US Financial Crisis/Bailout, China's Role
- Thread starter FugitiveVisions
- Start date
AssassinsMace
Lieutenant General
Nice to see China finally learning how to play ball. Good retorts on blaming China. Especially the part about the US restricting what China can buy. Watch out next for the contradiction of hoping China buys more US debt for their stimulus packages while complaining China owns the US because of it.
RedMercury
Junior Member
Jim Rogers on Banking Bailout: 'Horrible Economics'
by: William Patalon III January 04, 2009
William Patalon III
Ask investing icon Jim Rogers about the $700 billion U.S. banking bailout, and he’ll tell you that it’s nothing but “horrible economics.” And with good reason: Most of the major U.S. banks are already bankrupt.
“Without giving specific names, most of the significant American banks, the larger banks, are bankrupt, totally bankrupt,” Rogers said in a recent teleconference at the Reuters Investment Outlook 2009 Summit. “What is outrageous economically and is outrageous morally is that normally in times like this, people who are competent and who saw it coming and who kept their powder dry go and take over the assets from the incompetent. What’s happening this time is that the government is taking the assets from the competent people and giving them to the incompetent people and saying, now you can compete with the competent people. It is horrible economics.”
A long-time China bull, Rogers first made a name for himself with The Quantum Fund, a hedge fund that’s often described as the first real global investment fund, which he and partner George Soros founded in 1970. Over the next decade, Quantum gained 4,200%, while the Standard & Poor’s 500 Index climbed about 50%.
It was after Rogers “retired” in 1980 that the investing masses first really got to see him in action. Rogers traveled the world (several times), and penned such bestsellers as “Investment Biker” and the recently released “A Bull in China.” He also made some historic market calls: Rogers predicted China’s meteoric growth a good decade before it became apparent to everyone else, and he subsequently foretold of the powerful updraft in global commodities prices that’s fueled a year-long bull market in the agriculture, energy and mining sectors.
Rogers’ candor has made him a popular figure with individual investors, meaning his pronouncements are always closely watched. Twice last year Rogers granted exclusive interviews to Money Morning Investment Director Keith Fitz-Gerald. In one of the interviews - carried each time as a two-part series in Money Morning - Rogers correctly predicted that the U.S. financial crisis was destined to get much worse before any improvement was visible.
Goldman Sachs analysts last week estimated that banks worldwide have incurred $850 billion of credit-related losses and write-downs since the global credit crisis began last year.
But Rogers said sound U.S. lenders remain. He said these could include banks that don’t make or hold subprime mortgages, or which have high ratios of deposits to equity - “all the classic old ratios that most banks in America forgot or started ignoring because they were too old-fashioned.”
Many analysts have cited the Sept. 15 bankruptcy filing by Lehman Brothers Holdings Inc. [OTC: LEHMQ] as a trigger for the soon-to-follow cratering of the U.S. stock market and accompanying worsening of the U.S. economy.
But Rogers called that idea “laughable,” noting that banks have been failing for hundreds of years. And yet, he said policymakers aren’t doing enough to prevent another Lehman.
“Governments are making mistakes,” he said. “They’re saying to all the banks, you don’t have to tell us your situation. You can continue to use your balance sheet that is phony. All these guys are bankrupt, they’re still worrying about their bonuses, they’re still trying to pay their dividends, and the whole system is weakened.”
The next top prospects for the leadership after Hu Jintao/Wen Jiabao are apparently Xi Jinping and Li Keqiang. Both have law backgrounds (although I believe Xi Jinping also has a degree in engineering). Other big-shots have history degrees, economics, etc.
RedMercury
Junior Member
bladerunner
Banned Idiot
Must see if I can track down the original essay
Brave new connections
Jan 28th 2009
From Economist.com
Will America's “network power” trump the “Asian century”?
