You could equally say - be nice to countries that let your products in without tariffs. Remember the Schumer tariffs on Chinese goods? I think they're gonna make a comeback during an Obama administration. But this time, they will pass.
Maybe they could do a leveraged buyout of the US. In order to put pressure on China to close quickly and at a reasonable price, we can approach the Somali Pirates for "other talks."
Lou Jiwei, the chairman and chief executive of the China Investment Corporation, a $200bn (£135bn) fund, said China had no intention of "saving" the West from the financial crisis.
"Right now we do not have the courage to invest in financial institutions because we do not know what problems they may have," said Mr Lou, at the Clinton Global Initiative conference in Hong Kong.
CR, why do "poor" countries like China (and other "devloping" nations) lend the US so much money? Shouldn't it be the other way around? Aren't we supposed to be the fat cats???
Zhou Xiaochuan, governor of the Chinese central bank, urged the US to rebalance its economy. Over-consumption and a high reliance on credit is the cause of the US financial crisis, Mr Zhou said.
Hmm, a sound, straightforward explanation from a government official. It's rather refreshing.
Zhou Xiaochuan, governor of the Chinese central bank, urged the US to rebalance its economy. Over-consumption and a high reliance on credit is the cause of the US financial crisis, Mr Zhou said.
From the folks who have manipulated their currency for years to keep it weak to encourage U.S. consumption.
Do not think the U.S. has a monopoly on hypocrisy.
Zhou Xiaochuan, governor of the Chinese central bank, urged the US to rebalance its economy. Over-consumption and a high reliance on credit is the cause of the US financial crisis, Mr Zhou said.
No! Capitalism works on bad credit and defaults, mercantilism works on money (or gold). Paying back credit in full results in a zero sum game aka mercantilism. Ahhhhh....
"Zhou Xiaochuan, governor of the Chinese central bank, urged the US to rebalance its economy. Over-consumption and a high reliance on credit is the cause of the US financial crisis, Mr Zhou said."
The Chinese are idiots. Only an idiot would load up his portfolio with more than ten percent of the float of US treasuries. What do they think is going to happen to the price of those treasuries the minute they start to unload them. When the price goes through the floor who do you think is going to load up on them? The fed, for fifty cents on the dollar. What will the fed unload to buy the treasuries? The MBS they took on in the last six months.
tbgpalisades...who were the morons lending us the money...oh that's right. It was the Chinese govt. And that same govt has held its currency artificially low to subsidize exports to the US. In the linked Setser piece, he describes how China needs to make major changes, as well as the US.
China won't be attacking any countries...they'll be too busy engaging in civil war/repression of their angry citizenry.
I am beginning to think that we won't be stable enough for stagflation.
We will end up in some twilight lifesupport socialism with a vicious black market in anything of exportable value. I have been watching Craigslist and Ebay for a while, and denial is thick for the common person on the street.
How's that for sufficiently grim.
I have to go see the doc about my ulcers, they have been acting up severely. So I will be going long more antacids, and short spicy foods.
In other words, I need a nap, and some time off of work.
"We must begin to build an exit strategy from this myriad of new programs and commitments," SEC Chairman Christopher Cox said at an event in Washington.
Spaceships to Mars?
I would like to see more stories on the coming collapse in the middle east...Dubai, Saudia Arabia, Iran...China will crush dissent among their people, I don't think they can do that in the middle east when crude is $15bbl
Except they already are. Where do they think the TARP money comes from?
Well right now it's from the Fed and Treasury so far.
Add in toxic assets from insolvent banks and you got all the ingredients to make a good cake.
Have a peek at this article, it's about gold but a bit related.
i'm in the deflation camp--are there any safe places (besides a remote mountain abode with clear sight lines, game and water, and maybe Pocahantas) to make money, get a job, start a business??
are we really just back to the stone age, even with the technological advances we've made since 1830, 1871, 1929, pick your favorite depression era? is there really no way out but to start from scratch?
China has simply been providing the US consumer vendor financing. They have been motivated to lose money on the financing to encourage creation of domestic production capacity and jobs. The amount they will lose on their holdings of US Treasuries as the dollar falls should be looked at as an investment in Chinese production.
I would guess that the Chinese believe their return on investment (in the form of profits, social stability, rising standard of living, etc.) from providing such "loss leader" vendor financing is worth the continued subsidy to the US consumer.
Remember if unemployment goes to 10% in the US the US government has to deal with 10 million unhappy people. However, if the unemployment rate goes to 10% in urban China you the Chinese government has to deal with 60 million pissed off people. Providing cheap financing to the US consumer is the cost of keeping those 60 million people employed and not rioting against the government.
China should loosen up...have some fun. Sell a couple hundred billion in Treasury, longer dated stuff, just to pull Ben's chain.
It be a nice tug of war there...
Hey guys 4.5%... watch this..
At least the news wouldn't be so..like...droll.
The mall across the street has a reasonable amount of cars in it, but the people shopping don't seem to have many bags. The Gamestop Store (which I got rid of a year ago)had one clerk and one browser.
We are already buying less and less from China.
They, as repeated by many above weren't all that smart either.
China should loosen up...have some fun. Sell a couple hundred billion in Treasury, longer dated stuff, just to pull Ben's chain.
It be a nice tug of war there...
Hey guys 4.5%... watch this..
At least the news wouldn't be so..like...droll.
barkingtribe
I like it. They could make some prank calls to George, Hank and Ben about dumping all their pigshit holdings, hang up and laugh their asses off.
Rich called it again last night, the death of retail. Now the NYTimes has a great piece on high-end merchants in NYC, slashing prices on luxury goods. Saks led the charge, with 70% off fall merchandise, and Bergdorf, and Barney's are in the same boat.
Mentions that the high-end merchants are not trying to salvage the season, but their commercial lives...
Cause: 80 hedge funds now have the money locked up as in no redemptions
So
1. Lower class looses maunfacturing/retail jobs
2. Middle class looses sevice jobs and goes from holding a 401k to a 101k.
2. Upper class looses WS jobs but keeps bonuses, looses hedge bragging rights and suffers a temp cash flow problem.
Dec. 4 (Bloomberg) -- The classified ads in Dubai read like an obituary for a real-estate market that until a few months ago seemed immune from the global credit crisis.
A Turkish investor, who identified himself as Sebat, took out 10 bright yellow ads in the Nov. 25 edition of Gulf News, the United Arab Emirates biggest newspaper, with the headline: DIRECT FROM OWNER DISTRESS SALE!!! Sebat said he used to be able to buy four or five properties at a time and sell them the next day for a profit of as much as 5 percent.
There is panic in the market, said Sebat, 52, who wouldnt give his full name because hes juggling 60 properties.
'PONZI SCHEME' AT CITI - NYPOST.com
A new Citigroup scandal is engulfing Robert Rubin and his former disciple Chuck Prince for their roles in an alleged Ponzi-style scheme that's now choking world banking.
However, Rubin and other top insiders were able to keep Citi shares afloat until they could cash out more than $150 million for themselves in "suspicious" stock sales "calculated to maximize the personal benefits from undisclosed inside information," the lawsuit said.
An estimated 36 million Chinese starved during Mao's "Great Leap Forward". The Chinese government managed to keep in control during this period. I have a sinking suspicion they can survive high unemployment with an externalized enemy for their exceedingly large demographic of young men.
East vs West. Islam vs Christianity. Creditor vs debtor. Oil producers vs non oil producers. This has quite a few ways to play out.
Dubai is more precarious than it has ever been, said Christopher Davidson, author of Dubai: The Vulnerability of Success (2008, Columbia University Press). If the property industry collapses in Dubai, it will be finished. Dubais relative autonomy will come to an abrupt end.
However, Rubin and other top insiders were able to keep Citi shares afloat until they could cash out more than $150 million for themselves in "suspicious" stock sales "calculated to maximize the personal benefits from undisclosed inside information," the lawsuit said.
Chop off their hands, throw them in a pit. Broadcast it live on PPV
The Recesssion Metastasizes To The Bone
There are a lot of pieces of data about what is happening to the economy, perhaps too many to make any sense of them.
In the last day or so, two stand out. One is tha Treasury Secretary Henry Paulson may elect to drive down interest rates for new home buyers, perhaps as low as 4.5%, using Fannie Mae (FNM) and Freddie Mac (FRE) as his instruments. Any observer would look at the news and say that Treasury can finally see that saving banks will not solve the problems of the economy. Working from the top down has been a failure.
The other more frightening bit of information is that Goldman Sachs (GS) believes that the nation lost 400,000 jobs last month. Most economists have that number close to 300,000. Goldman is saying unemployment is moving toward 7%. There is no data from the business or financial sectors to indicate that any jobs are being created. A look at the headlines reads a bleeding out of more jobs, sometimes tens of thousands a day. That leaves out all of the small companies cutting back. Those never make the evening news, but, in total, the destruction of entrepreneurial ventures may be going on at record rates.
Manufacturing, retail sales, and consumer spending are falling so fast that the effect is geometric now. This means that intervention is going from being a solution with fair prospects to one which is approaching futility. The government could be criticized for putting money into the economy too slowly, but it may be that the timing would not have mattered. The circle of jobs destroying housing destroying consumer spending destroying jobs may be too powerful.
A lot of analysts say that this recession will be worse than any other since WWII. It should not be lost on people that the federal government did not sit on the sidelines in 1974 and 1981. It could not do enough to keep GDP from shrinking and joblessness from rising to 10% or so. Another way to look at it is that some downturns are so vicious that they cannot be prevented by huge infusions of capital and better regulation.
The new administration will continue to try to "save" the economy, the housing market, and jobs. At the core of getting elected to national office is the promise that the world will get better. It is like telling a child that it is OK that is father is out of a job.
The solution to the problem is simple and it may be a long way off. At some point everything will be so cheap that businesses and consumers will start buying even if they have little access to money. Homes will become ludicrous bargains. So will cars and airplane trips to Florida. Businesses will be able to buy goods and services for unprecedented prices which have not been seen for decades. Businesses will hire because they can get employees for a fraction of what they paid them in 2006 and 2007.
It is impossible to predict if despair will turn into mayhem, a confusion of the system where businesses begin to fail are astonishing rates and people cannot find work of any kind.
But, it will have to get close to that before the economy finds a bottom
It is hard to understand capitalism when it's biggest supporters are wall street shysters who quote adam smith rather selectively.
I wish they also quoted his views on the necessity of progressive taxation, need to maintain government neutrality, breaking up oligopolies/ monopolies, discourage the formation of self-regulated professional organizations.
"Only an idiot would load up his portfolio with more than ten percent of the float of US treasuries."
Their T- holdings were the consequence of the immense USD inflow from the trade imbalance; it had to go somewhere. Around the edges, it went into real investments, but the US didn't actually allow any resource investments of any consequence (remember the Unical issue)? But Financials? Sure, why not.
Now, though, the PRC government has put themselves in a bind. In an earlier thread, mention was made of a statement by L. Summers of the duality of financial and foreign policy. If they "dumped" Treasuries now, it would be seen by both sides as entailing foreign policy motivations, or at least as having policy implications.
The PRC behaves as, in Internation Relations theory, a Defensive Realist. They see, most likely, that their security would not be served by dumping Treasuries at this time, and their economic interests certainly would not be. And, afgter all, the economics is still secondary -they are, after all, state communists with a Fascist twist.
This following will be the next hedge fund scam we'll be reading about:
Imagine this. 30% of the "investors" file for withdrawals within 60 days, say 40% of the funds assets. The manager sees this and goes short (in another fund) the exact crap they will be dumping to meet your quarter end redemptions.
Our markets have become shams. They are no longer efficient, they are casinos in a casino eCONomy.
Sorry, posted this on the wrong thread. Here it is again.
Back in the 1960's I was doing post-doc work in business organizations at a German university -- law faculty. One of my side lines was to translate German financial and patent materials into English legalese for US consumption.
One of the titles I translated was "Bank Kredit" and the underlying theme of the whole book was not "will we be able to lay this off?" or "will the collateral be enough?" No. The underlying theme was "How will the creditor be able to pay us back?"
OK, almost 50 years ago, but isn't that still the most important question? How will the creditor be able to pay us/this back?
--
ML: OIL COULD GO BELOW $25 IF CHINA ENTERS RECESSION
The Merrill Lynch forecast was reported on CNBC. My forecast in 2005 was that Crude would go to $25 when the US enters depression, something that I fully expect during 2009-10. Global depression is almost guaranteed and China and India will fully participate. People simply dont understand Finance Capitalism that guarantees booms and busts (I mean depressions) by abuses in lending practices during the booms and, most importantly, highly asymmetric government interventions. Democratic governments almost always intervene badly and at the expense of the majority. No?
All of this will only end badly if there is a big push for nuclear disarmament. Disarmament would make it safe for WW III, something that, even without nukes, would make WW II look small. So, I think that if there is a big push for disarmament, especially by U.S., then our leaders have set their sights on war.
"New York Federal Reserve Opens 'Pawn Shop' to Buy Up ABS Junk"
"On Wednesday, December 3, 2008 The New York Federal Reserve website reported that they will begin to purchase Asset Backed Securities (ABS) from failed mortgage giants Fannie Mae and Freddie Mac, as well as the Federal Home Loan Banks. They also hinted that they will stop there - everything seems to be on the table now, officially. Treasuries and stocks may see direct effects, with outcomes mixed. Initially, the program will concentrate on non-callable, fixed-rate senior benchmark securities such as Mortgage Backed Securities (MBS), but there are indications in the language used that the program may expand to include other ABS such as privately issued MBS (non-GSE), bonds, stocks and other equities. With this much unprecedented Government intervention in the markets, I find it difficult to apply any models effectively in a predictive fashion. In the long run, I believe will be inflation and devaluation of the dollar - combined with the aftermath of record writedowns, mergers, buyouts, and outright failures that we will see in 2009 - that will be the legacy of these efforts."
China, as a major power, needs to learn that not all debts are redeemable. For crying out loud Cuba still owes 'us' money.
I see no reason why the US taxpayer, eg, should stand behind GSE debt as the prospectus said these were NOT obligations of the US government. That is why they paid more than treasuries.
Great Powers have great responsibilities. China is now a Great
Power. Time for them to assume the same responsibilities that the US has had to bear and use its resources and financial clout fot the greater good.
Ivan writes:
It is hard to understand capitalism when it's biggest supporters are wall street shysters who quote adam smith rather selectively.
I recommend <a href="http://dandelionsalad.wordpress.com/2008/01/04/education-is-ignorance-by-noam-chomsky-1995/>Education is Ignorance by Noam Chomsky (1995) (interview w/ David Barsamian)
China is not and will never be a Great Power. In the end - as they always do - they will reflexively turn back upon themselves and close their door to the world.
"I have a sinking suspicion they can survive high unemployment with an externalized enemy for their exceedingly large demographic of young men."
Yeah but we can't. Nine months from now I suspect we'll be looking for a country to shoot up. Nobody in the USA is going to shed a tear for China either.
First it will be their colonial interests in Africa and South America and it will spread East from there. CIA will buzz around their heads like gnats on a hot summer day, crawling into their ear canals and behind their eyeballs until they can't stand it and they're pushed to the brink of "naked aggression".
Chinese also believed the 'commodity bubble' was here to stay. There big mining cartel bought $14 billion worth of Rio Tinto and now have a $2 billion stake.
That is another reason why China and the US must work together or nothing good will happen. You can't be such a huge part of the global economy and pursue mercantilist economics.
"The moves included putting the nightly CNBC show "The Big Idea" with Donny Deutsch on hiatus, said Brian Steel, vice president of CNBC public relations"
-627 should scare the CNBC pundits in to sobriety. Does anyone listen to them anymore? They still can't get the severity of what we are experiencing. This is life changing for most of the population.
RE: oil prices. $47/bl oil makes about as much sense as $147/bl oil. It takes at least $50/bl to make it worthwhile to even pump it. So yeah, the oil bubble has collapsed, but I wouldn't bet on $25/bl oil any time soon unless the entire world economy just implodes all at once (a possibility, of course.)
There is another option, which is to blame everyone else, and then strike out.
I would be really afraid if there are a lot of nationalistic rhetoric being spread around, sort of like what is going on with many of the folks who wants to raise tariffs, or shut the borders, or kick out illegals.
When people start blaming others, the next logical step is war, with some lag time in between to get everyone on-board that the others are to blame.
Chinese government has gone for 97 years without the Mandate of Heaven. That was seen to by Dr Sun and the revolution that overthrew the Ching Dynasty.
We CAN do what we want....if we grow a pair and decide do it! This is going to get messy and we will have to get dirty before dinner gets served. No more Mr. Nice guy and take what we are willing to give you or COME OVER HERE AND GET IT! COMMIE
The common thing between the past and present is people. It's amazing that with all the education, people are still driven by greed, pride, and the lust for power.
As long as that doesn't change, history is still relevant.
