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First Cisco And Microsoft, Now IBM: China Orders Banks To Remove High-End IBM Servers

Tyler Durden's picture


A week ago, in retaliation to the inane charges lobbed by the US accusing 5 Chinese army officials of spying on US companies (when the NSA spying scandal on, well, everyone refuses to leave the front pages), China announced it would ban the use of Windows 8 on government computers (considering the quality of Windows 8, this is likely a decision government computers would have taken on their own regardless). Today, China has expanded its list of sanctioned companies from Microsoft to include IBM as well, following a Bloomberg report that the Chinese government is pushing domestic banks to "remove high-end servers made by International Business Machines Corp. and replace them with a local brand."

Why is MSFT and now IBM sowing the seeds of the US government's stupidity and failed attempts to distract from its own spying scandals? We don't know. Here is what we do know:

Government agencies, including the People’s Bank of China and the Ministry of Finance, are reviewing whether Chinese commercial banks’ reliance on IBM servers compromises the country’s financial security, said the four people, who asked not to be identified because the review hasn’t been made public.


The review fits a broader pattern of retaliation after American prosecutors indicted five Chinese military officers for allegedly hacking into the computers of U.S. companies and stealing secrets. Last week, China’s government said it will vet technology companies operating in the country, while the Financial Times reported May 25 that China ordered state-owned companies to cut ties with U.S. consulting firms.


Harriet Ip, a Singapore-based spokeswoman for IBM, referred questions to IBM in the U.S. Jeffrey Cross, a Somers, New York-based spokesman, didn’t immediately respond to an e-mail seeking comment outside U.S. business hours.


“Security trumps everything,” said Duncan Clark, chairman of BDA China Ltd., a Beijing-based consultant to technology companies. “China doesn’t need the U.S. companies in the way it did for the last few decades.”

Perhaps somewhat ironically, IBM sold its low-end server business to Lenovo, itself a part of IBM once upon a time, several months ago for $2.3 billion.

But if this wasn't enough of an insult to IBM's top line, here is another concern about IBM margins: China simply believes Big Blue's products are too expensive:

In addition to concern about Armonk, New York-based IBM’s equipment as a security threat, China’s government also believes IBM servers are more expensive in China than in other regions, the people said.


China Postal Savings Bank Co. is using servers made by Jinan-based Inspur Group Ltd. as part of a trial program that began in March 2013, the people said. The government plans to expand that trial to other banks, they said. The group’s Inspur International Ltd. unit gained 10 percent to HK$1.53 at 2:57 p.m. in Hong Kong trading today. In Shenzhen, Inspur Electronic Information Industry Co. rose 4.7 percent.

That's ok though: since news and fundamentals don't matter, we fully expect IBM stock to also be up several percent on what now appears to be the terminal loss of one of the company's largest export markets. And not only IBM: other stocks set to surge on this bad news are MSFT and, of course, Cisco, whose CEO was recently crying about Obama's NSA policies, and whose sales in China are once again assured to crater. But as they say in the movies: tis but a scratch - who needs top line growth when a company can issue debt to buy back its share and pretend all is well?


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Tue, 05/27/2014 - 07:38 | 4797755 Headbanger
Headbanger's picture

Way to go NSA!

Because Obama!

Tue, 05/27/2014 - 07:44 | 4797767 negative rates
negative rates's picture

Okay, all waiters jump ship, they're on there own.

Tue, 05/27/2014 - 08:05 | 4797804 eurogold
eurogold's picture

The war with China has finally and officially begun !

Tue, 05/27/2014 - 08:13 | 4797819 kliguy38
kliguy38's picture

China has been planning and preparing for years for this transition......the real reason that gold and silver is supressed is to return bullion to China and has been negotiated since early 2006 with Treasury

Tue, 05/27/2014 - 09:17 | 4798015 Son of Loki
Son of Loki's picture

Tough luck China...we don't need that $50 trillion dollar business with 1.3 Billion chinese consumers anyway....


oh, wait a sec.....

Tue, 05/27/2014 - 09:38 | 4798058 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

Thankfully, America doesn't make much to sell to China... except for no-good paper certificates and soybeans.

Tue, 05/27/2014 - 10:03 | 4798137 Döwnner
Döwnner's picture


America also has chlorine-washed genetically modified chicken meat to sell.

Adt also geneticaly modified corn seeds.

And fat-porn (soory, Eastern Europeans do slim&sexy porn).


What else?

Ah yes, freedum and demonocracy.

And gay rights. Oh yeahh, shouldn't forget legalized corruption by simply lobbying.


Yes. America. Feels great to be an 'merikan.

Tue, 05/27/2014 - 10:05 | 4798148 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

The moment any US based multi-national sends their manufacturing to China that product is torn apart and all IP is stolen. Local manufacturers can make cheaper, acceptable versions for the own use. Why do they need IBM now? CEOs are just stupid these days.

Tue, 05/27/2014 - 10:12 | 4798170 James_Cole
James_Cole's picture

Who needs big blue when you have truly brilliant long term plays like KING, TWTR, FB & NFLX? Those four companies alone will keep the US economy strong into perpetuity. 

Tue, 05/27/2014 - 10:13 | 4798172 gmrpeabody
gmrpeabody's picture

FX war spilling into a trade war, soon to be a shooting war...

Tue, 05/27/2014 - 10:45 | 4798287 old naughty
old naughty's picture

b,b,but they still have not told wal-mart to FO.

Tue, 05/27/2014 - 11:01 | 4798355 Herd Redirectio...
Herd Redirection Committee's picture

What happens if China no longer wishes to hold USD as reserves, any one?

Tue, 05/27/2014 - 12:39 | 4798758 Leraconteur
Leraconteur's picture

Belgium will step up and fill in.

The Chinese can only dump and deny ONCE. After that they played that card.

Tue, 05/27/2014 - 15:39 | 4799323 macholatte
macholatte's picture


“China doesn’t need the U.S. companies in the way it did for the last few decades.”

