Here is how you kill two birds with one stone, all the while confirming that Europe has been about a step away from a full collapse. Greece, which like Ireland, has been unable to peddle its bonds to anyone now that Bunds spreads are back to all time record levels, has just seen the last white knight of the Keynesian system come to its rescue: China. As Bloomberg reports, the European lender of last resort is no longer the ECB: "China has already bought and holds its Greek bonds," Wen
said in joint comments with Papandreou today, which were carried
live on state-run ET-1 television. "It commits, very
positively, to buy new bonds to be issued by Greece." Yet herein lies the rub: in exchange for the Chinese last-ditch rescue financing, which by the way is so transparent that everybody, except maybe for the Norwegian wealth fund will see right through it, Greece, in what is an almost identical replica of the Petrobras shell game, will use the money to turn around and buy Chinese ships.
"Wen said a $5 billion shipping fund will be set up to
tighten relations between the countries' two maritime industries
and facilitate the sale of Chinese vessels to Greeks." Truly brilliant what Keynesians will come up with in the last days of a collapsing economic religion.

And one wonders just how far the reach for yield has pushed China - instead of buying US bonds, the country with the $2 trillion + trade surplus is investing in the sovereign equivalent of subprime. Which makes sense, when your cost of capital (i.e. artifical GDP growth) is 8%+, buying 2 Year US bonds at 0.4% just won't cut it any longer.

Greece received a 110-billion euro ($151 billion) bailout from the EU and International Monetary Fund in May to avoid default. The country, which has been locked out of international credit markets, plans to issue new bonds in 2011.

In the first visit to Greece by a Chinese premier in 24 years, Wen said he wants to signal a vote of confidence in Greece and the European Union in overcoming the international financial crisis.

"With our common efforts the total mass of imports and exports between the two countries in the next five years can double to $8 billion," Wen said. He called on Chinese businesses to invest in Greece.

As for the JV in what could be the most oversupplied industry in the world, here is how China and Greece hope to confirm that all is well, despite a Baltic Dry Index which after its latest dead cat bounce, so vapidly extolled by those who have no idea about supply/demand mechanics in the Capesize sector which has about 5 boats of excess supply for every boat in demand, has been down for nearly two straight weeks with one or two day exceptions:

The two leaders will today visit Piraeus Port, Greece's biggest, where Asia's third-biggest container terminal operator has a 35-year concession to run some operations. China plans to deepen its Piraeus investment to move 3.7 million containers a year by 2015.

Cosco Pacific Ltd. won the concession to run container operations at Piraeus Port's Pier II and build and run Pier III in 2009. Greece's government owns 75 percent of Piraeus Port Authority SA, the company that manages the harbor.

Wen will speak in the Greek parliament on Oct. 3, Ambassador Luo Linquan said in an interview with China's state- run news agency Xinhua.

For all intents and purposes, this is equivalent to Buffett buying a stake in Goldman, or convertible preferred in GE, just before the bottom fell off the market. The problem here is that after China, there is no other backstop left, period, unless one discovers some rather prominent printing presses on Mars, coupled with some intelligent life. Which, unfortunately for Greece... and Earth... would mean no Keynesians.