Growing a Pair? Only after we stop believing that the government can fix this mess we're in. It will take a lot of hunger before NIMBY is a dirty word.
We and the Chinese are in a fierce competition to see who is stupider. At first glance, we seem unbeatable with our wall street titans payed billions in bonuses to loan money to people who cannot possibly repay it through financial instruments that the titans admit was too complex for them to understand... With leverage of 100 to one in some cases, based on the belief that real estate never goes down (how many land deals have gone sour, starting with Louisiana, Florida, Arizona...).
The Chinese however, are stupider than they first appear. Obviously, continuing to buy bonds from a government that can print as many dollars as it wants, and has PUBLICALLY stated so much, brings the Chinese about even. The Chinese may be ahead when one considers that there economic model is to sell their labor for less than they could...hey, don't pay me a dollar an hour, I'll do it for a quarter. We all want to make less money!!! (as Patton would say, its not your job to die for your country - its your job to make the other dumb son of a bitch die for his).
Setser about ?two? weeks ago had a great link, where it was shown that between currency manipulation, and the lack of return on the bonds they buy, their (Chinese) products are 15% than their nominal price.
Can't the world have smarter leaders???
Globalization is BS. Since when did global superpowers have to depond on 2nd and 3rd world countries for it's own well being? Besides Americas recent history?....We are toast, unless we start doing things by ourselves and for ourselves.
There is an island off Siberia. Named
Wrangel. About the size of the Falklands. Belonged to the US. I think it was even discovered by the US.
We ceded it back to the USSR because it just wasn't important enough to make it a 'global' issue. Panama Canal
Zone is another example of some greater renown.
China has got some 'islands' too and I'm not speaking of Taiwan. It needs to relax a bit and not worry about pushing Vietnam, the Philippines or even Japan off of them as equivalent to Great Power status.
"We are the ones who can't make steel anymore, can't dispose our toxic wastes, can't make chips for our play things."
But can those things be made/done by any of the United States' allies or protectorates? Korea? Japan? Mexico? Nevada? And the issue of protecting Sea Lines of Communication v.v. China is not relevant to that question.
There is that pesky problem of finding more consumers to sustain growth. Without growth, a debt based financial system is kaput.
"Money Man writes:
Globalization is BS. Since when did global superpowers have to depond on 2nd and 3rd world countries for it's own well being? Besides Americas recent history?....We are toast, unless we start doing things by ourselves and for ourselves.
Money Man | 12.04.08 - 6:31 pm | #"
Not if they're people. This is as smart as it gets, usually. And then, those who are brilliant in one era turn out to be dull references in a succeeding era.
Bismarck, than whom there was none more intelligent and none more clever, remarked, I think, some time in the 1860s, that if the British Army invaded Germany, he would have it arrested.
But history, which is an express train, does not make local stops - or any stops.
I think Conjure had something to say about this China business some months ago. If memory serves, Conjure said something in the middle about the end of the US$ as international reserve currency and, at the end the end, I think his exact words may have been, "Bwahahahaha." But then those are usually Conjure's last words.
"Will be able to pay for them at the rate we are going ?"
Food. Helium. Molybdenum. Micky Mouse. American Idol. B-737s. We ain't totally without stuff here. And as far as workforce goes, the service industry implosion is freeing a number of folks up to do other, more productive things.
After all, the truest thing probably said on this thread is this:
"
We are toast, unless we start doing things by ourselves and for ourselves." Money Man @6:31
My point is that WE need to scrap the debt based economy. It may take a war to get the debt burden removed but something has to give. I have now assumed crash positions and put my tin foil hat back on. You may now proceed to throw insults and produce.
"Darth Toll writes:
RE: oil prices. $47/bl oil makes about as much sense as $147/bl oil. It takes at least $50/bl to make it worthwhile to even pump it. So yeah, the oil bubble has collapsed, but I wouldn't bet on $25/bl oil any time soon unless the entire world economy just implodes all at once (a possibility, of course.)"
I just filled my car for $22. That means the $38 less I paid from earlier this summer can be used to buy booze, cigarettes, and lottery tickets.
mmckinl, Taiwan has currency reserves on a Chinese scale. I.E. the US could
turn Taiwan into an Asian version of Israel if we need to go down that road.
F-22s,nuclear submarines light years ahead of what the Chinese can build,
AEGIS destroyers etc.
As it is, the US, avoids transitting the Straits of Taiwan, not because we have to, they are international waterways over 100 miles wide, but simply because why create a problem where none has to exist.
China has to accept that there are limits to its power too unless it wants to get into a fight it is unlikely to win for the foreseeable future.
"They press Detroit about 34B but sign off on trillions for Wall Street."
They were spooked. It was poor public policy, which was recognized by many on this board as it happened. But have an "expert" tell a politician a few weeks before an election that if he/she does not act, a financial asteroid will strike the heartland before Nov. 4th, and poor policy is guaranteed.
Now, with time to reflect and consult, and seeing that the experts are flailing around from one failing idea to the next, it is not so easy to convince the Members of "do it now or else..."
Thanks, 001. I've just read that Ecuador will default on one third of its debt. The source is one I got my head handed to me for forwarding before, but I take it to be reasonably reliable.
The Chinese have gained a huge advantage over us here in the US. While they became masters in manufacturing, we abandoned manufacturing (Thanks to Walmart and Walmart shoppers) and became 70% focused on service oriented industries. Needless to say that this is not sustainable but by this time we are already screwed beyond royally.
China had better build up her military if she wants any realistic chance of seeing those debts repaid.
Nemo | Homepage | 12.04.08 - 5:25 pm |
Unless things have changed in the last 15 years, China's like Israel...every young person goes into the military for a couple of years. I talked with a young female tour guide in Guangzhou in the '90's and she told me that it was to teach them how hard the military was and to always have respect for the military. When she got out, then she got to go to university, but not until her military service was completed.
I asked her if it was hard, she answered "very hard". No desk jobs for women, I forget what you call foot soldiers (blonde moment) but that's what her job was.
As an American, I had no concept of how tough these people have to be, the conditions they lived in. I have never seen anything like it, before or since. When we crossed the border from Hong Kong, it was like stepping back in time 200 years, literally at the border (the year before reunification).
CR, thanks for the link to the Atlantic story, very interesting. Here's another one on Gao Xiqing from Duke Law. Duke Law in China: Gao Xiquing '86
Our own greed and myopic pursuit for a heftier bottom-line have allowed China to gain advantage over us. We have no one to blame but ourselves. Greed is good until you sell away the farm and starve to death.
Economically we may be 'screwed' but that takes time to determine.
Military situations are not so opaque.
There is no more 'mobilization' or 'arsenal of democracy' crap. You go to battle with what you have in the modern world.
You pull the trigger and the other guy starts shooting back. You find out if your stuff is a match for your opponents and if not in a few hours your command and control, your infrastructure either survives or it does not.
China is not yet in a position to play that game with the US, Japan, etc.
"Pavel, I just listened to Emergency Brake. Very good stuff, indeed. BTW, do you have anything, shall we say, less gloomy?"
SOLEMN FOOL
Hey, you solemn redhead! Why hammer in that tree?
Hammering and hammering, anyone can see;
Why the yellow pick, why the scarlet crest?
What could be more handsome, what would you suggest?
Here in gray December, the gleanings must be scant -
Not for us, not for us, we find delicious ants,
Formic-acid-seasoned, piquant, whole and sweet,
What could be a finer food, what food do you eat?
Why so heavy-grounded, legs like clumsy columns,
Why stare upward like a fool? Who do you call solemn?
Re: unirealist @ 5:29
Obama is Hitler~ (~ is the snark tag)
Re: Jas @ 6:08
ML saying oil could go below $25? Aren't these the same jokers projecting oil to go to $500?
Re: dreadlord76
If there is going to be a war won't it be internal American class warfare? I'm thinking of something like a number of people descending on Capital and then the Capitol police turning their guns on the politicians. Of course if something else happened one would have to conclude that the Capitol police are in on the fraud/bribes/corruption...
"We" have no say in what the path the elites in this country take us down, short of a revolution. They've already signaled to us their intentions on our debt. Check that: they've signaled their intention of running up as much debt as possible.
"The Chinese have gained a huge advantage over us "
Many of you are old enough to remember the late 1980's, when it was the conventional wisdom that the US had allowed Japan to gain huge advantage over the US. Trying to be like the Japanese was all the rage, from management style to Ma Jong.
I was starting to believe it myself, until one evening an ex-Fed regional officer said at a dinner, "We are allowing them to ship us Toyotas, and they are allowing us to ship them Treasury bills in return."
Soon the Rockefeller Trusts had Rock Center back, the Nikkei had started a decline that is still going on, and Japan's economic miracle became a stagnant shell supporting a country that cannot feed itself.
Reading between the lines of the articles below, it would appear that the Chinese are threatening to depreciate the yuan in order to protect their investments (treasuries and agencies) in the face of the Federales monetization program.
No other explanation makes sense.
The Chinese can't depreciate the currency enough to have a dramatic effect on exports, as acknowledged by the Chinese Central Bank governor.
What can Zirpmeister Ben and Timmy G do to assuage their Chinese counterpart to continue yuan appreciation so as not to set off additional asian devaluations and demand destruction?
What guarantees will be given in order to protect Chinese investments?
According to the World Bank the Chinese will still have dollar reserves that they need to dispose of in 2009 due to decreasing terms of trade (cheaper inputs i.e.,half-off sale on all commodities.)
Continued yuan appreciation with guarantees to the Chinese that offset currency risk of our sovereign debt would seem to be the desired outcome.
A currency swap with appreciating reserves tied to the depreciating value of the greenback? Maybe Goldie can share some of the Treasury CDS.
Don't laugh ... imagine how silly any of today's headlines would have been a year ago.
Connect the dots as you see fit with the articles below.
Thu Dec 4, 2008 2:17am EST
BEIJING, Dec 4 (Reuters) - Zhou Xiaochuan, governor of the People's Bank of China, flew to the United States on Thursday for an unscheduled meeting, a central bank official said.
By Li Yanping and Dune Lawrence
Dec. 4 (Bloomberg)
The comments in Beijing today by Vice Premier Wang Qishan and central bank Governor Zhou Xiaochuan came as U.S. Treasury Secretary Henry Paulson praised Chinas responsible role in combating the crisis.
We hope that the U.S. can take all necessary measures to stabilize its financial markets and economy as soon as possible and ensure the safety of Chinas assets and investments in the U.S., Wang said. To work together to tackle the financial crisis is the most pressing task that we are facing.
by Joe McDonald
Dec 4th -AP
"The Chinese continued to reinforce to us that they were committed to continued reform, and by that I mean continued appreciation (of the yuan) over time," said an American official who briefed reporters on condition he not be identified further.
The American officials said they did not know details of what Wang meant by protecting Chinese investments.
thestandard.com.hk
(12-04 17:19)
China needs to be prepared for the worst case scenario amid a deepening global economic crisis, central bank governor Zhou Xiaochuan said.
Zhou also urged the US government to take more measures if needed to help stabilize the global economy and financial markets, Jin Qi, head of the international department of the Peoples Bank of China said in Beijing after a meeting of the China-US Strategic Economic Dialogue.
China's government should take timely, effective and pre-emptive measures, analyze the progress, evolution and outlook of the crisis and be especially prepared for a worst- case scenario, Jin quoted the central bank governor as telling the meeting .
By Wang Bo (China Daily)
Updated: 2008-12-02 16:00
The governor of the People's Bank of China, Zhou Xiaochuan said earlier that he wouldn't rule out the possibility of the renminbi depreciating.
"The moderate depreciation of the Chinese currency is conducive to the domestic economy," said Guo Tianyong, director of the Research Center of the Chinese Banking Industry, Central University of Finance and Economics.
But he also pointed out that as overseas demand has declined substantially, renminbi depreciation is not "quite an effective tool" to spur export growth.
I just filled my car for $22. That means the $38 less I paid from earlier this summer can be used to buy booze, cigarettes, and lottery tickets. - Elvis
So, this Chinese guy thats coming to the US. He won't have to turn around and fly back will he? It's not the same guy I hope. If it is, he better bring underwear and a toothbrush in his carry on.
China will prolong dollar hegemony.
Their natural adversary is Japan and if the dollar blows up, the yen is more likely a reserve currency than the euro.
China is not Japan ... it is a command economy ... they do have the same population decline problem ahead. Really bad for a fractional banking monetary system ...
Driving through the Yangtse delta with a friend in the early nineties, a friend and I were discussing what would happen if China attempted to become "another Tiger", a la Taiwan, S. Korea, etc. We agreed that in order to industrialize to that extent, the ROW f'tys could pack it up and give manicures to each other. And moreover it would entail a huge expansion in the volume of world trade and international financial flows.
But that simply couldn't happen, we agreed, due to the imbalances that would inevitably result.
Well, it didn't go all the way, barely half way, and we see what we've got as a result.
Lack of domestic stimulous: I cannot believe the shortsightedness of China's economic planners.
Hell for leather debt creation: I cannot believe the shortsightedness of the FED and J. Q. Public.
But here we are, in a mutual death dance. I have no idea how we'll return to our seats for a nice chat, but we have to.
"If we had to work as hard as Chinese peasants, many of us would collapse after the first day."
But the point, sir, is that we don't have to. In the early 1990's I had cause to go to China, and elected to take the train from Hong Kong to Guangzhou. The rail line was maybe 3/4 tracks then, but was being widened by magnitude. Along the way, a bridge was being built, and several Chinese peasants were working their buffalo on one side of the creek, moving dirt and rock. On the other side of the stream, there were several pieces of equipment sitting as well.
No, you inquired as to what "Nazi" memorabilia I collected.
To tell you the truth I wish I had an extensive collection. It is quite valuable!
I'll tell you a story. Many years ago I traded some hashish ( it was long ago) for a Nazi SS dagger. I was driving a 1956 Porsche and my engine
block cracked. I didn't have the money to have it repaired. It had to be 'heli-arced' or some such high tech technique to be salvageable.
The local Porsche dealer's ace mechanic discovered that I had this 'rare' piece of 'memorabilia'. He offered me a trade.
Don't know which would be worth more today. My Porsche or the dagger. I no longer own either and the poor fool who wanted to smoke 'hash'? Who knows where he is?
dreadlord76 | 12.04.08 - 6:27 pm |
Pavel Chichikov | 12.04.08 - 6:54 pm |
+1 to you both, I seriously don't know what happened to the quality of the commenting here.
Thank you for interjecting thoughtful posts throughout the nonesense.
Reading between the lines of the articles below, it would appear that the Chinese are threatening to depreciate the yuan in order to protect their investments (treasuries and agencies) in the face of the Federales monetization program.
Thanks, C. Swan. Back in the day, the U.S. applied tremendous pressure on Taiwan for a NT appreciation, and by the late eighties, with the yen strengthening, it was inevitable.
There was a huge flame of speculative excess, again like Japan, and then collapse.
In any case, there was continued growth of exports and forex reserves, along with a rising std of living for the local consumer.
This time, the chinese had their (slight) revaluation of the RMB, and an early bout of speculative excess.
I'd suggest that a stronger RMB would be in their interests now. Inflation is a regime killer as much as unemployment. And in any event, weaker RMB is not going to jump start exports. Simply won't work in the best of times, let alone now.
The key is to get the Chinese spending domestically. A stronger RMB helps.
Re: New Car Search
Got a few more responses from new car salesman after sending out a low ball offer on what I'd be willing to pay.
All of them laughed and said it was not a serious price. One of them said something like "if we sell you at that price we will go out of business". I guess he doesn't think they will go out of business as it is. My friend who deals cars all the time told me I shouldn't have put a price in the feeler e-mail I put out. I'm glad I tweaked some of them.
Per Auto-trader 4 cars have moved within my search area the past week. If they keep that rate up they'll all be gone in 2 months... oh no!
"But here we are, in a mutual death dance. I have no idea how we'll return to our seats for a nice chat, but we have to."
They used to say in the old SU: Last year we stood on the edge of the abyss. This year we have taken one step forward.
The world can survive a severe economic downturn. What it may not survive is another general war. I wish there were an international consortium of geniuses who would study the prevention of war, and have the influence to put their studies into practice. A sort of anti-violent Manhattan Project.
That the scientific community could go from Rutherford to Szilard to Fermi to Oppenheimer - and of course there were many others - in only about thirty years, shows what can be done on the demonic side by brilliant men. Could they not take the side of light? We need peace, guaranteed and loved and preserved. Then all else can be worked through.
I've seen enough to be convinced that only maniacs want war, and that maniacs are rare birds even in leadership positions. But are there enough moral, intellectual, spiritual geniuses?
I seriously don't know what happened to the quality of the commenting here
Ridiculous events deserve ridiculous commentary.
