This page has been archived and commenting is disabled.

Spanish Situation Worse Than Expected: China Rumored To Inject $13 Billion Directly Into Spanish Banks

Tyler Durden's picture


As if holding $36 billion (€25 billion) in Spanish sovereign debt wasn't enough, China now appears to be going all in as Spain's white knight. Reuters reports that in addition to keep the government solvent, China is now going direct to Spain's troubled banking system. "Chinese investors including the country's
sovereign wealth fund may inject $13 billion into Spanish banks, a
government source said on Wednesday after Spain's premier met financial
authorities in Beijing." Then again, recall that it was Portugal which relied last exclusively on China as a last chance rescuer. Which is why we disagree completely with this statement: ""If this is true it is positive for the market. If CITIC or another Chinese vehicle invests 9 billion euros that would represent around 5 percent of the equity in the Spanish banking system," said a London-based analyst who asked not to be named."  Uh, no. It means that the market, like a good Pavlovian dog,  will now start dumping Spanish paper in expectations of yet another bailout. And the more Spain is forced to buy to preserve it cross-linked investments in the PIIGS, the more dumping. After all such is life in centrally planned bizarro world.

Per Reuters:

There was no immediate comment from Beijing and it was not clear what terms would make the risk attractive to China, which has invested cautiously in overseas financial markets in the last couple of years partly to avoid any criticism it is squandering reserves.

Concerns about delays in recapitalising Spain's ailing savings banks -- heavily exposed to bad loans from a burst property bubble -- have overshadowed the euro zone state's efforts to convince markets it will not need a bailout.

According to official estimates the savings banks -- which are known as cajas and hold about half the deposits in Spain's financial system -- need about 15 billion euros in fresh funding to meet strict new financial targets.

But private estimates go eight times higher than that when taking into account future losses from real estate writedowns.

How does China plan on throwing good money after bad?

Speaking by telephone from Beijing, the Spanish government source told Reuters that Chinese sovereign wealth fund China Investment Corporation was studying an investment of $9 billion, and that private entities might add an additional $4 billion.

China is looking at two possible investment structures, either investing directly in specific cajas, or savings banks, or creating a general fund that the cajas would be able to tap, another Spanish government source told Reuters in Beijing.

What is more troubling is that Spain now needs the implicit bail out by the ECB, China, and let's not forget, petrodollars:

Spain's borrowing costs have soared in the past year and a half due to concerns about its large deficit, but some confidence has returned as Zapatero has cut spending and pursued the consolidation and recapitalisation of the savings banks.

But while Qatar and United Arab Emirates sovereign wealth funds intend to invest 450 million euros in the cajas, private investors who have looked at the books say they will only invest at a steep discount, due to doubts about the scale of overall losses.

So the only question is whose taxpayers end up footing the bill. Alas, we are confident that once the IMF gets involved in the Spanish bailout some time in September, the answer will be, as always, America's.


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 04/13/2011 - 11:00 | 1165161 jtmo3
jtmo3's picture

Does it really matter what condition they're in? I mean, after all, it's not like it affects anything anyway.

Wed, 04/13/2011 - 11:19 | 1165238 Oh regional Indian
Oh regional Indian's picture

Actually it matters a lot. Spain is the intended target for EU financial destabilization on a mega-scale. No bail-outs can stabilize the property bubble bursting in spain, which is the saeme thing as saying the banking bubble bursting. And via Santander, South America will get a kick in the gut too. So yes, spain is a big deal.

They lie on the Financial axis, going neatly with the war axis..... when it rains in spain, watch the EU and the Euro go...


Wed, 04/13/2011 - 11:22 | 1165249 Oh regional Indian
Wed, 04/13/2011 - 12:06 | 1165414 falak pema
falak pema's picture


This guy DSK is destined to play a major role in the coming years as arbitrator of NWO deal making between Imperial USA, surrogate EU and ambitious, independent China : Either as IMF chairman or more likely as new french president. Like the chairman of WTO, Pascal Lamy, he is a french social demorcrat trying to get the world off the head-on collision axis of East-West WAR about OIL/Reserve currency/Creditor-debtor 'grand canyon' divide. But he is a diehard globalist, like all social democrats. He believes that the widening apparent gap in ongoing balancing act,  between USA and China, gives a role to EU/India/Brazil as swing players maintaining a desire to avoid monetary/RM asets supply confrontation from going to nuclear stand-off. Saudi future stability becomes key to this global play. Nobody can survive next two decades without having Saudi oil in their supply basket. If push comes to shove there's where the divide of East-West confrontation will appear. On OIL...Sauron's greasy ring...So lets see if IMF's black prince can maneuver world any where else but to the very brink. 33 rd  circle calling!

