Most European stocks rose, erasing earlier losses, as the International Monetary Fund was said to propose a $1 trillion expansion of its lending resources. Asian shares and U.S. index futures advanced.China Rejected Bailout Request Already
The IMF is proposing an expansion of its lending resources to safeguard the global economy against any worsening of Europe�s debt crisis, according to an official at a Group of 20 nation. The lender is pushing China, Brazil, Russia, India, Japan and oil-exporting nations to be the top contributors, according to the official, who spoke on condition of anonymity because the talks are private.
For starters, China already rejected bailout requests by Europe.
China's vice foreign minister has ruled out using the country's vast foreign exchange reserves to bail out Europe, as the debt-laden continent tries to stave off the risk of a massive default.Moreover, Brazil, Russia, India, and Japan have their own problems. The US is not going to contribute more and was not even asked.
"The argument that China should rescue Europe does not stand," vice foreign minister Fu Ying told an EU-China forum.
"We cannot use foreign reserves for... rescuing foreign countries. We need to ensure safety, liquidity and profit for the foreign reserves."
Nonetheless S&P futures spiked about seven fast points overnight on the news.
That the IMF feels the need to make such a request should not be anything to cheer about. Indeed, there has been so much orchestrated "good news" that I can't help wondering if the bottom is about to fall out of the market.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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