No shit!
China has learned how to mass produce everything and do it well. It was taught by the best, the Americans. Now, as it prepares for war with the “West” it is setting itself up to be self reliant. It will not need anything “American” to run its machine while Europe and the USA will need everything made in China.

How many TV and computer monitors are there in all the ships and aircraft in the US Navy?  How many of them are manufactured in the USA?

"The Capitalists will sell us the rope with which we will hang them."
– Vladimir Ilyich Lenin

Tue, 05/27/2014 - 11:25 | 4798454 Renewable Life
Renewable Life's picture

I love this talk of shooting war! Yes if you mean skermishes, but China or Russia have NO long or short term interest in a large scale military engagement with America!
We are Rome, they see themselves as the "New Americas" circa 1778!!

They have watched VERY closely as we couldn't occupy a phone booth in Iraq and Afganistan without losing men and treasure daily, so they know we won't be "holding any Chinese or Russian territory"!! So sail and fly around in your shiny equipment all you want, but China and Russia have new global empires to build!!

Tue, 05/27/2014 - 10:43 | 4798280 tony wilson
tony wilson's picture

i likes chlorines

i likes chickens

whats yer beef?


Tue, 05/27/2014 - 11:15 | 4798404 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

My apologies, I forgot about those fantastic American products.

Also... please allow me to take soybeans off the list, since China would rather buy from Brazil and Argentina when given the same price.

Tue, 05/27/2014 - 15:18 | 4799235 Flagit
Flagit's picture

Do stockholders (cant believe I'm rooting for them) of Cisco, Microsoft, and IBM have a case to recover fiscal damages? I mean, if a movie studio can sue Kim Basinger for what a movie could have made, do the stockholders have a similar claim against the NSA?

Tue, 05/27/2014 - 10:21 | 4798199 Kirk2NCC1701
Kirk2NCC1701's picture

IBM banned?  Well, finally some good news for its arch-rival HP.  No NSA-ware on their servers, right?

Oh, wait...

Tue, 05/27/2014 - 08:14 | 4797820 Smegley Wanxalot
Smegley Wanxalot's picture

The more things hopeNchange, the more they stay the same.

Tue, 05/27/2014 - 08:32 | 4797867 what's that smell
what's that smell's picture


comet hits the earth...bullish (ask krugmanites why broken glass is so important); comet misses the earth...bullish (vix fix).

sun burns out....bullish (build underground civilization near the hot core); sun blows up....bullish (build a new sun).

game theory for dummies.

Tue, 05/27/2014 - 09:40 | 4798075 PT
PT's picture


It's a silent 't'

Tue, 05/27/2014 - 07:42 | 4797764 JustObserving
JustObserving's picture

Chinese do not approve of free backup of their data by the NSA?  

Tue, 05/27/2014 - 07:50 | 4797780 Dr. Engali
Dr. Engali's picture

This hope and change gets better and better every day.

Tue, 05/27/2014 - 08:12 | 4797818 TheFourthStooge-ing
TheFourthStooge-ing's picture

Damn the icebergs, full speed aground!

Tue, 05/27/2014 - 08:49 | 4797834 intric8
intric8's picture

'hoping' for 'change' with this bullshit administration! I hope obozo is happy, sanction power tripping like a crack smoking bolshevik and  causing countries to proceed further into economic, class and societal decline. Will he be happy when international trade ceases altogether and millions start starving to death? Insipid man! Insufficient bastard of a president

Tue, 05/27/2014 - 09:37 | 4798061 redd_green
redd_green's picture

you got more than a screw loose if you think its all due to Obama.

Tue, 05/27/2014 - 10:16 | 4798185 gmrpeabody
gmrpeabody's picture

Well..., he did ask for your vote with a promise to change it, remember.

Tue, 05/27/2014 - 10:22 | 4798203 MrPalladium
MrPalladium's picture

Nevertheless, Obama is in a position to fix the problem if he cared to do so.

Tue, 05/27/2014 - 10:27 | 4798220 Max Cynical
Max Cynical's picture

"you got more than a screw loose if you think its all due to Obama."

He hasn't put a stop to it, has he?

Tue, 05/27/2014 - 11:00 | 4798354 intric8
intric8's picture

sorry, didnt know failing to provide you with a long list of shysters = 'screws loose'

Tue, 05/27/2014 - 07:42 | 4797765 Cognitive Dissonance
Cognitive Dissonance's picture

Replace IBM, the international Gold standard in mainframe computing? That does not compute. /sarc

Tue, 05/27/2014 - 07:45 | 4797769 negative rates
negative rates's picture

There is a bushing loose in the power cord.

Tue, 05/27/2014 - 10:48 | 4798300 TheReplacement
TheReplacement's picture

No.  They forgot to change the winter air out for summer air in the tires.

Tue, 05/27/2014 - 10:51 | 4798310 Oh regional Indian
Oh regional Indian's picture

I know a few smart Indians making really good money keeping AS 400's alive for Insurance and Banking world wide. Insane interfaces they work in, pre-historic.


Tue, 05/27/2014 - 15:15 | 4799227 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

Most global banks would grind to a halt if the wrong 64-year old IT guy got hit by a bus

Tue, 05/27/2014 - 15:29 | 4799292 Flagit
Flagit's picture

I think i see the solution. Change the name slightly to confuse them. International China Business Machines.


Tue, 05/27/2014 - 07:46 | 4797771 Kina
Kina's picture

The demi-Oligarchs are going to be pestering the Oligarchs over this.

Tue, 05/27/2014 - 10:41 | 4798275 prains
prains's picture

yes but iNSA hasn't opened up their chat room yet

Tue, 05/27/2014 - 07:48 | 4797775 g'kar
g'kar's picture

“China doesn’t need the U.S. companies in the way it did for the last few decades.”


They've already stolen everything they need.

Tue, 05/27/2014 - 08:03 | 4797800 Anasteus
Anasteus's picture

Right. Pushing domestic banks to operate on local brand is the best thinkable impetus to develop machines much faster than IBM.