Wed, 04/13/2011 - 12:29 | 1165526 Oh regional Indian
Oh regional Indian's picture

Falak, I agree with what you say on an obvious level.

But I see two things a-coming, like a freight train sans brakes.

War and Water (shortages). Water is the new oil and did you know Libya sits on one of the largest, purest fresh water aquifers in the world? Puts a new spin on the regional dynamics, eh? Because at what energy cost does de-salination become ridiculous?

I think oil is dimming, even if not in these maniac's minds. It a bigger play now, a survival play. And DSK is cabal-man, through and through.

And then there is the great re-set, already at work, soon to con-flagerate. The big Abrahamic war of the Judeo-Christian-Islamic "frater"nity-gritty.

And yes, look at that map come alive eh? Spain.... tch...


Wed, 04/13/2011 - 12:55 | 1165672 falak pema
falak pema's picture

Hum, Libya's fresh water reservoir in Siwa. I'll have to put my water goggles on and dive into libyan sands to verify this new gold mine! Abraham is father of ideological divide like no other. Granted. But to my eternal regret, I feel this is deja vu and should not be on world agenda in a secular western world. But then, when GWB becomes son of Saint Louis who is to tell where the current madness could lead us! Maybe Obama is son of Emperor Titus. Jerusalem destroyed...? or just Gaza? Anything goes as the multiple mirrors now confuse the real with its image. We are in Orson Welles film...the lady from Shanghai...very appropriate title of this day and age! Wasn't she gorgeous!

Wed, 04/13/2011 - 12:07 | 1165417 Harlequin001
Harlequin001's picture

Told ya, China creates new money from thin air, uses it to buy a US T Bill and then pledges that as collateral to a European bank for Euros which it then uses to buy Spanish debt. So what if it fails, China simply creates another load of new money, buys another US T Bill and replenishes its collateral to the European bank.

If China only gets 1 cent on the dollar in a Spanish default they've done well, because that 1 cent is callable against a Spanish bank for as long as it takes to be repaid. This needs to stop.

China is creating money from thin air to buy Spanish real estate and other assets from those that have been foreclosed upon. There should be riots.

and by that I mean against our own politicians...

Wed, 04/13/2011 - 12:14 | 1165451 ElvisDog
ElvisDog's picture

I disagree. Many people think the Chinese leadership is wise and is following a Machiavelian plan for world domination. I think China is stupid and is throwing money down the Spanish rat hole. Spain is going to need just as much money next year, and the year after that, and the year after that. China is buying a stake in an asset that is certain to depreciate in the future.

Wed, 04/13/2011 - 12:44 | 1165486 Harlequin001
Harlequin001's picture

Without credit their sovereign fund is worthless. They have no choice but to bail out Europe, and the US and everyone else.

Now that they need a weaker currency the gloves are off, they create unlimited quantities of new cash and simply stuff it into CIC.

For a s long as there is a race to devalue currency they can literally buy up the entire planet without going anywhere near a US T Bill if they choose.

The only thing that can stop this is a gold standard.


Wed, 04/13/2011 - 12:18 | 1165462 falak pema
falak pema's picture

Not from thin air : based on its USD reserves, its 9% growth, it's annual trade balance which is very positive. So they have reserve assets they want to get rid off (USD to Euro switch), and access potentially to EU market for their products later on through direct investments in Spain.

Wed, 04/13/2011 - 12:29 | 1165515 Harlequin001
Harlequin001's picture

Bernanke is going for a weaker dollar, China wants a weaker Yuan, they can simply create as much money as they need and if markets devalue the Yuan it is to their advantage.

The idea that foreign reserves have any relevance went out the window as soon as the race to devalue currencies relative to each other began. There is no limit or end to this until we have stronger currency ergo we need a gold standard, nothing else will do it.

Wed, 04/13/2011 - 12:41 | 1165603 falak pema
falak pema's picture

I agree the current currency war is leading to some type of gold standard readjustment. The IMF says the same. But Bernanke won't hear it. So the currency war goes on untill the USD falls and then the basket currency plus gold standard will become necessary. But in much worse macroeconomic conditions for the world as the main current culprit of monetary mayhem : USA,  won't throw in the towel. We will get there. What China does with it's "phony" money buying other "phony" Euro money, selling it's phony USD is of no real issue relative to other "hard assets". It will continue to fuel world inflation.  But it allows everybody to reposition in the waiting game as the currency war will inevitably lead to a collective collapse. All players will then come to the table in the dust of the ruins of USD hegemony. We will be post-2012 elections and the bitter pill will be sold to the plebes all around. China has least to lose in this waiting game...

