HomeGnome wrote:

"You're not going to get 1.3 billion Chinese to change by insulting them,"

Hu knows... DC is insulting the 60% of Americans that are against healthcare tonight... At least the DEMs are consistent...

but fits this thread perfectly.

I'm starting to appreciate the impact of the Triffin dilemma. Might come in handy over the next few years as I expect that the U.S. will attempt to play the other side for a few painful years:

Global imbalances and the Triffin dilemma | Analysis & Opinion | Reuters

...
THE TRIFFIN DILEMMA

This paradox linked to the provision of the world’s reserve currency was first noted by Yale economist Robert Triffin. In a famous warning to Congress in 1960, Triffin explained that as the marginal supplier of the world’s reserve currency the United States had no choice but to run persistent current account deficits.

As the global economy expanded, demand for reserve assets increased. These could only be supplied to foreigners by America running a current account deficit and issuing dollar-denominated obligations to fund it. If the United States stopped running balance of payments deficits and supplying reserves, the resulting shortage of liquidity would pull the global economy into a contractionary spiral.

But Triffin warned that if the deficits continued, excess global liquidity risked fueling inflation. Worse still the build up in dollar-denominated liabilities might cause foreigners to doubt whether the United States could maintain gold convertibility or might be forced to devalue.

Triffin was writing in a world of fixed exchange rates, but his work provides a useful way of thinking about the current crisis. In the 1950s, the fear was convertibility of greenbacks into gold. Today, the fear is dollar devaluation, inflationary default on Treasury bonds, or capital losses on securitized products linked to widespread insolvencies.

Triffin’s work suggests that the Fed did have a choice in the late 1990s and early 2000s, albeit an unpalatable one. Officials could have refused to supply the incipient demand for liquidity. Higher interest rates could have prevented the (worldwide) borrowing boom and widespread deterioration of financial standards seen in recent years. But they would also have meant lower growth in the United States and the rest of the world. ...
.

ᐅᖃᓗᕿᑦᑐᖅ ?

China Tests Stronger Yuan on 12 Industries | Journal of Commerce

the solution to mispriced assets, is itself

Congress is NOT reforming health care; they ARE reforming Health Insurance.

Blackhalo wrote:

I doubt that 60% are against healthcare, just this abomination of a bill.

Well stated.. I actually love health care. But this bill is a turd in the punchbowl...

Ahhh, but what happens when 320 million US consumers decide that Vietnam is a better place to make clothes and Ipods? China needs exports desperately to keep employment up at levels commensurate with economic growth. What we forget is the highest wages are in export industries, and low wages prevail in industries that serve the local markets.

Soooooo, if Europe and America don't take the massive levels of the past, well, the third world will have to step up, and at much lower prices. A very interesting conundrum of who will move first and make the adjustments necessary. Europe is totally behind the curve, but already has import restrictions in place that are easy to scale up. Now, the Japanese did the same Oh no we won't change in the late 80s, but by 95 they were no longer masters of the universe.

China knows they ride the tiger, and the real question is when they decide to stimulate the national economy and retain more of those exports for internal consumption. Lower oil would also fix their current account deficit, so a bunch of influences are going to combine to make interesting markets.

Someday this war's gonna end...

RE wrote:

Higher interest rates could have prevented the (worldwide) borrowing boom and widespread deterioration of financial standards seen in recent years. But they would also have meant lower growth in the United States and the rest of the world. ...

Was there real sustained growth or just lots of Starbucks and McMansions that folks can't pay for? Growth that produces real wealth and assets is good.. Growth based on a debt ponzi, not so much.

longwaver wrote:

Growth that produces real wealth and assets is good..

It's not clear to me that this is even possible at this juncture. Sclerotic public and fiscal policies (Exhibit A: the Federal tax code) severely constricts the "absorptive capacity" of the "world's leading free market economy."

Hubris is dangerous whether in a waxing or waning power. Now we see it from both.

Hegemons secure in their position have little inclination to brandish trump cards.

carnap wrote:

Why can't people talk about health care without idiotic hyperbole?

---Because we're talking about health INSURANCE?

The Chinese, like others before, are overestimating themselves.

This is particularly funny ... IMO.

The American Business community that have exported millions of jobs to China, withdrawing support? I guess I do not understand. With razor thin margins for the Chinese companies, American Business keeps most of the margins for themselves. So why would they want to change the status quo!?

longwaver wrote:

Sure seems like protectionism is setting in all over. Helping others out is easy when you have excess..

From what I remember from economic history, Smoot Hawley was implemented right around the point where the Dow had recovered around 50%. While there's no legislation on the table as of yet, the similarities (i.e. increased protectionist leanings) are a little concerning.

Thanks. I just looked around, but not in depth, or at Treasury.

Aren't all fiat currencies manipulated?

SNAFU wrote:

So why would they want to change the status quo!?

Have you ever observed the relationship with a Chinese supplier before? They are very good at improving their margins by exploiting any advantage they have in the relationship. So on the one hand the best profit margins are in the past, and on the other hand American companies trying to sell in China are stymied. This is more about getting China to open its demand to foreign markets.

The whole currency mispricing problem is a very interesting thing in itself. Suffice it to say that if and while a currency is underpriced, then that country's imports are being taxed while its exports are being subsidized.

sm_landlord wrote:

Could the currency noise be "Smoot Hawley by other means"?

People still think Smoot Hawley created the Great Depression, yet global trade collapsed in Sept, 2008 with the Crash anyway.

hello?

you don't get anything for free, even if you stamp "free market" all over it.

broward wrote:

sm_landlord wrote:
Could the currency noise be "Smoot Hawley by other means"?
People still think Smoot Hawley created the Great Depression, yet global trade collapsed in Sept, 2008 with the Crash anyway.