Tue, 05/27/2014 - 09:30 | 4798048 813kml
813kml's picture

China didn't need to steal anything, US corps gave everything away in the pursuit of higher profits.

Tue, 05/27/2014 - 10:01 | 4798133 PT
PT's picture

Yep.  Will they never learn?  Hate to drag it up again, but number 8:


Fool me once, shame on you.  Fool me twice, um... umm, aahhh, watch someone else get fooled, uhm, um, oh shit!  It happened again!  Oh yes, they got fooled but surely we can get away with it next time ... but they're soooo cheap!!! ... and no we can do it, they won't fool us ... damn! 

Tue, 05/27/2014 - 10:17 | 4798186 813kml
813kml's picture

I think it's amusing when people blame China for US woes, the US shot itself in the foot and then hung itself with its own belt.  China was opportunistic, but it's not hard to look like a chess grandmaster when playing against a toddler.

But make no mistake, China will be scapegoated for every US incompetency.

Tue, 05/27/2014 - 12:24 | 4798708 kchrisc
kchrisc's picture

Yes and no. China had nothing to do with the demise of the DC US, but the FedRes did.

The thieves of the FedRes stole everything from the American people while backed stopped by the violence of their DC US puppets.


"Banksters, pol and crats

Thieves, bullies and rats

Some day come no head for their hats."

Tue, 05/27/2014 - 11:19 | 4798435 WillyGroper
WillyGroper's picture

That was seriously funny! 

One would have to have worked for corporate to truly appreciate.

Tue, 05/27/2014 - 12:03 | 4798641 DaveyJones
DaveyJones's picture

China steals some technology

we steal everything else

Tue, 05/27/2014 - 09:46 | 4798092 Raging Debate
Raging Debate's picture

g'kar - There is that but from a bigger perspective trade between the countries had to normalize. Both will rattle sabers and conduct protectionist policies for the next several years. However, I don't think trade will decrease drastically.

Last, there hasn't been much in terms of innovation here in the last few years that is compelling for them to continue to buy our hardware or software. Windows 8?!? If IBM's offerings are on par with that...

The NSA wouldn't factor into cost if I was on the Chinese end it is value or not.

Tue, 05/27/2014 - 07:49 | 4797777 observer007
observer007's picture

Thats the reason:

Obama wants new world order 2014


See video here (speech from yesterday)

Tue, 05/27/2014 - 08:22 | 4797847 StateofFraud
StateofFraud's picture

Video out of context. Misleading and trollish.

Tue, 05/27/2014 - 08:57 | 4797961 NidStyles
NidStyles's picture

Can we get rid of this guy Tyler? He's just spamming his site.

Tue, 05/27/2014 - 11:10 | 4797990 Anasteus
Anasteus's picture

"Ordinary men and women are too small minded to govern their own affairs."

Hm, when did I hear similar words like those?.. Ah, I remember, during my communist youth. Arrogant and conceited puppet who has NEVER governed his own affairs.

No, the video, if genuine, is NOT out of context, it's a serious thing. It's an open declaration and public defense of tyranny. In such a case China can do the only reasonable thing it can, to completely cut off from the surveillance network and get rid of western technical infrastructure as an important part of it.

Tue, 05/27/2014 - 11:32 | 4798489 Anasteus
Anasteus's picture

Well, it seems I took some wooden nickels... the video is indeed misleading, the sentence if out of context.

Congratulations Observer007 for cheating me successfully.

Tue, 05/27/2014 - 07:48 | 4797778 Dr. Engali
Dr. Engali's picture

Bullish for Chinese reverse engineered IBM clone servers.

Tue, 05/27/2014 - 07:56 | 4797789 JustObserving
JustObserving's picture

And the rest of the BRICS get cheap servers though with a new set of spyware.  Will Obama  let Silicon Valley continue to sell its most advanced chips to China so it can build cheap servers?  When will Obama indict the next 5 Chinese military hackers?  Trade wars and inflation are about to surge.

Tue, 05/27/2014 - 08:32 | 4797880 espirit
espirit's picture

Will prolly never know whether the 5 Chinese indicted were prying open the servers purchased from big blue.

Hacking is a matter of interpretation.

Tue, 05/27/2014 - 07:50 | 4797779 Winston Churchill
Winston Churchill's picture

Obozo's handlers must be getting punch drunk.The jabs just keep coming.

Just waiting on the upper cut and the coup de grace.

Tue, 05/27/2014 - 07:54 | 4797784 GetZeeGold
GetZeeGold's picture



Word is Jay Carney is getting combat pay now.

Tue, 05/27/2014 - 08:05 | 4797807 TheFourthStooge-ing
TheFourthStooge-ing's picture


Word is Jay Carney is getting combat pay now.

He deserves it. In addition to running the cotton candy machine, he is now also responsible for running the Tilt-A-Whirl ride.

Tue, 05/27/2014 - 08:48 | 4797930 espirit
espirit's picture

I thought he was the music grinder.

Tue, 05/27/2014 - 08:00 | 4797798 Dr. Engali
Dr. Engali's picture

Why do you say that? The media will ignore this too.

Tue, 05/27/2014 - 07:54 | 4797783 buzzsaw99
buzzsaw99's picture

trade war = bullish

Tue, 05/27/2014 - 08:05 | 4797805 Dubaibanker
Dubaibanker's picture

This is #deglobalization at its best.

In 2005, IBM sold its PC division to Lenovo...then IBM sold its x86 low end server division to Lenovo...then Lenovo bought Motorola from China owns most of IT company assets so it does not really need the US companies. 

Isn't this how buy and then conquer works?

Tue, 05/27/2014 - 08:08 | 4797811 TheFourthStooge-ing
TheFourthStooge-ing's picture

Hey, IBM is just focusing on groath in its core competency: stock buybacks.

Tue, 05/27/2014 - 10:06 | 4798138 813kml
813kml's picture

And HFT, but it looks like that "industry" is dying.  Maybe they should get heavy into BTC mining or World of Warcraft gold.  Coming quarter's profits might hinge on how well Watson does in the next Jeopardy tournament.

