FugitiveVisions
Junior Member
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US Financial Crisis/Bailout, China's Role
- Thread starter FugitiveVisions
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RedMercury
Junior Member
If the factories collapse the government isn't too far behind? Fed a little too much on the propaganda, there? Sorry if I don't take your take.
Anyway, I see China still choosing to continue the Chinmerica paradigm for now. Taiwan is on the back burner and the rest (Iran, NK, Sudan) are all manageable. There is no real short-term threat to a symbiosis that works, if with a good deal of friction. As the US economy slows, China will wean itself from that market and let the slack be picked up else where. But the important thing is doing this gradually, as sudden changes are disruptive. So I doubt there will be sudden moves, but slow diversification or lack of renewal of matured bonds would not surprise me.
As for the cost of doing this, it will have costs. But every action has costs and the alternatives are largely more risky. Paying the costs is a premium for reduced risk. It might not seem like the best path, but it could be the least worst.
Anyway, I see China still choosing to continue the Chinmerica paradigm for now. Taiwan is on the back burner and the rest (Iran, NK, Sudan) are all manageable. There is no real short-term threat to a symbiosis that works, if with a good deal of friction. As the US economy slows, China will wean itself from that market and let the slack be picked up else where. But the important thing is doing this gradually, as sudden changes are disruptive. So I doubt there will be sudden moves, but slow diversification or lack of renewal of matured bonds would not surprise me.
As for the cost of doing this, it will have costs. But every action has costs and the alternatives are largely more risky. Paying the costs is a premium for reduced risk. It might not seem like the best path, but it could be the least worst.
FugitiveVisions
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In the last year or so, China has already shown that its economy has in fact been decoupled from the US. It has maintained growth, while the US economy drops. If there is a coupling scenario, China's growth and decline would have been directly proportional to the US. It ain't so. Furthermore, China doesn't have the magic solution to the decline of the American consumer. While the debt is growing, China's share of it remains steady, which means other investors are taking the slack. The problem of these investors---mainly the Middle East, Russia and India---is even less dependent of the US economy and can afford not to invest in the US. So you cannot expect China to be the savior for the American consumer when it lacks the power to. Simply, China has no choice but to look after their own interest.
As far as being "vibrant", its not, just as all the foreclosure signs in Stockton, CA tells you. And that's housing for the most "vibrant" part of the US economy---the IT tech sector.
Everyone is going to dump the dollar no matter what. There is not enough investors there to take up the 700 billion (which can go up to 2-3 trillion) slack. This is a hole so deep no foreign intervention is capable of dealing with. In order to make up for the slack, the US government will do the inevitable---print money. No one wants to dump the dollar, but the US government keeps giving investors the reason to dump the dollar.
Mitsubishi who just bought into Morgan Stanley, is now taking a dump on its stock. I have real questions if Morgan Stanley will regain the same position of eminence it once had.
The problem with all these bonds and mortgages is that you cannot account for how much residual value is left behind those homes, if these bonds are financing homes, not company debt.
Price of home and land is directly equated to economy. If economy goes up, so will the land. If economy goes down, so will the land. The use of land and homes as basis for economic growth is like assuming the chick without the egg. The basis for all declines has been deficit one after another, trade and government wise.
Lastly, these firms are all going to be investigated one by one. So you have not fully accounted for all the damage that was done, and every investigation is going to drive scares into the stock of that company and the general market. One should not buy into anything that is a prospective government investigation.
The avalanche is starting and it hasn't bottomed out. You're going to get a jobless rate report on Friday.
As far as being "vibrant", its not, just as all the foreclosure signs in Stockton, CA tells you. And that's housing for the most "vibrant" part of the US economy---the IT tech sector.
Everyone is going to dump the dollar no matter what. There is not enough investors there to take up the 700 billion (which can go up to 2-3 trillion) slack. This is a hole so deep no foreign intervention is capable of dealing with. In order to make up for the slack, the US government will do the inevitable---print money. No one wants to dump the dollar, but the US government keeps giving investors the reason to dump the dollar.
Mitsubishi who just bought into Morgan Stanley, is now taking a dump on its stock. I have real questions if Morgan Stanley will regain the same position of eminence it once had.
The problem with all these bonds and mortgages is that you cannot account for how much residual value is left behind those homes, if these bonds are financing homes, not company debt.
Price of home and land is directly equated to economy. If economy goes up, so will the land. If economy goes down, so will the land. The use of land and homes as basis for economic growth is like assuming the chick without the egg. The basis for all declines has been deficit one after another, trade and government wise.
Lastly, these firms are all going to be investigated one by one. So you have not fully accounted for all the damage that was done, and every investigation is going to drive scares into the stock of that company and the general market. One should not buy into anything that is a prospective government investigation.
The avalanche is starting and it hasn't bottomed out. You're going to get a jobless rate report on Friday.
Quoth Crobata:
Precisely, which is why I can see no benefit to China in buying any actual Comapanies. If they can buy the Nationwide Branches to convert to their own operations then fine, that makes sense.
There are still many ordinary Depositers and Companies who need uncomplicated traditional Banking Services from Banks untainted from the current scandal. China's Banks do have the Capital to return confidence to the US economy, but they should do it under their own unsullied flag.
Precisely, which is why I can see no benefit to China in buying any actual Comapanies. If they can buy the Nationwide Branches to convert to their own operations then fine, that makes sense.
There are still many ordinary Depositers and Companies who need uncomplicated traditional Banking Services from Banks untainted from the current scandal. China's Banks do have the Capital to return confidence to the US economy, but they should do it under their own unsullied flag.
It would be far cheaper for China to just just hire the best "brains' of GS than to actually acquire GS .
FugitiveVisions
Junior Member
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antimatter
Banned Idiot
lol, the avanlache is falling, everyone is looking for cover, and someone wants China to be the main savior of the giantic fall so that chinese government can provide some low level jobs for its poor people.
:roll:
btw some of the articles I ran across, coincidentally, those folks calling for China inject capitals to save the US are namely from Korea, Canada, and UK. They want CHina to foot the big bill saying that it's good for everybody... talk about ulterior motives.
:roll:
btw some of the articles I ran across, coincidentally, those folks calling for China inject capitals to save the US are namely from Korea, Canada, and UK. They want CHina to foot the big bill saying that it's good for everybody... talk about ulterior motives.
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FugitiveVisions
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RedMercury
Junior Member
And how will a few hundred million angry Chinese factory workers, if they were laid off form their jobs because some American banks' skulduggery, be any threat to the CPC's power? I find it laughable that they will throw everything around them into turmoil, throw away any chance at prosperity and peace, because somebody across the ocean dropped the bucket. It is amazingly clear who messed things up, and easy enough for the Chinese media to point it out. Like I said, fed too much on anti-Chinese propaganda.