Posted by Karl Denninger
Dollar-denominated risk assets, including asset-backed securities and corporates, are no longer wanted at the State Administration of Foreign Exchange (SAFE), nor at China’s large commercial banks. The Chinese government has ordered its reserve managers to divest itself of riskier securities and hold only Treasuries and US agency debt with an implicit or explicit government guarantee. This already has been communicated to American securities dealers, according to market participants with direct knowledge of the events.
Oh, so implicit guarantees are good enough? That means Fraudie and Phoney, right?
This is hilarious, really – but in context makes perfect sense.
Why would a government, or it’s arms, take a stake in corporates unless it intended to influence said corporate interests?
Oh, that’s a bridge we’d rather not cross, eh? A discussion we’d rather not have?
This is just more gum-flapping. These funds should have never been in there in the first place, and if we had any hint of real governance out of our leaders they wouldn’t have been allowed to be.
These people are not our friends folks. They steal our intellectual property, they threaten us at whim and they have intentionally tampered with their currency by pegging it to the dollar in order to prop up their exporters, not to mention making our bogus accounting and lending look like a six-year old’s birthday party by comparison.
Goodbye and Good Riddance to corporates owned by Chinese “sovereign interests”, and don’t let the door hit you in the ass on the way out!