Tue, 05/27/2014 - 10:07 | 4798145 PT
PT's picture

What?  Are you saying that if China internationally enforced patent law then they'd own all the computer technology?



Now I REALLY wish I'd finished my engineering degree and done further study.  Mind you, the extra debt probably would have killed me by now.

Tue, 05/27/2014 - 07:55 | 4797785 AGoldhamster
AGoldhamster's picture

Definitely bullish - even more reason to push stocks to da moon - BTFATH.

Tue, 05/27/2014 - 07:55 | 4797787 F-X
F-X's picture

This is kind of earth-shaking news. Top Cisco, Microsoft and IBM management must be shitting their pants. To lose a market like that because of your own government must be hard to stomach. Governments normally support their own industry in developing export markets. 

Tue, 05/27/2014 - 07:59 | 4797793 buzzsaw99
buzzsaw99's picture

spy vs spy = good for the eCONoME

Tue, 05/27/2014 - 08:00 | 4797797 orangegeek
orangegeek's picture



So China will just tear out all "American Stuff" and put - well - something else in its place.


Shouldn't take more than 5, maybe 10 minutes.

Tue, 05/27/2014 - 08:03 | 4797801 Dr. Engali
Dr. Engali's picture

Maybe you aren't paying attention, but that's exactly what they are doing.

Tue, 05/27/2014 - 08:05 | 4797806 F-X
F-X's picture

The concern fot IBM, MS and Cisco isn't that they will tear out the old stuff. It's that they won't buy any new stuff.

Tue, 05/27/2014 - 08:44 | 4797848 Pee Wee
Pee Wee's picture

These "corporations" have sucked the Fascist tit dry in the USA.  Fascist Sam and his security paradise pay very, VERY well.  Government dirty work is very lucrative if one can get it so these companies sold their future for pennies.

Executives have thrown the baby out with the bathwater.  US tech is in a nose dive straight down -- soon it will be 3rd world tech you used to make fun of.   Perhaps the USA can dump IBM and get a little V-Tech toy technology.

The Bush cartel (Michael Hayden) hit the pedal to the medal to accelerate tech demise for the Fascist edge.

Still waiting in the wings is how Fascist-tech helped Fascist-finance screw everyone.   When do we get confirmation the banks had access to this technology, and usage was pervasive (and nothing to do with National [in]Security)?

Tue, 05/27/2014 - 08:57 | 4797942 Omen IV
Omen IV's picture

sure - but why did these companies cooperate? major market share everywhere at risk - this is not Chinese specific but world issue -

then this same condition can be applied to sanctions of individuals / companies with Russian origin (limit access to bank accounts) blow back is move accounts outside of US currency massively and Bank Intl. Settlements as crossroads - this  is all strange business logic for protection of "any" long term franchise

were they blackmailed into cooperating with NSA? Did they trade access overt  or "turn a blind eye to" for quid pro quo: espionage information on competitors?

seems you would want to be lilly white given especially move to the cloud for data storage  - especially - knew that was coming 15 years ago - guys like Chambers and Ellison a lot to lose - yet went along - bright guys clearly so how did they make the decision?

why would anyone expect it to be long term secret regardless of Snowden confirmation?

the decision process used is more intriguing than the results since potential effects are a sum certain - why?????? 

Tue, 05/27/2014 - 10:52 | 4798317 DR
DR's picture

Did you really believe that China,the second largest economy in the world, was going to continually rely on the US to provide for it's data security? The US tech giants would have lost the China markets no what the US government did.

Tue, 05/27/2014 - 07:56 | 4797788 stant
stant's picture

They are still trying to unring a bell while standing on a bomb.

Tue, 05/27/2014 - 07:58 | 4797791 orangegeek
orangegeek's picture

Maybe China could cut off their food imports from the US.


Funny how communists process - READY!!!  SHOOT!!!! AIM!!!!

Tue, 05/27/2014 - 12:10 | 4798672 DaveyJones
DaveyJones's picture

yes, no other countries produce food.

Tue, 05/27/2014 - 08:02 | 4797794 Notsobadwlad
Notsobadwlad's picture

So, what would happen if the elitist f*cktards threw a war and nobody decided to fight. (maybe that is why they need drones and robotic armies designed for the sole purpose of murdering people)

I have hope that even though this might not be the day, that someday it will happen. It is said that it is very hard to start a war that is covincing enough to get the people behind it. Maybe the people are growing up and soon will no longer need the parasitic masters of the dialectic to run their lives ... and then we can simply tell them to "go away".

The Chinese elitists would obviously prepare for war by reducing their dependence on the west.

Tue, 05/27/2014 - 08:19 | 4797795 Mentaliusanything
Mentaliusanything's picture

last time I checked, my underwear was made in China. suck on that!

for every thing else it's Mastercard..... till you lose that advantage.

Spy V Spy was one of my favorite things as a child.

USA . even your "Worlds largest"Momo hull cranes in New York building a new bridge up state does not make the list. China...... Pawned big time.

Sorry, as an American by Birth, I am ashamed how far you have fallen.

Once you were the light of the world.... Now you have become a owned entity with so much coruption you shall surely fall. It breaks my heart to say it..... you have lost another War. Junk away but it's becoming a joke everywhere but your ears are closed.. exceptional only to the year 1963, then you Fucked it up (Warren Commission, my ass still points to the ground)

Edward Snowdon... That was a whole big can of Woop ass. Needed but not wanted, except you.. Thanks for what its worth. You cannot undo what has been undone. Sorry but thanks

Tue, 05/27/2014 - 09:12 | 4798001 Omen IV
Omen IV's picture

Mental... you said: "Sorry, as an American by Birth, I am ashamed how far you have fallen. Once you were the light of the world.... Now you have become a owned entity with so much coruption you shall surely fall."

