At this point it is no longer interesting to recap the ever-growing list of problems facing Spain - we all know the country needs billions and billions in aid to merely contain its implosion, let alone grow. And while as of as of minutes ago we just got another rumor of "Accelerated Kinetic Action In Close Proximity To Cash Dispensing Machines" which is the proper nomenclature, as the B-R word is not in good form these days it appears, the real news is that as the ECB fiddles, and Madrid burns guess who is buying? Why China of course.
From the WSJ [7]:
A debt-laden Spanish construction firm became the latest European company to unload assets onto eager Chinese buyers, as Europe's debt woes force firms to look to China for cash.
State Grid Corp., China's government controlled power-grid operator, said Tuesday it would buy high-voltage electricity transmission assets in Brazil from Spain's Actividades de Construccion y Servicios SA ACS.MC -0.55% for 1.86 billion reais ($938.2 million), including debt. The deal is State Grid's second investment in Brazil and its fourth major investment overseas, and is the most recent in a string of deals in which a European company has looked to exit an investment amid financial troubles facing the region.
The story is a well-known one: boom years leading to exorbitant growth, following by a liquidity crunch as the easy money punch bowl is pulled away.
ACS's standing has weaken because of its debts and the falling value of investments made during Spain's boom years. Chairman Florentino Pérez, who is also the president of Spain's soccer club Real Madrid CF, led ACS's expansion when liquidity was abundant and Spain's economy was booming on the back of a real-estate bubble that imploded about five years ago.
As credit dried up, ACS began to cut down on debt by shedding assets. ACS currently has more than €9.33 billion ($11.70 billion) in debt, about a half of what it had a few years ago.
Enter the white knight:
The move marks State Grid's latest effort to expand into more lucrative areas than its tightly- regulated home market. State Grid oversees China's power network over all but some southern portions of the country, giving it nearly nine tenths of the country.
Beijing also tightly controls the power market, limiting State Grid's ability to seek terms from power suppliers or pass on costs to customers.
Beijing's leaders over the past few years have pushed State Grid as well as other state-run behemoths to invest overseas as part of a broader effort to use China's financial firepower to strike deals.
The pressure has been especially strong on China's energy companies, which are seen as potential national champions in an increasingly competitive global market.
Perhaps this is why Greece is failing? Because China has realized it could buy Spain (and soon Portugal and Italy) for the same price, or even cheaper: remember - these are asset, not stock, purchases: one assumes liabilities as well. So $1 of equity value should be sufficient. And once China is done with the PIIGS, it can proceed to control the rest of the Europe... Which incidentally will still have to rely on Russia for its energy.
Is the New New World Order finally cristallizing to all?