Wed, 04/13/2011 - 15:26 | 1166390 ivana
ivana's picture

+1 looks like that but someone powerful may decide to stop that path and re-ignite financial armageddon ... if they see they are loosing

Wed, 04/13/2011 - 12:43 | 1165616 ElvisDog
ElvisDog's picture

China's 9% growth is an illusion based on building empty cities and enormous malls with no customers.

Wed, 04/13/2011 - 11:38 | 1165293 jtmo3
jtmo3's picture

Well, it's not like they're going to kick the can for several more years. It only matters to those who think rationally, not to those that exercise their legs for further work. In the end, this means shit for years to come, if even then. The bias is to continue the status quo for as long as humanly possible, and that's what'll happen here as it has in every other ponzi scheme.

Wed, 04/13/2011 - 11:49 | 1165351 Green Leader
Green Leader's picture

That's  exactly why Spain has been turned into almost a desert with chemtrails and geoengineering in preparation for the big blow. This has been going on for several years now.

When Spain goes, Europe goes.


Wed, 04/13/2011 - 12:02 | 1165397 MK ultra
MK ultra's picture

Chemtrails are a load of bunk. You've been sucking on Alex Jones too long. When the green extreme tree hugging dirt worshipers can't argue using facts they come up with crap like this.

Wed, 04/13/2011 - 12:11 | 1165443 Green Leader
Green Leader's picture

1) I happen to live in an area under heavy attack, I don't need that Alex Jones Psy-ops site to teach me anything.


2) I am an environmentalist of the Torah, not a tree hugger.

Wed, 04/13/2011 - 12:12 | 1165437 Harlequin001
Harlequin001's picture

Europe is not going to go. China is happy with a weaker currency which means that sovereign funds are now a whole new ball game.

CIC can bail them all out, it's just that Europe then ends up in debt to China for borrowing money that is not real.

It's treason perpetrated against the Spanish people by their own government, pure and simple.

Wed, 04/13/2011 - 12:27 | 1165502 falak pema
falak pema's picture

The Oligarchy wins the people lose. Quite right. Except now, more and more, the Oligarchy is Chinese fat cats and not US fat cats. That's the change in NWO mix. It galls the hell out of TPTB in DC and WS. But what choice to they have anyway? Their money is shill and their trade balance is steep uphill!

Wed, 04/13/2011 - 12:29 | 1165533 Harlequin001
Harlequin001's picture

Quite right, and it doesn't matter whether the money is real or not is still has to be repaid. There is the treason perpetrated against the people by governments through fiat money.

Wed, 04/13/2011 - 20:14 | 1167294 i-dog
i-dog's picture

"more and more, the Oligarchy is Chinese fat cats and not US fat cats"

"The Oligarchy" are neither Chinese nor US fat cats ... they are very old European family bloodlines that long pre-date the founding of the US. The fat cats are simply hangers-on with contacts that enable them to amass paper wealth while the oligarchs are working to separate objectives (population reduction and a return to global feudalism).

The oligarchs don't actually need money -- because they "own" the critical assets: your ass and the land it is sitting on. They can make a few extra hundred billion peasant dollars any time they like (as they have been doing for many hundreds of years) through the collection of "indulgences" from the fat cats who do the actual dirty work of drug trafficking, slave trading, war profiteering and financial shenanigans.

Wed, 04/13/2011 - 21:29 | 1167531 Oh regional Indian
Oh regional Indian's picture

Very nice i-dog. A straight cut to the chase. The hidden hand. 

Can you imagine being a fly on the wall of a Battenberg strategy session?



Thu, 04/14/2011 - 09:35 | 1168456 falak pema
falak pema's picture

all bloodlines comes to an end. But the oligarchical mantra never dies. That's the bottom line. Don't chase this on a hereditary basis, rather on a sociological basis. A good 'top of the heap' strategy will always find new leaders, irrespective of 'bloodline'.

Wed, 04/13/2011 - 11:39 | 1165285 FeralSerf
FeralSerf's picture

Spain and the rest of the EU's insolvent countries are destined to become Chinese colonies.  It's much cheaper, quickier and potentially more successful for China to acquire colonial possessions with their soon-to-be worthless USDs than build up a military to accomplish the same as America has attempted to do the last 100 years.

In the bigger picture, China becomes the saviour that all the PIIGS and some of the others that aren't classified as such (Belgium and France come to mind) are looking for, and China gets a place to sell their manufactured goods that it has no internal use for.   China must also keep all those Chinese peasants at work 60 hrs. or so per week at starvation wages.  Idle hands, devil's workshop and all that jazz.  The alternatives are too frightening for the commisars to contemplate.  It's only (paper) money.

