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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
GetZeeGold's picture

 

 

Crap.....thought it was just a rumor.

 

Tue, 03/20/2012 - 08:41 | 2272697 HedgeAccordingly
HedgeAccordingly's picture

wait china? who? http://hedge.ly/gFWVSm

Tue, 03/20/2012 - 08:53 | 2272727 Oh regional Indian
Oh regional Indian's picture

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
number cruncher's picture

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
kridkrid's picture

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
mrgneiss's picture

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
Spirit Of Truth's picture

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
dwdollar's picture

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
RocketmanBob's picture

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
Spirit Of Truth's picture

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
Sudden Debt's picture

Operation: "We've got it under control"

Tue, 03/20/2012 - 08:42 | 2272699 chinaguy
chinaguy's picture

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
ReallySparky's picture

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
Born-Again Bankster's picture

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
LongSoupLine's picture

Year of the Drag-on...

Tue, 03/20/2012 - 08:50 | 2272732 Oh regional Indian
Oh regional Indian's picture

Long Soup, that was hilarious! :-)

ori

Tue, 03/20/2012 - 08:56 | 2272751 LongSoupLine
LongSoupLine's picture

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
GeneMarchbanks's picture

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
Doubleguns's picture

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
GetZeeGold's picture

 

 

Maybe Iran will just surrender.....ok......probably not.

 

Tue, 03/20/2012 - 09:04 | 2272776 Quinvarius
Quinvarius's picture

No.  You can be sure the US will be hit over Iran.

Tue, 03/20/2012 - 10:40 | 2273093 Doubleguns
Doubleguns's picture

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
LikeClockwork's picture

No tanks? BOOORRRIIIIIINNGGGG.

Tue, 03/20/2012 - 08:47 | 2272711 DormRoom
DormRoom's picture

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
Global Hunter's picture

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
DormRoom's picture

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
Shizzmoney's picture

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
kridkrid's picture

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
sessinpo's picture

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
Vince Clortho's picture

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
dick cheneys ghost's picture

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
Sudden Debt's picture

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
kralizec's picture

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
williambanzai7's picture

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
JohnKozac's picture

Do you mean soup? I read there is a severe shortage of shark fin soup in Beijing.

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