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Andy Lees On China Coup Rumors

Tyler Durden's picture




 

Earlier this morning, there have been some completely unfounded speculation of a Chinese coup. And this is all. To get some additional color, we go to Chinese macro expert Andy Lees, who incidentally has have left the churn factory known as UBS, and is now at AML Macro Ideas. Here is his take.

I am an hour and a half behind the market, but there has been some chatter of a coup in China. An article on the web says "Over the night of March 19th and early morning of March 20th, Beijing local time, a message about a large number of military police showing up in Beijing spread widely across microblogs in mainland China. The key figures in the action are said to be Hu Jianto, the head of the CCP, Wen Jiabao, the premier; Zhou Yongkjang who has control of the People's Republic of China's police forces; and Bo Xilai who was dismissed from his post as the head of Chongqing City Communist Party on March 15th by Wen Jiabao after a scandal involving Bo's former police chief". The article does not really say anything beyond that. Some people have dismissed the troops as security for a North Korean delegation. It could also be to head off any demonstrations against the fuel price hikes.

 

A second article says that around New Year's day 2 airforce officers were arrested on suspicion of plotting a coup, and a nuclear submarine on potrol was ordered back to port because they were thought to have links with the plotters.

 

There may be absolutely no truth in any of this, but if there is the possible consequences could be enormous for the global economy, for Chinese economic policy response - (remember the cheques that Saudi Arabia wrote to buy calm in the Arab Spring) - and for market volatility generally. 

So there you have it: in short - it may be too early to discount anything, especially in the aftermath of the Bo Xilai party coup. One thing is certain, do not expect to find any media confirmation or validation of these rumors.

 

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Tue, 03/20/2012 - 08:39 | 2272692 GetZeeGold
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Crap.....thought it was just a rumor.

 

Tue, 03/20/2012 - 08:41 | 2272697 HedgeAccordingly
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wait china? who? http://hedge.ly/gFWVSm

Tue, 03/20/2012 - 08:53 | 2272727 Oh regional Indian
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Hah! At least it is a rumor fit for March 20th, Spring Equinox.

And if this is just the rumor mill, what does the rest of the day portend?

Awesome. More cracks in the Dyke!

Who? Tsing-Tao!

ori

/if-i-ever-saw-a-sign/

Add-on : I'm clearly getting soft. Of course, both China AND Russia will face all kinds of trouble, because they will not let NATOUSA bomb Syria to democracy.

Tue, 03/20/2012 - 09:07 | 2272783 number cruncher
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well if true that is the largest black swan event to hit the earth yet... the real economic data comes out of china

Tue, 03/20/2012 - 09:12 | 2272811 BW
BW's picture

So you think your going to protect Iran, China?

Iranian oil bourse starts today not priced in USD's.

Tue, 03/20/2012 - 09:22 | 2272843 kridkrid
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SWIFT action happens 3 days earlier.  When does the the Enterprise arrive?  The russians show up in Syria, 3 aircraft carriers head to the region, Iran gets cut off from the international banking community, Iran begins to sell oil not priced in FRNs...get ready, cause it's coming.

Tue, 03/20/2012 - 09:31 | 2272874 mrgneiss
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If there is a coup anywhere, it might be where the government has covered up 60 + years of alien contacts,  Ex Canadian Defense Minister admits the existence of aliens and UFO's:

http://poleshift.ning.com/forum/topics/breaking-the-cover-ups-disclosure-is-welcoming

 

Wed, 03/21/2012 - 01:54 | 2275949 Spirit Of Truth
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http://thespiritoftruth.blogspot.com/2012/03/rumors-of-military-coup-in-...

"Behind the mask of diplomatic and political cooperation and partnership with the United States and Europe, the current Russian leaders are following the strategy of their predecessors and working towards a 'New World Order'. When the right moment comes the mask will be dropped and the Russians with Chinese help will seek to impose their system on the West on their own terms..." - Anatoliy Golitsyn's Memorandum to the CIA: FEBRUARY 1993 - The Importance Of The Strategic Factor In Assessing Developments In Russian And Communist China

Tue, 03/20/2012 - 09:24 | 2272844 dwdollar
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LOL... This is America's wet dream... to engage them militarily, instead of, you know, becoming more productive and competing that way.

