Grandinite

I’m not saying these events are necessarily connected, but something big may be happening here.

1. AP: China suspends military exchanges with US

BEIJING (AP) — China suspended military exchanges with the United States, threatened unprecedented sanctions against American defense companies and warned Saturday that cooperation would suffer after Washington announced $6.4 billion in planned arms sales to Taiwan.

The response to Friday’s U.S. announcement, while not entirely unexpected, was swift and indicated that China plans to put up a greater challenge than usual as it deals with the most sensitive topic in U.S.-China relations.

“This is the strongest reaction we’ve seen so far in recent years,” said Stephanie T. Kleine-Ahlbrandt, northeast Asia project director for the International Crisis Group. “China is really looking to see what kind of reaction it’s going to receive from Obama on this.”

2. Bank of America Web site goes down Friday

Bank of America was investigating an outage on Friday that affected an unknown number of customers but had ruled out a cyberattack, a representative said.

3. ZeroHedge: Huge Volume In ES on Close

4. Bloomberg (via BusinessWeek): Paulson Says Russia Urged China to Dump Fannie, Freddie Bonds

Jan. 29 (Bloomberg) — Russia urged China to dump its Fannie Mae and Freddie Mac bonds in 2008 in a bid to force a bailout of the largest U.S. mortgage-finance companies, former Treasury Secretary Henry Paulson said.

Paulson learned of the “disruptive scheme” while attending the Beijing Summer Olympics, according to his new memoir, “On The Brink.”

The Russians made a “top-level approach” to the Chinese “that together they might sell big chunks of their GSE holdings to force the U.S. to use its emergency authorities to prop up these companies,” Paulson said, referring to the acronym for government sponsored entities. The Chinese declined, he said.

Russia’s five-day war with U.S. ally Georgia started on Aug. 8, the same day as the opening ceremonies of the Beijing Games. Prime Minister Vladimir Putin told U.S. President George W. Bush during those ceremonies that “war has started,” according to Dmitry Peskov, Putin’s spokesman.

“The report was deeply troubling — heavy selling could create a sudden loss of confidence in the GSEs and shake the capital markets,” Paulson wrote. “I waited till I was back home and in a secure environment to inform the president.”

Russia never approached China about dumping U.S. bonds, Peskov said today. “This is not the case,” he said by phone.

5. China Investor: China stocks fell in Asia to the lowest in 2010

6. Daily Mail: Nobel Peace Prize-winner Barack Obama ups spending on nuclear weapons to even more than George Bush’

7. NYTimes/Yahoo!: Contrarian Investor Sees Economic Crash in China

James S. Chanos built one of the largest fortunes on Wall Street by foreseeing the collapse of Enron and other highflying companies whose stories were too good to be true.

Now Mr. Chanos, a wealthy hedge fund investor, is working to bust the myth of the biggest conglomerate of all: China Inc.

As most of the world bets on China to help lift the global economy out of recession, Mr. Chanos is warning that China’s hyperstimulated economy is headed for a crash, rather than the sustained boom that most economists predict. Its surging real estate sector, buoyed by a flood of speculative capital, looks like “Dubai times 1,000 — or worse,” he frets. He even suspects that Beijing is cooking its books, faking, among other things, its eye-popping growth rates of more than 8 percent.

8. Business Insider/ Clustersock: Another Warning Sign: China-Based, Singapore-Listed Firms Rapidly Collapsing Amidst Debt And Fraud