I agree and feel exactly the same - especially about 63' - the question for me is why so late in life did it become crystal clear that we are all in a scumbag system? i should not have been supportive as an american for so long

it should have been obvious that Vietnam  - when in the midst of it in 69' -  was not a one off event but was emblematic of an entire sick system - end to end - that was never ever, ever  the communists or Al Queda being the problem - but the USA at the core of the world wide corruption / sickness which it promotes 


Tue, 05/27/2014 - 10:54 | 4798311 MrPalladium
MrPalladium's picture

Foreign governments generally knew what NSA was doing. But by making it all public, Snowden created massive political pressure on foreign governments to do something to protect their communications. And the extent of involvement by U.S. big tech opened the door to massive protectionists moves in tech purchasing.

All this was forseeable but for some odd reason not foreseen.

Tue, 05/27/2014 - 11:43 | 4798548 silentboom
silentboom's picture

We were exceptional right up until the founding of the Federal Reserve and the income tax.  After that the money began it's descent and the government began balooning.  It was slow until the 70's when the mistakes came to a head and the gold standard was completely abandoned.  Now we have no savings, massive debt, uncontrolled government growth, and intervention into all things foreign and domestic.  Americans didn't know enough to complain about the Fed so it ran unchecked, they are too busy chasing socialism in the forms of boogie men like global warming or wage equality to see what's really causing the middle class to be destroyed.  By the time Americans realize what's happening, if they ever do, it will probably be too late.  100 years of setting growth records, then 100 years of squandering the wealth.

Tue, 05/27/2014 - 08:04 | 4797802 Kina
Kina's picture

The US is a bunch of dumb cnuts.... still trying the bully boy ways as always..but this time it is China and Russia. And certainly with China bullying will get Obama a smack in the face.


Is OK when the US bullies its Europeane peasnt leaders with all those NSA obtained personal secrets..they will just bend over and take it up the arse. But China...well you cause them to lose face they will shoot back.....their biggest weapon...the current size and the potential size of its market now and in the future....and the competitive loss of US companies as China developes its own or allows in non US competitors.


Corporate America will spanking Obama's little bottom if he keeps this shit up....he hasn't learned properly that don't speak until the Oligarchs give the ad libing bozo.

Tue, 05/27/2014 - 08:12 | 4797817 g'kar
g'kar's picture

"Corporate America will spanking Obama's little bottom if he keeps this shit up....he hasn't learned properly that don't speak until the Oligarchs give the ad libing bozo."


Nothing a little bailout can't fix.

Tue, 05/27/2014 - 11:40 | 4798526 CrazyCatLady
CrazyCatLady's picture

Ahh, now there is the rub!

Tue, 05/27/2014 - 20:22 | 4800186 g'kar
g'kar's picture

Yes indeed madame.

Tue, 05/27/2014 - 08:16 | 4797825 aleph0
aleph0's picture


And what about all the Software ?

Much bigger headache for the  Chinese ... probably easier to just clone the IBM machines .

 Or there are no mainframes ... but just Unix machines.

Tue, 05/27/2014 - 08:16 | 4797829 Colonel Klink
Colonel Klink's picture

Fuck IBM, the Chinese finally see it for what it is....Big Brue-t! (sic)

Tue, 05/27/2014 - 13:58 | 4798991 Colonel Klink
Colonel Klink's picture

For you two down voters, just look how they fucked their employees with the whole pension shafting.  Look how they've laid off massive amounts of US workers to hire a vast amount of Indian workers.  Having worked for them for several years and witnessed it all firsthand, you may want to readjust your thinking.  If not, remain ignorant!

Tue, 05/27/2014 - 08:19 | 4797836 Calculus99
Calculus99's picture

The USA is the blowback capital of the world.


Tue, 05/27/2014 - 08:19 | 4797838 ThisIsBob
ThisIsBob's picture

Well I wouldn't  buy anything from those cocksuckers either.

Tue, 05/27/2014 - 08:19 | 4797839 rgetty
rgetty's picture

Fuck the Chinese. grow some balls US GOV. stop allowing them to buy up property take away the smith field sale, could a US company buy a pork producer in China? Fuck No! kick them all the fuck out . They want to dump US bonds. go ahead but they wont, if they take a lose who cares, they are big boys they should know the risks with investing, stop whining.

Tue, 05/27/2014 - 08:51 | 4797906 espirit
espirit's picture

The old playbook suggests you let them in to build the infrastructure, then nationalize the asset and kick the useful idiots out.

But here in the USSA, I'm unclear who the useful idiots are.

Tue, 05/27/2014 - 08:37 | 4797898 youngman
youngman's picture

The question is will they sell the used stuff on Alibaba...or Ebay....I need to know to buy the IPO

Tue, 05/27/2014 - 08:43 | 4797909 negative rates
negative rates's picture

You'll need to know how to dig your own grave before too long.

Tue, 05/27/2014 - 08:39 | 4797903 NYPoke
NYPoke's picture

Well, if you want to crash the markets, requiring the entire (Chinese) financial industry to overhaul their entire I.T. structure...ASAP...should do it.


Not that I blame them.  However, when technology gets caught in politics, it rarely ends well, especially for an entire industry.  NSA/CIA are at fault, but that really won't matter when it all unwinds.

Tue, 05/27/2014 - 08:40 | 4797904 Ignorance is bliss
Ignorance is bliss's picture

This could be a good thing. Global trade was just a way to squeeze the worker. Let's start bringing business back to America.

Tue, 05/27/2014 - 08:44 | 4797914 espirit
espirit's picture

Doood, we sold them all our steel and replaced it with plastic trinkets.


Tue, 05/27/2014 - 08:51 | 4797944 Ignorance is bliss
Ignorance is bliss's picture

I asked the checkout girl at the local grocery store if she knew what Memorial day stood for. She had no idea. Its not just the government, this country has real issues. At some point we need to withdraw and start addressing real issues that effect Americans and not just international business.

Tue, 05/27/2014 - 09:03 | 4797978 espirit
espirit's picture

It's bad, real bad.

If that girl at the checkout was to lose use of her iThingy, her life would not be worth living.

