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China Bail Out Europe? Quite The Opposite Actualy, As Chinese Banks Cut European Exposure
Hardly a week passes without some washed out, discredited legacy media outfit bringing up the "China will bail out Europe" rumor from the dead if only for a few minutes, just so the robots which have now shifted from stocks to the EURUSD, ramp the currency higher and stop out the weak housewife hands. So while we know what the wishful thinking within the status quo (and those who wish to receive its advertising dollars) is, here is the reality. From Reuters which translates China's Financial News: "Chinese banks and companies in the northern port city of Tianjin have cut their exposure to Europe as the euro zone debt crisis festers. In a recent survey of 53 banks and 15 firms done by the local foreign exchange regulator, 11 banks said they had cut or stopped trade finance for European countries with high debt risk, suspended derivatives business with European banks, cut or stopped lending to foreign peers, particularly those from Europe, the newspaper said." Isn't this a little contrary to an atmosphere of mutual goodwill if not mutual bail outs? "They also reduced the issuance of euro-denominated wealth management products as a weakening euro resulted in negative earnings last year. The pullback by Chinese companies comes as European leaders have appealed to the Chinese government to support debt bailout funds. Although Chinese leaders have expressed confidence in European nations, they have also refrained from making firm financial commitments, urging Europe first to take further steps on its own." But why is Tianjin important: "Europe is Tianjin's second-largest exporting destination only after the United States. But local exporters are trying to sell more domestically or venture into emerging markets to cut their reliance on the euro zone, the newspaper said." Great work Europe: by slowly going broke, you are implicitly promoting the development of the Chinese middle class. And for that general act of goodness for humanity, well Chinese humanity, we salute you.
Since September, Chinese companies have typically paid their import bills quickly by buying foreign currencies, as tightening liquidity overseas has almost doubled their funding costs, according to the survey.
On the whole, Chinese banks have limited exposure to the euro zone debt crisis, it added.
The euro zone must agree and approve a 130-billion-euro ($170 billion) bailout package with Greece before Feb. 15 to allow time for complex legal procedures involved in the bond swap to be completed in time for a March 20 bond redemption.
Failure to strike a deal risks pushing Athens into a chaotic debt default that could threaten its future in the euro zone and worsen the crisis.
And further confirming that once the market shortly reverts back to asking just who it is that will rescue Europe (because despite what is happening in Greece every day, Europe is still in dire need of rescuing, especially now that there is again stigma associated with LTRO borrowing), they can forget China is the following piece from the WSJ, where we learn that the IMF is now literally begging China to bail out itself so it can bail out Europe next:
China should be prepared to sharply stimulate its economy if Europe's growth falls more than anticipated, the International Monetary Fund said, adding to expectations that Beijing could turn to spending if conditions significantly worsen.
In its China economic outlook report released on Monday, the IMF urged China to run a deficit of 2% of GDP rather than looking to reduce the country's deficit as planned, given the uncertainty in the global economy.
If Europe's problems turned out to be worse than expected, China should hit the fiscal gas pedal harder. In that case, "China should respond with a significant fiscal package" of about 3% of GDP, the IMF said, including reductions in consumption taxes and new subsidies for consumer-goods purchases and for corporate investments in pollution-control equipment.
However, the IMF warned that Beijing should execute any fresh stimulus through its budget rather than the banking system. China used a four trillion yuan, or about $635 billion, stimulus package in 2008 to help blunt the impact of the financial crisis, in large part through bank lending. Economists now worry China's response to new economic threats could be hobbled if a significant slowdown in growth leads to bad debt on the balance sheets of China's major state-controlled banks.
China has room to spend. Its deficit last year came in at an unexpectedly low 1.1% of GDP, according to Wall Street Journal calculations, though the figures are subject to considerable revision. A number of economists within the government and in the private sector say spending could help reduce China's reliance on monetary stimulus and help the government transition to a more consumer-driven economy.
Actually, Wall Street is wrong as usual: if anything last night's RBA data confirmed that Chinese inflation, contrary to goal seeked Excel data from the PBOC, is still running quite high, and that not only will the government not engage in monetary easing any time soon, but any fiscal stimulus miles away. Which is certainly far closer than where a European bailout by China would be.
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Rots of ruck Europe.
The Careless Whisper Quote Of The Day & Threadjacking
Fuck you, you vulture-fund pinkwashing piece of parasite shit, funneling funds to our WORST enemies? and investing in gay-murdering regimes around the world. ...."steerpike66" in a comment on youtube under a commercial by Lloyd Blankfein supporting "marriage equality". VIDEO:
http://www.youtube.com/watch?v=cSv5bXC2ANg
he "supports love & family". long walks on the beach, puppy dogs, and gov bailouts.
OK, let me get this str8. Europe wants to invade, rape and plunder Syria and iRan. And it wants China to pay for it, and Russia to send gas to keep the eurosheeple warm and cozy and in do-not-riot mode????
Sounds like a plan to me.
china buying up the crude this morning? http://hedge.ly/xLjsso
Yep. glad I got in before they did. More to come for sure.
AHHH HA HA HAA! Hey no worries though! Apparently GREAT news for US bubble equities!
LMFAO!
I am not worried about this because China will bailout Europe
REALLY, youre sure of that? Ok, so THEN what? Sit around, and wait for another bailout, because thats just what has to happen? Sorry, I dont buy the 'endless bailouts' nonsense at all.
you dont buy it, as in you dont believe it
or
you dont buy it, as in you havent been buying into it
pick carefully, crazy man
Bravo....
