China, sitting $414 billion in US treasuries (that won't get paid back) and over $100 billion in US mortgage backed securities (that won't get paid back), and over $1 trillion total in US dollars (that are becoming toilet paper), plus a recent big investor in Blackstone's hilariously failed IPO (man, that's gotta hurt), has gotta be getting PISSED OFF lately. Welcome to American capitalism comrades, where you can get suckered by con-men and lose it all!
Seriously, could the royal screwing of these corrupt communist jackasses, who helped ruin America with their evil cozy partner Wal-Mart, be any more perfect?
A Special HousingPANIC message to the corrupt leaders of Communist China:
Thank you for selling us all that cheap crap these past few years and enabling our housing bubble by artificially surpressing our interest rates.
Thank you for ruining our manufacturing base by manipulating your currency and dumping your goods on unpatriotic and clueless Americans. And thank you for destroying the character of our towns and cites by enabling your evil partner Wal-Mart to destroy its competition with an endless supply of cheap dangerous crap from your sweat shops.
And by the way, you really didn't think we'd ever pay you back, did you?
And by the way, you really didn't think we'd ever pay you back, did you?
Sincerely, HousingPANIC (and the Deadbeats of America)
China shying from shaky US mortgage market
While China is eager to invest a portion of its US$1.33 trillion foreign-exchange reserve overseas, it is unlikely to take a chance on buying additional US mortgage-backed securities (MBS) as they are now considered too risky, Chinese economists said.
China shying from shaky US mortgage market
While China is eager to invest a portion of its US$1.33 trillion foreign-exchange reserve overseas, it is unlikely to take a chance on buying additional US mortgage-backed securities (MBS) as they are now considered too risky, Chinese economists said.
"The Chinese economy is benefiting from high-yielding, safe investments in US mortgage-backed securities. Here at home, American homeowners are benefiting from lower interest rates on mortgage loans resulting from greater Chinese demand for these securities," Jackson said.
41 comments:
Keith, you missed Hank Paulson boarding a plane for China after his interview with CNBC Friday morning.
After the HUD secretary failed to get China to buy more mortgage backed securities, they had to send in the big dog. How will Paulson do? I have a feeling China will say "we'll buy more but you have to take 5 million Chinese immigrants this year."
Monday will be an interesting day. With the dollar falling at home, a lot of hedge funds chased returns by buying into foreign markets and running them up. How much leverage have they used to do so? At what point does a selloff in one place, in this case the U.S., start a stampede of people covering and having to meet margin calls? A lot of developing countries could see liquidations begin Monday morning. That will shock and disillusion those new to capitalism and their experience of the past few years that markets only go up. In such a scenario, the Yen might rise big in a short amount of time because of carry trade unwinding.
The trigger for WW3?
Well Keith, I usually agree w you. But now you are sounding like Hilary--its the Chinese fault. Common Keith, its our damn fault and you know it. Don't blame them. Don't blame the cocoa farmer, blame the junkie.
Man - this goes so deep - what a mess
If I were king of of the USA I would decree all US debt and dollars owned by china to be worthless. They have an awful, brutal government and we already paid them by giving them so much of our economy. I know they aren't the only one to blame, we deserve what we get from our stupidity and our leaders selling us out for the few.
Dear HP,
We knew that your dollars would be worthless, but your capital has enabled us to build our infrastructure, industry, technology, and military to a level not possible without it.
With this infrastructure in place, we will now be able to go and take exactly what we want from whomever we please.
By the way, sorry about all the dangerous, defective products and food that is killing some of you guys and your pets.
All your commodities are belong to us.
Love,
China
Now you pay us rent Yankee dogs.
Their products might be cheap in price, but the quality is the same as American ones; in fact, whole factories have been shipped to China, so there might be no difference at all. Globalization is a good thing, especially if one values freedom.
Only ignorant peasants are against it.
Since when have Chevy and Ford meant quality?
Rotsa Ruck.
Those dollars will need to find a home. When the Chinese tire of holding paper, they will begin to buy hard assets in the USA, just like the Japanese did in the 80's.
This will be a situation of great political delicacy. Think Dubai ports deal. HPer's individually may be solvent, but as a country we are a debt slave.
Los Angeles narrowly escapes a Longshoremans strike at the port of LA this week.If this would have happened, China's crap would have been dumped in the Pacific.I think it was a bluff by the US. The US is posturing alot lately.The compliant MSM within the last 6 months has pointed to China for intentionally causing stock market downturns,housing crashes,and even dumping gold on the market.China ,and the US are bed partners that have become embroiled in a trade war.