Cannot be repeated enough. Trade collapsed due to an effective negative income shock which was caused by a wealth/credit shock.

You could start a good fight with just that in just about any economics department. Most are unwilling to consider the alternative to their comforting myths.

EvilHenryPaulson wrote:

You could start a good fight with just that in just about any economics department. Most are unwilling to consider the alternative to their comforting myths.

You know what concerns me? If another Smoot-Hawley was introduced in April, and it corresponded to another downleg in the Dow, future economists would have two data-points in which to rail on the evils of protectionism. Twice as convinced, those economists would be.

EvilHenryPaulson wrote:

You could start a good fight with just that in just about any economics department. Most are unwilling to consider the alternative to their comforting myths.

I wasn't arguing it one way or the other, just wondering if history is rhyming.

But thanks for the tip on starting a good fight in an econ department. If I decide to go back to university in my retirement, I'll keep that grenade handy for when things get too dull.

From last year:

Under Section 3004 of the Act, the report must consider whether any foreign economy manipulates its exchange rate vis à vis the U.S. dollar to prevent effective balance of payments adjustments or to gain unfair competitive advantage in international trade. Between 1988 and 1994, Treasury cited three economies (China, Korea, and Taiwan) several times each for manipulating their exchange rates. Annex 2 provides further details regarding these determinations. Since July 1994, no economy has been found to have met the standards identified in Section 3004 of the Act.

Theme music for currency valuations:

YouTube - Jackie DeShannon - What The World Needs Now (1965)

Anyone have an idea of where Agricultural Subsidies rank in terms of priority for every major agriculture exporting country?

That would be a boost to the domestic economy, and a train wreck for foreign economies. Also imo it would reduce trade, which of course goes against the assumption that any decrease in government involvement will lead to an increase in trade.

sm_landlord wrote:

I wasn't arguing it one way or the other, just wondering if history is rhyming.

I sure hope not. But the cadence is awful similar, even if the tempo is a little slower this time. The next few months will tell the tale.

EvilHenryPaulson wrote:

That is why Bernanke must remain as Chairman of the Federal Reserve for now.

Yes, he has to wear this for at least another year or two. Timmy, on the other hand...

U.S. Rig Count Passes Super-Spike Peak

EvilHenryPaulson wrote:

Anyone have an idea of where Agricultural Subsidies rank in terms of priority for every major agriculture exporting country?

How so? I don't understand your question. Are you asking about their removal, or adding to them?

noob goldberg wrote:

You know what concerns me? If another Smoot-Hawley was introduced in April, and it corresponded to another downleg in the Dow, future economists would have two data-points in which to rail on the evils of protectionism. Twice as convinced, those economists would be.

I personally am quite worried about another Smoot-Hawley. I expect it to lead to resource hoarding and that will not help a resource constraint world. I consider it extremely dangerous economically and politically and, in fact, much more dangerous than in the 30s.

km4 wrote:

besides mostly financial instruments, arms, ( and Hollywood movies ) what exactly is America going to increase exports of to the world Mr. Pres.

They aren't intending on opening up new product lines into new markets (beyond lip service). There's no appetite for a Doha agreement or new bilaterals, really.

They're intending on initiating a large number of WTO challenges on foreign countries to enforce existing agreements and wring every last drop out of them. Just like China, come to think of it.

Business is taught backwards. You don't want to compete. Competing leads to smaller margins.
You want to avoid competition. That's what marketing is. That's what feature differentiation is. That's what price fixing is. That's what finding new markets is.

I knew I posted something on this recently and here it is Infographic of the Day: The U.S. Trade Imbalance Eclipsed by Competing Charts | Design and Innovation | Fast Company

have to go to full size here US Merchandise Trade | to better see what's happening in merchandise trade and it's not pretty

A disc representing 2009 is superimposed over a disc representing 2008 to show how much expenditures on imports such as cars and consumer electronics has decreased from one year to the next. The same technique is applied to exports, indicating the slowing of economic activity at home. And in the end, despite our new austerity, the aggregate total of imports for both years far exceeds the aggregate total of exports, leading to America's trade imbalance.

now go to America's service trade - NY Times which is carrying more and more of America's economic load. To no surprise look how financial services led by the fucking stands out

Net Net: the surest way out of the recession will be to develop new forms of economic activity not same ole bullshit being executed by the gubmit and corptocracy and the export that Pres O wishes for.

mock turtle wrote:

it looks like a pretty middle of the road piece of legislation
thats pissin everybody off and should get them royally screwed
at least, i guess, we cant call it politics as usual

So far the "change" has been policies and tactics that eventually tick off both the liberals and the conservatives.... It's not looking good for Dems, but then again people remember that they can't trust Republicans either..

China is about to go through a 1930's US depression-like period and the result will be that asset prices will collapse in the near term but incomes may rise long-term.

Currency is artificially low. Income gap is large (about the size of the US today I believe). Flat to falling consumption of their exports worldwide.

Anyone disagree?

Rob Dawg - You gotta hankie on you?

sm_landlord wrote:

Congress is NOT reforming health care; they ARE reforming Health Insurance.

As someone who spends a lot of time on healthcare cost analysis, I'm hoping for a last minute failure on this one.

Perfect for this thread
Help Us Google, You’re Our Only Broadband Hope. (The Government Has No Spine.)

GOOG pulling out of China.

Like I said above the surest way out of the recession will be to develop new forms of economic activity not same ole bullshit being executed by the gubmit and corptocracy and the export that Pres O wishes for.

some investor guy wrote:

You only have to get a few Party members to change their minds. It's not like most of those 1.3 billion people actually vote.

Unlike here in America, where such a large percentage of the population actually votes, and Party members always... Oh, wait.