The Anglo-American Axis of Evil is due for replacement.  Don't expect them to die quietly or non-radioactively, though.

Wed, 04/13/2011 - 11:52 | 1165355 takinthehighway
takinthehighway's picture

My thoughts exactly.

Wed, 04/13/2011 - 12:27 | 1165503 ElvisDog
ElvisDog's picture

Oh really. You think that Euros accustomed to a life of relative government-funded ease are going to quietly take being exploited by a country half a world away populated by people of a different race who speak a language that is incomprehensible to them? Europeans have a long history of xenophobia. And exploited they will be. There would no reason for China to do what you suggest unless they were profiting significantly for their effort. What you write may be the Chinese leadership's plan, but I don't think the people in their prospective colonies will sit still for it.

Wed, 04/13/2011 - 14:12 | 1166071 FeralSerf
FeralSerf's picture

If properly indoctrinated the colonials won't know what hit them.  The sheep will happily believe that their Chinese friends/masters are just enslaving them out the goodness of their hearts, just like the Anglo-Americans did previously.  The few that bleet will be written off as kooks.

It's all in creating the necessary perceptions and owning the media, politicians and bankers.  The technology for this sales job has been honed to perfection in the last 50 years.

Wed, 04/13/2011 - 12:25 | 1165505 Reptil
Reptil's picture


nailed it. Expect Peking Duck on the spanish costas from now on.

Wed, 04/13/2011 - 12:37 | 1165581 Harlequin001
Harlequin001's picture

Expect the media to tell us how the Chinese are doing us a favour by buying up all our assets with non existent money, and then expect them to rant about how we must repay them...

Wed, 04/13/2011 - 12:54 | 1165666 tired1
tired1's picture

Quite a few Chinese restaurants there already. And like in most places where they are 'foreigners' they stay out of sight. They just work and save their money.

Wed, 04/13/2011 - 16:37 | 1166698 OliverTwist
OliverTwist's picture

Spain and the rest of the EU's insolvent countries are destined to become Chinese colonies.  It's much cheaper, quickier and potentially more successful for China to acquire colonial possessions with their soon-to-be worthless USDs than build up a military to accomplish the same as America has attempted to do the last 100 years.


After you acquire colonial possessions though, is precisely the point where it starts to get expensive to protect your "national" interests which became international.

Wed, 04/13/2011 - 11:41 | 1165298 caconhma
caconhma's picture


Wed, 04/13/2011 - 11:01 | 1165166 CPL
CPL's picture

The answer to failure is to print more money.  Just think of it as a POMO injection abroad.

Wed, 04/13/2011 - 11:05 | 1165180 Thomas
Thomas's picture

China really has embraced capitalism: they are acting like complete dumb shits.

Wed, 04/13/2011 - 11:12 | 1165201 EscapeKey
EscapeKey's picture

No, they're not. They know exactly what they're doing.

They know the capital will never be returned, what they buy is political influence - historically, the main weapon of the US.

Wed, 04/13/2011 - 11:20 | 1165234 Ray1968
Ray1968's picture

Yes, they have learned well. The student has become the master.

Wed, 04/13/2011 - 11:12 | 1165202 Careless Whisper
Careless Whisper's picture

oh really. i want you to close your eyes and imagine what shanghai looks like. ok. are you ready? here it is:


Wed, 04/13/2011 - 11:19 | 1165222 ihedgemyhedges
ihedgemyhedges's picture

You sure that's not Detroit???????

Wed, 04/13/2011 - 12:31 | 1165523 ElvisDog
ElvisDog's picture

That's not even a real picture. It's a cartoon rendition of Shanghai. It reminds me of the cover pictures on Oprah's magazine.

Wed, 04/13/2011 - 13:32 | 1165879 Careless Whisper
Careless Whisper's picture

i know it's hard to believe, but dewd it's real. here's wikipedia - same


Wed, 04/13/2011 - 11:21 | 1165233 Sudden Debt
Sudden Debt's picture



It’s quite chocking because only 37% of the American still believe that Capitalism is the best economic system and most people tend to like the socialist system. This number is down from 80% in the US in 2002.


When GlobeScan began tracking views in 2002, four in five Americans (80%) saw the free market as the best economic system for the future—the highest level of support among tracking countries. Support started to fall away in the following years and recovered slightly after the financial crisis in 2007/8, but has plummeted since 2009, falling 15 points in a year so that fewer than three in five (59%) now see free market capitalism as the best system for the future.