What fantastical revelations did you expect about an idiotic situation which was many years in the making and whose outcome was easily predictable? (although its timing wasn't, Stephen Roach doesn't get enough credit)
"Maybe that's why I pray to St. Jude every morning."
This early morning I drove my wife to AUS airport. In a little crossroad town on the way, morning Mass was in session; 20 or so cars in the lot.
She mentioned in passing how the history of settlement by German Catholics --those who practice faith by Works-- has had lasting impact in making this part of Texas distinctive.
Pavel,
As long as there is power, influence, or prestige to be gained there will be people who are after it. So to will countries seek the same. Many are convinced that there is no such thing as a "win-win" situation for the world. Thus countries must vie to be dominant over other countries.
I'm sure the world population would just like to live their lives and be left alone... but even in that situation those in government try to dominate over the populace.
"Food. Helium. Molybdenum. Micky Mouse. American Idol. B-737s. We ain't totally without stuff here..."
I read in Wired that at current rates of consumption we will run out of Helium in 9 years. Tried to find other sources but did not find this conclusion anywhere else. Mickey is moving to Shanghai, Idol is an idiotic waste having millions of Americans waste time and money to find 1 person a job singing songs. Very productive use of time. If airlines are forced to charge the real nominal cost of flying you have plenty of idle 737's for the demand.
Basically the only thing left is food.
Learn to operate a Deere if you want a job in 3 years.
I took that same trainride in '94, no track widening, no Caterpillar. Just peasants working the fields by hand.
Could it have been later in the 90's?
I remember Western money was already coming in, but if I remember correctly, I didn't see many personal vehicles, and only one modern (oppulent) hotel, and buses so crammed with humanity it was amazing. I do remember there was a modern freeway (one).
"Basically the only thing left is food." vs "Mickey is moving to Shanghai"
Mickey lives in a vault in California, and thanks to the changes in the copyright and trademark laws, will do so forever.
That someone in Shanghai would pay to have Mickey's image there is my point.
As far as helium depletion goes, by the way, I did not know that, but I believe the US is still (virtually) the only place on earth with commercial quantities of helium, isn't it?
In any case, I was writing metaphorically. You are right about Idol, of course. Bad metaphor.
I bought some cell phone/GPS jamming equipment from a Chinese company. It is illegal in the US so I had to order
it direct from China. Praise the internet.
The instructions that accompanied it were translated from the Chinese and I mention because it is illustrative.
I paraphrase because the manual is not at hand but it isn't far from the original, if at all.
"Because electronic emissions are the major source of industrial and political espionage, many secrets can be lost. These can damage the company, the country and the PARTY.
Yep, the Chinese populace is still subject to one party control. They maybe robust capitalists and not at all our enemy but Hu Jin Tao and his 'Politburo' are an atavistic disgrace to the world.
With China as a 'new' Japan or Germany all things are possible but if not 'all things are possible'.
"She mentioned in passing how the history of settlement by German Catholics --those who practice faith by Works-- has had lasting impact in making this part of Texas distinctive."
There are so many people who keep this world alive, and most of them will never be known beyond a small circle of friends.
I feel gratitude towards people who encourage me here.
There's an old desert father story (desert hermits and monks of the early centuries) about how one abba was walking down a road, and he saw the devil walking towards him on the other side. As the devil got closer he greeted the abba this way: Father, I've been trying to overcome you for many years, but I give up. You are unconquerable. And you know why? It's because of your great humility.
When the abba heard this, he clapped his hands over his ears and took off running down the road as fast as he could, screaming all the way.
As I understand it, helium gets produced as a by-product of natural gas production. Normally it is just allowed to vent into the air because it is not cost-effective to capture it.
But once gone, it is very hard to get back. So the U.S. spent decades collecting the stuff.
The Wikipedia article needs some work. I am not sure what the status of the Helium Reserve is today.
No, it was fall of 1993. I don't remember which side of Shenzen, but I believe it was the PRC side.
Austin Tex | 12.04.08 - 7:51 pm |
Ah well, it was a long time ago, perhaps I'm misremembering it. But I do recall HK got a little desperate looking as we came up on the border, even so, there was a huge difference after crossing and the food was just awful. : )
I'd love to go back again one day, I've always been fascinated with the Chinese culture since I was a little girl.
Funny (strange) that for all our progress the same question persists: Why do the nations rage so furiously together and the people imagine a vain thing?
AnonyMiss - end 93, and through 94 we were still arguing the hard landing / soft landing story in China. Credit was duly injected into the system in massive doses of policy lending, sweetheart deals, and a very cosy triangular debt relationship emerged with colossal amounts of, erm, leakage. The coastal CRE and RRE bust of 98/99. The overhang was enormous.
Clearly a unique situation which couldn't or wouldn't be repeated in more "mature" economies. Too many smarties, Group of 30 etc.
"But I do recall HK got a little desperate looking as we came up on the border, even so, there was a huge difference after crossing and the food was just awful. : )"
Perhaps a different line? And did the train stop at Shenzen so the PLA soldiers could come on and look everyone over?
Pavel Chichikov(Unrated) writes:
So the income of a rural family is typically under USD 1,000?
Pavel Chichikov | 12.04.08 - 5:49 pm | #
LOL - ya something like that. A story for you Pavel, you're literate and would appreciate a 'story' more than just raw numbers...
I work for a company that built a plant in China a while back - not long ago - not to export to the US directly but to support the many multinational OEMs that export to the US - they supply parts to those OEMs worldwide.
We were discussing a part... and whether we should 'core' a hole in the part [put the hole in the mold to form the hole in each part as it is being molded] or should we drill the hole in each part separately AFTER we mold it sans the hole. Here in the US we would try to mold the hole in to save labor drilling a hole... not always the best choice in China.
At this meeting I asked a dumb question "So how much does it cost to drill a hole in China?" [I knew that putting the 'core' feature in the mold would add something like $5000 to the cost of the mold]...
The reply I got from our China expert was "About $60."
I protested - "No F'ing way! At their labor rates it has to cost way less than sixty bucks!"
Our expert said... "That's not per part... it will cost us about $60 a month to hire a guy to drill holes. Divide that sixty dollars by as many holes as he can drill working six days a week ten or twelve hours per day. THAT'S your cost per hole."
Came out to be something like a quarter penny per hole.
That worker's salary is about $720/year... and people are leaving rural China in droves to get those jobs. My guess is the people in rural China make way less than $1000 USD... probably less than $700 per year all things considered... else why would they leave?
Hu and JIwei need to read and understand Sester's blog cited above. The Chinese are pissed because they are losing money, and Brad explains why this is bound to happen. Let's hope these two guys learn from their mistakes and stop blaming the US for the imbalances their weak yuan policy has caused.
Pavel - your point is well taken with regard to the story of the abba and the devil. I believe Dante said there was a special circle of hell reserved for flatterers. Certainly something to keep in mind.
dryfly...quality control on those holes is going to be weak; the hole-driller can't be that consistent, even with some kind of fixture. Which is why stuff from China is often, in fact, cheap Chinese crap.
Paper with ink on representing more paper with ink on it has very little intrinsic value. Increasing productive labor is the only true source of wealth. Who has made the most improvement over the last thirty years? It seems to me since they could print paper with ink on it to buy our paper with ink on it to keep the price of their paper with ink low and stable, they were able to industrialize a country. Could they have done it if they had to borrow something with true replacement cost? Who will be the winner in the long run?
Perhaps a different line? And did the train stop at Shenzen so the PLA soldiers could come on and look everyone over?
Anonymous | 12.04.08 - 8:08 pm |
No, we came straight through the New Territories on a group visa, we were checked on in HK through a group visa. Gosh, now you have me thinking...nope, no soldiers, so we came straight through. I checked a map just now, I've never been to Shenzhen as far as I can tell!
I do recall that when we got into Guangzhou, our tour bus wasn't waiting for is as it should have been. I don't think I've ever been so scared in my life. Maybe two dozen of us, surrounded by hundreds of lame, handicapped beggars, children, and women. Once again, I have never seen anything like it.
As Pavel mentioned upthread, I probably couldn't last an hour as a Chinese peasant.
And when I said the food was bad, I only meant that the quality of the food maybe 10% of the quality of the food we ate in HK although the buildings were more beautiful.
That worker's salary is about $720/year... and people are leaving rural China in droves to get those jobs. My guess is the people in rural China make way less than $1000 USD... probably less than $700 per year all things considered... else why would they leave?
dryfly | 12.04.08 - 8:10 pm |
I'd agree with you on that, I recently read a story (who knows where) about some employees of Chinese car manufacturers. I'll see if I can dig it up.
Unit472 writes:
"F-22s,nuclear submarines light years ahead of what the Chinese can build"
Really? More american football mentality dope patriotism is what I'm reading and the bravado of the USA is bigger and stronger. Time to grow up and recognize China as the dangerous red dragon that it is:
Dailymail.co.uk November 2007:The uninvited guest: Chinese sub pops up in middle of U.S. Navy exercise, leaving military chiefs red-faced
At least a dozen warships provide a physical guard while the technical wizardry of the world's only military superpower offers an invisible shield to detect and deter any intruders.
That is the theory. Or, rather, was the theory
American military chiefs have been left dumbstruck by an undetected Chinese submarine popping up at the heart of a recent Pacific exercise and close to the vast U.S.S. Kitty Hawk - a 1,000ft supercarrier with 4,500 personnel on board.
By the time it surfaced the 160ft Song Class diesel-electric attack submarine is understood to have sailed within viable range for launching torpedoes or missiles at the carrier....The lone Chinese vessel slipped past at least a dozen other American warships which were supposed to protect the carrier from hostile aircraft or submarines.
And the rest of the costly defensive screen, which usually includes at least two U.S. submarines, was also apparently unable to detect it
CNN 1999: China has the largest military in the world of 2.8 million...China., with some 400 nuclear warheads, still has the world's third-largest nuclear arsenal and missiles that can reach the United States.
Bush's foreign policies has forged new alliances: China, Russia, India and Brazil ( three-quarters of the world's population), Pakistan, Iran, Venezula, South Africa have particularly forged relations.
November 2008:Chinese trade agreement with Taiwan...China's agreement with Taiwan will triple the number of direct flights across the Taiwan straight.... and Cheyne Chiu drafts peace agreement between Taiwan, China
People's Dailyonline:China, South Africa sign labor agreement
South Africa and China Monday signed an extension to the memorandum of understanding (MoU) in the labor field agreed to in 2002.
China had managed to create 10 million jobs a year over the past four years and had much experience to offer South Africa in this regard, he said. Mdladlana agreed, saying South Africa was creating only about 500,000 jobs a year...
venezuelasanalysis.com: 1/31/05:President Hugo Chavez and Chinese Vice President Zeng Qinghong signed 19 agreements ...The Chinese Vice President explained that fortunately for the good of the world, China would continue growing socially, morally, politically and economically. "China continues to be the country with the most solid economic growth in the world," affirmed Qinghong.
Qatar News Agency: China and Japan sign cooperation agreements in Energy Conservation
Tokyo , November 29 (QNA) -China and Japan signed a number of new contracts using Japan's technologies to cut China''s energy consumption and cooperation in energy conservation and sustainable development . In the third edition of a China-Japan energy conservation forum held here Friday, a total of 19 contracts are signed between government institutions and companies from both countries...Trade and Industry of Japan, said cooperation in the environmental protection sector has become the main highlight of economic ties between China and Japan. (Qna)
bilaterals.org 11/20/08: China and Peru sign free trade agreement, extending Asian influence in Latin America
China has made similar forays into other Latin American countries, such as Chile, where it signed a free trade agreement in 2005. Last year, China supplanted the United States as Chiles top trading partner.
In addition to Peru and Chile, China has already signed free trade agreements with Costa Rica and Cuba. In fact, Cubas state news agency reported that President Hu has signed almost a dozen agreements with Cuba,
In Brazil, China is currently in negotiations are negotiating to build a $3 billion steel mill with help from the Bank of China, which is set to open a branch with a $100 million in lending capital there next year. China has also sunk billions into oil exploration in Ecuador, Colombia and Venezuela.
The reality is that to some degree the fate of Latin America has been decoupled from the US, Daniel Erickson, of the Inter-American Dialogue thinktank, told the AP. Or at least its not as tightly entwined as it used to be.
The USA offshored manufacturing and industry to China. USA's wealth was finished product exports at one time. Now we sell to the world; raw commodities and "financial SIV's and services." We fabricated a faith based currency while China PRODUCES finished manufactured products and has the rest of the world in trade agreements. SAIC is GM's chinese foreign car maker. Soon SAIC will buy GM.
Never underestimate China's long-range plan; to be the next empire as the USA gasps its' last collective breath of stupidity of selling out american workers and manufacturing jobs and industry. China will buy our debt until they've accomplished their goal; The new world leaders.
Don't forget about China's FOREX; $1.9 trillion. Unlike the USA, China is a country that planned ahead and saved for the rainy day. As Paulson and Bush go on bended knee BEGGING China to buy more treasuries to bailout the USA and 'too big to fail' investment and insurance. China smiles as it buys our treasuries to fund our MIC and stupid wars because they understand that we are bankrupting our future. And the future came early...
Stiffing China will be like stiffing the Mafia. The chump who greedily takes the shark loans always ends up dead in the trunk.
rps, you get your naval info from the Daily Mail? I get my Spice Girls and Brittany stuff from that source.
Yeah, submarines popping up in the middle of naval exercises are nothing new. Some 25 years ago the Kitty Hawk, I believe it was, was damaged by a Soviet sub surfacing beneath it!
Whom knew where who was?
The better analysis is this. The US military took two weeks to drive to Bagdhad. The subsequent military activity is irrelevant because the US, at its option, could have crushed the Saddam Fedayeen, al Qaeda in Iraq, Mookies Brigades etc. but didn't because it was trying to achieve political, not military objectives.
In a war with China, the US Navy would not ANNOUNCE it was holding exercises in the Sea of Japan or ask
shipping to stay away from such and such areas.
Carrier strike forces would move and they would strike. US Navy subs would not 'locate' possible intruders they would 'sink' them. Big difference.
Those China #s PPP? I can live minimally (shelter, food, utilities, transit, misc. staples) for $8000 in Central FL. I bet $1000 in urban China is more like $5000-$6000 here.
Unit472 writes:
"rps, you get your naval info from the Daily Mail? I get my Spice Girls and Brittany stuff from that source."
The Cleveland Leader:
Chinese Sub Pops Up Undetected in U.S. Navy Exercise
...As a citizen of the United States, it may leave you wondering if we are really as safe as we think we are.
UPI.com
Chinese sub has U.S. military concerned
LONDON, Nov. 10 (UPI) -- U.S. Navy officials are concerned over the unexpected appearance of a Chinese submarine during a major military exercise in the Pacific Ocean.
CBS NEWS: Chinese Sub Came Close To U.S. Ships
Navy Commander Says Close Encounter Could Have Triggered 'Unforeseen' Incident
And how is the USA going to Finance a war with China? Presently, China and Japan finance our current stupid wars and military. Americans have an aversion to pay as you go and demand tax cuts. China obliges us...and smiles as they buy OUR DEBT-treasuries. They have a plan.
China will win without a physical war. It'll be financial armageddon for the USA. Bush and Paulson have already sold US workers future labor. Did ya think the bailout money via China's willingness in buying treasuries was free with zero interest?
should check out that rubber covered sub that popped out behind the carrier rack within the last year or so. sorry no ref, but look it up if can't find by creative google. eurasian centrality is key to world dom, unless it isn't. (hard rain gonna fall)
these threads are long, but might want to check a bit of naval military triumphalism.
rubber covered sub is fairly well vetted, please debunk if you ca
Ancient Chinese Secret(Unrated) writes:
dryfly...quality control on those holes is going to be weak; the hole-driller can't be that consistent, even with some kind of fixture. Which is why stuff from China is often, in fact, cheap Chinese crap.
Ancient Chinese Secret | 12.04.08 - 8:17 pm | #
The cored-molded holes aren't that 'accurate' either - draft angles & 'shrink'. As bad as the Chinese drilled holes would be they wouldn't be any worse than a molded hole... the difference is that in the developing economies a molded hole is cheaper... in the developing economies the drilled hole is cheaper... it all has to do with the relative costs of labor vs. capital in each place.
Those China #s PPP? I can live minimally (shelter, food, utilities, transit, misc. staples) for $8000 in Central FL. I bet $1000 in urban China is more like $5000-$6000 here.
Straight dollar to rmb conversion.
Don't even make me laugh talking PPP here - you have no idea how grimy & primitive the lives of front line Chinese laborers are compared to ours. PPP hardly covers the differential or explains the contrast in lifestyles or costs.
Rural is 'less polluted' but even harder & harsher than urban lives - that's why they leave.
I've never been there - have been offered to be sent there, declined - but those I work with who have been to the industrial centers [we aren't talking Great Wall tourist traps] are blown away by how rough it is.