This should get really interesting.
Deja vu: China is to Japan what the 00's are to the 80's. Sold stuff to us, made lots of $$, invested $$ in US -- mostly on worthless real estate -- and got hosed.
I like this blog, but:
1) China isn't communist - it's quite capitalist (but not a full-fledged market econonomy due to central direction)
2) Chinese goods are fairly high quality overall (save for those produced by a small minority of corrupt companies), but they can suffer when pollution affects the raw materials
Other than that, yes they'll lose money on investments in the housing debacle (but they probably have one going on back home as well)
Oh, forgot to say: Chinese emmigration is dropping as the country becomes richer
The blackstone IPO was a stunning success - the insiders bailed out at the top with a ton of money...
think Time-Warner...
I agree - it's not China's fault. It's our corrupt Congress's fault for letting China do what they did, and our lazy, uneducated and ignorant population for letting Congress letting China do what they did.
It always comes back to us. WE caused everything. The collective WE.
its still red china
shut our borders and stop all legal immigration for a year or two ,or longer except in cases of extreme hardship or need. Tax the crap out of large companies who out source our jobs .
Even China does not want our worthless crap!
Natural Eyebrows said...
Those dollars will need to find a home. When the Chinese tire of holding paper, they will begin to buy hard assets in the USA, just like the Japanese did in the 80's.
July 28, 2007 4:02 PM
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well, they won't buy RE. The Chinese turned down mortgage based investments. I think they know just how bad it is, unlike 55% of polled American homeowners!
Anonymous said...
I like this blog, but:
1) China isn't communist - it's quite capitalist (but not a full-fledged market econonomy due to central direction)
Much like the U.S.A.!!!
Next time I expect more shrimp and less moo goo!
HAHAHAHA!
Hoos yo daddy now!
Better start learning Mandarin if you and your progeny are gonna have a chance in the NEW ORDER. Han Chinese are gonna have it good in the next 2 centuries.
And guess what? We are everywhere, and more insular and racist than you can imagine.
They sold us cheap crap made with slave labor and we paid them in rapidly depreciating currency.. It seems like a fair trade.
America land of rap music suv`s big gulps and the GOP
This is not a problem yet because the USA is still militarily superior to China. That will change in the near future. Just look at what China spends on military hardware.
They can already blind us by taking out our satellites with an Electro Magnetic Pulse. So much for net centric warfare thanks for all you did Mr Rumsfeld.
China does not yet have an ICBM that can take out the whole USA. They can Nuke L.A. but is that really a bad thing?
Take it to the bank we will fight a war with China in the next 50 years and it will be over a little island called Taiwan. Thank you Mr. Nixon.
if Alphonso had made his trip a few weeks earlier before the MBS house of cards started to fall he may have had a chance to con off some of the crap... but they ain't that stupid. pretty pitiful sight, going to the Chinese for help.
Paulson's frequent flyer account must look pretty good by now.
That will change in the near future. Just look at what China spends on military hardware.
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Hoping the quality of their military hardware is the same as the quality of their walmart cr*p.
China does not yet have an ICBM that can take out the whole USA. They can Nuke L.A. but is that really a bad thing?
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didn't they put a man into orbit recently? If so, then it seems like they could place a nuke anywhere in the usa.
yep, walmart's building a new huge store a few blocks away from my little shop. Will soon be unemployed. How long does it take to become a dental hygenist? Of course, if i was smart, would get some community action to turn the old box they are leaving vacant into a commune or homeless shelter or something...
"Anonymous 1:54 PM said...
The trigger for WW3?"
Quite possibly one of many triggers. China's not going to like being left holding that big of a bag, especially one not made in one of their factories.
The central banks of India, Russia, Japan, Brazil, UAE also hold hundreds of billions of US dollars each - see Brad Setser's blog. Ty Andros, if I understand him correctly, says that the developing world (Japan may not fit this pattern) is now exchanging those dollars for control of real assets, and that as a result it will do much better than the G-7 in the years ahead.
If they were smart they would start buying U.S. assets with the dollars (high end commercial real estate). We haven't yet seen real inflation on local assets, only on imported goods but once foreigners realize the dollar is going to crash they might (if they aren't stupid which is a big assumption) want to give those dollars back to the idiots who are willing to take them, Americans.
Screw Taiwan. Screw South Korea, Screw Israel and normalize relations with Cuba.
