China Confidential
Friday, April 24, 2009
Notwithstanding the Handshake, Hu's on First
A photograph of Barack Obama and Hugo Chavez grinning and gripping each other's hands caused alarm bells to ring in the United States and eyebrows to raise in China.
Understand (as Candidate of Change Obama was fond of saying throughout his Presidential campaign) that China is a major investor in Venezuela and that its anti-American, populist president--an ally of nuclear-arming Iran--is determined to turn Venezuela into one of China's top oil suppliers.
“All the oil China needs for the next 200 years, it’s here," Chavez said in February. "It’s in Venezuela.”
He's right. Venezuela is sitting atop huge heavy oil resources that have been known to Americans for decades, since the catastrophic Carter administration, but dismissed by an unholy alliance of Middle East-oriented big oil companies and environmental extremists fanatically opposed to "fossil fuels."
China Need Not Worry
China need not worry about the U.S. changing its view of Venezuelan heavy oil. Washington will continue to overlook the resource--for political reasons. And this reporter is not referring to Venezuela's support for Iran or suspicious dealings with the Islamist nation's terrorist proxy, Hezbollah. Obama, in the clutches of global warming fear mongers led by the charlatan Al Gore (who parlayed a slide show into a Nobel Peace Prize and an Academy Award) is simply not interested in hearing about heavy oil, regardless of whether it is produced in Caracas or California. Instead, the President is promoting uneconomical and nonexistent green energy solutions, which, in the midst of a recession, will cruelly push energy prices higher for all Americans and American businesses while failing to significantly reduce U.S. dependence on foreign oil.
Venezuela, in the meantime, will sell more oil to China. In 2008, the South American nation sold 380,000 barrels per day of petroleum and petroleum derivatives to China.
Venezuela sold 1.13 million barrels a day of oil to the United States in 2008--about 10% of total U.S. oil imports. But Chavez, notwithstanding his headline-making photo-op with Obama, would like to increase oil sales to China at America's expense.
During his recent visit to China--his sixth visit there since 1998--Chavez promised to boost Venezuela's total annual exports to China to one million barrels by 2013.
With that goal in mind, Venezuela is expanding its oil tanker fleet, and China is dedicating more and more refining capacity to Venezuelan crude.Thursday, April 23, 2009
Probe Shows Paulson Pressured BOA to Suppress Material Information About Insolvent Merrill Lynch
Did former U.S. Treasury Secretary Henry Paulson pressure publicly traded Bank of America to withhold material information from the public about the financial condition of publicly traded Merrill Lynch?
AFP reports:US officials used threats to pressure Bank of America to complete a takeover of ailing Wall Street firm Merrill Lynch last year, documents from a state probe showed Thursday.
Continue reading here.
The documents released by New York state Attorney General Andrew Cuomo indicated that top US Treasury and Federal Reserve officials threatened to push out bank management and board members if the takeover were not completed.
The documents also showed regulators cautioned Bank of America chief Kenneth Lewis not to disclose the extent of Merrill's troubles [italics added for emphasis] because of fears of a "disaster in the financial markets."
The documents indicated Bank of America wanted to walk away in December from the deal announced in September to take over Merrill, which had been on the brink of collapse at the same time as Lehman Brothers, the Wall Street rival that went bankrupt and triggered a financial panic.
U.S. securities laws are based on the bedrock principle of full disclosure in order to create a level playing field for investors. Hence, the need for timely and truthful filings with the Securities Exchange Commission, including quarterly and annual reports, audited financial statements, and special, 8-K filings and press releases of any and all developments, including material impairments, which could influence investors or affect their interests, for better or worse.
A penny-stock-sized company's CEO or CFO who withholds material information about the company's financial condition could be sued or prosecuted. That Paulson, the former Chairman and CEO of Goldman Sachs, in his capacity as U.S. Treasury Secretary would do what he appears to have done--albeit with a national interest rationale--is truly shocking.
Apparently, Paulson spent too much time in China before coming to Washington--the secrecy and despotism may have affected his decision-making. One of the reasons Paulson was selected to replace John Snow at Treasury was because of his strong connections to Wall Street and to China. At Goldman's helm, Paulson, whose net worth has in the past been estimated as close to $1 billion, made over 70 business-related trips to China. As Treasury Secretary, he headed a "strategic dialogue" with Beijing that accomplished nothing of real value or importance from a U.S. perspective.Recognizing Rising Islam, China Sees the European Union as a Mere Market, America as the Next Rome
China Confidential analysts across Asia and Europe report China's rulers--the leaders of the Communist Party and the commanders of the People's Liberation Army--have arrived at a startling consensus concerning the world's political future. They see (a) the United States as the dying but still dangerous "Hegemon"--a modern-day version of the ancient Roman Empire in its declining years, and (b) Europe as an increasingly politically irrelevant collection of weak states.
China sees Europe not as a power, but as a market. A European Union in name only--from China's perspective, the old Common Market name is more fitting--it is certainly not a serious rival to either China or the U.S. for international influence and prestige.
With the above in mind, click here to read Tony Barber's first-rate, Financial Times report on China's view of Europe as a "mere pawn" in a global chess game. His analysis is timely and important with regard to understanding China's changing posture in the context of the worldwide recession.
Destined to be Overwhelmed
Barber's provocative piece is on target with regard to Beijing's take on Europe; but China Confidential analysts, including intelligence experts who monitor Chinese think tanks, are even more provocative than Barber. China Confidential analysts say the PLA, in particular, is convinced that Europe is destined to be overwhelmed and irreversibly transformed by its Muslim minorities, especially if Turkey's bid for EU membership (which U.S. President Barack Obama has endorsed) proves successful.
In contrast with Europe, the U.S. clearly has a long way to go before it is Islamized. In terms of importance, Detroit, for example, can't be compared with Londonistan. But Beijing, according to China Confidential analysts, believes that the continuing Muslim influx into the U.S. and rise in Muslim supremacist groups combined with the ceaseless flood of illegal immigrants from Latin America--capable of turning overnight into a human tidal wave if Mexico collapses into chaos and anarchy--will eventually overwhelm and ultimately bury the Hegemon.
Chinese Communist Party economic advisers also believe the U.S. economy is doomed as a result of years of hollowing-out and outsourcing, incapable of being revived without a radical restructuring. A slow death is foreseen; hence, the need to diversify out of the dollar in an orderly fashion--without killing China's stake.
There is more to the story. China's military strategists are said to be convinced that the U.S. is dangerously vulnerable to asymmetric warfare, including Islamist terrorist attacks. Another mega-attack, the Chinese believe, could be fatal for the U.S. A series of Mumbai-style, swarming attacks on so-called soft targets--schools, hospitals, commercial buildings and shopping centers--could prolong the recession or turn it into a full-blown depression.
Several Chinese asymmetric warfare experts believe it is only a matter of time before the U.S. is hit by nuclear terrorism.
Friday, 24 April 2009
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