Never mind.

EvilHenryPaulson wrote:

Trade collapsed due to an effective negative income shock which was caused by a wealth/credit shock.

Funny. I thought trade collapsed because people realized they had too much stuff, and their asset prices were too high.

broward - is your new car red? Or maybe a convertible?

I get points if it is.

"So now that makes China look weak and Obama look strong "

Revaluing now would make China look weak.

We're eventually going to get a blow-up over cultural differences. Americans will never understand the importance of face to Chinese and Chinese will never understand many facets of American culture.

km4 wrote:

what exactly is America going to increase exports of to the world Mr. Pres.

Dollars.

I have free health care now, so I can afford to be in a bad car accident!

yuk yuk.

Off to go do some work.

some investor guy wrote:

Print dollars buy renmembi?

That might be somewhat difficult with present Chinese exchange controls.

Marketwatch just announced that the House sent a bill to the POTUS.

I think in 2008 60% of employment was by private companies (mentioned in an article I remember because SOEs got 60% or some majority amount of the 9.59tn ¥ of lending the banks did in 2009)

speaking of SOEs, from the Wuhan post, a SOE job fair of 25 SOEs offering 5000 positions
Google Translate

It was shut down after crowds rushed the building when it opened
Interestingly enough, they reported the crowd was exactly 5000 people big

That's 'saving face'. Because reporting 25,000 people stampeding for 5,000 jobs would be embarrassing hypothetically speaking

Congressmen Propose Measure To Address China Currency Issue

The GATT 1994 agreement is part of the Final Act of the 1986-94 Uruguay Round of trade negotiations, which led to the establishment of the World Trade Organization (WTO).

Under Article XV of GATT 1994, members of the WTO are prohibited from using exchange rate policies to circumvent the intent of the GATT agreement.

Article IV of the IMF's Articles of Agreement also prohibits the use of currency manipulation to prevent effective balance of payments adjustment or to gain unfair trade advantage.

The proposed legislation would impose tariffs on Chinese imports automatically if the Treasury secretary found that China's exchange rate policy met the WTO definition of currency manipulation. The tariff rate would be equal to the percentage of manipulation found and would be imposed in addition to existing tariffs.

This bill requires the Secretary of the Treasury, within 60 days of enactment, to analyze and report to Congress whether China is manipulating its currency within the meaning of article XV of GATT 1994.

If the Secretary finds affirmatively, the report to Congress will indicate the degree of manipulation against the dollar.

I think the "health care" package has holes that Swiss cheese would be proud of.

Print dollar; counterfeit remenmbi?

sm_landlord wrote:

They can't possibly control costs. Hospitals cannot turn away patients. The costs must be shifted somewhere.

Well, this reminds me of a Mish post from the NY Times from a few years ago:

Mish's Global Economic Trend Analysis Message Board - Msg: 22942537

Hospitals Try Free Basic Care for Uninsured

Unable to afford health insurance, Dee Dee Dodd had for years been mixing occasional doctor visits with clumsy efforts to self-manage her insulin-dependent diabetes, getting sicker all the while.

In one 18-month period, Ms. Dodd, 38, was rushed almost monthly to the emergency room, spent weeks in the intensive care unit and accumulated more than $191,000 in unpaid bills.

That is when nurses at the Seton Family of Hospitals tagged her as a “frequent flier,” a repeat visitor whose ailments — and expenses — might be curbed with more regular care. The hospital began offering her free primary care through its charity program.

With the number of uninsured people in the United States reaching a record 46.6 million last year, up by 7 million from 2000, Seton is one of a small number of hospital systems around the country to have done the math and acted on it. Officials decided that for many patients with chronic diseases, it would be cheaper to provide free preventive care than to absorb the high cost of repeated emergencies.

The "Signing Statement" is more important than the bill,and it will not be published.

broward wrote:

People still think Smoot Hawley created the Great Depression, yet global trade collapsed in Sept, 2008 with the Crash anyway.
hello?
you don't get anything for free, even if you stamp "free market" all over it.

heyas broward, hows the work thing breaking? did you catch the "China bubble" meme from Google trends a thread or so back?

Tom Stone wrote:

I still think we should raffle off Britney spears and Paris Hilton to the Chinese at $10 a ticket.

You're onto something there. Sure there's probably some kind of human rightsy issuishy thing ... but once people do the math ...

sm_landlord wrote:

Text of Obama’s Planned Executive Order on Abortion - Washington Wire - WSJ

Well, I'll say one thing, Obama did learn from BushCo.

energyecon wrote:

Their challenge is production capacity far in excess of current demand, which they stimulate by...hosing loans at adding capacity...so the new, higher level of demand now has an even greater amount of excess capacity to deal with so...

The fate of most exporters at this time. Germany, though with less stimulus, is in a similar predicament with its Kurzarbeit, all in the hope of cranking up the spigot again. Overcapacity all over the world and everybody wants to export themselves out of this crisis. Once the stimulus wanes...

BG,no human rights problems at ALL! Enemy Combatants are NOT persons,SCOTUS says so.

Congressional sources report that Rep. English introduced the measure after Treasury again refused tolabel China a “currency manipulator.” On December 19, 2006, Treasury released its semiannual “Report to Congress on International Economic and Exchange Rate Policies” in which it did not label China or anyother U.S. trading partner a "currency manipulator." The report criticizes China’s exchange rate policy as distorting the domestic economy and impeding international economic imbalance adjustments. However,it acknowledges that China’s exchange rate policy has improved in the past several months through changes to the Chinese financial sector that allow for greater transparency and liberalization of the country’s exchange rate practices.This is not the first time that Rep. English has introduced legislation targeting China’s currency practices. In 2003, Rep. English, along with Reps. Robin Hayes (R-NC) and Thomas Reynolds (R-NY), introduced similar legislation.