Tue, 03/20/2012 - 10:17 | 2273001 RocketmanBob
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You don't really believe that, do you? Because it's a pretty absurd scenario to posit...

One doesn't try to militarily engage a country who's army is an appreciable fraction of the entire US population. And nuclear weapons are out of the question...

A Naval encounter would be one thing, perhaps, but there's no way the US is going to get into a shooting war with the Chinese.

With all due respect...

Tue, 03/20/2012 - 10:32 | 2273063 UGrev
UGrev's picture

You must be forgetting a few "conflicts" where we did engage the Chinese. 

Tue, 03/20/2012 - 11:26 | 2273298 Spirit Of Truth
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A coup in China at this point would fit my global bipolar disorder hypothesis.

Let's hope this is just a bogus rumor, however I believe ultimately Jeff Nyquist's warnings will prove true about the stupidity of dealings with China: http://www.youtube.com/watch?v=621kb9seuf8

Anytime the Communists want now they can pull the rug out from under global Capitalism and this has been the strategy all along.

Tue, 03/20/2012 - 08:47 | 2272717 Schmuck Raker
Schmuck Raker's picture

It IS just a rumor.

If there's an 'Official Denial' you can go ahead and freak right the fcuk out.

Tue, 03/20/2012 - 08:54 | 2272743 Sudden Debt
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Operation: "We've got it under control"

Tue, 03/20/2012 - 08:42 | 2272699 chinaguy
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repost

Yes, I received a 1/2 dozen frantic e-mails from friends in China last night seeking offshore news....

And if you think that the media here would run the story with out official sanctions...then read this...If the white house says "no story"...they pull the story

http://www.theblaze.com/stories/why-is-the-story-about-malia-obama-vacationing-in-mexico-disappearing-from-the-web/

 

Tue, 03/20/2012 - 08:53 | 2272730 ReallySparky
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I saw the story yesterday on Drudge. Link is dead and gone now. Our news is censored.

Edit: just checked Drudge has it up again with a different link now. Wonder how long until that link is dead.

Tue, 03/20/2012 - 10:44 | 2273113 Born-Again Bankster
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Agree about media censorship, but not hard to see why the President wouldn't want his daughter's travel plans going viral.  25 secret service agents ain't nothing to the Mexican cartel. 

Tue, 03/20/2012 - 08:42 | 2272701 LongSoupLine
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Year of the Drag-on...

Tue, 03/20/2012 - 08:50 | 2272732 Oh regional Indian
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Long Soup, that was hilarious! :-)

ori

Tue, 03/20/2012 - 08:56 | 2272751 LongSoupLine
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yeah ori, I'm good for surges of brain dopamine once in a blue moon...I'm no Million Dollar Bonus though.  That guy's got mad skills.

Tue, 03/20/2012 - 09:04 | 2272774 GeneMarchbanks
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If MDB doesn't 'friend' me on ZH chat I'm going to be pissed for weeks...

Tue, 03/20/2012 - 09:15 | 2272821 kridkrid
kridkrid's picture

No Soup Line... I was floored yesterday when my local sports radio station had an ad for SNAP... It was so upbeat... it PITCHED so hard for people to find out if they qualify for SNAP... and there was a local number to call.  Who is paying for that ad?  45 million and climbing... and an ad blitz to increase those numbers even further.  

Tue, 03/20/2012 - 09:27 | 2272859 LongSoupLine
LongSoupLine's picture

krid, now that's recovery.

Tue, 03/20/2012 - 09:50 | 2272934 kridkrid
kridkrid's picture

sure... my 25 minute commute is generating ad revenue so they can keep giving me my distraction.  Of course when I consider that my taxes are going towards the spots that are encouraging more people still to go on food stamps... well... that kind of interupts my distraction.  I guess I'll have to stop listening to the radio.

Tue, 03/20/2012 - 10:31 | 2273062 Doubleguns
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Just making sure the bread and circus gets properly distributed to ensure maximum distraction from what the other hand is doing!!!