Their business & 'intelligentsia' class are closing the gap quickly but not their 'hole drillers'
dryfly-- "I've never been there - have been offered to be sent there, declined - but those I work with who have been to the industrial centers [we aren't talking Great Wall tourist traps] are blown away by how rough it is."
When I took U.S. visitors through rural China, I would await the proper moment, and then quote David A. Coe:
I found the auto factory worker wages in the article I posted above under part 3. Here's the relevent paragraph.
"Thomas Yao, the factory's head of public relations, took me on a guided tour. The factory, he explained, had opened five years ago, built from scratch in strict accordance with Ford's global manufacturing standards, and produces up to 250,000 cars a year. The average non-technical production line worker earns 18,000 yuan (about £1,300) a year, working an eight-hour day, with a 15-minute break every two hours and an hour for lunch. (Wages, and the cost of living, in Chongqing are between a quarter and a third less than in the major manufacturing centres of the south and east, where the average urban salary is 25,000 yuan, about £1,800, a year.) The company provides extensive healthcare, insurance and pension packages. Workers are encouraged to make suggestions about how to improve the production process - there are 'break-out' areas where groups sit together and review their performance - and receive awards and bonuses if their suggestions are adopted."
Two things jump out but you'd need to read the full series for the whole context.
When I visited Guandong (sp?) province 14 years ago, they were just beginning to mechanize and built up, now wages are up to around $2640 per YEAR, so they built and moved west for the lower salaries $1905 per YEAR. They moved all their factories and built a city of over 5M people and growing in less than 15 years just to save $735 per year/employee.
Stiffing China will be like stiffing the Mafia. The chump who greedily takes the shark loans always ends up dead in the trunk.
rps | 12.04.08 - 8:29 pm | #
Great post. I think we've outsmarted ourselves this time.
I've never been there - have been offered to be sent there, declined - but those I work with who have been to the industrial centers [we aren't talking Great Wall tourist traps] are blown away by how rough it is.
dryfly | 12.04.08 - 9:23 pm |
You really should go. 14 years ago, it was a lot easier to see the real, but it is also a staggeringly beautiful country.
Persecuted Comrade Anonymouse: Those China #s PPP? I can live minimally (shelter, food, utilities, transit, misc. staples) for $8000 in Central FL. I bet $1000 in urban China is more like $5000-$6000 here.
Pork shoulder in NYC is about $1 a pound. In China, it also costs $1 a pound. Shelter can be cheaper, but it depends on where you live. In the "wealthy" coastal cities, a three bedroom 1000 sq ft condo costs $40,000. Wages for skilled/votech workers are about $2,000 a year. That's 20 years wages to buy a condo, not counting interest. Stateside, bank were doing loans on the basis of homes appraised at 10x verified annual income, at the peak of the housing bubble. We may have a housing bubble, but it's nothing compared to China's.
re Gao's last staements the US political system is inc indicatient that someone needed to speak the truth to the american people and gear them up for war; the american political systemis incapable of delivering unpleasant truths to its people. We only elect political leaders who will tell us what we want to hear-pleasant comforting lies.
Calm down, guys. I am a Chinese. I don't think china is doing any harm to the U.S. If we are really hostile to you guys, we would have to spend most of our reserves to buy your country bonds.
The Chinese government just said what they think -- u.s. spend too much and have not much of saving. The translation may be misleading. It makes you guys feel we are making a war with you. Think in this way, the GDP of china is only 5% of the world, while US has more than 30%. How can it be possible that china have the ability to save the U.S?
China was part of the great allied powers in WW2 and got lend lease assistance from the USA in the same manner the British Empire did.
China got most preferred trading nation status under Nixon in the 1970's
China is an Ally of the USA. If interests in the USA want greater defense spending they can rely on China to cooperate to ensure that happens.
The issue really is that richer US interests want to remain rich by having a pool of cheap labour in China rather than enriching people in the USA so that the rich in the USA become poorer.
Even so there is a relationship there between the US and China where China knows it is onto a good thing it does not want to disturb. I think you have to see China in that context. It has something like 1.5T of US financial assets but it cant really spend them. All it can do is allow them to go back to the USA for the benefit of the USA while it recieves whatever interest and remuneration that fits the nature of the relationship.
On a point of infomation Americans are notoriously poor at understanding anything about the world outside of America. You have an overly US centric view. I think that black swan book says something about this. Many of you make decisions and form opinions beginning from a US centric view that is not the correct one.
None of us can in fact actually know the correct view. Because their are different views depending where you stand.
pw: China has simply been providing the US consumer vendor financing. They have been motivated to lose money on the financing to encourage creation of domestic production capacity and jobs. The amount they will lose on their holdings of US Treasuries as the dollar falls should be looked at as an investment in Chinese production.
This is the way the other Asian economic powers have viewed it. The problem is that with prosperity has come the view that they are indispensable, and that these foreign currency reserves actually mean something. Domestic audiences are now demanding that these reserves be redeemed for something of value. Any Asian country that does so will find itself in several economic difficulty - the root of the problem is that most Asian countries, including the wealthy ones, are essentially screwdriver turners for Western countries that come up with path-breaking innovations. Think about it - in the 2000 years of its existence, the continent of China has come up with a handful of inventions - a primitive compass, fireworks, porcelain, tea and silk, block printing (paper was invented by the Egyptians). In 400 years, the continent of Europe (and its progeny in the Americas) came up with the steam engine, the sextant, air conditioning, the Bosch and Haber processes, the internal combustion engine, the jet engine, modern plumbing, et al.
The one significant innovation China brought to the world was its skill at political control necessary to maintain its continental-scale empire - the rest of the Chinese experience is merely history repeating itself. This skill also led to a deadening of creativity. Compare the Chinese empire to the Roman one. Britain was the most remote and uncivilized corner of the Roman empire, the ancient equivalent of China's Tibet. The Roman empire's dissolution led to a flowering of European creativity, as kings competed with each other to recruit men of talent. Britain - a mere Roman province - rose from nothing to become a country whose inventions alone exceed those in China's 2000-year existence. In China, the empire's size made it easy for Chinese rulers to harvest huge sums of money for thousand-concubine palaces filled with pricey baubles, even as the peasants lived in squalor. In truth, there is one thing the Chinese ought to have learned, but have not - it would be better off as a dozen independent countries rather than as a monolithic empire unaccountable to its subjects. And so Chinese history - the passage of time without visible progress - keeps repeating itself.
Zhang Fei,
you are a sly game player;). "block printing (paper was invented by the Egyptians)"
The Chinese invented paper money. And how to count it; abacus, and count to the last penny; decimal system. Lest not forget dominoes as we watch the domino effect of all fiat currency systems around the world. The Chinese are very inventive and calculating.
Let me reiterate; Never underestimate China's long-range plan; to be the next empire. China has been patient for a very long time with those foolish greedy foreigners. China is the Red Dragon.
The Chinese invented paper money. And how to count it; abacus, and count to the last penny; decimal system.
The Chinese might have invented paper money, but the concept of fiat money pre-exists the Chinese state. The abacus was invented by Mesopotamians, and the decimal system was invented by the Indians.
ome
China. Who are you? What ae your motives? Please don't crush us.
I understand what SED stands for; but what does XIAOCHUAN stand for?
China's a fad.
You could equally say - be nice to countries that let your products in without tariffs. Remember the Schumer tariffs on Chinese goods? I think they're gonna make a comeback during an Obama administration. But this time, they will pass.
Maybe they could do a leveraged buyout of the US. In order to put pressure on China to close quickly and at a reasonable price, we can approach the Somali Pirates for "other talks."
China had better build up her military if she wants any realistic chance of seeing those debts repaid.
China will not save Western banks
China will not save Western banks - Telegraph
Lou Jiwei, the chairman and chief executive of the China Investment Corporation, a $200bn (£135bn) fund, said China had no intention of "saving" the West from the financial crisis.
"Right now we do not have the courage to invest in financial institutions because we do not know what problems they may have," said Mr Lou, at the Clinton Global Initiative conference in Hong Kong.
I understand what SED stands for; but what does XIAOCHUAN stand for?
Does it mean, "YOU BETTER PAY UP YOU 3$^@#$^@# DEADBEATS!"?
As China's problems burgeon, its attitude toward its biggest debtor, the US, will get nastier.
At some point it will demand that its dollar reserves be redeemed in hard assets rather than rapidly-devaluing dollars.
I imagine they'll take gold, and natural resources, and ag products, but I doubt they'll accept unsold McMansions.
At some point, the public may rebel at this takeover of US assets.
Then it's "hello, National Socialism, welcome to America. By the way, which one of you is Hitler?"
So when does the current chinese government lose the 'mandate of the heavens'?
CR, why do "poor" countries like China (and other "devloping" nations) lend the US so much money? Shouldn't it be the other way around? Aren't we supposed to be the fat cats???
From the link:
Zhou Xiaochuan, governor of the Chinese central bank, urged the US to rebalance its economy. Over-consumption and a high reliance on credit is the cause of the US financial crisis, Mr Zhou said.
Hmm, a sound, straightforward explanation from a government official. It's rather refreshing.
When you the bank 10 grand it is a you problem.
When you owe the bank 10 Trillion it is the bank's problem.
Don't get me wrong, I am taking no sides in this and I firmly believe we should pay our debts back, even those to ourselves.
Just sayin' it is a problem, either way you look at it!!!!!!1
CR, I warned you a couple of months ago this was coming...
Time for that famous Star Wars quote:
"I've got a bad feeling about this..."
Now comes the next part of the crisis.
Interesting that Harper pulled a seven week coupe out of the hat.
Life is just about to get full of foolishness for us too!!!
Someday this war's gonna end...
China will not save Western banks
Except they already are. Where do they think the TARP money comes from?
Thanks for buying Blackstone...LOL...suckers
AllenM, good to see you on the board.
Are you still a proponent of the 'stagflation' ending to all this, or has your thinking changed?
Zhou Xiaochuan, governor of the Chinese central bank, urged the US to rebalance its economy. Over-consumption and a high reliance on credit is the cause of the US financial crisis, Mr Zhou said.
From the folks who have manipulated their currency for years to keep it weak to encourage U.S. consumption.
Do not think the U.S. has a monopoly on hypocrisy.
Zhou Xiaochuan, governor of the Chinese central bank, urged the US to rebalance its economy. Over-consumption and a high reliance on credit is the cause of the US financial crisis, Mr Zhou said.
And if we cut back, they're screwed.
No! Capitalism works on bad credit and defaults, mercantilism works on money (or gold). Paying back credit in full results in a zero sum game aka mercantilism. Ahhhhh....
"Zhou Xiaochuan, governor of the Chinese central bank, urged the US to rebalance its economy. Over-consumption and a high reliance on credit is the cause of the US financial crisis, Mr Zhou said."
The Chinese are idiots. Only an idiot would load up his portfolio with more than ten percent of the float of US treasuries. What do they think is going to happen to the price of those treasuries the minute they start to unload them. When the price goes through the floor who do you think is going to load up on them? The fed, for fifty cents on the dollar. What will the fed unload to buy the treasuries? The MBS they took on in the last six months.
tbgpalisades...who were the morons lending us the money...oh that's right. It was the Chinese govt. And that same govt has held its currency artificially low to subsidize exports to the US. In the linked Setser piece, he describes how China needs to make major changes, as well as the US.
China won't be attacking any countries...they'll be too busy engaging in civil war/repression of their angry citizenry.
I am beginning to think that we won't be stable enough for stagflation.
We will end up in some twilight lifesupport socialism with a vicious black market in anything of exportable value. I have been watching Craigslist and Ebay for a while, and denial is thick for the common person on the street.
How's that for sufficiently grim.
I have to go see the doc about my ulcers, they have been acting up severely. So I will be going long more antacids, and short spicy foods.
In other words, I need a nap, and some time off of work.
Someday this war's gonna end...
U.S. must ensure market aid is temporary: SEC's Cox
I'd love to hear Mr. Cox's definition of temporary!
"We must begin to build an exit strategy from this myriad of new programs and commitments," SEC Chairman Christopher Cox said at an event in Washington.
Spaceships to Mars?
Reminds me of that cartoon with the waterbird eating the frog, but the frog has its hands around the bird's throat.
I would like to see more stories on the coming collapse in the middle east...Dubai, Saudia Arabia, Iran...China will crush dissent among their people, I don't think they can do that in the middle east when crude is $15bbl
I read that China is still in the fold but, Obama worries them.
China's already in trouble, social-movement-wise. They'll do their best to crush dissent or whatever, but I think they'll fail.
Except they already are. Where do they think the TARP money comes from?
Well right now it's from the Fed and Treasury so far.
Add in toxic assets from insolvent banks and you got all the ingredients to make a good cake.
Have a peek at this article, it's about gold but a bit related.
The Manipulation of Gold Prices -- Seeking Alpha
i'm in the deflation camp--are there any safe places (besides a remote mountain abode with clear sight lines, game and water, and maybe Pocahantas) to make money, get a job, start a business??
are we really just back to the stone age, even with the technological advances we've made since 1830, 1871, 1929, pick your favorite depression era? is there really no way out but to start from scratch?
Joe Montana/Ronnie Lott hedge fund closed. Hoocodonode?
China has simply been providing the US consumer vendor financing. They have been motivated to lose money on the financing to encourage creation of domestic production capacity and jobs. The amount they will lose on their holdings of US Treasuries as the dollar falls should be looked at as an investment in Chinese production.
I would guess that the Chinese believe their return on investment (in the form of profits, social stability, rising standard of living, etc.) from providing such "loss leader" vendor financing is worth the continued subsidy to the US consumer.
Remember if unemployment goes to 10% in the US the US government has to deal with 10 million unhappy people. However, if the unemployment rate goes to 10% in urban China you the Chinese government has to deal with 60 million pissed off people. Providing cheap financing to the US consumer is the cost of keeping those 60 million people employed and not rioting against the government.
China should loosen up...have some fun. Sell a couple hundred billion in Treasury, longer dated stuff, just to pull Ben's chain.
It be a nice tug of war there...
Hey guys 4.5%... watch this..
At least the news wouldn't be so..like...droll.
The mall across the street has a reasonable amount of cars in it, but the people shopping don't seem to have many bags. The Gamestop Store (which I got rid of a year ago)had one clerk and one browser.
We are already buying less and less from China.
They, as repeated by many above weren't all that smart either.
China should loosen up...have some fun. Sell a couple hundred billion in Treasury, longer dated stuff, just to pull Ben's chain.
It be a nice tug of war there...
Hey guys 4.5%... watch this..
At least the news wouldn't be so..like...droll.
barkingtribe
I like it. They could make some prank calls to George, Hank and Ben about dumping all their pigshit holdings, hang up and laugh their asses off.
So the income of a rural family is typically under USD 1,000?
We are already buying less and less from China.
They, as repeated by many above weren't all that smart either.
lawyerliz
Their intelligence pales in comparison to the great round eyed ones.
Population statistics always trip me up, but...
...with initial claims for unemployment insurance consistently above 500K for some weeks now, and with continuing claims continuing to move up...
Does anyone else think that November job losses announced tomorrow could be 500K?
Someone please help me with the logic.
I didn't say who was stupider. I am not sure who was.
Go Dodd! Go Frank! Kill TARP part two!
Dodd, Frank Say Treasury May Not Get More TARP Funds (Update2) - Bloomberg.com
Does anyone else think that November job losses announced tomorrow could be 500K?
Someone please help me with the logic.
Comrade-Dope jg
That was the number given by a guest on CNBC last hour
crispy&cole writes:
I would like to see more stories on the coming collapse in the middle east...
That's too prescient; can't read about it until 2 years after it's happened.
job losses announced tomorrow could be 500K?
Comrade-Dope jg (jg)
Actual num I get is 627k
Rich called it again last night, the death of retail. Now the NYTimes has a great piece on high-end merchants in NYC, slashing prices on luxury goods. Saks led the charge, with 70% off fall merchandise, and Bergdorf, and Barney's are in the same boat.
Mentions that the high-end merchants are not trying to salvage the season, but their commercial lives...
Luxury Prices Are Falling; the Sky, Too - NY Times
I don't trust CNBC, but I do trust Barley.
Thanks both!
Hu's to blame?
Actual num I get is 627k
Barley
Wow! Martial law, blood on the streets tomorrow. Gotta go get some popcor
Hu's on First?
The Chinese are idiots.
Naive about capitalism might apply to their government.
We may see a Non-Farm Payroll of minus 1 million jobs some month over the next year. This is based on my desire to be more bearish than others.
Be nice to the countries/banks/brokers that lend you money?