WoW! I can earn 40% plus yearly with imperial!! Is it time to sell my beanie babies and go all in?

Paulson Doesn't Label China as a Currency Manipulator (Update2) - Bloomberg.com

I am deeply disappointed,'' with the Treasury findings, Senator Christopher Dodd, a Democrat from Connecticut, said in a statement. ``China's currency manipulation is having a substantial adverse effect on the American economy,'' said Dodd, who is in line to take over the chair of the Senate Banking Committee.

BG.who is the cute one with the watch cap?

Calcium score was 200. Not bad, but all in one vessel, a biggie.

I did a treadmill stress test and they had to stop at 14 minutes cuz the ekg stickers were coming off from the sweat. I swear the treadmill was at 45 degrees.

Georgia is booming from European Bank of Reconstruction and Development aid/grants/loans
Azerbaijan is doing well too because of oil
Australia is doing well because of iron ore, coal
etc...
I think we'll find at least a few countries will respond to piece-wise incentives and play the role of Icarus to find out how close to infinite credit creation they can get

sm_landlord wrote:

They can't possibly control costs. Hospitals cannot turn away patients. The costs must be shifted somewhere.
Which arrangement of the deck chairs would you prefer?

The insurance companies are trapped competing with each other over who can best externalize costs. If you spend $8 to externalize $10 you've made a $2 'profit'

I have two friends, one works for a dental insurance company, that other for a health insurance company. They both describe very dysfunctional inefficient organizations. One of them said if another company came in that knew what they were doing and were able to compete on efficiency instead of just hosing patients and doctors, the blood would flow. The problem is the regulatory framework doesn't allow that.

Comrade Gibbon wrote:
The problem is the regulatory framework doesn't allow that.
"...were able to compete on efficiency instead of just hosing patients and doctors, the blood would flow."
I am assuming it was designed that way. EHP hit the nail on the head - modern business is about getting around the requirements of free market competition and creating barriers to entry through regulatory capture.

rosethorn wrote:

Iceland prepares for second, more devastating volcanic eruption - Times Online

Looks like the Magic Hand is Angry!

EvilHenryPaulson wrote:

I think we'll find at least a few countries will respond to piece-wise incentives and play the role of Icarus to find out how close to infinite credit creation they can get

Zero reserves requirements should just about do that, dontcha think?

dr munch wrote:

I heard both young people and old people complaining about the cost of drugs.

Different kinds I presume.

prairiedog wrote:

With regards to France, another revolution occurring?

I seriously doubt it. Incumbents are having a tough time all over. Sarkozy and his party have another two years to go. The next national election will be one of the more interesting in quite a while.

Comrade Gibbon wrote:
Looks like the Magic Hand is Angry!
From the Invisible Hand (1776) of the market to the Visible Fist of governmental intervention (1947)... You've come a long way, baby!

So. Anything happen while I was at Disneyland?

Rob Dawg wrote:

Anything happen while I was at Disneyland

You must not have seen Mickey Mouse today, because he was busy in DC....

I believe the congress has awakened the silver haired tiger with all the Medicare cuts... This wont be pretty - those folks are going to get some payback...

dr munch wrote:

The insurance companies will now have to take people with "pre-existing conditions". That guarantees huge rate increases on top of huge tax increases.

i'd be curious what the actual premium increase will be. once the insurance companies start drawing their risk pools to resemble the US population, the truly expensive patient population should still look quite small. there will be premium increases, no doubt, but really how huge?

sm_landlord wrote:
I'm wondering what that will do to bonds and and dividend-paying stocks.
We lack an icon for 'smoking crater'

sm_landlord wrote:

ResistanceIsFeudal wrote:
We lack an icon for 'smoking crater'
How did KCoop miss that one?

I sure could use a "Gripping Hand" icon for FedGov.

"Have Moody’s, Standard and Poor’s, and Fitch announced the sovereign downgrade yet or are they waiting for the market reaction."

They're waiting to get the go ahead from the FED/Treasury when the USG needs to drive foreign money into Treasuries after the next "failure" of a Treasury auction.

energyecon wrote:

What we need here are three handed economists!

One for the knife in your back, one for your wallet and one to give you the finger instead of a reach around.

Rob Dawg wrote:

One for the knife in your back, one for your wallet and one to give you the finger instead of a reach around.

Just remember, every Dawg has his day, and if they are the patient watchful kind, usually more than one...

how is that a pay off

i thought it was a concession and insurance for those who insisted that the hyde amendment had not been sufficiently protected?

energyecon wrote:

Just remember, every Dawg has his day, and if they are the patient watchful kind, usually more than one...

The opportunity of defeating the enemy is provided by the enemy himself. - Sun Tzu

Here's a smoking crater: YouTube - Volcano Eruption in Eyjafjallajökull Iceland 21 Mars 2010 Night View. Video 2 of 2

sm_landlord

he was never told he couldnt have the language in the bill

the language was in the house bill

senate bill language not as strong

but with the loss of kennedy and the addition of brown the senate bill could no longer be changed cause no republican would vote for it

so the dems had only one play left

pass the senate version

interesting choice of words, that giving the blue dogs stronger anti abortion language is a pay off

ResistanceIsFeudal wrote:

Where's the Stark Fist of Removal when you need one?

Is that what a Ferengi repo man carries?

sm_landlord wrote:

Is that what a Ferengi repo man carries?

no

"interesting choice of words, that giving the blue dogs stronger anti abortion language is a pay off "

I'm not sure how it's not a pay-off. They wanted something in return for voting for the healthcare bill. How is it not a payoff, or quid-pro?

yajgij wrote

"It isn't like those babies are going to pay for themselves!"

always found it amazing how concerned repubs are for the sanctity of pregnancy and the life within

but as soon as the baby is born....mother and infant care, health care, pres-school , all day kindergarten

not so much

"ok so really every political deal is a pay-off, is that the meaning? "

Yes that's how I read pay-off in this context.

