I am a long time Dohmen reader and ya he has been saying for like 3 years now that China is going to blow up and be the biggest bubble in human history. He is certainly not moving off of that now that all of this recent stuff has surfaced :).

Mon, 07/04/2011 - 23:56 | 1425766 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

China has years of accumulated garbage on its books. It is not what is good economic sense. It is what serves the Communist gov't at the time. Let the bubble pop!

Tue, 07/05/2011 - 00:11 | 1425783 Oh regional Indian
Oh regional Indian's picture

Interesting. The latest work from Halfpasthuman points to the ratings agencies having a huge role in the coming currency and really everything crisis.

Competitive devaluations and currency controls.

It's going toget very interesting.



Tue, 07/05/2011 - 00:52 | 1425828 Michael
Michael's picture

China has 64 million empty vacant residential properties on its hands.

That's enough to house the entire population of the United States.

Tue, 07/05/2011 - 06:25 | 1425944 Ghordius
Ghordius's picture

And 120 m people without what we would call a proper roof over their heads. They are dangerous to the extreme for the Government of China.

Tue, 07/05/2011 - 05:39 | 1426059 Yen Cross
Yen Cross's picture

 Ahhh. yes.  Those, [Vacant Fields].

Mon, 07/04/2011 - 22:40 | 1425597 Yen Cross
Yen Cross's picture

 Imagine that!  Who would have figured? Must be the Ghosts of Dynasties (cities) past.

Mon, 07/04/2011 - 22:40 | 1425608 flyr1710
flyr1710's picture

china? fraud? nah

Mon, 07/04/2011 - 22:43 | 1425612 ISEEIT
ISEEIT's picture


Maybe I should stop drinking and go watch Braveheart or something?

This is going REALLY fast.

I'm tired.

They probably know that. Fuck it. Let 'em have it.

It's yours now. Have fun.

Mon, 07/04/2011 - 22:44 | 1425613 chump666
chump666's picture

Good stuff ZH!

Mon, 07/04/2011 - 22:50 | 1425637 bob_dabolina
bob_dabolina's picture

This is good news for Oats.

Mon, 07/04/2011 - 22:51 | 1425649 boricuadigm-shift
boricuadigm-shift's picture

Aircraft Carrier, Stealth Fighter, Drone & now Shadow Debt...  China is picking up the pace fast.

Later this week:

Chinnesse HAARP; Chinneesse Krispy Kreme; Chinnesse ITouch!

Ula la!!

Mon, 07/04/2011 - 22:56 | 1425661 bob_dabolina
bob_dabolina's picture

Chinese replica of Greenwich?

“We want to know how to create a good environment to attract the financial industry.” 

Answer: Remove all the Chinese people from that area.

Mon, 07/04/2011 - 23:26 | 1425718 Yen Cross
Yen Cross's picture

 Bob you guys are killing me. I can't stop laughing.  Some one send me a picture of

  Barney Frank, in a double wrap around with Dodd in Jello! Weiner would suffice as a #2.

Mon, 07/04/2011 - 23:33 | 1425734 bob_dabolina
bob_dabolina's picture

Would a Boehner suffice as a last resort?

Mon, 07/04/2011 - 23:51 | 1425750 Yen Cross
Yen Cross's picture

  They can (Judge) a 24 year old on the weekend, but can't  even configure a debt cap? Go Figure.

Tue, 07/05/2011 - 00:13 | 1425788 UGrev
UGrev's picture

He's on the side fap fapping away.. he's a watcher, not a doer.. 

Tue, 07/05/2011 - 02:25 | 1425922 macholatte
macholatte's picture

where's Bonzai when you need him?

Mon, 07/04/2011 - 22:52 | 1425654 LetThemEatRand
LetThemEatRand's picture

Chances are, this will not be mentioned tomorrow on CNBC, Bloomberg, or Fox.  But several months from now, it will be raised as a little known fact that "no one could have anticipated."

Mon, 07/04/2011 - 23:27 | 1425720 Dugald
Dugald's picture

Good Lord, Stone the crows, starve the don't mean a a a Black Swan?????

Tue, 07/05/2011 - 00:13 | 1425789 Cleanclog
Cleanclog's picture

"Transitory, due to weather, as in snow job"

Now back to your regularly scheduled CNBC - let's drill down, what are you buying now, how can youo make money on this right now, taxes are evil, government is evil, greed is good, regulation is evil, banks' self-regulate best, mark-to-market is for putzes, no one should be able to short except hedge funds, etc etc etc.  The market is a level playing field.  Sigh.

Mon, 07/04/2011 - 22:53 | 1425655 The Axe
The Axe's picture

ZH is awesome...always cutting edge....stuff that is no where else...YET....I am always so shocked that financial markets never seem to be fazed by these flaws in the system, in fact the ponzi only moves forward....

Mon, 07/04/2011 - 23:03 | 1425680 island
island's picture


Tue, 07/05/2011 - 00:14 | 1425790 i-dog
i-dog's picture

The Grand Masters Of The Ponzi own the market and own the media ... ipso facto, the media is only used, post facto, to justify to interested readers--all 3 of them--the latest market manipulations.

The current feints against Europe and China by the rating agencies are, IMO, simply ruses to prolong the ponzi into next year. Lulls the American sheep into a false sense of "it'll be OK ... they'll fix it, somehow ... see, [insert country here] is worse than us".

TGMOTP need to keep the US afloat until late next year in order to complete construction of their control grid (DHS, FEMA, TSA, etc).

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