Don't blame the borrower for the lousy underwriting.
crispy - there's an article about the Dubai RE bubble bursting on todays Bloomberg homepage in the Exclusive section. (sorry, no good at linking)
I say minus 375k..anything less (even a thousand less) and CNBC will be pumping all f'n day
slashing prices on luxury goods
Cause: 80 hedge funds now have the money locked up as in no redemptions
So
1. Lower class looses maunfacturing/retail jobs
2. Middle class looses sevice jobs and goes from holding a 401k to a 101k.
2. Upper class looses WS jobs but keeps bonuses, looses hedge bragging rights and suffers a temp cash flow problem.
thanks 001!
c-&c-, you have to reduce your positive birth/death adjustment.
You are getting like the BLS, sir.
Dec. 4 (Bloomberg) -- The classified ads in Dubai read like an obituary for a real-estate market that until a few months ago seemed immune from the global credit crisis.
A Turkish investor, who identified himself as Sebat, took out 10 bright yellow ads in the Nov. 25 edition of Gulf News, the United Arab Emirates biggest newspaper, with the headline: DIRECT FROM OWNER DISTRESS SALE!!! Sebat said he used to be able to buy four or five properties at a time and sell them the next day for a profit of as much as 5 percent.
There is panic in the market, said Sebat, 52, who wouldnt give his full name because hes juggling 60 properties.
I saw that Citibank purchased 5.3% of General Growth Properties.
Comrade-Dope jg (jg)- Is tommorow the semi-annual BD adjustment?? If so, then mabye 450k
'PONZI SCHEME' AT CITI - NYPOST.com
A new Citigroup scandal is engulfing Robert Rubin and his former disciple Chuck Prince for their roles in an alleged Ponzi-style scheme that's now choking world banking.
However, Rubin and other top insiders were able to keep Citi shares afloat until they could cash out more than $150 million for themselves in "suspicious" stock sales "calculated to maximize the personal benefits from undisclosed inside information," the lawsuit said.
The Dubai investors will all be sayin': whoculdaknode?
An estimated 36 million Chinese starved during Mao's "Great Leap Forward". The Chinese government managed to keep in control during this period. I have a sinking suspicion they can survive high unemployment with an externalized enemy for their exceedingly large demographic of young men.
East vs West. Islam vs Christianity. Creditor vs debtor. Oil producers vs non oil producers. This has quite a few ways to play out.
Anne Applebaum - When China Starved - washingtonpost.com
Dubai is more precarious than it has ever been, said Christopher Davidson, author of Dubai: The Vulnerability of Success (2008, Columbia University Press). If the property industry collapses in Dubai, it will be finished. Dubais relative autonomy will come to an abrupt end.
However, Rubin and other top insiders were able to keep Citi shares afloat until they could cash out more than $150 million for themselves in "suspicious" stock sales "calculated to maximize the personal benefits from undisclosed inside information," the lawsuit said.
Chop off their hands, throw them in a pit. Broadcast it live on PPV
Great...more damn good news.
The Recesssion Metastasizes To The Bone
There are a lot of pieces of data about what is happening to the economy, perhaps too many to make any sense of them.
In the last day or so, two stand out. One is tha Treasury Secretary Henry Paulson may elect to drive down interest rates for new home buyers, perhaps as low as 4.5%, using Fannie Mae (FNM) and Freddie Mac (FRE) as his instruments. Any observer would look at the news and say that Treasury can finally see that saving banks will not solve the problems of the economy. Working from the top down has been a failure.
The other more frightening bit of information is that Goldman Sachs (GS) believes that the nation lost 400,000 jobs last month. Most economists have that number close to 300,000. Goldman is saying unemployment is moving toward 7%. There is no data from the business or financial sectors to indicate that any jobs are being created. A look at the headlines reads a bleeding out of more jobs, sometimes tens of thousands a day. That leaves out all of the small companies cutting back. Those never make the evening news, but, in total, the destruction of entrepreneurial ventures may be going on at record rates.
Manufacturing, retail sales, and consumer spending are falling so fast that the effect is geometric now. This means that intervention is going from being a solution with fair prospects to one which is approaching futility. The government could be criticized for putting money into the economy too slowly, but it may be that the timing would not have mattered. The circle of jobs destroying housing destroying consumer spending destroying jobs may be too powerful.
A lot of analysts say that this recession will be worse than any other since WWII. It should not be lost on people that the federal government did not sit on the sidelines in 1974 and 1981. It could not do enough to keep GDP from shrinking and joblessness from rising to 10% or so. Another way to look at it is that some downturns are so vicious that they cannot be prevented by huge infusions of capital and better regulation.
The new administration will continue to try to "save" the economy, the housing market, and jobs. At the core of getting elected to national office is the promise that the world will get better. It is like telling a child that it is OK that is father is out of a job.
The solution to the problem is simple and it may be a long way off. At some point everything will be so cheap that businesses and consumers will start buying even if they have little access to money. Homes will become ludicrous bargains. So will cars and airplane trips to Florida. Businesses will be able to buy goods and services for unprecedented prices which have not been seen for decades. Businesses will hire because they can get employees for a fraction of what they paid them in 2006 and 2007.
It is impossible to predict if despair will turn into mayhem, a confusion of the system where businesses begin to fail are astonishing rates and people cannot find work of any kind.
But, it will have to get close to that before the economy finds a bottom
Douglas A. McIntyre
The CRE crash is starting to hit La Jolla:
Two separate CRE folks who have fallen on tough times have put their truly lovely, but way overpriced, homes on the market for $11M and $5M.
They blew it in CRE, and they will blow it on the sale of their homes.
One year before they wake up and smell the coffee, i.e., that their homes will sell for 50%, max., of expected price?
Copyright Vio !!!
oopps, I assumed folks here knew it would be minus but for clarity
-627, sat (sorry about that)
Thats why tomorrow is an-all-day
Tomorrow - Wikipedia, the free encyclopedia
It is hard to understand capitalism when it's biggest supporters are wall street shysters who quote adam smith rather selectively.
I wish they also quoted his views on the necessity of progressive taxation, need to maintain government neutrality, breaking up oligopolies/ monopolies, discourage the formation of self-regulated professional organizations.
"Only an idiot would load up his portfolio with more than ten percent of the float of US treasuries."
Their T- holdings were the consequence of the immense USD inflow from the trade imbalance; it had to go somewhere. Around the edges, it went into real investments, but the US didn't actually allow any resource investments of any consequence (remember the Unical issue)? But Financials? Sure, why not.
Now, though, the PRC government has put themselves in a bind. In an earlier thread, mention was made of a statement by L. Summers of the duality of financial and foreign policy. If they "dumped" Treasuries now, it would be seen by both sides as entailing foreign policy motivations, or at least as having policy implications.
The PRC behaves as, in Internation Relations theory, a Defensive Realist. They see, most likely, that their security would not be served by dumping Treasuries at this time, and their economic interests certainly would not be. And, afgter all, the economics is still secondary -they are, after all, state communists with a Fascist twist.
This following will be the next hedge fund scam we'll be reading about:
Imagine this. 30% of the "investors" file for withdrawals within 60 days, say 40% of the funds assets. The manager sees this and goes short (in another fund) the exact crap they will be dumping to meet your quarter end redemptions.
Our markets have become shams. They are no longer efficient, they are casinos in a casino eCONomy.
Sorry, posted this on the wrong thread. Here it is again.
Back in the 1960's I was doing post-doc work in business organizations at a German university -- law faculty. One of my side lines was to translate German financial and patent materials into English legalese for US consumption.
One of the titles I translated was "Bank Kredit" and the underlying theme of the whole book was not "will we be able to lay this off?" or "will the collateral be enough?" No. The underlying theme was "How will the creditor be able to pay us back?"
OK, almost 50 years ago, but isn't that still the most important question? How will the creditor be able to pay us/this back?
Just aski
What money man said, except, hopefully sooner and not quite so bad.
--
ML: OIL COULD GO BELOW $25 IF CHINA ENTERS RECESSION
The Merrill Lynch forecast was reported on CNBC. My forecast in 2005 was that Crude would go to $25 when the US enters depression, something that I fully expect during 2009-10. Global depression is almost guaranteed and China and India will fully participate. People simply dont understand Finance Capitalism that guarantees booms and busts (I mean depressions) by abuses in lending practices during the booms and, most importantly, highly asymmetric government interventions. Democratic governments almost always intervene badly and at the expense of the majority. No?
Jas
All of this will only end badly if there is a big push for nuclear disarmament. Disarmament would make it safe for WW III, something that, even without nukes, would make WW II look small. So, I think that if there is a big push for disarmament, especially by U.S., then our leaders have set their sights on war.
OK, almost 50 years ago, but isn't that still the most important question? How will the creditor be able to pay us/this back?
LOL, no. The most important question is: What is my bonus structure?
"New York Federal Reserve Opens 'Pawn Shop' to Buy Up ABS Junk"
"On Wednesday, December 3, 2008 The New York Federal Reserve website reported that they will begin to purchase Asset Backed Securities (ABS) from failed mortgage giants Fannie Mae and Freddie Mac, as well as the Federal Home Loan Banks. They also hinted that they will stop there - everything seems to be on the table now, officially. Treasuries and stocks may see direct effects, with outcomes mixed. Initially, the program will concentrate on non-callable, fixed-rate senior benchmark securities such as Mortgage Backed Securities (MBS), but there are indications in the language used that the program may expand to include other ABS such as privately issued MBS (non-GSE), bonds, stocks and other equities. With this much unprecedented Government intervention in the markets, I find it difficult to apply any models effectively in a predictive fashion. In the long run, I believe will be inflation and devaluation of the dollar - combined with the aftermath of record writedowns, mergers, buyouts, and outright failures that we will see in 2009 - that will be the legacy of these efforts."
New York Federal Reserve Opens ‘Pawn Shop’ to Buy Up ABS Junk « Your Mortgage or Your Life…
China, as a major power, needs to learn that not all debts are redeemable. For crying out loud Cuba still owes 'us' money.
I see no reason why the US taxpayer, eg, should stand behind GSE debt as the prospectus said these were NOT obligations of the US government. That is why they paid more than treasuries.
Great Powers have great responsibilities. China is now a Great
Power. Time for them to assume the same responsibilities that the US has had to bear and use its resources and financial clout fot the greater good.
Eliot Spitzer is staging a comeback. His opinion on the economy.
We're using the bailouts to rebuild giant financial institutions. But what we really need are small ones. - By Eliot Spitzer - Slate Magazine
Ivan writes:
It is hard to understand capitalism when it's biggest supporters are wall street shysters who quote adam smith rather selectively.
I recommend <a href="http://dandelionsalad.wordpress.com/2008/01/04/education-is-ignorance-by-noam-chomsky-1995/>Education is Ignorance by Noam Chomsky (1995) (interview w/ David Barsamian)
As when a conjurer takes a lease
From Satan for a term of years,
The tenant's in a dismal case,
Whene'er the bloody bond appears.
A baited banker thus desponds,
From his own hand foresees his fall,
They have his soul, who have his bonds;
'Tis like the writing on the wall.
Eliot Spitzer is staging a comeback.
I will not make inappropriate jokes.
I will not make inappropriate jokes.
I will not make inappropriate jokes.
Kind of greek to me, the BLS birth/death adjustment stuff:
Fake Jobs
But, the '08 B/D adjustments appear to be tracking the '07 B/D adjustments. And, Nov. '07's B/D adjustment was only 17K.
So, there may be little help from the B/D adjustment tomorrow.
Yeah, you will jp. Go ahead, I'm listening. . .
The Chinese are idiots.
~~~~~~~
They actually believed the shadow banking system could survive.
Quants are stupid everywhere.
Remember those heady days of yestermonth, when the handle on the dow was 12 and it kept dipping into the elevenses, and everybody'd scream ppt, ppt.
Ahhhh, those were the days. . now it's 8 and 7.
China is not and will never be a Great Power. In the end - as they always do - they will reflexively turn back upon themselves and close their door to the world.
XIAOCHUAN translates to "small river" or "small creek"
See Wiki for more details:
Zhou Xiaochua - Wikipedia, the free encyclopedia
So, there may be little help from the B/D adjustment tomorrow.
Comrade-Dope jg (jg)
Maybe Hanky will get that "modified" - a home security thingy
Shit creek is more like it.
"I have a sinking suspicion they can survive high unemployment with an externalized enemy for their exceedingly large demographic of young men."
Yeah but we can't. Nine months from now I suspect we'll be looking for a country to shoot up. Nobody in the USA is going to shed a tear for China either.
First it will be their colonial interests in Africa and South America and it will spread East from there. CIA will buzz around their heads like gnats on a hot summer day, crawling into their ear canals and behind their eyeballs until they can't stand it and they're pushed to the brink of "naked aggression".
"We need to stop using the bailouts to rebuild gigantic financial institutions."
There's nothing quite like tilting at windmills.
Is Spitzer's next column going to argue that we need to stop the sun from setting at the end of the day?
Chinese also believed the 'commodity bubble' was here to stay. There big mining cartel bought $14 billion worth of Rio Tinto and now have a $2 billion stake.
That is another reason why China and the US must work together or nothing good will happen. You can't be such a huge part of the global economy and pursue mercantilist economics.
That is the French role.
China is too big for that now.
In the end - as they always do - they will reflexively turn back upon themselves and close their door to the world.
Lol. Every nation is protectionist in varying degrees. See the coming auto bailout followed by more TARPistry.
"The moves included putting the nightly CNBC show "The Big Idea" with Donny Deutsch on hiatus, said Brian Steel, vice president of CNBC public relations"
The worst show on cnbc is gonzo!
Scooby - whats up with that...scary detail
We are already shooting up several countries and nobody is happy about it.
-627 should scare the CNBC pundits in to sobriety. Does anyone listen to them anymore? They still can't get the severity of what we are experiencing. This is life changing for most of the population.
"Shit creek is more like it"
That's going in your file, Mister.
RE: oil prices. $47/bl oil makes about as much sense as $147/bl oil. It takes at least $50/bl to make it worthwhile to even pump it. So yeah, the oil bubble has collapsed, but I wouldn't bet on $25/bl oil any time soon unless the entire world economy just implodes all at once (a possibility, of course.)
The Yellow Brick Road › Page not found
XIAOCHUAN translates to "small river" or "small creek". Does it say anything about "without a paddle"?
So when does the current chinese government lose the 'mandate of the heavens'?
Ivan | 12.04.08 - 5:29 pm | #
THAT is the question...
There is another option, which is to blame everyone else, and then strike out.
I would be really afraid if there are a lot of nationalistic rhetoric being spread around, sort of like what is going on with many of the folks who wants to raise tariffs, or shut the borders, or kick out illegals.
When people start blaming others, the next logical step is war, with some lag time in between to get everyone on-board that the others are to blame.
Love TARPistry.
Love without a paddle.
Keep it coming.
The chinese have thousands of years of history and the US has hundreds.
Both could learn something.
"Scooby - whats up with that...scary detail"
Just trying to paint a picture. I grew up in the tropics...its what I know.
Darth Toll - at $25 the ME and Russia are BK.
Just as the bubble was forming some said $200/bbl. Now on the downside, I would expect to hear things like $25/bbl. IMHO $40 is the new floor
Darth Toll - Cost to pump is $20-25...anything under that and you have some dry holes
Headed out.
Happy glooming people.
The question is, who is without a Paddle?
We are the ones who can't make steel anymore, can't dispose our toxic wastes, can't make chips for our play things.
They have the factories that our companies invested in to make things.
"This is life changing for most of the population."
George Will is working, so what's your problem?
I grew up in the tropics...its what I know.
Scooby
Real? I mean are there critters that do this?
Kramer calling a housing bottom:
"Isn't it possible we won't have enough homes?"
What a maroon.
Chinese government has gone for 97 years without the Mandate of Heaven. That was seen to by Dr Sun and the revolution that overthrew the Ching Dynasty.
Thousands of years of history are great for tourism but not exactly relevant for today.
We live in a contemporary world and trying to use ancient 'playbooks' will lead to ancient tragedies.
We CAN do what we want....if we grow a pair and decide do it! This is going to get messy and we will have to get dirty before dinner gets served. No more Mr. Nice guy and take what we are willing to give you or COME OVER HERE AND GET IT! COMMIE
Confucius says....man who sleep naked wakes up with stinky fingers.
Thousands of years of history are great for tourism but not exactly relevant for today.
You missed my point, they survived did they not?
The common thing between the past and present is people. It's amazing that with all the education, people are still driven by greed, pride, and the lust for power.
As long as that doesn't change, history is still relevant.
@Barley
Did you WAG that 627K number or do you have some real info?
If its under 350K, it'll be a spaceshot.
"So, I think that if there is a big push for disarmament, especially by U.S., then our leaders have set their sights on war."
You guys are from another planet, aren't you?
Growing a Pair? Only after we stop believing that the government can fix this mess we're in. It will take a lot of hunger before NIMBY is a dirty word.
But the west (after 1970) chose to create and live in a risk averse, excessively regulated and feminized world.
"dreadlord76 writes:
The question is, who is without a Paddle?
We are the ones who can't make steel anymore, can't dispose our toxic wastes, can't make chips for our play things.