Tue, 03/20/2012 - 08:42 | 2272705 ixus
ixus's picture

Bo Xilai  was the first thing that came to mind for me. 

If there's a coup, you can be sure the US will hit Iran.

 

 

Tue, 03/20/2012 - 08:45 | 2272714 GetZeeGold
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Maybe Iran will just surrender.....ok......probably not.

 

Tue, 03/20/2012 - 09:04 | 2272776 Quinvarius
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No.  You can be sure the US will be hit over Iran.

Tue, 03/20/2012 - 10:40 | 2273093 Doubleguns
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And the homeland security budget will increase exponentially while citizens rights will decrease in kind (but its for your protection, its for the kids.... Ad Hominem)  Think there is a plan in the works?

Tue, 03/20/2012 - 08:44 | 2272708 ixus
ixus's picture

Oh, and didn't Art Cashin mention a power stuggle last week?

Tue, 03/20/2012 - 09:09 | 2272797 bugs_
bugs_'s picture

Yes Art gave this to us last week.

Tue, 03/20/2012 - 08:45 | 2272710 LikeClockwork
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No tanks? BOOORRRIIIIIINNGGGG.

Tue, 03/20/2012 - 08:47 | 2272711 DormRoom
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There is no way this is true.  Most of the powerful Chinese generals are gettting mega rich off control or stakes in Chinese state owned companies.

 

The current regime ensures their wealth & prosperity will grow.

 

Also the Epoch Times is very biased against the regime.   The paper is a mouth piece , and communication tool of the Falun Gong movement, which has been crushed in China.

Tue, 03/20/2012 - 08:47 | 2272720 Global Hunter
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as Russian troops land in Syria it would make sense to try and destabilize China from the NATO and UN's perspective to keep them focused internally rather than helping Iran/Syria.  Maybe some of those generals just cashed a cheque?  Maybe its not true but don't you get the sense the lid is blowing off and as such how can you confirm or deny?

Tue, 03/20/2012 - 08:54 | 2272740 azzhatter
azzhatter's picture

just feels like something totally not good is coming, can't even identify from where

Tue, 03/20/2012 - 08:58 | 2272746 DormRoom
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Uhmm.. If NATO & the US were exposed in coordinating a coup there would be huge blowback.  And I don't believe Obama, or Merkel are foolish enough to make such a move, given all the other issues on the table.

 

The easiest explanation arises from denying the premise of the Epoch Times article, which Andy Lee references, as hearsay, and a wish fulfillment echo chamber.

 

What's interesting is how the financial market reacts to a slowdown in China, and the probability of the commodity bubble popping.

 

http://www.bloomberg.com/news/2012-03-20/china-steel-growth-has-flattene...

 

Tue, 03/20/2012 - 09:12 | 2272804 Shizzmoney
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TBH, I bet any coup that came out of China would be grassroots, and probably a suprise to Western Governments, who have their minds onto other things.

Remember, there is a subversive internet culture in China (which Nouriel alluded to in his tweets like it was news; sht has been a moonlanding for 4+ years).  Television streaming, Twitter, even BitTorrents to an extent.....all improved under Chinese innovation spurred on by an oppressive government when it comes to speech and content rights. 

Hell, TVAnts was invented just so Chinese people could watch Yao Ming 4 times a week (instead of the 1 game/week State TV would show them).

Tue, 03/20/2012 - 09:29 | 2272868 kridkrid
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Who is going to expose them?  The same people looking into Building 7 or the false narratives provided for our military excursions?  I used to think the way you do... I used to hide behind "Occam's Razor" for all sorts of things.  It doesn't mean that every rumor has to be true... but nothing is more absurd than "fire brought down building 7".  

Tue, 03/20/2012 - 10:10 | 2272987 sessinpo
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DormRoom

There is no way this is true.  Most of the powerful Chinese generals are gettting mega rich off control or stakes in Chinese state owned companies.

 The current regime ensures their wealth & prosperity will grow.

 

Comment:

Until you reach a point where the generals are powerful and bold enough to decide I will take power instead waiting for the beaurocrats give it to me. All I need is a little media and general population support.