Tue, 05/27/2014 - 10:20 | 4798195 Atticus Finch
Atticus Finch's picture

I asked numerous TSA agents if they knew what the Fourth Amendment of the Constitution was and I never found a single one who knew.

I asked one TSA agent if she knew what the Bill of Rights was. Her reply, "What's that?"

Tue, 05/27/2014 - 11:21 | 4798442 silentboom
silentboom's picture

In order to do that we would have to remove the regualtory handcuffs from our businesses which would allow us to produce things cheaply but regualtors are going the other direction.  In fact they're even arming the EPA.

Tue, 05/27/2014 - 08:43 | 4797910 highwaytoserfdom
highwaytoserfdom's picture

China has more engineers than population of US  I desperately want Huawei, fluidized bed coal plants, coal gassification, coal liquefaction. The military industrial offense (nothing to do with security or defense) department has done this.. Every US engineer that profited from this has given up security for freedom and has none.  The hegemony that gave Gates the PC OS..  , Google, Yahoo, Qualcomm  and allowed the theft of technology from the likes of  DEC, Motorola, Xerox, Bell labs.  have failed to make life better....

Just how much debt is the world going to float for this nonsense.


The Colder War and the End of the Petrodollar

Tue, 05/27/2014 - 08:45 | 4797915 q99x2
q99x2's picture

Bout time China dumps IBM and NSA-ware

Fuck You Zbigniew Brzezinski

Tue, 05/27/2014 - 09:48 | 4798030 forwardho
forwardho's picture

Bout time China dumps IBM and NSA-ware.

Too true, The article compleatly misses the fact that ALL  U.S. software comes with the handy nsa collection back door, and it is that back door that china and soon every other country will slam shut. Their sovereignty is being violated every moment of every day.

This is about itellectual freedom.

The right of people to keep or share their thoughts without every keystroke being saved in perpetuity.

Besides fat lazy U.S. consumers, who wants their every thought to be captured by an entity with the track record of u.s. .gov?

Tue, 05/27/2014 - 10:15 | 4798179 Atticus Finch
Atticus Finch's picture

Not to mention an independent internet being built right now by the BRICS.

Soon the US function will only be to sabotage the new Silk Road rail system running from China to Germany, the new independent internet and the BRICS bank, which is going to replace the IMF.

Sabotage is what the US does. Building new things? not so much.

Tue, 05/27/2014 - 08:45 | 4797920 JDFX
JDFX's picture

Currency Wars, Trade Wars, World Wars .


We're processing through stage 2. 




Tue, 05/27/2014 - 08:47 | 4797928 pepperspray
pepperspray's picture
“As the graduating Class of 2014, you stand at an important inflection point. You’re facing a new age being made possible by a new natural resource—data. I would assert that what steam was to the 18th century, electricity to the 19th, and hydrocarbons to the 20th, data will be to the 21st century,” Rometty said. - See more at:
Tue, 05/27/2014 - 08:53 | 4797948 intric8
intric8's picture

at this rate, nsa spying and the ukraine sanction fallout will change the course of technology

Tue, 05/27/2014 - 08:58 | 4797964 Ignorance is bliss
Ignorance is bliss's picture

IBM sales in China and the rest of the BRIC nations have fallen through the floor over the last year. The shift away from American technology has been on going for at least a year. IBM now has a new excuse why it will miss top and bottom line revenue numbers. IBM also planned on selling off their windows server division to Lenovo. The U.S. may want to reconsider that since we will be going to war with China, Russia, and the rest of the BRICS in the foreseeable future.

Tue, 05/27/2014 - 08:58 | 4797965 Everybodys All ...
Everybodys All American's picture

In the long run this is the best thing that could have happened to American freedom and liberty. Forcing IBM, Microsoft, Cisco to rid itself of the NSA is not something the American people in this country would ever be able to force on these companies especially with this administration. However, China is a big enough market to get everyone's attention. Now these companies are going to have to address fundamentally the growth and innovation that's missing and going forward they must compete like we use to expect from them all.

Tue, 05/27/2014 - 09:23 | 4798028 Omen IV
Omen IV's picture

yes - but think about it  - the Bill of Rights should stop the NSA in its tracks but not only is there no one to enforce the BoR provisions but the citizens cant change the government management either  - demo or rep is the same  -

only way to stop NSA is losing money by Ciscos / IBM et al - which is sick

Tue, 05/27/2014 - 09:40 | 4798074 813kml
813kml's picture

The Supreme Court should have cut the NSA off at the knees many years ago, but only corps have enough clout to get laws enforced or changed in the USSA.  It's good that high tech profits will take a huge hit, either they will force change or the USSA can print up some subsidies.  Worthless dollars drive every decision nowadays.

Tue, 05/27/2014 - 10:18 | 4798192 Spastica Rex
Spastica Rex's picture

only corps have enough clout to get laws enforced or changed

Everybody is always pointing out the bad parts of fascism - what about the good parts?

Tue, 05/27/2014 - 10:30 | 4798237 813kml
813kml's picture

Good point, that was kind of glass half empty.  Under fascism Americans won't have to waste time on thinking, which leaves much more time for TeeVee and porn.

Tue, 05/27/2014 - 09:34 | 4798056 BlackVoid
BlackVoid's picture

Noone will trust US again. Not until there is a revolution.

Tue, 05/27/2014 - 10:20 | 4798163 Döwnner
Döwnner's picture

Sad when so called Communists are helping the Capitalists to be more Democratic and Free, ain't it?


God, it  feels soo fucking great not be an American these days.  Every day it's popcorn day, every day some shit is going down in USSA.

Enjoy 'merikuns!

Your stupid and blind consumerism brought you Here and Today = The Fucking End of Your Nation. Fuck yeah! Burn MERICA, BURN!!!

Enjoy the few years of hedonism you people have. Go buy that new iPhone! You need it! Be gay, it's healthy.

When the killing starts in your country, God what a picture that will be. 'merikuans killing 'merikuans just to be able to have food on the table. 