GlobeScan Chairman Doug Miller commented: “America is the last place we would have expected to see such a sharp drop in trust in the free enterprise system. This is not good news for business.”

The results mean that a number of the world’s major emerging economies have now matched or overtaken the USA in their enthusiasm for the free market. The Chinese and Brazilians, 67 per cent of whom regard the free market system as the best on offer, are now more positive about capitalism than Americans, while enthusiasm in India now equals that in the USA, with 59 per cent rating the free market as the best system for the future.

Among the 20 countries polled in both 2009 and 2010, an average of 54 per cent today rate the free market economy as the best economic system, unchanged from 2009.

Americans with incomes below $20,000 were particularly likely to have lost faith in the free market over the past year, with their support dropping from 76 per cent to 44 per cent between 2009 and 2010. American women have also become much less positive, with 52 per cent backing the free market in 2010, down from 73 per cent in 2009.




The second chocker is that MORE PEOPLE IN CHINA BELIEVE THE FREEMARKET principle then in the US!





Wed, 04/13/2011 - 11:28 | 1165258 ZakuKommander
ZakuKommander's picture

Incorrect.  They are gaining the ability to control the fluctuation of the Euro, and hence the dollar, and hence the markets.  Subtle, nuanced and clever.

Wed, 04/13/2011 - 11:05 | 1165171 ItFarmer
Wed, 04/13/2011 - 11:04 | 1165175 nobusiness
nobusiness's picture

This is a rounding error compared to what the US owes China

Wed, 04/13/2011 - 11:07 | 1165178 hedgeless_horseman
hedgeless_horseman's picture

It means that the market, like a good Pavlovian dog,  will now start dumping Spanish paper in expectations of yet another bailout.

Where there are Chinese firefighters there is usually a (currency) fire.

Wed, 04/13/2011 - 11:08 | 1165182 Cdad
Cdad's picture


So Europe is going under now...or at least 30% of its economy, and...

...over at the BlowHorn [CNBC] E. Burnett and M. Haines have been deeply involved in a conversation about whether cosmetic surgery is necessary to maintain a strong career.

Also, and OT, after being lied to about JPM qtrly earnings, now we discover that we were lied to [by the Street] about increases in dividends.

Well, you can see why the VIX is falling, and stocks are rising on virtually no shares traded whatever...because after all, aren't you encouraged?

Hello cosmic bunny hole...with your RSI hitting infinity....twice today!

Wed, 04/13/2011 - 11:41 | 1165314 SheepDog-One
SheepDog-One's picture

Hey Erin, go for it and up the B cup to a D!

Wed, 04/13/2011 - 12:33 | 1165546 ElvisDog
ElvisDog's picture

Well, Mark Haines has determined that a massive comb-over is necessary for his career.

Wed, 04/13/2011 - 11:08 | 1165190 vote_libertaria...
vote_libertarian_party's picture

clink..clink....clink  (kicking the can down the road)

Wed, 04/13/2011 - 11:18 | 1165226 Josh Randall
Josh Randall's picture

clink..clink....clink.."BRING OUT YER DEAD..."clink..clink....clink.."BRING OUT YER DEAD..."

Wed, 04/13/2011 - 11:11 | 1165194 Sudden Debt
Sudden Debt's picture

How does a Chinese Guy say in Spanish "Can I have my money back please"?








Wed, 04/13/2011 - 11:14 | 1165204 Cash_is_Trash
Cash_is_Trash's picture

He parks an aircraft carrier off the coast.

Wed, 04/13/2011 - 11:12 | 1165196 silvertrain
silvertrain's picture

China has become the payday lender of the world....And who thinks there not going to get a better seat at the IMF table?

Wed, 04/13/2011 - 11:11 | 1165200 Sudden Debt
Sudden Debt's picture

For them it's just a way to get rid of their dollars.


Wed, 04/13/2011 - 11:16 | 1165217 writingsonthewall
writingsonthewall's picture

Very good - soon we'll all be investing in 'anything' to get rid of the worthless dollar.


Why let Bernanke devalue your wealth when you can own something tangible - Spain, Portugal or Italy.

Maybe the Chinese are cleverer than they let on.....although they don't seem to have realised that this is rather 'ponzi like' as the money they lend to Spain they are hoping will be used by the Spanish to buy their own goods and 'tat'.


Why don't they just give their stuff to the Chinese people and cut out the middle man.

Wed, 04/13/2011 - 13:08 | 1165727 Urban Redneck
Urban Redneck's picture

They are acquiring a significant volume of tangible assets with their paper, as well as a significant amount equity paper which has some tangible asset backing.  If all the paper becomes truly toxic they are better positioned than most. 