The great threat of China somehow ruining us by dumping dollars seems a fiction (see Michael Pettis). A simple question is where else would they put the money if they try to flee dollars.
The Chinese know the are the center of the world. So of course they will not allow themselves too be pushed into anything. Which is great. I would bet that if we label them as currency manipulators and impose a 20% or more tariff we will quickly be followed by the EU and others. We have little reason not to so label and treat them.
We would then have two choices for cheap labor. Let the DFI firms move say to Vietnam etc or to provide advantages for them to resettle in Central America and especially Mexico..This would help sop up excess labor there and keep it below our border.
establishment of a substantial free trade zone in Northern Mexico would put a second border check on the trade zone Mexican border.

poic wrote:

I'm not sure how it's not a pay-off. They wanted something in return for voting for the healthcare bill. How is it not a payoff, or quid-pro?

I agree. Isn't this what politics is all about? Isn't the idea of a democracy to have diversity in the body politic? With diversity negotiations are inevitable.

ResistanceIsFeudal wrote:

How about a pickpocket hand?

Uh, that is what the other 2 are for...

"The alien is bizarrely asymmetric, with two delicate arms on one side of its body and a single, much larger and stronger arm on the other."

The Mote in God's Eye - Wikipedia, the free encyclopedia

3 handed economists. The 3rd hand is for the reach around. The first 2 to position you for the screwing you're gonna get.

mock turtle wrote:

i questioned the notion that compromise or accommodation on language was a "pay-off"

To me, a pay-off can be as simple as the second side of a horse trade.
Sometimes a cigar is just a cigar.

Obama gave the go ahead on this because he felt slighted by Hu Jintao at Copenhagen...he doesn't take well to that, ask Hillary. This is apart from the merits or not of the manipulator case. Weak people who must overcompensate are the most dangerous. Also, they need a nice scapegoat for 9 % unemployment come November.

Blackhalo wrote:

Imagine my disappointment when negotiations lead to address concerns of special, corporate interests, rather than the publics.

That's a systemic flaw. Just ask the supreme court.

Re those cultural differences . . . good translators and interpreters know that when Americans say "impossible" they mean "inconvenient". And when Chinese say "inconvenient" they mean "impossible". But you still gotta translate it straight!

Not to say that parties from either side can't turn on a dime, er, mao.

Anak wrote:

And when Chinese say "inconvenient" they mean "impossible".

And when the Chinese say "impossible", that means they have to go back and get more latitude to negotiate, no?

sm_landlord wrote:

when the Chinese say "impossible"

In my experience, if a Chinese negotiator were to say "impossible", it would indicate a pretty poisonous conversation.

Not typical in B2B nego's, but who knows what happens amid the lofty peaks when things get hot?

Re those ag subsidies mentioned up thread, I agree w/ Noob that the EU has the biggest set, and those of the US are substantial. Both are pretty transparent.

But countries imposing TRQ to limit cheaper imports can have imputed costs that are bigger than the published ones.

China's got a lot of these, as does the US (sugar).

Anak wrote:

Not typical in B2B nego's, but who knows what happens amid the lofty peaks when things get hot?

That makes sense. I was thinking from the English-only side about negotiations I was involved in. The translator was a pro, so I expect he translated as you describe. Although subsequent re-negotiations got pretty erm...unpleasant.

Edit: The re-negotiations involved a force majure problem, at least the way we saw it.

Working with a good translator when you have a decent passive knowledge of the language, but weak active, is like driving a Ferrari after trading in your Pinto. It's really a joy to operate.

noob goldberg wrote:

probably would not result in any change to world price if they were removed.

Yes, but by being in place I imagine they dampen demand and weaken price, if anything.

But it's like the converse of those arguments of how much software is "stolen". The imputed value always assumes people can and would pay full price.

sm_landlord wrote:

Edit: The re-negotiations involved a force majure problem, at least the way we saw it.

I'm sure you know that's the way the other side would see it if they somehow failed to perform.

EvilHenryPaulson wrote:

sounds simple enough, everything relationship is a battle of wits

I'm not sure if I could say it is a battle of wits. Flirting with a member of the opposite sex at a social function is a battle of wits. In regards to the Nipponese, it is more of an odd arrangement between word choice, social custom, expectations (West & East), and game plans.
.
At least with the Nipponese, you know that they rarely do anything officially or formally on a whim.

yagij wrote:

In regards to the Nipponese, it is more of an odd arrangement between word choice, social custom, expectations (West & East), and game plans.

On side plays Poker and the other side plays Go.

Rob Dawg wrote:

On side plays Poker and the other side plays Go.

Bingo. Go is a great game to learn for anyone, and it provides a great point of view into that world.

sm_landlord wrote:

changes in laws and regulations

Oh! You were serious about the force majeur part!

Just kidding.

Yes that would be hard, but sh!t, they've got to swerve to meet changes in regs all the time. Ought to be part of their business dna.

And talking about short sticks, that's just what changing currency values do mid-program. And few hedge.

OT: Jim Sinclair's latest posting:
"What is clear here is the egregious OVERVALUATION of the assets of financial entities thanks to the capitulation of the FASB that allows banks and other financial entities to pick the value of their assets. This is a public disgrace that the public has no idea about. In these cases the overstatement was between 37% and above 100%. This is outrageous beyond outrageous.
The FDIC has accepted loss guarantees up to 95% of assets going out as long as 10 years. The same people who brought this crisis to you are buying these banks with the long term FDIC guarantees."
Welcome To Jim Sinclair’s MineSet

The avg loss at the failing banks this week? 30-35%. Extrapolate that through the FASB Curtain.