Tue, 03/20/2012 - 10:24 | 2273019 Vince Clortho
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Don't discount human nature.

Wealth and power breed Greed.

You can never get enough once you get a taste.

I am sure some of those Generals feel they are not getting their proper share of the pie.

Tue, 03/20/2012 - 08:46 | 2272715 dick cheneys ghost
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Conceived of and underwritten by Wall St Banks?

Tue, 03/20/2012 - 08:47 | 2272721 Global Hunter
Global Hunter's picture

was thinking that exactly

Tue, 03/20/2012 - 08:49 | 2272724 bigwavedave
bigwavedave's picture

just a distraction for the silver smackdown today

Tue, 03/20/2012 - 08:52 | 2272736 Sudden Debt
Sudden Debt's picture

Let them run it down! I've got a trigger finger that goes at 28$!!

SELL IT CHEAP!!

TO ME!!!!

 

Tue, 03/20/2012 - 08:51 | 2272733 Sudden Debt
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I've heard that the Mongols also had a near rumor Coup this morning!!!!

DOW 3000 HERE WE COME!!!

Tue, 03/20/2012 - 08:56 | 2272749 RSDallas
RSDallas's picture

Where there is smoke there is often fire.

Tue, 03/20/2012 - 08:57 | 2272754 kralizec
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Maybe Hu shut down part of the city so a bunch of hookers could get expressed to CCP HQ!

Tue, 03/20/2012 - 10:17 | 2273002 williambanzai7
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Why bother when you can just go to a barber shop after 10?

Tue, 03/20/2012 - 10:52 | 2273147 Doña K
Doña K's picture

I am not sure if many westerners know the meaning of this! 

Tue, 03/20/2012 - 09:00 | 2272763 JohnKozac
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Do you mean soup? I read there is a severe shortage of shark fin soup in Beijing.

Tue, 03/20/2012 - 09:03 | 2272769 Quinvarius
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WW3 will find a way.  No matter how it happens, China will not allow the US to control its flow of Iranian oil.  One way or the other, China will go to war over it.

Tue, 03/20/2012 - 09:05 | 2272778 Shizzmoney
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This does not bode well for iStuff; after all, communism and it's cheap labor is a corporate CEO's best friend.

Tue, 03/20/2012 - 09:29 | 2272784 Monedas
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The fuse is burning from Tunisia towards Pyongyingyang ! Onward Christian/Jewish/Free-Asian information revolution ! Communists and Islamo-Fascists beware ! Hitch up your hernia harness and change out you colostomy bag and tighten your seat belt !   Monedas  2012   An Egyptian flea grazing his sector of a camel's scrotum has to make the trek to the camel's eyes to have a drink of tear every 15 minutes ?  Sometimes I make up shit....you decide !

Tue, 03/20/2012 - 09:48 | 2272927 oldman
oldman's picture

Monedas,

You're a funny guy---keep making shit up just to keep the fascists off balance.

Oh, yeah----keep all of these rednecks out of South America---there bringing fear and greed here like the plague

we want to keep the softness---you know, generosity and culture                      om

Tue, 03/20/2012 - 09:09 | 2272794 FubarNation
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Curious question here.  What happens to the debt you hold for a country that declares war on your ass?

 

Tue, 03/20/2012 - 09:18 | 2272830 Mitzibitzi
Mitzibitzi's picture

If you're the Bank of England, you keep collecting the interest payments for the duration of the conflict. We always have before!

In general, though, I think the victor tends to make the rules, in that regard.

Tue, 03/20/2012 - 09:28 | 2272865 writingsonthewall
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You can ask Germany (1938).

Tue, 03/20/2012 - 09:11 | 2272805 RagnarDanneskjold
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The original rumor (Monday evening beijing time) was that Bo Xilai was detained and questioned. I covered the weibo rumor and have a screenshot of it, it is since deleted.

 

Tue, 03/20/2012 - 09:22 | 2272841 Mitzibitzi
Mitzibitzi's picture

Someone just pointed out, on another forum, that tomorrow is a 'bookend' date of potential occult significance (if you use the day / month / year format) - 21-3-12. And right on the Spring Equinox, to boot.