Those goons in the Army and Police, those that think that somehow they Serve&Protect in 'Murica, will kill 'Muricans just so that their families have something to eat.

That's how the Commies did it in Eastern Europe. They starved everyone, and then choose a few and gave them food, and said to them:"kill anyone that is against us, they will steal your food otherwise"

Enjoy you bastards! The Whole Third World is enjoying the show!

Tue, 05/27/2014 - 10:32 | 4798249 silentboom
silentboom's picture

"Your stupid and blind consumerism brought you Here and Today = The Fucking End of Your Nation. Fuck yeah! Burn MERICA, BURN!!!"

and special thanks to the Federal Reserve who supplied the liquor at the party.

Tue, 05/27/2014 - 15:21 | 4799247 Raging Debate
Raging Debate's picture

Downner - There is a reason 1/3 people die in the next world war. You do not understand game theory. I wish all of you well but I see that some must remain misled and learn the hard way. Be aware of those who pretend as paper tigers. Enough said, I hold my tongue on some matters now.

Tue, 05/27/2014 - 09:24 | 4798020 GCT
GCT's picture

The companies brought this upon themselves and most here know it.  They sold their souls for the mighty US dollar, and got lucrative defense contracts for doing so, all on the back of the US taxpayer.  They have already got bailouts and most likely this will continnue.  What boggles my mind is this administrations wants to charge people around the world for hacking and we have our own cyber defense branch of the military now.  Hell it is even advertised on TV. I wonder what they are doing ?  Oh forgot hacking allies and enemies to protect the USA!!  What a crock!

I am not the sharpest tool in the shed but if my foreign company had US hardware, I would have tossed it immediately when the backdoors were discovered.  We oftentimes thump our chests and think we are superior but in the end China is a huge market for these companies and they screwed themselves. Now the US taxpayer will get fucked once again.  China has more engineers then the good ole USA and alot of the technology you carry on a day to day basis is already made in China, even the precious Iphone you all so worship is made there.  LOL China will just blow off patent laws and make it all themselves.  Hell our own big corporations actually designed and payrolled all those first class fab factilities in China, while fucking the American people over by closing fab facilities.  I love the USA but if this stupid ass administration thought they could do whatever they pleased without repercussions, they are fucking stupid.

Take a look from a different perspective this administration may well be doing this on purpose all in the name of social justice.   I do not think this administraion could give a rats ass about this country with that type of ideology.  Lets turn the USA into a third world country is the name of the intentional game.  All playing out right in front of us.  As more and more people have to depend on handouts they will never fight back to stop this shit.  There is no hope just alot of change coming.

Tue, 05/27/2014 - 10:08 | 4798157 Atticus Finch
Atticus Finch's picture

Why the focus on this Administration?

This has been going on since 1980 starting with the Reagan Administration. The sell out of this country has  been going on for 30 years.

I'm surprised that the US hasn't given them our most advanced weapons.

Those who off-shored American jobs are traitors.

Tue, 05/27/2014 - 11:58 | 4798615 WillyGroper
WillyGroper's picture

" Lets turn the USA into a third world country is the name of the intentional game."

That is it in a nutshell.

Tue, 05/27/2014 - 09:29 | 4798045 BlackVoid
BlackVoid's picture

Yes, all US-made HW / SW has a huge NSA backdoor.

Tue, 05/27/2014 - 09:55 | 4798114 pupdog1
pupdog1's picture

All of this kind of big ticket gear has a 1 to 2 year sales cycle. The evidence of this spy chip trainwreck is only just beginning.

Tue, 05/27/2014 - 10:45 | 4798230 Döwnner
Döwnner's picture


Behind the scenes, I bet not one bit of important shit the Chinese or Russians have is running anything 'Merikans these days.


If it's designed by 'Merikans, you can  bet that that hardware, if is up and running in China/Russia is only running in some institutions that are not really important.


I bet with all the advanced reverse engeneering the Chinese have aquired, they discovered all the backdooors that lead to NSA.

Heck, they might even have used those backdoors to misleads&manipulate and even enter the NSA.

See, that's one of the risk with this type of shit: you get a backdoor to enter, but if someone discovers your backdoor, they might be able to infiltrade into you fucking base using your own backdoor.

Great eh?!!!!


Imagine everyone, I mean 6 billion Internet users, today, all sending themselves messages like "let's kill the Messiah". Could you imagine the panic that would start at NSA headquarters?

The people of this planet, if they could somehow unite, could really have some great fun with the fucking 'merikans, without firing a single shot.


I think the terrorists have really won. 'Merika is so paranoid these days, a simple message that 'Merikans will die simply gets most 'Merikans all rilled up.

If I was some talibani fuck in a cave, I would post shit on JouTube just for the laugs: "kill all infidelzzzz from the Great Satan Amerika", "destroy the Chicago area", "send RPGs to our brothers holy warriors in Texas" etc...

God, the amount of lulz!!!

Tue, 05/27/2014 - 09:57 | 4798122 Duc888
Duc888's picture



Fuck 'em.  I hope this starts a groundswell and puts these hardware / software manufacturers all out of biz.  Reap what you sow bitches,

Tue, 05/27/2014 - 10:18 | 4798191 Atomizer
Atomizer's picture

[IBM] Israeli Business Machine, don’t forget the Crisco (greasing the wheel) routers.


Tue, 05/27/2014 - 10:22 | 4798204 ptolemy_newit
ptolemy_newit's picture

this is differently warfare!

it is obvious that Putin shared with China (snowden) information about the extent of NSA bugs into the China financial industry.


You can bet NSA can shut down any atm. Maybe Australia is only a test site.

Tue, 05/27/2014 - 10:32 | 4798247 Atomizer
Atomizer's picture

Who needs ATM banking when Sealy, and Gold/Silver prevail.