Even with China losing every trillion in credits they "own", the US CRE and RRE, and their multiply stacked, inverted pyramids of value will and MUST collapse the value of the USD.

Of course, the game of pretend is just another dance to the government controlling musicians, both political and corporate.

The game will end. Bernard Baruch said, " 2 + 2 = 4 "

IMO, what's amazing to me is how the populace demands not to be be asked to observe, demands not to be asked to think, and demands their "leadership" to solve this for them.

There is no answer but inflationary collapse. Buy Gold.

I am an uber-nerd when it comes to health insurance. My first job was an underwriter and I KNOW the industry really well (said w/out arrogance) as I have worked at major companies in some pretty broad roles.

The premium increases can be massive because of the adverse selection within that particular group. But I am not sure what this bill is exactly yet - I have not read it - or the latest version. Maybe we can have some dedicated threads on it in the future; it will certainly affect the finances of all citizens in some way (I am 99% sure it's adversely affecting one's finances).

There are 2 very important things people need to realize on this topic, generally.
1. Health 'insurance' is a misnomer. It is not true insurance whereby you are insuring against a remote loss - like death on life ins. policies. Health insurance demand can be infinite - unless someone/something puts a limit on what can be had. A patient, insurance company, doctor, or employer can all/any be the one(s) imposing that limit.
2. Insurance companies are always "bad cop" and willingly take on that role as part of the cost of doing business. "Good cop" is the employer group. I have had employer groups that have wanted the richest plan of benefits for their employees "just pay the claim, no questions asked". Were these expensive plans? Hell yes! Think about unlimited demand -unchecked. Can insurance companies administer such plans easily? Yes! Do most employer groups want to offer medical BUT without breaking their budgets? Yes! And that is why there are plans with networks, deductibles, limits, etc. The insurance companies are simply administering that which the employer group purchased. Does that make the evil? Does that 3% annual profit seem huge? Really? Think about it.

Unless we address the issue of unlimited potential demand, NO SOLUTION will ever control costs.

In my ideal world, the PATIENT is the one who limits the limitless demand (in consult w/doctor) And the only way to efficiently do so is if they have financial "skin in the game". Entitlements and burying true costs will never, ever address this issue, and, therefore, fail.

Unfortunately, this bill is worse than a boondoggle. It is also unconstitutional and needs to be struck down by the Supreme Court, imo. A person should not be required by law to purchase anything just because they are American citizens.

Yankee

Anak wrote:

Flakmeister wrote:
China has roughly 735 billion of US treasuries with an weighted coupon of about 3.8%.
Good point, your tax dollars at work, typically. But where do you draw the line on how much new issues that they snap up are recycled to service old debt? Or am I missing something?

Just like the Marshall Plan. The US gave away goods, and ran its factories and experienced high employment, and took a pile of paper from the European nations/

Only in that case, the US inflated away the true store of value acquired when handing over the goods. And in China's case, they're not Judeo-Christian. They're psychically wounded and they want domination the way Nixon wanted the Presidency. Both evidence insanity.

Yankee wrote:

Unless we address the issue of unlimited potential demand, NO SOLUTION will ever control costs.

AMEN.

Thanks for the welcome....

Although I have not posted, I count myself among the CR originals. Whatever did happen to Sebastian? Did he get raptured away in
the recent Bull run?

Flakmeister wrote:

Whatever did happen to Sebastian?

He still pops in occasionally.

O-Joe, Tennis 8, Ipodius, Robyn, these names are lost to history I think. Their distinctive styles would shine through any change of handle, imho.

Yankee wrote:

Unfortunately, this bill is worse than a boondoggle. It is also unconstitutional and needs to be struck down by the Supreme Court, imo. A person should not be required by law to purchase anything just because they are American citizens.

you made several claims about the bill that i would dispute..but let me just pick that last one above

there are many things that as a matter of law we are required to buy

you cant just bury people in out back any more

you are required to buy a license to hunt or fish

drivers must buy insurance

all people are required to 'buy" education whether public and thus thru taxes or private school or home schooling, which also has costs, especially opportunity costs for the parent that teaches the curriculum

the plan to take this aspect of the hcr bill to the courts likely will fail because the "fine" is actually a tax

a tax that is levied to cover those who are uncovered who eventually end up in the emergency room

if you truly believe what you say...that people should not be required to pay

then you must be willing to turn the indigent and thee uninsured away from emergency rooms

otherwise, people who do have insurance and do pay taxes and do pay for medical care are forced to defray these expenses

Chinese exporters are often hugely dependent on imports, directly or indirectly.

That said, nobody does autarky well, except from a very low base.

From what mp reports about the loss of US manufacturing nous, I'd be apprehensive of what would happen if imported manufactures were drastically cut with the stroke of a pen. Hard to fathom, I know, but he's not looking into those old machine tools for nostalgic purposes.

I almost can't believe I'm writing this, but the last 30 minutes of comments on health care cost/insurance have been extremely coherent, constructive and (importantly) civil.

Keep it up, folks.

picosec

word

yep , the great thing about hoocoodanode is that we can argue, debate and even get a bit testy with each other but in general we refrain from name calling and bad language

i have nothing but respect for people who disagree with me in no uncertain terms, but do it smart and without name calling

TJ posted this earlier, but since it's the overnight thread....

