part 2

2. China goes into full power mode and claims its place as a global leader

a) First they said probably much nicer to TG to go and f... himself about the currency situation - they are now starting to compete directly with America. Its a smart timing as America is already fighting many wars and is in the biggest crisis of the last 100 years. It will lead at some point to more nationalism as I had posted before we are entering stage 2 of the de-globalisation that's what all the economists get wrong then saying will outperform and lead the global economy up. We rather enter a global economic war with the gloves down now.

b) The execution of a British citizen was another sign of their new self presentation now as was the Copenhagen showdown where they basically blocked all solutions which was very welcome by the USA as it matched their selfish interests anyway - both are by far the biggest polluters in absolute terms but America due to its far smaller population is insanely overpolluting.

c) The straight forward refuse to pay any derivative losses on oil to foreign banks and Goldman is the first official opponent in this new stage of selfconfidence. Now we will see how tough Obama and his boys are as they got slapped 2 times into their face which is a bit of a disgrace and very crucial as the Treasury is going to borrow 2 trillion next year in capital markets.

Excerpt

Small Chinese Company Tells Goldman To Take A Hike, Refuses To Pay $80 Million In Derivative Losses

It appears that even after thoroughly dominating the US legislative, judicial and executive branches, the long tentacles of the squid have been no better than the Mongolian hordes at overcoming the Chinese Wall (which is ironic seeking how easy it is to ignore the same construct internally between the firm's prop and flow traders...and yes, we will be posting our response to Goldman shortly, we have not forgotten). In the meantime, half a world away, a small Chinese power generator, Shenzhen Nanshan Power, is blatantly refusing to honor contracts with Goldman Subsidiary J. Aron for $80 million in derivative losses, and it appears that China itself has decided to stand behind the small company.

Reuters reports:

Shenzhen Nanshan Power (000037.SZ) (200037.SZ) said in a statement that it received several notices from J. Aron & Company, a trading subsidiary of Goldman Sachs (GS.N), for at least $79.96 million as compensation for terminating oil option contracts.

"We will not accept the demand by J. Aron for all the losses and related interests," said Nanshan, in line with the stance it took last December.

"We will try our best to negotiate with J. Aron and resolve the dispute peacefully...but the possibility of using a lawsuit can not be ruled out when talks fail," it added.

"J. Aron told us in one notice that if we do not pay the money, they will reserve the right to launch a lawsuit and will not send us any further notice."

The State Assets Supervision and Administration Commission said in September that it would back state-owned companies in any legal action against the foreign banks that sold them oil derivatives, which resulted in losses when oil prices dived late last year. [ID:nPEK14474]

A Beijing-based Goldman Sachs corporate communication official declined to comment.

Not sure what Hank Paulson's former firm would comment: alas the Chinese communist party still has to be filled with Goldman alumni. That being said, this is precisely the track that Goldman has been focusing on for the past few years. At this point, the firm realizes all too well that dominating power politics in China in the near futures is far more critical than complete control over D.C., as there is little the world's most important company can do domestically in the context of taxpayer capital transfer without a full fledged revolution.