Abs correct about china inflation RBI signal link
Me Chinese, Me play Joke
There no bailout! Now you go broke!
LOL! Hey can you believe this PATHETIC state of affairs as everyone is reduced to hoping CHINA will come fucking bail them out as their last resort? Utter insanity! We are ruled by LUNATICS...and I guess we deserve it!
The fact that Merkel left Beijing with only a veto on Syria and PM Wen telling her that Europe has to save itself ought to have made it clear China isn't interested.
But cant we just keep hyping the rumor of imminent Chinese bailout miracle at any moment? Sure hate to see stocks go red, then we'd be in real trouble ya know?
EURUSD still skyrocketing!
Greek ills are cured. Take two bailouts and call me in the morning.
And inverse-reversal has been made, as equities also follow up! Mindless euphoria once again RULES!
"legacy media"
Nice... I believe that better describes them. The term "MSM" no longer applies since they are no longer the mainstream.
Cannot believe IMF can publish dooming report about China in order to ask China to help Europe.
The arrogance of European-run IMF must be retarded if they think they can blackmail China in such way
Blackmail? Casus belli for the Euro-sheeple is more like it. (same thing as with the "greedy" Germans who won't help a poor PIIGgie)
The Chinese are fine strategists and tacticians sitting on a mountain of fiat treasures, as lords of surplus trade with both Eurozone and USA. Germany anf France BOTH have annual trade deficits with China of 20 billion E. The USA has an absymal mega deficit in hundred of billions of USD, 300+, and forever growing.
So who is top dog in world trade? And who is key player in currency war...?
Who can blow hot and cold on all who want its support as #1 reserve or as #2 sub-reserve?
Who can kick US butt when it tries currency war to leverage US petrodollar hegemony on China's imports; by instilling commodity inflation against the fixed Yuan peg?
China is sitting on a volcano at home of repressed consumer sentiment facing inflation and now a looming RE bubble.
But its still less in hell than debt laden first world. Expect China to blow hot and cold as suits its tactical and strategic interests.
They are nobody's opium doped servants anymore; on the contrary they export their dope now! Time stays their best friend...And time is the line of tomorrow's new rising sun economy.
Why would China come in now when they can wait for the crash and get everything from companies to ports for pennies on the dollar?
In fact, theyre in perfect position to speed up the crash.
All they have to do is wait us out while we do ourselves in.
Nobody knows for sure, what the Chinese really do. But one thing is clear: the Chinese rather help the Europeans than the US. That alone is bullish for the EURO as we can see.
As I said before:
1. If Greece lefts the Euro: bullish for Euro
2. If there is somekind of aidpackage for the Greek: bullish for Euro
The US-Petro-$ system is about to end. That's it. End of story.
Yes it is. And when that happens, europe will once again become a caliphate. It already is in many places.
The Netherlands will become Western Europe's first majority-Muslim nation by 2015.
fucking terrifying.
China will indeed bail out Europe once they decide to hand over their trade secrets, especially Germany. The only condition for the bailouts.
China is trying desperately to increase their quality and supposedly one requirement is for several European companies to hand over their secrets or it is a no deal.
China does not need those "secrets". China now has the upper hand.
It is China that now holds the high tech ace of spades. They have reverse engineered several recovered -ahem- "unidentified" objects.
Chinese bankls are cutting their dividends, where would the cash come from?
http://investinginchinesestocks.blogspot.com/2012/02/dividend-cuts-at-chinese-banks-chinese.html
A "Made in China" printer?
I'm not sure what to think of this comment.
Well then, what are your thoughts on the comment above you, since you're not sure what to think about your own?
Europe is China's #1 export destination. If the EU fails, exports collapse and the Middle Kingdom may be in trouble.
Read Currency Wars by Rickards:
http://www.amazon.com/Currency-Wars-Making-Global-Portfolio/dp/159184449...
China will be surpassed US this year to become EU's no.1 export market.
Keep trying
L0L!!!
then again, it may not, riiiight...?
In a bipolar world, with China and minions sitting on one pole, and the U.S., Europe, and minions sitting on the other, where will we find Russia? Does it not have to boil down to just such a bipolar state of affairs in the end? At least when Europe and the U.S. default or inflate away their debt?
As a Chinese it is an insult to keep hearing about us bailing out Europe.
As an American it is insulting to be bailing out Europe through the back door; and you can definitely forget the front door.
This template applies to US / EU / UK / China et al..
OFFICIAL: We are in GOOD shape
UNOFFICIAL: Their SHIT is so bad its actually as bad as ours if not worse.
OFFICIAL: We are in full control
UNOFFICIAL: They are as clueless as we are.
OFFICIAL: We have good continguency plans to cover all events.
UNOFFICIAL: Only 3 million people in New Zealand. If I can get some cash together before SHTF I might mange to get some land on the North Island with some fresh water..
IF ONLY the banksters will lend China the magical digital printers to PRINT PRINT PRINT....the much wanted FRN then there won't be any problem for a quick & decisive bailout!
EASY "MONEY"....out of thin air... no problem at all to lend it away,. to bail out EVERYTHING.
Great life, every one is happy on this planet. Magical printers solve all the problems!!! party goes on.... kicking games continue