They have the factories that our companies invested in to make things.
dreadlord76 | 12.04.08 - 6:24 pm | #"
You guys are from another planet, aren't you?
Best response to the said statement.
We and the Chinese are in a fierce competition to see who is stupider. At first glance, we seem unbeatable with our wall street titans payed billions in bonuses to loan money to people who cannot possibly repay it through financial instruments that the titans admit was too complex for them to understand... With leverage of 100 to one in some cases, based on the belief that real estate never goes down (how many land deals have gone sour, starting with Louisiana, Florida, Arizona...).
The Chinese however, are stupider than they first appear. Obviously, continuing to buy bonds from a government that can print as many dollars as it wants, and has PUBLICALLY stated so much, brings the Chinese about even. The Chinese may be ahead when one considers that there economic model is to sell their labor for less than they could...hey, don't pay me a dollar an hour, I'll do it for a quarter. We all want to make less money!!! (as Patton would say, its not your job to die for your country - its your job to make the other dumb son of a bitch die for his).
Setser about ?two? weeks ago had a great link, where it was shown that between currency manipulation, and the lack of return on the bonds they buy, their (Chinese) products are 15% than their nominal price.
Can't the world have smarter leaders???
Globalization is BS. Since when did global superpowers have to depond on 2nd and 3rd world countries for it's own well being? Besides Americas recent history?....We are toast, unless we start doing things by ourselves and for ourselves.
Ben Frank'll Tank Bernanke - reasoned and reasonable guess...Tomorrow I'll predict it after its released, k?
.....nothing exceeds, like excess.
There is enough in the world for everyone's need, but not for everyone's greed.
-M.G.
Thousands of years of history are great for tourism but not exactly relevant for today.
~~~~~~~~
The fall of empires is the rule not the exception to the rule.
.
There is an island off Siberia. Named
Wrangel. About the size of the Falklands. Belonged to the US. I think it was even discovered by the US.
We ceded it back to the USSR because it just wasn't important enough to make it a 'global' issue. Panama Canal
Zone is another example of some greater renown.
China has got some 'islands' too and I'm not speaking of Taiwan. It needs to relax a bit and not worry about pushing Vietnam, the Philippines or even Japan off of them as equivalent to Great Power status.
Push too hard anywhere and the world
pushes back.
They have nukes, ICBMs, a large manufacturing base, a huge chip on their shoulder and millions of spare young men. It is going to get interesting.
"They actually believed the shadow banking system could survive.
Quants are stupid everywhere.
Anonymous | Homepage | 12.04.08 - 6:15 pm | #"
The Chinese however, are stupider than they first appear. Obviously, continuing to buy bonds ...
~~~~~
The bonds they bought are worth a lot more than they paid for them ...
.
"We are the ones who can't make steel anymore, can't dispose our toxic wastes, can't make chips for our play things."
But can those things be made/done by any of the United States' allies or protectorates? Korea? Japan? Mexico? Nevada? And the issue of protecting Sea Lines of Communication v.v. China is not relevant to that question.
There is that pesky problem of finding more consumers to sustain growth. Without growth, a debt based financial system is kaput.
"Money Man writes:
Globalization is BS. Since when did global superpowers have to depond on 2nd and 3rd world countries for it's own well being? Besides Americas recent history?....We are toast, unless we start doing things by ourselves and for ourselves.
Money Man | 12.04.08 - 6:31 pm | #"
Flim Flam writes:
Kramer calling a housing bottom:
"Isn't it possible we won't have enough homes?"
Surprising he says that the same night Toll bros. CEO is on his stupid fucking program
Can someone give a coles version of current canadian politics?
But can those things be made/done by any of the United States' allies or protectorates?
~~~~
Will be able to pay for them at the rate we are going ?
But can those things be made/done by any of the United States' allies or protectorates? Korea? Japan? Mexico?
Canada could do it but they'd charge us in Loonies and demand that we recognize them as an independent nation.
It's just not worth it.
Can someone give a coles version of current canadian politics?
Barley
HMFIC sent Parliment packing until January cause he was about to lose his job
"Can't the world have smarter
leaders???"
Not if they're people. This is as smart as it gets, usually. And then, those who are brilliant in one era turn out to be dull references in a succeeding era.
Bismarck, than whom there was none more intelligent and none more clever, remarked, I think, some time in the 1860s, that if the British Army invaded Germany, he would have it arrested.
But history, which is an express train, does not make local stops - or any stops.
Emergency Brake:
pavel.libsyn.com
I think Conjure had something to say about this China business some months ago. If memory serves, Conjure said something in the middle about the end of the US$ as international reserve currency and, at the end the end, I think his exact words may have been, "Bwahahahaha." But then those are usually Conjure's last words.
得到与节目 (Get with the program.)
"Will be able to pay for them at the rate we are going ?"
Food. Helium. Molybdenum. Micky Mouse. American Idol. B-737s. We ain't totally without stuff here. And as far as workforce goes, the service industry implosion is freeing a number of folks up to do other, more productive things.
After all, the truest thing probably said on this thread is this:
"
We are toast, unless we start doing things by ourselves and for ourselves." Money Man @6:31
My point is that WE need to scrap the debt based economy. It may take a war to get the debt burden removed but something has to give. I have now assumed crash positions and put my tin foil hat back on. You may now proceed to throw insults and produce.
After all, the truest thing probably said on this thread is this:
"
We are toast, unless we start doing things by ourselves and for ourselves."
~~~~
Congress doesn't think so. They press Detroit about 34B but sign off on trillions for Wall Street.
My point exactly. We are surrounded by idiots...prepare to defend yourself.
Pavel - thanks for the link! Love your stuff!
We are toast, unless we start doing things by ourselves and for ourselves"
Speak for yourself. Idaho is a net exporter of food and there's enough billiard equipment & tables to last for the rest of my life.
Bring it!
"Darth Toll writes:
RE: oil prices. $47/bl oil makes about as much sense as $147/bl oil. It takes at least $50/bl to make it worthwhile to even pump it. So yeah, the oil bubble has collapsed, but I wouldn't bet on $25/bl oil any time soon unless the entire world economy just implodes all at once (a possibility, of course.)"
I just filled my car for $22. That means the $38 less I paid from earlier this summer can be used to buy booze, cigarettes, and lottery tickets.
mmckinl, Taiwan has currency reserves on a Chinese scale. I.E. the US could
turn Taiwan into an Asian version of Israel if we need to go down that road.
F-22s,nuclear submarines light years ahead of what the Chinese can build,
AEGIS destroyers etc.
As it is, the US, avoids transitting the Straits of Taiwan, not because we have to, they are international waterways over 100 miles wide, but simply because why create a problem where none has to exist.
China has to accept that there are limits to its power too unless it wants to get into a fight it is unlikely to win for the foreseeable future.
Paulson will return from China empty-handed. As Confucius said, "Squirrel that runs up woman's leg, not find nuts."
"They press Detroit about 34B but sign off on trillions for Wall Street."
They were spooked. It was poor public policy, which was recognized by many on this board as it happened. But have an "expert" tell a politician a few weeks before an election that if he/she does not act, a financial asteroid will strike the heartland before Nov. 4th, and poor policy is guaranteed.
Now, with time to reflect and consult, and seeing that the experts are flailing around from one failing idea to the next, it is not so easy to convince the Members of "do it now or else..."
""Squirrel that runs up woman's leg, not find nuts."
El Cliffo"
But squirrel finds something much better...
China has to accept that there are limits to its power too unless it wants to get into a fight it is unlikely to win for the foreseeable future.
~~~~
As do we ...
"Pavel - thanks for the link! Love your stuff!"
Thanks, 001. I've just read that Ecuador will default on one third of its debt. The source is one I got my head handed to me for forwarding before, but I take it to be reasonably reliable.
The Chinese have gained a huge advantage over us here in the US. While they became masters in manufacturing, we abandoned manufacturing (Thanks to Walmart and Walmart shoppers) and became 70% focused on service oriented industries. Needless to say that this is not sustainable but by this time we are already screwed beyond royally.
"Needless to say that this is not sustainable but by this time we are already screwed beyond royally.
NAVSPECWARCOM"
We'll just annex Mexico and Central America. Problem solved.
Pavel, I just listened to Emergency Brake. Very good stuff, indeed. BTW, do you have anything, shall we say, less gloomy?
Peace
"Squirrel that runs up woman's leg, not find nuts."
That's going in your file, Mister!
NAVSPECWARCOM
China is only warlike on its own borders.
Elvis writes:
We'll just annex Mexico and Central America. Problem solved.
Elvis | 12.04.08 - 6:55 pm | #
Elvis, we in the US are so poor, Mexicans start swimming to Haiti for a better life. Forget the AZ or CA border...
China had better build up her military if she wants any realistic chance of seeing those debts repaid.
Nemo | Homepage | 12.04.08 - 5:25 pm |
Unless things have changed in the last 15 years, China's like Israel...every young person goes into the military for a couple of years. I talked with a young female tour guide in Guangzhou in the '90's and she told me that it was to teach them how hard the military was and to always have respect for the military. When she got out, then she got to go to university, but not until her military service was completed.
I asked her if it was hard, she answered "very hard". No desk jobs for women, I forget what you call foot soldiers (blonde moment) but that's what her job was.
As an American, I had no concept of how tough these people have to be, the conditions they lived in. I have never seen anything like it, before or since. When we crossed the border from Hong Kong, it was like stepping back in time 200 years, literally at the border (the year before reunification).
CR, thanks for the link to the Atlantic story, very interesting. Here's another one on Gao Xiqing from Duke Law.
Duke Law in China: Gao Xiquing '86
Unit472,
How will the US fund militarization to achieve that goal?
NAVSPECWARCOM writes:
The Chinese have gained a huge advantage over us
Our own greed and myopic pursuit for a heftier bottom-line have allowed China to gain advantage over us. We have no one to blame but ourselves. Greed is good until you sell away the farm and starve to death.
Economically we may be 'screwed' but that takes time to determine.
Military situations are not so opaque.
There is no more 'mobilization' or 'arsenal of democracy' crap. You go to battle with what you have in the modern world.
You pull the trigger and the other guy starts shooting back. You find out if your stuff is a match for your opponents and if not in a few hours your command and control, your infrastructure either survives or it does not.
China is not yet in a position to play that game with the US, Japan, etc.
[The worst show on cnbc is gonzo!
crispy&cole ]
Cramer is much worse.
"Pavel, I just listened to Emergency Brake. Very good stuff, indeed. BTW, do you have anything, shall we say, less gloomy?"
SOLEMN FOOL
Hey, you solemn redhead! Why hammer in that tree?
Hammering and hammering, anyone can see;
Why the yellow pick, why the scarlet crest?
What could be more handsome, what would you suggest?
Here in gray December, the gleanings must be scant -
Not for us, not for us, we find delicious ants,
Formic-acid-seasoned, piquant, whole and sweet,
What could be a finer food, what food do you eat?
Why so heavy-grounded, legs like clumsy columns,
Why stare upward like a fool? Who do you call solemn?
\t\t\t\t\t\tPavel
\t\t\t\t\t\tDecember 4, 2008
Face of Wall Street may change with shareholders vote on Bank of America-Merrill merger Friday
Unit472
You sound just like Bush ...
and we see how that worked out...
Re: unirealist @ 5:29
Obama is Hitler~ (~ is the snark tag)
Re: Jas @ 6:08
ML saying oil could go below $25? Aren't these the same jokers projecting oil to go to $500?
Re: dreadlord76
If there is going to be a war won't it be internal American class warfare? I'm thinking of something like a number of people descending on Capital and then the Capitol police turning their guns on the politicians. Of course if something else happened one would have to conclude that the Capitol police are in on the fraud/bribes/corruption...
"We" have no say in what the path the elites in this country take us down, short of a revolution. They've already signaled to us their intentions on our debt. Check that: they've signaled their intention of running up as much debt as possible.
"The Chinese have gained a huge advantage over us "
Many of you are old enough to remember the late 1980's, when it was the conventional wisdom that the US had allowed Japan to gain huge advantage over the US. Trying to be like the Japanese was all the rage, from management style to Ma Jong.
I was starting to believe it myself, until one evening an ex-Fed regional officer said at a dinner, "We are allowing them to ship us Toyotas, and they are allowing us to ship them Treasury bills in return."
Soon the Rockefeller Trusts had Rock Center back, the Nikkei had started a decline that is still going on, and Japan's economic miracle became a stagnant shell supporting a country that cannot feed itself.
"As an American, I had no concept of how tough these people have to be, the conditions they lived in."
If we had to work as hard as Chinese peasants, many of us would collapse after the first day.
Yuan Watch : Let's make a deal!
Reading between the lines of the articles below, it would appear that the Chinese are threatening to depreciate the yuan in order to protect their investments (treasuries and agencies) in the face of the Federales monetization program.
No other explanation makes sense.
The Chinese can't depreciate the currency enough to have a dramatic effect on exports, as acknowledged by the Chinese Central Bank governor.
What can Zirpmeister Ben and Timmy G do to assuage their Chinese counterpart to continue yuan appreciation so as not to set off additional asian devaluations and demand destruction?
What guarantees will be given in order to protect Chinese investments?
According to the World Bank the Chinese will still have dollar reserves that they need to dispose of in 2009 due to decreasing terms of trade (cheaper inputs i.e.,half-off sale on all commodities.)
Continued yuan appreciation with guarantees to the Chinese that offset currency risk of our sovereign debt would seem to be the desired outcome.
A currency swap with appreciating reserves tied to the depreciating value of the greenback? Maybe Goldie can share some of the Treasury CDS.
Don't laugh ... imagine how silly any of today's headlines would have been a year ago.
Connect the dots as you see fit with the articles below.
Thu Dec 4, 2008 2:17am EST
BEIJING, Dec 4 (Reuters) - Zhou Xiaochuan, governor of the People's Bank of China, flew to the United States on Thursday for an unscheduled meeting, a central bank official said.
By Li Yanping and Dune Lawrence
Dec. 4 (Bloomberg)
The comments in Beijing today by Vice Premier Wang Qishan and central bank Governor Zhou Xiaochuan came as U.S. Treasury Secretary Henry Paulson praised Chinas responsible role in combating the crisis.
We hope that the U.S. can take all necessary measures to stabilize its financial markets and economy as soon as possible and ensure the safety of Chinas assets and investments in the U.S., Wang said. To work together to tackle the financial crisis is the most pressing task that we are facing.
by Joe McDonald
Dec 4th -AP
"The Chinese continued to reinforce to us that they were committed to continued reform, and by that I mean continued appreciation (of the yuan) over time," said an American official who briefed reporters on condition he not be identified further.
The American officials said they did not know details of what Wang meant by protecting Chinese investments.
thestandard.com.hk
(12-04 17:19)
China needs to be prepared for the worst case scenario amid a deepening global economic crisis, central bank governor Zhou Xiaochuan said.
Zhou also urged the US government to take more measures if needed to help stabilize the global economy and financial markets, Jin Qi, head of the international department of the Peoples Bank of China said in Beijing after a meeting of the China-US Strategic Economic Dialogue.
China's government should take timely, effective and pre-emptive measures, analyze the progress, evolution and outlook of the crisis and be especially prepared for a worst- case scenario, Jin quoted the central bank governor as telling the meeting .
By Wang Bo (China Daily)
Updated: 2008-12-02 16:00
The governor of the People's Bank of China, Zhou Xiaochuan said earlier that he wouldn't rule out the possibility of the renminbi depreciating.
"The moderate depreciation of the Chinese currency is conducive to the domestic economy," said Guo Tianyong, director of the Research Center of the Chinese Banking Industry, Central University of Finance and Economics.
But he also pointed out that as overseas demand has declined substantially, renminbi depreciation is not "quite an effective tool" to spur export growth.
"If there is going to be a war won't it be internal American class warfare?"
No.
"Comrade-Dope jg (jg) writes:
The CRE crash is starting to hit La Jolla:"
Let me know when I can get a house for under $300k near the cove.
Mmckinl,
Well I've moved up in your demonology.
Last week I was Hitler. Today I've been reduced to a mere 'Bush'.
I maybe the Prince of Peace in a few
months. I'll work at it.
I just filled my car for $22. That means the $38 less I paid from earlier this summer can be used to buy booze, cigarettes, and lottery tickets. - Elvis
Hooker shortage?
So, this Chinese guy thats coming to the US. He won't have to turn around and fly back will he? It's not the same guy I hope. If it is, he better bring underwear and a toothbrush in his carry on.
Unit472
wasn't me that called you Hitler ...
posturing is what gets countries into war...
war is a no win for those that fight it ...
"Hooker shortage?
Rob Dawg"
No, I just have to give them a ride to their real esate office.
China will prolong dollar hegemony.
Their natural adversary is Japan and if the dollar blows up, the yen is more likely a reserve currency than the euro.
You sound just like Bush ...