Tue, 05/27/2014 - 10:27 | 4798218 hardmedicine
hardmedicine's picture

remove high-end servers made by International Business Machines Corp. and replace them with a local brand."


isn't that "protectionism"?   Calling someone protectionist here is nigh upon calling them the N word  /s'


My question is when and how did the government propoganda machine persuade the American sheeple that making and buying products made in America was un-American.  Forget the price......if we paid more for the products we could afford to pay more for the wages and make more. I'm just so pissed off about free trade and how they got the American public to not only buy it but LOVE it. 

Tue, 05/27/2014 - 10:42 | 4798278 sessinpo
sessinpo's picture

China has the cheap laber and the technology. Why has no one (but me apparently) asked the question, "Why would Chinese banks use more expensive servers?"


hardmedicine   My question is when and how did the government propoganda machine persuade the American sheeple that making and buying products made in America was un-American.  Forget the price......if we paid more for the products we could afford to pay more for the wages and make more. I'm just so pissed off about free trade and how they got the American public to not only buy it but LOVE it.


I don't think there was really a public anti-American push about buying American products. Such things like NAFTA were sold on the idea of more jobs, which of course is false. I think Americans buy products based on economics. That generally rules most decisions. If I could afford to buy 100% American, I would. And don't bring up quality. Apparently, quality sucks no matter where it is made.

Tue, 05/27/2014 - 10:48 | 4798294 Spastica Rex
Spastica Rex's picture

how did the government propoganda machine persuade the American sheeple that making and buying products made in America was un-American

You'll never get to be rich yourself if you question the interests of rich people.


Tue, 05/27/2014 - 10:57 | 4798336 Oh regional Indian
Oh regional Indian's picture


Tue, 05/27/2014 - 11:16 | 4798426 CheapBastard
CheapBastard's picture

sessinpo is right. Good example of how economics drive actions... my [fairly wealthy] neighbor's wife keeps bashing China, Japan, India, and so on, complaing we 'should all buy American an support America."


... yet, they drive Avalon cars [and repaired by a German mechanic] , her dresses mostly made by Ralph Lauren from China, wears perfume [Hecho en Paris] and his shirts made in Indonesia, Honduras, China or Bangladesh. Their house was built by Mexicans, designed by an Argentinian architect and they buy most furniture stuff at....gulp...IKEA.

So ... There it is.

Tue, 05/27/2014 - 10:28 | 4798225 Comte d'herblay
Comte d'herblay's picture

Funnnny..."considering the quality of the Windows 8".........yada,


How this dog ever got to be embedded on new computers, by the tens of millions is testament to the inefficiency, arrogance, and lack of concern for the customer when a near monopoly exists. 


Tue, 05/27/2014 - 10:29 | 4798233 zipit
zipit's picture

Confucius say: "Yu weap wat yu so, amewika."

Tue, 05/27/2014 - 10:36 | 4798256 sessinpo
sessinpo's picture

zipit    Confucius say: "Yu weap wat yu so, amewika."


More likely he says, "Why do stupid Americans use my name to defend their stupid ideas?"

Tue, 05/27/2014 - 10:34 | 4798253 Atomizer
Atomizer's picture

NAFTA and a presidential blowjob Clinton.

Tue, 05/27/2014 - 10:39 | 4798260 silentboom
silentboom's picture

This is just an excuse for protectionism.  China builds the parts that go into these servers and routers no matter what the brand.  These are like sactions on us.

Tue, 05/27/2014 - 10:54 | 4798325 Atomizer
Atomizer's picture

Globalisation will continue with us or without. The colored man-child started sanctions conflict. His operations were revealed. 

Tue, 05/27/2014 - 10:38 | 4798265 RevRex
RevRex's picture

Bush's fault, since it happened during the Obowelmovement.......the Socialist Semite democrat Media has already proclaimed how long until ZH Libertarian voters start repeating it as the gospel? You know, like "both parties are the same"?

Tue, 05/27/2014 - 10:50 | 4798295 TalkToLind
TalkToLind's picture

China's own central bankers will put and end to this in short order.  Changing the server infrastructure of an entire banking system is much more complex than putting out press releases and you can't print renminbi when the system is down.

Tue, 05/27/2014 - 10:48 | 4798299 slavador
slavador's picture

I remember back in 1995 my peers at work telling me that the future was in American technology whilst gold, energy and other raw materials were going to become basically free. It turns out that 19 years later the biggest markets will no longer buy even the finest American tech (CSCO, IBM, MSFT) and American Gold is purchased with great enthusiasm. Wish I had oriented myself more towards gold and less towards tech.

Tue, 05/27/2014 - 10:56 | 4798329 I Write Code
I Write Code's picture

China got abacus, don't need IBM punched cards.

Tue, 05/27/2014 - 11:03 | 4798365 Dre4dwolf
Dre4dwolf's picture

 . . . half the ports on their switches wont even work unless its cisco made, their banking network will just crash every 40 minutes.

Tue, 05/27/2014 - 11:06 | 4798380 CheapBastard
CheapBastard's picture

Some might call this a form of "Blowback" as described by Chalmers Johnson:

Tue, 05/27/2014 - 11:21 | 4798439 Chuck Knoblauch
Chuck Knoblauch's picture

Little prick John Chambers saw this coming a few weeks ago when he vilified Obama's NSA.

Yes John, you are a punk, and always will be the NSA's little bitch.

Tue, 05/27/2014 - 13:04 | 4798831 walküre
walküre's picture

One way to retaliate this would be to "kindly" ask AAPL et al to stop producing at Foxconn and re-relocate Chinese production of all electronic devices back to the US.

Another approach could include Walmart and Target and increase import duties on all made in China items until it's cheaper for them to setup shops in Uganda or Ecuador etc.

Should have happened years ago anyway. China's elite is living on borrowed time and they know it. Hence the massive amount of real estate purchases all across the Pacific Westcoast and elsewhere.

When China blows up, nobody in their right mind wants to be close to what happens next.


Tue, 05/27/2014 - 14:50 | 4799120 reTARD
reTARD's picture

ROR! Welcome to the NWO of Sanctions 2.0. Gotta love it when collectivists fight collectivists.

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