Wed, 04/13/2011 - 11:18 | 1165230 silvertrain
silvertrain's picture


Wed, 04/13/2011 - 11:13 | 1165205 Misean
Misean's picture

What in the hell are the Chinese buying? Is this like the Japanese paying quintuple value for U.S. golf courses in the late 80's?

Wed, 04/13/2011 - 12:28 | 1165448 AccreditedEYE
AccreditedEYE's picture

+1 They will get eviscerated fighting the market. As has been posted above, and I agree with, this has to be for political gain only. Being able to shape the course of the world is an expensive game...

Wed, 04/13/2011 - 12:15 | 1165452 Harlequin001
Harlequin001's picture

it doesn't matter what they're buying, they didn't pay for it with anything...

It's just funny money...

Wed, 04/13/2011 - 13:16 | 1165767 Urban Redneck
Urban Redneck's picture

If I were a Chinese banker I would be perfectly happy for a building speculator who wanted a pile of FRNs (which in either US or Chinese form are basically free to the bankster class over there too) to collateralize the loan with a few tons of copper.  The paper can go hell, the real estate market can tank- copper is copper.  It isn't quite as portable as gold, but there isn't enough gold for a true gold standard at anything approaching current prices.  And if by some strange turn of events the Chinese manage to keep the bubble expanding, the bankster has an FRN profit.

Wed, 04/13/2011 - 11:15 | 1165207 Rainman
Rainman's picture

No need for war when the People's Republik can buy up sovereign banking systems and enslave the inhabitants with even more unsustainable debt. The bloodless strategy can only work for so long, though.

Wed, 04/13/2011 - 11:14 | 1165213 Twindrives
Twindrives's picture

The needle and the spoon took me on a trip to the moon......shoot em' up.

Wed, 04/13/2011 - 11:18 | 1165216 ihedgemyhedges
ihedgemyhedges's picture


Wed, 04/13/2011 - 11:18 | 1165218 markar
markar's picture

If and when The Chinese call in their markers, the EU will cough it up in gold.

Wed, 04/13/2011 - 13:19 | 1165782 Urban Redneck
Urban Redneck's picture

The will execute operation FDR33 on their own population before, appearing needy (economically) to the Europeans.

Wed, 04/13/2011 - 11:19 | 1165220 Peterpaul
Peterpaul's picture

Wonder what pound of flesh China will extract later? Maybe they will get that port on the Meditteranean.



Wed, 04/13/2011 - 11:19 | 1165221 Internet Tough Guy
Internet Tough Guy's picture

Oil is going back up.

Wed, 04/13/2011 - 11:17 | 1165224 SDRII
SDRII's picture

Let's not forget that GS upgraded the Spanish savings banks a few weeks ago

Wed, 04/13/2011 - 11:20 | 1165229 pendragon
pendragon's picture

off topic but that submitted to accepted ratio on pomo is a monster. got to be a record

Wed, 04/13/2011 - 11:26 | 1165261 the not so migh...
the not so mighty maximiza's picture

Fusion cusine, chinese/spanish rice eggroll empalidas

Wed, 04/13/2011 - 11:32 | 1165270 americanspirit
americanspirit's picture

Out with the tapas - in with the dim sum


Wed, 04/13/2011 - 11:37 | 1165286 chinaguy
chinaguy's picture

Pieces on a chess board

Wed, 04/13/2011 - 11:35 | 1165288 SheepDog-One
SheepDog-One's picture

I dont believe for a minute China is interested in 'helping' them, if anything China is positioning for control, just buying Spain.

Wed, 04/13/2011 - 11:55 | 1165363 Bleeping Fed
Bleeping Fed's picture

China is providing the bubble gum and bailing wire to keep the EU afloat.  China knows that it will be destroyed by its enormous credit bubble in the next global recession so it will delay that as long as possible.

Wed, 04/13/2011 - 11:35 | 1165291 PY-129-20
PY-129-20's picture

One country with a property bubble helps another country with a property bubble. All I can say, it ends in tears. And we did the greatest mistake to join this Euro project, giving up our Deutsche Mark. I am sorry and I am normaly against the death penalty, but they should hang the people that commited this crime.

Wed, 04/13/2011 - 11:58 | 1165367 FeralSerf
FeralSerf's picture

Germans have been giving up IP that's a lot more precious that the Deutshe Mark.  An overvalued DM was the path to unemployment for Germans so there was no alternative for an industrial country the size of Germany than pegging their currency to that of their customers (even Greeks and Portuguese).  They can't buy those VWs unless you Germans finance them for them.  And you Germans don't buy enough olive oil and wine from them to make them good credit risks.  You shouldn't complain so much when you make this sort of deal to sell your stuff and keep your factories humming.  A factory without customers isn't worth much.