EVERY few years a piece of writing comes along that throws the global intelligensia into a tizzy. The rise and fall of great powers gives way to the end of history, which must make room for a clash of civilisations. Tipping points and black swans abound. These days, the grandest notion making the rounds is Asia’s unstoppable rise coupled to America’s inevitable decline.
Into the mix comes a short, deceptively simple essay by Anne-Marie Slaughter (pictured), who recently stepped down as dean of Princeton’s Woodrow Wilson School of Public and International Affairs to head the State Department's Office of Policy Planning. Ms Slaughter writes that power in the 21st century depends not so much on arms or wealth but on network connections. By this she means not just internet links, but physical ones such as immigrants have with their original countries, businesses with their trading partners, aid groups with the communities they serve and the like. Here, she believes, America has an extraordinary advantage.
In this world, the state with the most connections will be the central player, able to set the global agenda and unlock innovation and sustainable growth,” she declares. “Networked power flows from the ability to make the maximum number of valuable connections.” And into the debate over the ascent of Asia and decline of the West, she asserts: “The twenty-first century looks increasingly like another American century—although it will likely be a century of the Americas rather than of just America.
The essay answers both Asia boosters and America bashers. Ms Slaughter’s ideas are not earth-shatteringly original; indeed, she doffs her cap to no less than a dozen scholars. The essay occasionally devolves into cyberpunk manifesto and Panglossian apologia. But it is mostly very smart. Like recombinant DNA, Ms Slaughter mixes the known base-pairs into something unique and compelling. Coming from a foreign policy stalwart of the old school, it deserves attention. But is she right?
The argument, simplified, goes like this: by dint of population, geography and culture, America is best placed to lead. Its immigrants make it a hub for the world’s best ideas. Its geography helps it reach out to other regions while insulating it from global problems such as refugees, cross-border conflicts and even some of China's air pollution. Its culture of openness, as well as constructive intellectual and commercial conflict, makes it a hive for innovation. Other countries suffer a disadvantage in these areas. In a world where hierarchical power is less important and relationships paramount, Ms Slaughter writes, America’s ability to orchestrate, not dictate, will bring it success.
[B]The thesis beams an unflattering spotlight on Asia’s shortcomings. For example, many countries have sought to promote technology business by building physical infrastructure like R&D labs. But they lack the intangible qualities that allow entrepreneurship to flourish, such as an openness to new relationships and a culture of questioning authority. “The Chinese government is determined to develop innovation as if it were developing a fancy variety of soybeans,” she writes.
By contrast, America both produced and personifies the precise qualities required in the new environment. “The internet world, the wiki world, and the networked world all began in the United States and radiated outward,” she writes. Here Ms Slaughter’s firm footing falters.
Asia’s variant of capitalism and social interactions is certainly different than the West’s, and from the outside looks problematic. Japan’s keiretsu, or “web of companies”, and consensus-based decisions make many firms insular and slow. China’s guanxi—social connections—winnows the number of potential relationships, which means some beneficial interactions may be missed. India’s messy bureaucracy seems an insufferable hindrance to everything.
Still, something must be working. Toyota, not General Motors, is now the world’s biggest carmaker, and there is not a single tech gadget that isn't stuffed with Japanese electronics components. Chinese businesses sensibly depend on a few tight relationships because that lowers transaction costs and minimises risk, especially given the lack of a reliable legal system to settle disputes. And India’s IT-service firms run the back-offices of the world’s biggest companies. Clearly there are more things in heaven and earth than are dreamt of in Ms Slaughter’s philosophy.
Connections are all-important in an environment that privileges connections. But outside that context, it is only one factor, albeit vital, among others that account for power. Ms Slaughter, meanwhile, calls on [/B]America to make five reforms: improve immigration, education, and social and economic equality. Also, focus on Latin America (though she never explains exactly why) and adopt a spirit of humility and co-operation……………………..
Brave new connections
Jan 28th 2009
From Economist.com
Will America's “network power” trump the “Asian century”?
