China to buy Irish debt in June 2011?

RBinge

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Seeing as our "government" is acting like the shopkeeper in the parrot sketch, I wonder is there any truth in the bit of apparent kite flying below?

This is taken from Robert Peston's blog on the BBC website.

191. At 16:22pm on 17 Nov 2010, BluesBerry wrote: Ireland: How much punishment for British and international banks?
As much as the Wall-Street Boys can give them!
Ireland does not want, does not need a bail-out. Ireland is financed through till June, 2011. When and if Ireland decides (after June, 2010) to issue bonds, China has already committed to buy them.
Eurozone statement: “We welcome the measures taken to date by Ireland to deal with issues in its banking sector, via guarantees, recapitalisation and asset segregation. These measures have helped to support the Irish banking sector at a time of great dislocation...."
What the statement fails to say is that China made a great EU swing during which China committed to buy Irish bonds when they appear upon the market. Read this word "committed". It means promise.
Why are all the BBC journalists failing to mention China? Is China one, very big secret, or a key player in all this panic and fear within EU and its members?
China has guaranteed bond purchase of the debt of all EU PIIGs, including Ireland, Portuqal, Spain and even Greece. This includes sovereign debt.
Ireland is not in a panic; Ireland is doing it best, and so far its best has been good enough. I look forward top the re-emergence of that old Celtic Tiger. Ireland knows that China stands ready to buy her bonds come June, 2011.
So why is the EU in panic? It's China, isn't it?
All the BBC journalists have gathered around the EU, telling why the EU (even the UK) must support poor little Ireland.
Here comes the really scary part of your article: "What would then be triggered would be enormous payments by underwriters on credit default swaps (CDSs), the debt insurance contracts taken out by lenders and SPECULATORS. These payments would generate enormous losses for the financial institutions, including banks, which provided the CDS cover." and provide tremendous profit for the American Wall-Street Boys who have bet against Ireland's success.
Ouch.
Sources close to the Irish government tell me that the US authorities are deeply concerned (try "deeply gleeful") at the idea that CDS payments would be triggered in this way. The implication is that too-big-to-fail insurance contracts, designed to bet against sovereign debt, are IN FACT STILL A SOURCE OF SYSTEMIC INSTABILITY.
What’s more, if there are haircuts imposed on Irish bank debt (by credit default swaps), it’s very difficult to see how haircuts could be avoided for Greek and Portuguese bank debt too, and also for plain vanilla Irish, Portuguese and Greek government borrowings...except for the overlooked fact that China has committed/promised to buy bonds from all the STUPID PIIGS when and if they hit the bond market. What China does not want to do is buy American bonds; in fact, it is trying to unload American bonds. Does the UK want them?
So, if the UK and "international" (read American) banks take punishment, they will take because China has promised/committed to buy STUPID PIIG DEBT. And what will the punishment entail? China will temporarily own the sovereign debt of several EU nations and China will cease to buy American debt.
 


nuj

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http://www.politics.ie/economy/142376-who-benefits-if-ireland-defaults.html#post3156861

Try DTCC » Consent for a guide on outstanding (known) CDS positions. DTCC is a clearing house for CDS, but the positions it records aren't necessarily the whole picture, or any known percentage of it, either. It records both gross and net positions. Rather than there being a secondary market in CDS, participants usually square their positions by entering a new counterbalancing contract, hence the gross numbers way exceed the net.

For the week ended 5/11, the following positions are recorded on the site:
Net contracts $m
AIB 761
Anglo 388
Ireland 4539
ILP 334
BoI 670
Total 6692

Greece 7149
Portugal 7770


That Chinese story has been attached to Greece and Portugal as well, in recent weeks and months. It may be that the Chinese are shopping for a conduit into the EU, but I wouldn't be holding my breath waiting for their cheque. There seems to be a large amount of wishful thinking going on the part of potential recipients.
 

Cruffan

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Ireland at forefront of Chinese plans to conquer Europe

Ireland at forefront of Chinese plans to conquer Europe | Business | The Guardian

China is not interested in the "quick buck".

It is willing to take a longterm view with strategic investments.

Ireland is rather undeveloped, speaks English and has a friendly culture.

A Chinese exhibition centre in Athlone could host European, American and African attendees.

We also have the possibility of huge hydrocarbon reserves off our coasts.

We also happen to be going cheap! We also have a say in Europe.

What better than to buy up the debt of a few small European countries who would then be "indebted" to the Chinese.

The ECB wishes to pull the plug on Ireland and has made a b******ks of the Euro as a result as it did when allowed Ireland to guarantee the Banks debts although it knew that Anglo was a basket case.

All the ECB wanted to do was bailout German and French bondholders in the short-term; the Chinese play for keeps.
 

McDave

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If people are worried about losing sovereignty in an EU context, we ain't seen nothing if China buys into Ireland in a big way. [Big for us, but peanuts for them.]
 

johnfás

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If people are worried about losing sovereignty in an EU context, we ain't seen nothing if China buys into Ireland in a big way. [Big for us, but peanuts for them.]
Won't happen - EU won't allow it to happen. I'm surprised they're letting the IMF run rampant across the continent to be honest. That said, if we get the card into our hand, it'll add to our limited bargaining power.
 

Cute Coors

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sure we have being eating their food for decades in preparation ......sweet and sour chicken with flied lice ..mmmmmmmmmmm

anyone remember the Larry Gogan question on "the just a minute quiz" a few years back...
-where's the great wall of china

Jockser- Crumlin :lol:
 

McDave

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Won't happen - EU won't allow it to happen. I'm surprised they're letting the IMF run rampant across the continent to be honest. That said, if we get the card into our hand, it'll add to our limited bargaining power.
Involving the IMF gave the ECB and especially the Germans political cover. Getting the IMF in as a junior partner negates the perception of external control, while marshalling the IMF's technical skills and diversifying the fund itself.

The stability fund means Ireland isn't obliged to go the market to pay 10% for bonds. That very fact alone is probably enough to take China out of the equation. Fortunately. Because on the open market, 5% from China might be too attractive to resist.
 

sheehan

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sure we have being eating their food for decades in preparation ......sweet and sour chicken with flied lice ..mmmmmmmmmmm

anyone remember the Larry Gogan question on "the just a minute quiz" a few years back...
-where's the great wall of china

Jockser- Crumlin :lol:
Name the Capital of China.
 

acme

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sure we have being eating their food for decades in preparation ......sweet and sour chicken with flied lice ..mmmmmmmmmmm

anyone remember the Larry Gogan question on "the just a minute quiz" a few years back...
-where's the great wall of china

Jockser- Crumlin :lol:
Name the Capital of China.
eh...Republic of China or Peoples Republic of China ? which ?
two different places
 


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