I thought it was Rumsfeld
"I thought it was Rumsfeld"
He says lots of things. He said so himself.
China is like a big private equity fund. They take the long view and folks are 'really' locked in.
Plus their central bank doesn't want to take a loss ... in that way they are more capitalist than us!
No, I just have to give them a ride to their real esate office. - Elvis
How do you get the french fry smell out of the upolstery?
Austin Tex
China is not Japan ... it is a command economy ... they do have the same population decline problem ahead. Really bad for a fractional banking monetary system ...
"How do you get the french fry smell out of the upolstery?
Rob Dawg"
My car smells very musky.
Driving through the Yangtse delta with a friend in the early nineties, a friend and I were discussing what would happen if China attempted to become "another Tiger", a la Taiwan, S. Korea, etc. We agreed that in order to industrialize to that extent, the ROW f'tys could pack it up and give manicures to each other. And moreover it would entail a huge expansion in the volume of world trade and international financial flows.
But that simply couldn't happen, we agreed, due to the imbalances that would inevitably result.
Well, it didn't go all the way, barely half way, and we see what we've got as a result.
Lack of domestic stimulous: I cannot believe the shortsightedness of China's economic planners.
Hell for leather debt creation: I cannot believe the shortsightedness of the FED and J. Q. Public.
But here we are, in a mutual death dance. I have no idea how we'll return to our seats for a nice chat, but we have to.
Ominous anecdotal sign of the day: small-town Ford dealership burns to the ground in "accidental" Fire...
Tulsa World: Bristow auto dealership burns
Fortunately it sounds like the fireman will be OK. Hope Bristow was still able to afford health insurance for its firefighters...
"If we had to work as hard as Chinese peasants, many of us would collapse after the first day."
But the point, sir, is that we don't have to. In the early 1990's I had cause to go to China, and elected to take the train from Hong Kong to Guangzhou. The rail line was maybe 3/4 tracks then, but was being widened by magnitude. Along the way, a bridge was being built, and several Chinese peasants were working their buffalo on one side of the creek, moving dirt and rock. On the other side of the stream, there were several pieces of equipment sitting as well.
Caterpillar.
True story.
Hu coodanode?
Did.
From about January. At least that the way I read it from the way officials starting framing things.
C
Mcminckl,
No, you inquired as to what "Nazi" memorabilia I collected.
To tell you the truth I wish I had an extensive collection. It is quite valuable!
I'll tell you a story. Many years ago I traded some hashish ( it was long ago) for a Nazi SS dagger. I was driving a 1956 Porsche and my engine
block cracked. I didn't have the money to have it repaired. It had to be 'heli-arced' or some such high tech technique to be salvageable.
The local Porsche dealer's ace mechanic discovered that I had this 'rare' piece of 'memorabilia'. He offered me a trade.
Don't know which would be worth more today. My Porsche or the dagger. I no longer own either and the poor fool who wanted to smoke 'hash'? Who knows where he is?
My car smells very musky. - Elvis
How many times I gotta tell ya the stiffs go in the trunk next to the Realitter signs.
Southern California Shanty Town / Tent City YouTube - Southern California Shanty Town / Tent City
dreadlord76 | 12.04.08 - 6:27 pm |
Pavel Chichikov | 12.04.08 - 6:54 pm |
+1 to you both, I seriously don't know what happened to the quality of the commenting here.
Thank you for interjecting thoughtful posts throughout the nonesense.
Got to prepare my sermon for the flock. Later.
China is taking over. Check it out on GloomBoom.com
Unit472
Butcher I knew had memorabilia. Retired, got more than $500,000 for it. Some guy in Texas.
Credit enima,
That footage is more than two years old.
I know it's a little late for thread music, but...
concerning the Chinese. . .
Reading between the lines of the articles below, it would appear that the Chinese are threatening to depreciate the yuan in order to protect their investments (treasuries and agencies) in the face of the Federales monetization program.
Thanks, C. Swan. Back in the day, the U.S. applied tremendous pressure on Taiwan for a NT appreciation, and by the late eighties, with the yen strengthening, it was inevitable.
There was a huge flame of speculative excess, again like Japan, and then collapse.
In any case, there was continued growth of exports and forex reserves, along with a rising std of living for the local consumer.
This time, the chinese had their (slight) revaluation of the RMB, and an early bout of speculative excess.
I'd suggest that a stronger RMB would be in their interests now. Inflation is a regime killer as much as unemployment. And in any event, weaker RMB is not going to jump start exports. Simply won't work in the best of times, let alone now.
The key is to get the Chinese spending domestically. A stronger RMB helps.
Re: New Car Search
Got a few more responses from new car salesman after sending out a low ball offer on what I'd be willing to pay.
All of them laughed and said it was not a serious price. One of them said something like "if we sell you at that price we will go out of business". I guess he doesn't think they will go out of business as it is. My friend who deals cars all the time told me I shouldn't have put a price in the feeler e-mail I put out. I'm glad I tweaked some of them.
Per Auto-trader 4 cars have moved within my search area the past week. If they keep that rate up they'll all be gone in 2 months... oh no!
"But here we are, in a mutual death dance. I have no idea how we'll return to our seats for a nice chat, but we have to."
They used to say in the old SU: Last year we stood on the edge of the abyss. This year we have taken one step forward.
The world can survive a severe economic downturn. What it may not survive is another general war. I wish there were an international consortium of geniuses who would study the prevention of war, and have the influence to put their studies into practice. A sort of anti-violent Manhattan Project.
That the scientific community could go from Rutherford to Szilard to Fermi to Oppenheimer - and of course there were many others - in only about thirty years, shows what can be done on the demonic side by brilliant men. Could they not take the side of light? We need peace, guaranteed and loved and preserved. Then all else can be worked through.
I've seen enough to be convinced that only maniacs want war, and that maniacs are rare birds even in leadership positions. But are there enough moral, intellectual, spiritual geniuses?
I seriously don't know what happened to the quality of the commenting here
Ridiculous events deserve ridiculous commentary.
What fantastical revelations did you expect about an idiotic situation which was many years in the making and whose outcome was easily predictable? (although its timing wasn't, Stephen Roach doesn't get enough credit)
"Thank you for interjecting thoughtful posts throughout the nonesense."
I'm a very limited person, AnonyMss. Maybe that's why I pray to St. Jude every morning.
"A stronger RMB helps."
It is so convenient to have one currency for domestic policy, and one for international trade.
BTW, I haven't enjoyed poetry like I enjoy Pavel's since I was reading Kipling and Eliot.
The man's talent is astounding.
"Maybe that's why I pray to St. Jude every morning."
This early morning I drove my wife to AUS airport. In a little crossroad town on the way, morning Mass was in session; 20 or so cars in the lot.
She mentioned in passing how the history of settlement by German Catholics --those who practice faith by Works-- has had lasting impact in making this part of Texas distinctive.
Things are going for shit in the good ol USA.
Pavel,
As long as there is power, influence, or prestige to be gained there will be people who are after it. So to will countries seek the same. Many are convinced that there is no such thing as a "win-win" situation for the world. Thus countries must vie to be dominant over other countries.
I'm sure the world population would just like to live their lives and be left alone... but even in that situation those in government try to dominate over the populace.
St Jude LLP?
C
"Food. Helium. Molybdenum. Micky Mouse. American Idol. B-737s. We ain't totally without stuff here..."
I read in Wired that at current rates of consumption we will run out of Helium in 9 years. Tried to find other sources but did not find this conclusion anywhere else. Mickey is moving to Shanghai, Idol is an idiotic waste having millions of Americans waste time and money to find 1 person a job singing songs. Very productive use of time. If airlines are forced to charge the real nominal cost of flying you have plenty of idle 737's for the demand.
Basically the only thing left is food.
Learn to operate a Deere if you want a job in 3 years.
Great cartoon from Dwane Powell:
McClatchy
Praying to God that someday you will be rich again. Blasphemy.
Caterpillar.
True story.
Austin Tex | 12.04.08 - 7:22 pm |
I took that same trainride in '94, no track widening, no Caterpillar. Just peasants working the fields by hand.
Could it have been later in the 90's?
I remember Western money was already coming in, but if I remember correctly, I didn't see many personal vehicles, and only one modern (oppulent) hotel, and buses so crammed with humanity it was amazing. I do remember there was a modern freeway (one).
"Basically the only thing left is food." vs "Mickey is moving to Shanghai"
Mickey lives in a vault in California, and thanks to the changes in the copyright and trademark laws, will do so forever.
That someone in Shanghai would pay to have Mickey's image there is my point.
As far as helium depletion goes, by the way, I did not know that, but I believe the US is still (virtually) the only place on earth with commercial quantities of helium, isn't it?
In any case, I was writing metaphorically. You are right about Idol, of course. Bad metaphor.
I bought some cell phone/GPS jamming equipment from a Chinese company. It is illegal in the US so I had to order
it direct from China. Praise the internet.
The instructions that accompanied it were translated from the Chinese and I mention because it is illustrative.
I paraphrase because the manual is not at hand but it isn't far from the original, if at all.
"Because electronic emissions are the major source of industrial and political espionage, many secrets can be lost. These can damage the company, the country and the PARTY.
Yep, the Chinese populace is still subject to one party control. They maybe robust capitalists and not at all our enemy but Hu Jin Tao and his 'Politburo' are an atavistic disgrace to the world.
With China as a 'new' Japan or Germany all things are possible but if not 'all things are possible'.
"She mentioned in passing how the history of settlement by German Catholics --those who practice faith by Works-- has had lasting impact in making this part of Texas distinctive."
There are so many people who keep this world alive, and most of them will never be known beyond a small circle of friends.
I feel gratitude towards people who encourage me here.
There's an old desert father story (desert hermits and monks of the early centuries) about how one abba was walking down a road, and he saw the devil walking towards him on the other side. As the devil got closer he greeted the abba this way: Father, I've been trying to overcome you for many years, but I give up. You are unconquerable. And you know why? It's because of your great humility.
When the abba heard this, he clapped his hands over his ears and took off running down the road as fast as he could, screaming all the way.
"I took that same trainride in '94, no track widening, no Caterpillar. Just peasants working the fields by hand. "
No, it was fall of 1993. I don't remember which side of Shenzen, but I believe it was the PRC side.
Unit472 writes:
I bought some cell phone/GPS jamming equipment from a Chinese company.
Bond....James Bond
Re: Helium
National Helium Reserve
As I understand it, helium gets produced as a by-product of natural gas production. Normally it is just allowed to vent into the air because it is not cost-effective to capture it.
But once gone, it is very hard to get back. So the U.S. spent decades collecting the stuff.
The Wikipedia article needs some work. I am not sure what the status of the Helium Reserve is today.
Pavel Chichikov | 12.04.08 - 7:42 pm |
Pavel Chichikov | 12.04.08 - 7:50 pm |
I enjoy your humorous posts too! : )
Crewman, wherever I go there is a 'Zone of Silence' around me.
Lot of fun turning off the cellphone of the moron in front of you in traffic.
There are also legitimate reasons for wanting privacy but one can't overlook the entertainment value of jamming equipment either.
"...These can damage the company, the country and the PARTY."
So GPS/cell jammers can be real PARTY POOPERS!
Get it? Party poopers! LOL
No, it was fall of 1993. I don't remember which side of Shenzen, but I believe it was the PRC side.
Austin Tex | 12.04.08 - 7:51 pm |
Ah well, it was a long time ago, perhaps I'm misremembering it. But I do recall HK got a little desperate looking as we came up on the border, even so, there was a huge difference after crossing and the food was just awful. : )
I'd love to go back again one day, I've always been fascinated with the Chinese culture since I was a little girl.
Funny (strange) that for all our progress the same question persists: Why do the nations rage so furiously together and the people imagine a vain thing?
Unit472, your "zone of silence" sounds illegal in public places, not to mention rude. FWIW it's easy to make equipment that finds jammers.
I think we should start a campaign to bring back the clothing line FUBU.
Someday talk about the war ending will end.
Time to go to work. Hope to catch up with you all later....
AnonyMiss - end 93, and through 94 we were still arguing the hard landing / soft landing story in China. Credit was duly injected into the system in massive doses of policy lending, sweetheart deals, and a very cosy triangular debt relationship emerged with colossal amounts of, erm, leakage. The coastal CRE and RRE bust of 98/99. The overhang was enormous.
Clearly a unique situation which couldn't or wouldn't be repeated in more "mature" economies. Too many smarties, Group of 30 etc.
Oh wait...
C
"But I do recall HK got a little desperate looking as we came up on the border, even so, there was a huge difference after crossing and the food was just awful. : )"
Perhaps a different line? And did the train stop at Shenzen so the PLA soldiers could come on and look everyone over?
Pavel Chichikov(Unrated) writes:
So the income of a rural family is typically under USD 1,000?
Pavel Chichikov | 12.04.08 - 5:49 pm | #
LOL - ya something like that. A story for you Pavel, you're literate and would appreciate a 'story' more than just raw numbers...
I work for a company that built a plant in China a while back - not long ago - not to export to the US directly but to support the many multinational OEMs that export to the US - they supply parts to those OEMs worldwide.
We were discussing a part... and whether we should 'core' a hole in the part [put the hole in the mold to form the hole in each part as it is being molded] or should we drill the hole in each part separately AFTER we mold it sans the hole. Here in the US we would try to mold the hole in to save labor drilling a hole... not always the best choice in China.
At this meeting I asked a dumb question "So how much does it cost to drill a hole in China?" [I knew that putting the 'core' feature in the mold would add something like $5000 to the cost of the mold]...
The reply I got from our China expert was "About $60."
I protested - "No F'ing way! At their labor rates it has to cost way less than sixty bucks!"
Our expert said... "That's not per part... it will cost us about $60 a month to hire a guy to drill holes. Divide that sixty dollars by as many holes as he can drill working six days a week ten or twelve hours per day. THAT'S your cost per hole."
Came out to be something like a quarter penny per hole.
That worker's salary is about $720/year... and people are leaving rural China in droves to get those jobs. My guess is the people in rural China make way less than $1000 USD... probably less than $700 per year all things considered... else why would they leave?
@Anonymous | 12.04.08 - 8:08 pm | #
was mine.
Browser jumped to new thread, I came back on another tab, yaha, yada.
Hu and JIwei need to read and understand Sester's blog cited above. The Chinese are pissed because they are losing money, and Brad explains why this is bound to happen. Let's hope these two guys learn from their mistakes and stop blaming the US for the imbalances their weak yuan policy has caused.
Pavel - your point is well taken with regard to the story of the abba and the devil. I believe Dante said there was a special circle of hell reserved for flatterers. Certainly something to keep in mind.
dryfly...quality control on those holes is going to be weak; the hole-driller can't be that consistent, even with some kind of fixture. Which is why stuff from China is often, in fact, cheap Chinese crap.
Paper with ink on representing more paper with ink on it has very little intrinsic value. Increasing productive labor is the only true source of wealth. Who has made the most improvement over the last thirty years? It seems to me since they could print paper with ink on it to buy our paper with ink on it to keep the price of their paper with ink low and stable, they were able to industrialize a country. Could they have done it if they had to borrow something with true replacement cost? Who will be the winner in the long run?
Perhaps a different line? And did the train stop at Shenzen so the PLA soldiers could come on and look everyone over?
Anonymous | 12.04.08 - 8:08 pm |
No, we came straight through the New Territories on a group visa, we were checked on in HK through a group visa. Gosh, now you have me thinking...nope, no soldiers, so we came straight through. I checked a map just now, I've never been to Shenzhen as far as I can tell!
I do recall that when we got into Guangzhou, our tour bus wasn't waiting for is as it should have been. I don't think I've ever been so scared in my life. Maybe two dozen of us, surrounded by hundreds of lame, handicapped beggars, children, and women. Once again, I have never seen anything like it.
As Pavel mentioned upthread, I probably couldn't last an hour as a Chinese peasant.
And when I said the food was bad, I only meant that the quality of the food maybe 10% of the quality of the food we ate in HK although the buildings were more beautiful.
I'm with Joe, I smell Deflation althought it may be temporary untill inflation rears its ugly head....
BTW the total amount of net worth of the big 3 is around 16B and they are asking for 34Billion?????
That worker's salary is about $720/year... and people are leaving rural China in droves to get those jobs. My guess is the people in rural China make way less than $1000 USD... probably less than $700 per year all things considered... else why would they leave?
dryfly | 12.04.08 - 8:10 pm |
I'd agree with you on that, I recently read a story (who knows where) about some employees of Chinese car manufacturers. I'll see if I can dig it up.
Unit472 writes:
"F-22s,nuclear submarines light years ahead of what the Chinese can build"
Really? More american football mentality dope patriotism is what I'm reading and the bravado of the USA is bigger and stronger. Time to grow up and recognize China as the dangerous red dragon that it is:
Dailymail.co.uk November 2007:The uninvited guest: Chinese sub pops up in middle of U.S. Navy exercise, leaving military chiefs red-faced
At least a dozen warships provide a physical guard while the technical wizardry of the world's only military superpower offers an invisible shield to detect and deter any intruders.