Wed, 04/13/2011 - 11:40 | 1165311 espirit
espirit's picture

The tv commercial which ends in "And now they work for us", referring of course to Chinese ownership of it all, is closer to the truth than most want to believe.

Default on debt, then war over resources will be the end game.

Wed, 04/13/2011 - 11:45 | 1165325 americanspirit
americanspirit's picture

Fully agree PY-129-20 however "they" won't be hanging "them" anytime soon. It's going to take one-on-one action by private citizens to avenge this crime, not official action.

Wed, 04/13/2011 - 11:46 | 1165327 redpill
redpill's picture

Soon, our unemployed will emmigrate to China and build THEIR railroads under slave-labor like conditions.  Payback is a bitch.

Wed, 04/13/2011 - 11:59 | 1165378 Bleeping Fed
Bleeping Fed's picture

They already have enough people to worry about keeping employed.

Wed, 04/13/2011 - 12:03 | 1165390 FeralSerf
FeralSerf's picture

It's too expensive to send your unemployed to China as slaves.  Since the Industrial Revolution, traditional slavery is not a viable business model.  Maybe your unemployed can be converted to Soylent Green and fed to Chinese pigs?  Solves a lot of problems, ein-win, eh?  Unless you happen to be one of the unemployed that is.  Ignorance is bliss in that case.

Wed, 04/13/2011 - 12:33 | 1165556 sethstorm
sethstorm's picture

Not likely. 

On the other hand, any Chinese/Chinese interests in the US/EU will end up becoming a new target.  Doubly so for those that are not fronts.

Wed, 04/13/2011 - 11:47 | 1165338 Caviar Emptor
Caviar Emptor's picture

China-Latina! Ay che bueno! Love the food

Wed, 04/13/2011 - 11:50 | 1165342 Monday1929
Monday1929's picture

China is becoming Warren Buffet.

Wed, 04/13/2011 - 12:03 | 1165400 FeralSerf
FeralSerf's picture

We have met Warren Buffet and he is us.

Wed, 04/13/2011 - 12:02 | 1165393 Dick Darlington
Dick Darlington's picture
04-13 11:22: EUR weakens across the board following reports from EU sources, that Greece needs 40-50% of its debt wiped off to ensure sustainability Nooo, how can that be? The high priest of the europonzi has assured us that everything's golden in Europe. But it's good european equities are up to make sure the "wealth" effect phenomena is still intact.
Wed, 04/13/2011 - 12:37 | 1165587 topcallingtroll
topcallingtroll's picture

Those yoyos have assured us there will be no defaults until 2013 when debt is no longer guaranteed.

Wed, 04/13/2011 - 12:08 | 1165413 Pseudo Anonym
Pseudo Anonym's picture

How does China plan on throwing good money after bad?

it's more like throwing bad money after bad.  China didnt use "good" money (gold/silver) in the first instance.  Just $digits.

Wed, 04/13/2011 - 12:20 | 1165461 Harlequin001
Harlequin001's picture

yes, it's not money...

Wed, 04/13/2011 - 12:12 | 1165433 proLiberty
proLiberty's picture

Is China moving to use its large reserve holdings as an attempt to buy favor and influrence?  Will we see Spain moving China's way as a result?  This is a new dynamic for the coherence of the EU!

Wed, 04/13/2011 - 12:47 | 1165600 ElvisDog
ElvisDog's picture

"Favor and influence" aren't really tangible goods. You have to keep paying for them over and over. How much favor and influence will China have over Spain when China starts demanding austerity measures in Spain so the Spanish can pay back their debts to the Chinese? (Hint: how much favor and influence does England and the Netherlands have in Iceland these days?)

Wed, 04/13/2011 - 12:14 | 1165446 aerial view
aerial view's picture

China has just traded up one of it's pawns for a knight (cost $13 billion)in order to protect it's king(dom) in the CHESS MATCH for world domination.

Wed, 04/13/2011 - 12:12 | 1165447 kito
kito's picture

you would think the chinese learned their lesson pouring good money after bad with the amounts they lost in the u.s. heres an idea-- invest in their own country. stop pissing it away on bankrupt nations. accept the fact that they have already lost their money in the u.s. and europe and move on

Wed, 04/13/2011 - 12:19 | 1165471 Harlequin001
Harlequin001's picture

how can you lose money when you create it from thin air?