Don't really believe in that crap, myself, but it does make ya go 'Hmmm', I suppose.

Tue, 03/20/2012 - 09:29 | 2272867 SMG
SMG's picture

Chumbawumba pointed out on an earlier thread that the skull and bones number is 3 2 2, ie 3-22.   We'll see in a couple days.  It's all just speculation until it happens anyway.

http://en.wikipedia.org/wiki/Skull_and_Bones

 

 

Tue, 03/20/2012 - 10:49 | 2273137 WillyGroper
WillyGroper's picture

WB7--Brown, Bro, Harr

Tue, 03/20/2012 - 09:22 | 2272842 Badabing
Badabing's picture

will this affect the i-shit coming out of china? dam and appl just hit 600!

Tue, 03/20/2012 - 09:25 | 2272852 RoadKill
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Housing prices falling in most markets. Stocks off 20% from recent highs and off 1/3rd since 2007, significant inflation in food and fuel which still accounts for 50% of a normal families' income, unrest and repression in rural areas, political corruption and GDP growth falling to 5%. China is a powder keg that could bloe at anytime.

Never understood the people that expect tje China miraclr to go on uninterrupted for another 20 years.

Tue, 03/20/2012 - 09:26 | 2272856 BobRocket
BobRocket's picture

Debts and War - AFAIK any debts between two nations that go to war are void however they may be resurrected at the end in the form of reparations, it depends who wins

 

Tue, 03/20/2012 - 09:30 | 2272871 GMadScientist
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What's worse than a Red Army? A rogue Red Army!

Tue, 03/20/2012 - 10:06 | 2272979 Terminus C
Terminus C's picture

the rouge army is the worst of all.

Tue, 03/20/2012 - 09:30 | 2272873 williambanzai7
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WISDOM OF HU FLUNG DUNG

Tue, 03/20/2012 - 09:39 | 2272896 Bubble
Bubble's picture

For all the people based in HK to keep their finger on the pulse of rubber dogpoo manufacturing. None of them actually have a clue what's occurring in China....the brasses of wanchai yes, the politburo no.

Tue, 03/20/2012 - 10:13 | 2272976 williambanzai7
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Actually, real Hongkies stear clear of Wanchai in favor of Lan Kwai Fong. Wanchai is for expats and SE Asian hotties.

No signs of any China coup in the noodle shop downstairs.

But the events of last week are being covered extensively in the local media and as a China watcher of sorts, I would say the public dressing down of Bo last week caused a great big double take. The contentious local elections in HK are also causing eye brows to raise.

This is typically a yawn but suddenly very interesting.

Tue, 03/20/2012 - 09:41 | 2272900 chindit13
chindit13's picture

Let me add that I won't dignify the rumors that former Chongqing City CP Chief Bo Xilai's wife is under arrest for corruption and for having ordered the murders of people who threatened to disclose all the kickbacks and commissions she received on construction projects in Chongqing.  Furthermore, it is absurd that this woman, Gu Kailai, a brash lawyer with a taste for money (and who bought her son a brand spanking new Ferrari on her husband's public servant salary) even threatened Chongqing Vice Mayor and former Police Chief Wang Lijun, who subsequently sought political asylum at the US Consulate in Chengdu. 

It's all probably just a misunderstanding, which is why all references to it have been removed from the internet.

 

Tue, 03/20/2012 - 09:42 | 2272907 LFMayor
LFMayor's picture

Brak Schwan, Bitchez

Tue, 03/20/2012 - 10:00 | 2272960 Sweet Chicken
Sweet Chicken's picture

lulzzz well done.

Tue, 03/20/2012 - 09:43 | 2272914 mc_LDN
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Black Swan

Tue, 03/20/2012 - 10:27 | 2273041 hyperbole2000
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When my father entered the Korean theatre on the shores of the Yalu River, the border  between China and Korea, just before the Red Army crossed over the river to engage UN forces.

My father went backwards for his entre tour of duty.  On the rare R&R opportunities, his poker mates all had new faces.

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