That is the theory. Or, rather, was the theory
American military chiefs have been left dumbstruck by an undetected Chinese submarine popping up at the heart of a recent Pacific exercise and close to the vast U.S.S. Kitty Hawk - a 1,000ft supercarrier with 4,500 personnel on board.
By the time it surfaced the 160ft Song Class diesel-electric attack submarine is understood to have sailed within viable range for launching torpedoes or missiles at the carrier....The lone Chinese vessel slipped past at least a dozen other American warships which were supposed to protect the carrier from hostile aircraft or submarines.
And the rest of the costly defensive screen, which usually includes at least two U.S. submarines, was also apparently unable to detect it
CNN 1999: China has the largest military in the world of 2.8 million...China., with some 400 nuclear warheads, still has the world's third-largest nuclear arsenal and missiles that can reach the United States.
Bush's foreign policies has forged new alliances: China, Russia, India and Brazil ( three-quarters of the world's population), Pakistan, Iran, Venezula, South Africa have particularly forged relations.
November 2008:Chinese trade agreement with Taiwan...China's agreement with Taiwan will triple the number of direct flights across the Taiwan straight.... and Cheyne Chiu drafts peace agreement between Taiwan, China
People's Dailyonline:China, South Africa sign labor agreement
South Africa and China Monday signed an extension to the memorandum of understanding (MoU) in the labor field agreed to in 2002.
China had managed to create 10 million jobs a year over the past four years and had much experience to offer South Africa in this regard, he said. Mdladlana agreed, saying South Africa was creating only about 500,000 jobs a year...
venezuelasanalysis.com: 1/31/05:President Hugo Chavez and Chinese Vice President Zeng Qinghong signed 19 agreements ...The Chinese Vice President explained that fortunately for the good of the world, China would continue growing socially, morally, politically and economically. "China continues to be the country with the most solid economic growth in the world," affirmed Qinghong.
Qatar News Agency: China and Japan sign cooperation agreements in Energy Conservation
Tokyo , November 29 (QNA) -China and Japan signed a number of new contracts using Japan's technologies to cut China''s energy consumption and cooperation in energy conservation and sustainable development . In the third edition of a China-Japan energy conservation forum held here Friday, a total of 19 contracts are signed between government institutions and companies from both countries...Trade and Industry of Japan, said cooperation in the environmental protection sector has become the main highlight of economic ties between China and Japan. (Qna)
bilaterals.org 11/20/08: China and Peru sign free trade agreement, extending Asian influence in Latin America
China has made similar forays into other Latin American countries, such as Chile, where it signed a free trade agreement in 2005. Last year, China supplanted the United States as Chiles top trading partner.
In addition to Peru and Chile, China has already signed free trade agreements with Costa Rica and Cuba. In fact, Cubas state news agency reported that President Hu has signed almost a dozen agreements with Cuba,
In Brazil, China is currently in negotiations are negotiating to build a $3 billion steel mill with help from the Bank of China, which is set to open a branch with a $100 million in lending capital there next year. China has also sunk billions into oil exploration in Ecuador, Colombia and Venezuela.
The reality is that to some degree the fate of Latin America has been decoupled from the US, Daniel Erickson, of the Inter-American Dialogue thinktank, told the AP. Or at least its not as tightly entwined as it used to be.
The USA offshored manufacturing and industry to China. USA's wealth was finished product exports at one time. Now we sell to the world; raw commodities and "financial SIV's and services." We fabricated a faith based currency while China PRODUCES finished manufactured products and has the rest of the world in trade agreements. SAIC is GM's chinese foreign car maker. Soon SAIC will buy GM.
Never underestimate China's long-range plan; to be the next empire as the USA gasps its' last collective breath of stupidity of selling out american workers and manufacturing jobs and industry. China will buy our debt until they've accomplished their goal; The new world leaders.
Don't forget about China's FOREX; $1.9 trillion. Unlike the USA, China is a country that planned ahead and saved for the rainy day. As Paulson and Bush go on bended knee BEGGING China to buy more treasuries to bailout the USA and 'too big to fail' investment and insurance. China smiles as it buys our treasuries to fund our MIC and stupid wars because they understand that we are bankrupting our future. And the future came early...
Stiffing China will be like stiffing the Mafia. The chump who greedily takes the shark loans always ends up dead in the trunk.
Barley: XIAOCHUAN stands for "little river."
The way things are going, you'd be well advised to learn an Asian language or two.
"Stiffing China will be like stiffing the Mafia. The chump who greedily takes the shark loans always ends up dead in the trunk."
Read Setser's blog. According to him, we aren't stiffing the Chinese or anyone else.
Found it! It's a four part series comparing/contrasting the US and China. It's from June so it might not be as relevent now.
Part 1. Telegraph.co.uk: news, business, sport, the Daily Telegraph newspaper, Sunday Telegraph - Telegraph
Part 2. Telegraph.co.uk: news, business, sport, the Daily Telegraph newspaper, Sunday Telegraph - Telegraph
Part 3. Telegraph.co.uk: news, business, sport, the Daily Telegraph newspaper, Sunday Telegraph - Telegraph
Part 4. Telegraph.co.uk: news, business, sport, the Daily Telegraph newspaper, Sunday Telegraph - Telegraph
girlbear writes:
BTW the total amount of net worth of the big 3 is around 16B and they are asking for 34Billion?????
girlbear | 12.04.08 - 8:25 pm |
$34B plus $25B from previously approved funds for retooling and increasing MPG...
AND they've put in for TARP money for their financing arms.
rps, you get your naval info from the Daily Mail? I get my Spice Girls and Brittany stuff from that source.
Yeah, submarines popping up in the middle of naval exercises are nothing new. Some 25 years ago the Kitty Hawk, I believe it was, was damaged by a Soviet sub surfacing beneath it!
Whom knew where who was?
The better analysis is this. The US military took two weeks to drive to Bagdhad. The subsequent military activity is irrelevant because the US, at its option, could have crushed the Saddam Fedayeen, al Qaeda in Iraq, Mookies Brigades etc. but didn't because it was trying to achieve political, not military objectives.
In a war with China, the US Navy would not ANNOUNCE it was holding exercises in the Sea of Japan or ask
shipping to stay away from such and such areas.
Carrier strike forces would move and they would strike. US Navy subs would not 'locate' possible intruders they would 'sink' them. Big difference.
dryfly,
Those China #s PPP? I can live minimally (shelter, food, utilities, transit, misc. staples) for $8000 in Central FL. I bet $1000 in urban China is more like $5000-$6000 here.
Oh no, dead thread =(
Unit472 writes:
"rps, you get your naval info from the Daily Mail? I get my Spice Girls and Brittany stuff from that source."
The Cleveland Leader:
Chinese Sub Pops Up Undetected in U.S. Navy Exercise
...As a citizen of the United States, it may leave you wondering if we are really as safe as we think we are.
UPI.com
Chinese sub has U.S. military concerned
LONDON, Nov. 10 (UPI) -- U.S. Navy officials are concerned over the unexpected appearance of a Chinese submarine during a major military exercise in the Pacific Ocean.
CBS NEWS: Chinese Sub Came Close To U.S. Ships
Navy Commander Says Close Encounter Could Have Triggered 'Unforeseen' Incident
And how is the USA going to Finance a war with China? Presently, China and Japan finance our current stupid wars and military. Americans have an aversion to pay as you go and demand tax cuts. China obliges us...and smiles as they buy OUR DEBT-treasuries. They have a plan.
China will win without a physical war. It'll be financial armageddon for the USA. Bush and Paulson have already sold US workers future labor. Did ya think the bailout money via China's willingness in buying treasuries was free with zero interest?
should check out that rubber covered sub that popped out behind the carrier rack within the last year or so. sorry no ref, but look it up if can't find by creative google. eurasian centrality is key to world dom, unless it isn't. (hard rain gonna fall)
weird coinc w/rps it seems
these threads are long, but might want to check a bit of naval military triumphalism.
rubber covered sub is fairly well vetted, please debunk if you ca
Ancient Chinese Secret(Unrated) writes:
dryfly...quality control on those holes is going to be weak; the hole-driller can't be that consistent, even with some kind of fixture. Which is why stuff from China is often, in fact, cheap Chinese crap.
Ancient Chinese Secret | 12.04.08 - 8:17 pm | #
The cored-molded holes aren't that 'accurate' either - draft angles & 'shrink'. As bad as the Chinese drilled holes would be they wouldn't be any worse than a molded hole... the difference is that in the developing economies a molded hole is cheaper... in the developing economies the drilled hole is cheaper... it all has to do with the relative costs of labor vs. capital in each place.
Those China #s PPP? I can live minimally (shelter, food, utilities, transit, misc. staples) for $8000 in Central FL. I bet $1000 in urban China is more like $5000-$6000 here.
Straight dollar to rmb conversion.
Don't even make me laugh talking PPP here - you have no idea how grimy & primitive the lives of front line Chinese laborers are compared to ours. PPP hardly covers the differential or explains the contrast in lifestyles or costs.
Rural is 'less polluted' but even harder & harsher than urban lives - that's why they leave.
I've never been there - have been offered to be sent there, declined - but those I work with who have been to the industrial centers [we aren't talking Great Wall tourist traps] are blown away by how rough it is.
Their business & 'intelligentsia' class are closing the gap quickly but not their 'hole drillers'
we all live in a ruber sub
dryfly-- "I've never been there - have been offered to be sent there, declined - but those I work with who have been to the industrial centers [we aren't talking Great Wall tourist traps] are blown away by how rough it is."
When I took U.S. visitors through rural China, I would await the proper moment, and then quote David A. Coe:
"Now if that ain't country, I'll kiss your ass!"
PCA & Dryfly,
I found the auto factory worker wages in the article I posted above under part 3. Here's the relevent paragraph.
"Thomas Yao, the factory's head of public relations, took me on a guided tour. The factory, he explained, had opened five years ago, built from scratch in strict accordance with Ford's global manufacturing standards, and produces up to 250,000 cars a year. The average non-technical production line worker earns 18,000 yuan (about £1,300) a year, working an eight-hour day, with a 15-minute break every two hours and an hour for lunch. (Wages, and the cost of living, in Chongqing are between a quarter and a third less than in the major manufacturing centres of the south and east, where the average urban salary is 25,000 yuan, about £1,800, a year.) The company provides extensive healthcare, insurance and pension packages. Workers are encouraged to make suggestions about how to improve the production process - there are 'break-out' areas where groups sit together and review their performance - and receive awards and bonuses if their suggestions are adopted."
Two things jump out but you'd need to read the full series for the whole context.
When I visited Guandong (sp?) province 14 years ago, they were just beginning to mechanize and built up, now wages are up to around $2640 per YEAR, so they built and moved west for the lower salaries $1905 per YEAR. They moved all their factories and built a city of over 5M people and growing in less than 15 years just to save $735 per year/employee.
Amazing.
Stiffing China will be like stiffing the Mafia. The chump who greedily takes the shark loans always ends up dead in the trunk.
rps | 12.04.08 - 8:29 pm | #
Great post. I think we've outsmarted ourselves this time.
I've never been there - have been offered to be sent there, declined - but those I work with who have been to the industrial centers [we aren't talking Great Wall tourist traps] are blown away by how rough it is.
dryfly | 12.04.08 - 9:23 pm |
You really should go. 14 years ago, it was a lot easier to see the real, but it is also a staggeringly beautiful country.
But are there enough moral, intellectual, spiritual geniuses?
Pavel Chichikov | 12.04.08 - 7:31 pm | #
One less than there was last week!
Miss ya, Tanta
Persecuted Comrade Anonymouse: Those China #s PPP? I can live minimally (shelter, food, utilities, transit, misc. staples) for $8000 in Central FL. I bet $1000 in urban China is more like $5000-$6000 here.
Pork shoulder in NYC is about $1 a pound. In China, it also costs $1 a pound. Shelter can be cheaper, but it depends on where you live. In the "wealthy" coastal cities, a three bedroom 1000 sq ft condo costs $40,000. Wages for skilled/votech workers are about $2,000 a year. That's 20 years wages to buy a condo, not counting interest. Stateside, bank were doing loans on the basis of homes appraised at 10x verified annual income, at the peak of the housing bubble. We may have a housing bubble, but it's nothing compared to China's.
re Gao's last staements the US political system is inc indicatient that someone needed to speak the truth to the american people and gear them up for war; the american political systemis incapable of delivering unpleasant truths to its people. We only elect political leaders who will tell us what we want to hear-pleasant comforting lies.
Calm down, guys. I am a Chinese. I don't think china is doing any harm to the U.S. If we are really hostile to you guys, we would have to spend most of our reserves to buy your country bonds.
The Chinese government just said what they think -- u.s. spend too much and have not much of saving. The translation may be misleading. It makes you guys feel we are making a war with you. Think in this way, the GDP of china is only 5% of the world, while US has more than 30%. How can it be possible that china have the ability to save the U.S?
just my two cents.
I believe about 40% of the Chinese population makes less than 2$ a day.
Yet we are going to be convinced that they are about to dominate the world.
China was part of the great allied powers in WW2 and got lend lease assistance from the USA in the same manner the British Empire did.
China got most preferred trading nation status under Nixon in the 1970's
China is an Ally of the USA. If interests in the USA want greater defense spending they can rely on China to cooperate to ensure that happens.
The issue really is that richer US interests want to remain rich by having a pool of cheap labour in China rather than enriching people in the USA so that the rich in the USA become poorer.
Even so there is a relationship there between the US and China where China knows it is onto a good thing it does not want to disturb. I think you have to see China in that context. It has something like 1.5T of US financial assets but it cant really spend them. All it can do is allow them to go back to the USA for the benefit of the USA while it recieves whatever interest and remuneration that fits the nature of the relationship.
On a point of infomation Americans are notoriously poor at understanding anything about the world outside of America. You have an overly US centric view. I think that black swan book says something about this. Many of you make decisions and form opinions beginning from a US centric view that is not the correct one.
None of us can in fact actually know the correct view. Because their are different views depending where you stand.
"I enjoy your humorous posts too! : )"
Bless you.
pw: China has simply been providing the US consumer vendor financing. They have been motivated to lose money on the financing to encourage creation of domestic production capacity and jobs. The amount they will lose on their holdings of US Treasuries as the dollar falls should be looked at as an investment in Chinese production.
This is the way the other Asian economic powers have viewed it. The problem is that with prosperity has come the view that they are indispensable, and that these foreign currency reserves actually mean something. Domestic audiences are now demanding that these reserves be redeemed for something of value. Any Asian country that does so will find itself in several economic difficulty - the root of the problem is that most Asian countries, including the wealthy ones, are essentially screwdriver turners for Western countries that come up with path-breaking innovations. Think about it - in the 2000 years of its existence, the continent of China has come up with a handful of inventions - a primitive compass, fireworks, porcelain, tea and silk, block printing (paper was invented by the Egyptians). In 400 years, the continent of Europe (and its progeny in the Americas) came up with the steam engine, the sextant, air conditioning, the Bosch and Haber processes, the internal combustion engine, the jet engine, modern plumbing, et al.
The one significant innovation China brought to the world was its skill at political control necessary to maintain its continental-scale empire - the rest of the Chinese experience is merely history repeating itself. This skill also led to a deadening of creativity. Compare the Chinese empire to the Roman one. Britain was the most remote and uncivilized corner of the Roman empire, the ancient equivalent of China's Tibet. The Roman empire's dissolution led to a flowering of European creativity, as kings competed with each other to recruit men of talent. Britain - a mere Roman province - rose from nothing to become a country whose inventions alone exceed those in China's 2000-year existence. In China, the empire's size made it easy for Chinese rulers to harvest huge sums of money for thousand-concubine palaces filled with pricey baubles, even as the peasants lived in squalor. In truth, there is one thing the Chinese ought to have learned, but have not - it would be better off as a dozen independent countries rather than as a monolithic empire unaccountable to its subjects. And so Chinese history - the passage of time without visible progress - keeps repeating itself.
Zhang Fei,
you are a sly game player;). "block printing (paper was invented by the Egyptians)"
The Chinese invented paper money. And how to count it; abacus, and count to the last penny; decimal system. Lest not forget dominoes as we watch the domino effect of all fiat currency systems around the world. The Chinese are very inventive and calculating.
Let me reiterate; Never underestimate China's long-range plan; to be the next empire. China has been patient for a very long time with those foolish greedy foreigners. China is the Red Dragon.
The Chinese invented paper money. And how to count it; abacus, and count to the last penny; decimal system.
The Chinese might have invented paper money, but the concept of fiat money pre-exists the Chinese state. The abacus was invented by Mesopotamians, and the decimal system was invented by the Indians.