ZH has an open thread up with anecdotal reports from all over the place. If that's your cup of hemlock:

Open Thread: The Real State Of The Economy | zero hedge 

Edit: Tomorrow should be an interesting day in the markets, so

Ah . . . and we were doing so well!

good General pointed out this morning

Yankee

obviously you are free to choose not to respond to my argument

how sad that you have to stoop to name calling

by the way, agree with your point and TJs that there must be limits...medical resources are not infinite

and a good way to do this is, as you say, to ensure the patient has skin in the game

as for your statement,

"But I am not sure what this bill is exactly yet - I have not read it - or the latest version. Maybe we can have some dedicated threads on it in the future; it will certainly affect the finances of all citizens in some way (I am 99% sure it's adversely affecting one's finances)."

so wouldn't you agree its too soon to be adamant in your position?

let me suggest that any one of us could be wrong about the impact of this legislation...i support the hcr but it may turn out that i was wrong

we know the current system is a mess and this legislation is an attempt to rectify some problems

i bet it likely that parts of this bill will be dropped, changed or improved upon by subsequent legislation

one thing is for sure, as an affluent person my taxes are going up...question is will my coverage improve

and will the overall health care of the country improve

i hope so, and if events show that im wrong, im willing to own up to it

can you say the same?

Preventative medicine for children
Preventative medicine for adults
Trauma care
Infectious disease control

These things either pay for themselves, or are what a lot of people would call "civilized".

In HK the public system prioritizes these types of care (or seems to in my experience) by allocating more resources to them. So there is little waiting, and low fees collected from the recipients.

Soon I may get a chance to experience some long deferred knee surgery here, and if so (joy), I'll let you know how they treat that....

km4 wrote:

besides mostly financial instruments, arms, ( and Hollywood movies ) what exactly is America going to increase exports of to the world Mr. Pres.

I was watching a guy doing business in Iraq and he said many government contracts specify name-brand equipment because otherwise too often the middle man will sell them some knock off piece of junk and pocket the difference. In fact, he said many private and government contracts in Iraq specify "not made in China or India" they specifically want European and North American products. If Iraq is that picky, not that many of them are any great fans of the USA, I can imagine many other places recognize that "Made in the USA" still means something.

dr munch wrote:

Is it true that many of these changes wont take place until 2014?

Karoli on Ten immediate benefits of HCR
Worth Reading #6: Karoli on Ten immediate benefits of HCR (March 21, 2010) - Grasping Reality with Tractor Beams

longwaver wrote:

Well stated.. I actually love health care. But this bill is a turd in the punchbowl...

Sure it has flaws, but it has a lot of good stuff too. Watching Twitter (C-SPAN trending, hell has really frozen over) tonight a lot of people seem to be looking at what's in it for the first time and actually liking most of it. Not to mention the fact that they actually GOT SOMETHING DONE automatically means bonus points. IMO the enemy isn't the other party, it's voter apathy.

Citizen AllenM wrote:

Soooooo, if Europe and America don't take the massive levels of the past, well, the third world will have to step up, and at much lower prices

AM, higher oil will severely degrade the labor price advantage held by the 3rd world.

IMO, as I've been posting, higher commodity prices is the same as hyperinflation. And that drives labor incomes down, but more importantly, it makes for a playing field in which labor price impact is dramatically reduced.

And that means the jobs come home.

I'm an importer as well as a mfr in the USA. For the goods I have imported from China, the price in the lowest labor-add goods is now very close to co-equal with Made in USA. And that's the story. BuhBye China.

What you're not recognizing is that not only will it be China, it will be everywhere outside the USA that will be considered unacceptable. CAFTA, NAFTA are no guarantee that the US consumer will want what's being offered from abroad.

Watch the psychological shift. I'm in on that tide. I'll post if I get a contract, the first of many... if I get it, in which my Made in USA apparel is priced near that of imported apparel, and the decision I hope will turn on shoveling purchase money back into the US economy. That's how I built this model, and that's how I'm playin' it. I win, and the buyers win because we're all one big family... as in USA workers need to work.

picosec, not "could swing the trade pendulum", but "will".

There has been for the past 12 months a palpable, growing desire to reject imports. It's now "public". Before it was closet talk. Now, the flag, sewn in the USA, is being waived assertively. In a while, the US consumer will view foreign goods as poison, if those can be mf'd in the USA. Patience!

Anak wrote:

Slumdog, may I inquire what type of apparel you're making? Or at least the fiber content?

100% cotton (karded ring), 75/25, 50/50, 50/50 jaspe, and soon, if I can get a weaver to do it in 5000 lb lots, 65 poly/35 cotton (for poplin & twill).

starving artist

i made a mistake in my previous comment

what i want to make sure is understood is that i suport the hcr

when i said "i agree" to another poster saying this is a turd in a punchbowl

i was being sarcastic and pointing out how what the dems did

gained them no clout with industry and thus no campaign money

and may well hurt their chances for re election

heres what i wrote in response to the punchbowl line from longwaver near top of thread

i agree

the dems sold out to the moderates

their librul base is angry cause we all wanted single payer-universal

so the dems didnt do it to just get re-elected

the lobbyists hate the bill and have caucused with the repubs to try every way to stop it

just like the libruls the conservatives hate it to but for opposite reasons

they dont like regulation...of any kind

and with all the flak the dems are taking about socialism, but...shit...

they left the insurance companies in tact

they left the doctor patient relationship in tact

they didnt do diddley to big pharma

and the dems tried to get at waste and fruad in medicare

thus giving their opponents a chance to scream they are killing grandma

and the dems even ran away from a womans right to abortion

so on balance...it looks like a pretty middle of the road piece of legislation

thats pissin everybody off and should get them royally screwed

at least, i guess, we cant call it politics as usual

The cost of Pakistani imported 50/50 yarn, irrespective of being tagged as 1st quality, is like $2.40/lb. The cost of Made in USA is $2.46/lb.

