China bank halts forex swaps with Europe banks !!

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Last Edited by UcDat on 09/20/2011 12:42 AM

This!

I wonder what the "action" will be tomorrow against China and will it really matter this late in the game?

I bet its PAYBACK for China not supporting the euro! HumpH! Typed on a keyboard made in China!

I guess in the next few days we will see if China says

Checkmate.

our military is pissed that China is holding back the Rare Earth metals needed for weapons systems so theyre putting the heat on

Only massive draft of every American capable of buying beer and flipping tv channels would result in force big enough to stand against 150 millions PRC army

He's on vacation again, sorry.

No - Euro DEMOLISHED!

Why else would you stop exchanging Euros to Yuan?

You would only stop if the value of the Euro was going to drop a LOT! E.g.

Today (these are just examples!)
6 Yuan = 1 Euro

Tomorrow
2 Yuan = 1 Euro

Wouldn't you wait...you'd halt trading today :-)


You don't even know what a swap is, but you're ready to call the Euro demolished?

A swap is a spot trade with a forward contract capturing the movement in exchange rates. They still exchange rinimbi for €.

The bank is saying, "we don't know where the exchange rate will settle in the near term." They are not saying they think the € will be demolished.

For all you know they could've had a massive carry trade on for funding purposes, given the tight lending environment in China, and need to unwind it due to exchange rate volatility.

Truth....Someones gonna get slapped tuesday!

mabie the dow..

China has been at war with our manufacturers for 20+ years. Both Republican and Democrat presidents and congresses have ignored it. Our manufacturing was the heart of America. Right now we are on life support and until our politicians protect our manufacturers we will continue down the toilet.
Its time for fair trade agreements.

European markets should be opening in a while...

Ok, THAT made me laugh. It's true though...

Problem is that this debt is incumbered with bets placed on them not being paid back (CDO's and CDS's "Credit Default Swaps and Credit Default Obligations) Thats why it cannot be unwound. The people that placed these bets want to get paid if it defaults.

The swaps could be leveraged 20x deep against default.

So a 1 billion dollar debt could be leveraged by 20 billion dollars in paper guarentee's to pay !

THAT'S ALL FOLKS!

[link to i113.photobucket.com]

I bloody hope so, seems the only war to get people to rise up against the madness. When their life is on the line! Those dumb enough to actually accept a draft will get whats coming to them!

up yours gubbermint

You don't even know what a swap is, but you're ready to call the Euro demolished?

A swap is a spot trade with a forward contract capturing the movement in exchange rates. They still exchange rinimbi for €.

The bank is saying, "we don't know where the exchange rate will settle in the near term." They are not saying they think the € will be demolished.

For all you know they could've had a massive carry trade on for funding purposes, given the tight lending environment in China, and need to unwind it due to exchange rate volatility.


Hmmm, let us examine your logic. It seems to me that your logic is like the logic of the morans who believe in anthropogenic global warming...we don't know what the weather will be tomorrow...but, we know what the weather will be in 20 years...what?!?! Please examine your reasoning...the Chinese do not trust the near term value of exchanging Yuan for Euros...but, they trust the long term value of such an exchange. Have you ever raised capital by any chance? If so, then you may have calculated NPV, or IRR...you want to do the break even analysis and find out how quickly you can have your principal back. If the near term is questionable...would you even consider saying that your principal or the principal of an investor is safe in the long term?

Just my $0.000002

Euro socialist fail. hahahahahahaha

China gets to protect themsleves as Americans get hosed bad.

Oh what rubbish.

There's plenty of rare earth metals all over the place, just that noone has been bothered mining them as it's been more lucrative to channel investment in to other mining.

To quote Gerald Celente:

First they will have currency wars, then they will have trade wars, and then world war.

This probably isn't going to end well for any of us.

you sound reasonable, but then it occurred to me: there are lots of investments that are more predictable in the long-term than the short term.

blastwave

I work at BNP Paribas in NYC. Just got in but when I hear anything I'll post whats up.

Lol, not many people know this, good catch.

China has been for the last decade positioning itself to drop Europe and the US as trade partners, and in the process sink the two and assume the role as the global economic superpower. China has been using the money from exports to drive internal infrastructure and manufacturing capacity. China's roads, railways, shipping fleet and factories are now envy of the rest of the World. They are moving manufacturing away from cheap plastic trinkets and to more hi-tech products like TVs, computers, cell phones, cars and aeroplanes, with the intention of selling mostly to their own domestic market. China will depeg from the Dollar and let the value of the Yuan rise so that Chinese consumers can afford to buy their own goods as well as goods from other countries.

Yes, China will take a hit from the loss of value in its foreign exchange reserves but they have been hedging against this loss with large-scale purchasing of commodities, like gold, land and minerals all over the World. The theory that China and the West are so ontertwined that they cannot do without the other is a fallacy that is perpuated by our own media to stop us from pannicking. The truth is that BRICS nations and other developing countries have been gearing up to break away from the parasitic Western capitalist hegemony and are the verge of being able to do so. There is a recession coming, but it is not the World-wide one that is portrayed in the news. Europe and the US will be the worse hit, while the rest of the World will recover far quicker after the initial transitional problems are worked out.

Meh, if this was really doom-y the European exchanges wouldn't be up 1-2% today.

The ECB or Fed will have it covered.

Chinese pirates unite!

who here hates the French?