Wed, 04/13/2011 - 12:21 | 1165478 Bubbles the cat (not verified)
Bubbles the cat's picture

Yeah.....nother day, nother bailout. The Chinese already own so much they are actually bailing themselves out.

Wed, 04/13/2011 - 12:24 | 1165501 LongSoupLine
LongSoupLine's picture

this is Sun Tzu at its best.


That's why my Sun Tzu defensive weapon of choice is...silver.


Wed, 04/13/2011 - 12:41 | 1165606 Reptil
Reptil's picture

+500 - since it's also their weapon.

Wed, 04/13/2011 - 13:19 | 1165793 chinaguy
chinaguy's picture

Sun Tzu, clearly, but what's the actual goal @LSL ? clearly has NOTHING to do w/ Spain and very little to do with the EU.

Wed, 04/13/2011 - 13:47 | 1165938 ivana
ivana's picture

Sun Tzu indeed

Wed, 04/13/2011 - 12:32 | 1165536 sethstorm
sethstorm's picture

So this is how Red Dawn is done.  Not with a military strike, but a gradual civil/corporate acquisition.

The question becomes, how to thwart and neutralize China?

Wed, 04/13/2011 - 12:34 | 1165565 redpill
redpill's picture

That ship has already sailed.  Actually they sail every day.  90% of the shit we buy comes from them.  We already sold out, now they are just moving on to Europe.


Wed, 04/13/2011 - 12:50 | 1165656 sethstorm
sethstorm's picture

I'm not sure that is the case.  There is no "too late" short of losing the US's sovereignty.  That, and there is always the last-ditch option of repudiating China's debt in a very hostile

A hostile enough Congress + administration is all it takes.  I'd imagine that we will have that, and discover how to ensure whatever is rebuilt, stays rebuilt.


Wed, 04/13/2011 - 12:58 | 1165689 jmc8888
jmc8888's picture

No a much better way is not to cancel the debt but reedeem it.  (after glass-steagall is put through the system)

What you do is guarantee in relatively same dollars the amount of raw materials and expertise needed to redeem said debt, so they will have a guarnateed supply of raw materials to help them transform and build up their western regions.

It's not hard.  We don't need to screw over the chinese.  We need to screw over those who foisted, who hold, who got bailed out...the fraudulent debt, and rid that 'system' from this planet forever.

Glass-Steagall (and it ain't even a new concept)


Wed, 04/13/2011 - 12:36 | 1165564 topcallingtroll
topcallingtroll's picture

The chinese.gooberment isnt known for astute investing. Remember all those guaranteed oil contracts they bought at the last top?

Wed, 04/13/2011 - 12:53 | 1165658 jmc8888
jmc8888's picture

Stupid Chinese (in this way) join the QoE in her monetary folly. 

They can't survive unless we buy their shit, well without massive pain of course (and with THAT MUCH pain...ALL bets are off even for them).  The politburo doesn't want revolution.  So they pay the few billion to keep it going.

I don't think this will last forever.  Eventually the Chinese will figure out the system is screwed and they are just throwing a few trillion chinese worth of hourly wages into Europe's fraudlent debt. 


Wed, 04/13/2011 - 13:20 | 1165785 topcallingtroll
topcallingtroll's picture

It is easier to pay hidden tribute than suffer non hidden factory closures.

Bastiat might want to comment on the seen and the unseen.

I think china paying tribute to usa and europe will last a long time.

Wed, 04/13/2011 - 13:08 | 1165728 AG BCN
AG BCN's picture

Spain works on bribery and corruption, must be some pictures somewhere.

Wed, 04/13/2011 - 13:16 | 1165768 topcallingtroll
topcallingtroll's picture

Makes sense.

The chinese are comfortable with that philosophy, from killer panamamian toothpaste to baby killing formula.

Wed, 04/13/2011 - 14:16 | 1166105 FeralSerf
FeralSerf's picture

And America and China does not?

Wed, 04/13/2011 - 13:28 | 1165835 tiger7905
tiger7905's picture

If you dig a buit deeper, from a Chinese perspective this is just business, but with Spain owing China makes for a great negotiating position for China. China apparently holds 12% of Spanish government debt so far, with the $15 billion figure and rumor number of 8X that one has to wonder how high of a percentage of Spanish debt China is willing to go to.

Chinese links here:

Wed, 04/13/2011 - 13:50 | 1165972 ivana
ivana's picture

As I noted before, believe there's banster scenario with indicators, timeline etc etc ... Chinese are disturbing it a lot now. Streching a thin chord to extreme tension.

When it snaps, we'll have real trade wars

Do NOT follow this link or you will be banned from the site!