The real problem is that there are only 2 or 3 spinners left in the USA, and one is now the world's largest. So, this is a near monopoly, real polygopoly. I'm too small to make an impact and even with all the other apparel makers I know, we don't amount to a hill of beans in the world marketplace.

However, when one gets to choose between pig in a poke vs safely backed by a known spinner in the USA, that 3% price differential is the cost of insurance. I've experienced the sting of the surprise that what's represented is ignorant puffery. I vote "buy it here" every single time. I want the right of recourse.

Starving Artist wrote:

That's very, very interesting.

But, SA, don't discount the fact that the US has exported the hard goods to China, the plant's equipment, and the technology, too. In some areas, we cannot and do not compete; eg., stainless steel waterbottles. All of them, repeat, all of them, are made in China. The markups here are nothing less than criminal price gouging. But the fact is there's not a single plant in the USA set up to turn these out, and they're probably all automated machining jobs in the most part.

So, some work can't happen because we have no infrastructure, and other work can't happen because we have no infrastructure.

Get the point? The owners chasing profit have screwed their prior employees both by abandoning them and by stripping the country of the hard goods to re-enter the game.

IMO, those jerks should be taxed mercilessly for their greed. But, the labor force who feed at Walmart's trough are not doing so with clean hands.

See y'a.
Gold at 1106. Not bad, eh. USD at approx. 80, and gold right alongside. Where's the fear of IMF dumping? Screw them! Where's the fear of China not buying? More fantasy. We all know the investment banksters screwed the stores of value, and we the public are left swinging in the wind.

Years ago the Economist (bastion of neo-liberal thinking) suggested that the future of apparel was just in time local manufacture, working off markers that were generated at retail via a body scan of the end user.

Never went anywhere afaik, but Interesting stuff. If the race to the bottom (with attendant consumer implosion) doesn't overwhelm the concept, could be a good niche in stuff like denim.

pigged myself

Hong Kong tailors yanking profits today, HSI down 2%. Asia aggregates down 1.6%, dragged lower by Taipei, Seoul and Sydney. Yerp futes all , around -0.5%.

FTSE VIX gapping higher on the open:

Euronext - Charts > Charts analysis

But likely squashed flat and lifeless after opex witching.

C

Yes, it's absurd.

Lame ducks should be put out of our misery.

New Hampshire Senator Judd Gregg, who will help coordinate the Republicans’ efforts, said his party can put forth “massive amounts” of amendments on unrelated issues from gun control to immigration. They can also challenge provisions such as the scaling back of a tax on high-end, or so-called Cadillac, insurance plans because it would affect money flowing into Social Security, he said.

House Approves Landmark U.S. Health-Care Overhaul Legislation - Bloomberg.com

Same Senator who will do "everything in his power" to protect the Fed.

Counterpointer wrote:

Warning, major MSM outlet actually publishes something halfway sensible about loose money fueling the bubble:

I have an answer that at least makes sense to me. There are two parts, the setup and the trigger.

The setup was the agreements around 1990 that allowed mortgage backed securities to be sold internationally. Combined with a failure on the part of the ratings agencies to rate them properly. Made worse because the ratings agencies had a conflict of interest dating from the early 1970's, they were being paid by the originators of the securities to rate them, not the buyers.

The problem was the ratings agencies used historical mortgage default rates to rate the MBS. instead of the loan to income ratio of the buyer. The painful lesson we've learned is anything above 5:1 is utter crap not AAA not matter how you slice and dice it. The problem with using historical data is the introduction of MBS changed the whole incentive structure of the market from one that was stable to one that was unstable.

The trigger was the Asian Financial Crises of 1997. Hot money fled the ASEAN economies looking for someplace safe with a good return. MBS fit the bill perfectly and the money flooded in. Astute observers will also note the dot bomb also started around this time. The problem was home prices began to rise. In 2001 the dot bomb went off and a recession started. However that didn't effect the MBS market, rising prices meant low default rates which hid the terrible danger.

The fed and other central banks were in an impossible situation, but it's doubtful they knew it. They cut rates to stimulate the economy. That was like pouring gas on the MBS and housing market.

Around 2002 interest rates were low and housing prices had been raising steady for five years. Speculation set in driving prices to moon. Encouraged by the fed, banks engaged in all sorts of financial innovation to keep the train rolling till it blew up four years later with loan to income ratios on many of the notes in MBS being almost 10:1 and shot through with obvious fraud.

Comment by 1 currency now -yogi from thread 'Unofficial Problem Bank List increases to 653'

1 Currency:

do you really think all securization is ponzi? back in the day at Salomon
I had to take these training session in bond market analysis dealing with
Ranieri's mortgage backs most of which didn't really sink in but I remember
the things in plain vanilla version seemingly benign structure wise.
...
side note: back now in USA in IN. had to bury youngest brother and wife, sad, very sad.
will return to NYC soon once I deal with my two colluding pirate business partner brothers
who I hoped might see the light of truth nad fairness after this tragedy but NOOOOooooo!

Close enough (although I was referring to a previous thread).

Madoff's scheme "didn't really sink" for 25 years. Then it did.

A money manager's 2% fee is a seemingly benign structure, until you compound it for a thirty year investment, and notice that it gets paid in up years and down. Then it eats up most of the gain.

Chicago Fed: Economic Activity index decreased in February

No one falls for the plain vanilla chain letter any more, so the schemes get more elaborate while still trying to appear benign.

The reason they probably didn't sink in with you was probably that there was a logical flaw that you sensed but couldn't quite grasp. It's basically the same old game of selling an asset-- here a mortgage or a security-- several times over. You can't enlarge a pie by slicing it, only increase the number of pieces.

Wen has explained that China wasn't invited to that meeting but heard about the meeting from another participant from another country during a dinner with the Queen. I guess the meeting organiser should clarify this.