EVERY few years a piece of writing comes along that throws the global intelligensia into a tizzy. The rise and fall of great powers gives way to the end of history, which must make room for a clash of civilisations. Tipping points and black swans abound. These days, the grandest notion making the rounds is Asia’s unstoppable rise coupled to America’s inevitable decline.
Into the mix comes a short, deceptively simple essay by Anne-Marie Slaughter (pictured), who recently stepped down as dean of Princeton’s Woodrow Wilson School of Public and International Affairs to head the State Department's Office of Policy Planning. Ms Slaughter writes that power in the 21st century depends not so much on arms or wealth but on network connections. By this she means not just internet links, but physical ones such as immigrants have with their original countries, businesses with their trading partners, aid groups with the communities they serve and the like. Here, she believes, America has an extraordinary advantage.
In this world, the state with the most connections will be the central player, able to set the global agenda and unlock innovation and sustainable growth,” she declares. “Networked power flows from the ability to make the maximum number of valuable connections.” And into the debate over the ascent of Asia and decline of the West, she asserts: “The twenty-first century looks increasingly like another American century—although it will likely be a century of the Americas rather than of just America.
The essay answers both Asia boosters and America bashers. Ms Slaughter’s ideas are not earth-shatteringly original; indeed, she doffs her cap to no less than a dozen scholars. The essay occasionally devolves into cyberpunk manifesto and Panglossian apologia. But it is mostly very smart. Like recombinant DNA, Ms Slaughter mixes the known base-pairs into something unique and compelling. Coming from a foreign policy stalwart of the old school, it deserves attention. But is she right?
The argument, simplified, goes like this: by dint of population, geography and culture, America is best placed to lead. Its immigrants make it a hub for the world’s best ideas. Its geography helps it reach out to other regions while insulating it from global problems such as refugees, cross-border conflicts and even some of China's air pollution. Its culture of openness, as well as constructive intellectual and commercial conflict, makes it a hive for innovation. Other countries suffer a disadvantage in these areas. In a world where hierarchical power is less important and relationships paramount, Ms Slaughter writes, America’s ability to orchestrate, not dictate, will bring it success.
[B]The thesis beams an unflattering spotlight on Asia’s shortcomings. For example, many countries have sought to promote technology business by building physical infrastructure like R&D labs. But they lack the intangible qualities that allow entrepreneurship to flourish, such as an openness to new relationships and a culture of questioning authority. “The Chinese government is determined to develop innovation as if it were developing a fancy variety of soybeans,” she writes.
By contrast, America both produced and personifies the precise qualities required in the new environment. “The internet world, the wiki world, and the networked world all began in the United States and radiated outward,” she writes. Here Ms Slaughter’s firm footing falters.
Asia’s variant of capitalism and social interactions is certainly different than the West’s, and from the outside looks problematic. Japan’s keiretsu, or “web of companies”, and consensus-based decisions make many firms insular and slow. China’s guanxi—social connections—winnows the number of potential relationships, which means some beneficial interactions may be missed. India’s messy bureaucracy seems an insufferable hindrance to everything.
Still, something must be working. Toyota, not General Motors, is now the world’s biggest carmaker, and there is not a single tech gadget that isn't stuffed with Japanese electronics components. Chinese businesses sensibly depend on a few tight relationships because that lowers transaction costs and minimises risk, especially given the lack of a reliable legal system to settle disputes. And India’s IT-service firms run the back-offices of the world’s biggest companies. Clearly there are more things in heaven and earth than are dreamt of in Ms Slaughter’s philosophy.
Connections are all-important in an environment that privileges connections. But outside that context, it is only one factor, albeit vital, among others that account for power. Ms Slaughter, meanwhile, calls on [/B]America to make five reforms: improve immigration, education, and social and economic equality. Also, focus on Latin America (though she never explains exactly why) and adopt a spirit of humility and co-operation……………………..
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