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ROFL! China Tells IBs: Stuff It!
Courtesy of Karl Denninger at The Market Ticker
The State-owned Assets Supervision and Administration Commission, the regulator and nominal shareholder for state-owned enterprises (SOEs), told six foreign banks that SOEs reserved the right to default on contracts, Caijing magazine quoted an unnamed industry source as saying in an article published on Saturday.
See what lawless behavior gets you folks?
You start this crap – selling worthless paper, intentionally turning a blind eye to fraud, profiting from fraud, screwing consumers and foreigners alike and guess what?
BINGO! A foreign government that runs a command economy says "Ok, you think that was cute? Try this!"
For banks that are hoping to sell more derivatives hedges in China, the world’s fastest-expanding major economy and top commodities consumer, the danger goes beyond the immediate risk to existing contracts to the longer-term precedent that suggests Chinese companies can simply renege on deals when they like.
Oh, so our wonderful banks have been over there peddling their junk in Beijing too eh? Derivatives you say? 
I love it.
We reap what we sow, and may the "foreign banks" (you know this includes some nice juicy ones over here in the US) get stiffed and stuffed.
I have no sympathy – zero – for the IBs who get burned by this.
Now let’s see China grow a pair of brass church bells and tell Geithner and company to stick it on their debt sales – or even better, why not sell?
If our government refuses to do the right thing and acts like Tony Soprano, then perhaps we need a bigger, badder, more powerful gang to come smack our government around a bit.