These strange old vendettas and alliances are just money down the drain. These countries are NEVER going to appreciate our "help" and never going to pay back what we've spent on their "defense". We've been suckered into taking care of them like a pet owner spending thousands of dollars for chemotherapy on a pet with cancer who dies anyway just because he feels "responsible". Bullcrap!
Let the South Koreans and Chinese deal with North Korea. If we weren't there they'd be a thorn in the locals' side. We don't have to stem the tide of communism any more. The "Domino Theory" doesn't apply anymore. South Koreans are living the good life with no appreciation to the U.S.
Let the Taiwanese deal with China. We didn't cause the Chinese civil war.
If the Israelis want to live in the middle of their enemies, let them. But it isn't our problem. They're the ones who have a religious thing about their homeland. Let them deal with it. We need to sell weapons to both sides. It's much more profitable and actually, will force them to the bargaining table much quicker when they realize without settling, the only possible outcome is Mutual Assured Destruction. We just stay neutral on the subject.
Right now China seems to have the upper hand because they are focused by a strong central government, however, as what happened here in the early 20th century, people don't want to be slaves and China will have to deal with more and more unrest as the younger generations, spoiled by luxuries like food and freedom, resist being controlled. China too will become communist like the U.S. and the population will be lazy, unfocused and feminized like the U.S. population has become. There will be vast unproductive sectors of their society like divorced women living off alimony, welfare losers, children not allowed to toil in factories, the indigent wealthy and the score of other capitalist parasites who come into being when human rights and welfare are allowed.
I'm just sayin' is all.
To all the proud staunchly conservative republicans and libertarians out there: so now you're upset, huh?
Please note that democrats have been supporting labor, i.e. domestic products, i.e. America. Republicans have a long history of attacking labor. They move factories out of the country, shelter their millions in offshore accounts to avoid paying taxes, then have the chutzpah to wrap themselves in the flag and claim what great patriots they are.
Way to go.
Nationalism is for peasants.
Hey folks, remember Mel Gibson's "Apolcalypto". The message was that empires collapse from within and like the Mayan hunter, Jaguar Paw, in the film, we're inadvertent observers of the decline of our own civilization along with the coming of a new world order (Spanish Conquistadors for the film) which in our case is a rise in an east Asian economic hegemony with China at its center.
Dear Keith:
We are regretful to poison the environment permanently. At least we have free health care for all of the future victims. I am not sure that our goverment will pay for all of the clean up, like in the USA. Because we still own the means of production.
Love,
Your Chinese Landlords
All right, since the Chinese are the big shots now, could they at least start eating with forks?
Or we'll have to teach the Chinese about that, too? Or they will have to put spies in the US to still the patents and schematics of how to manufacture a fork and a knife?
Wow, let's all wait for China, the megasuperdooper power, to invent the Jazz, Blues, Rock 'n Roll, Hip-Hop, Electronic Music, R&B, Internet, laser, microwave oven, Velcro, microchips, personal computer, mouse, put a man on the moon (hello, it's taking a while, want some help or copy how we did it?), invent the cell phone, fiber optics, cable tv, profession of DJ and personal trainer, invent the MBA and PHD, create a new movie industry like Hollywood, invent all the gazillion American medical and dental equipments that save or improve lives everyday, the power steering wheel and the air bags in cars, Google, Microsoft, Apple, Intel, Oracle, Wall Street, Nike, bubble gum, THX, Dolby, etc, etc, etc.
Oh boy, China is tha country that will improve humanity...hoo-wee, let's sit down and wait for the stinky Chinese to come up with all these revolutionary inventions, so the rest of the planet can gives a break on getting a ride on our backs for decades.
BTW, I haven't gotten my royalty check or a simple thank you note from the rest of the world for giving in a plate the Internet, microchips, fiber optics, and the Personal Computer. Have any of you fellow Americans? All I see is the rest of the planet getting a ride on our backs and calling themselves, "the new superpower", while spitting on our faces.
I tell you what world, from now on the Americans are crossing the arms to let the "new superpowers" come up with all the new revolutionary inventions. Go on China, come up with something relevant like the Internet or Rock 'n Roll, since you guys are the hottest shit on earth. All we see is china putting the copying machine to work, just like the Japanese did.
Let's face it, China is nothing more than a crappy copying machine that still eats with two sticks, and lives out of stealing inventions from Americans and kissing butt of their evil master Wal-Mart and Target. Take all that from them, and China is nothing more than a Cuba with noodles.
Keep trying hard to be Americans, stinky Chinese. And don't forget to dress like Elvis on your next Chinese Halloween.
PS: Don't you get too comfortable, purple Indians, because I haven't forgotten about you either.
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