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Chinese Are Likely to Halt Purchases of U.S. Treasury Debt

Americans are very good of shooting themselves in the foot without any encouragement from another country.

Why is it that Japan maintains its manufacturing base and dominate certain manufacturing industries. Are you going to blame the demise of Detroit on the Japanese car makers (or the German's)? Blame the Nokia for taking market share from Motorola? In Japan the cheap goods are made in China and very expensive goods are made in Japan, clearly the Chinese goods service the lower part of the population. US's no. 1 export is MacDonald's, which dominate the world cheap burgers.




On Mar 13 12:03 PM Mr. Big wrote:

> Sooner or later, Americans will realize that China has been waging
> a quiet war on America. You know what? China is winning. I'm just
> going to put it out there now: CHINA IS THE CAUSE OF THE CREDIT
> CRISIS.
>
> Their manipulation of their currency as decimated the US manufacturing
> base. Their massive buying of medium and long term treasury bonds
> (in support of their currency peg) as caused long term yields to
> remain depressed for a prolonged period, causing the inversion of
> the yield curve in 2005 to 2007 and setting up the conditions for
> leverage in the financial sector and the incentive for savers to
> become borrowers. They did this to America and now they have the
> gull to "warn" us?
>
> Fact of the matter is, China's currency manipulation should be considered
> an act of war on America. It is a blatant attack on America's economy
> and a destabilizing force on its financial sector.
>
> Quite the opposite should happen. America should be warning China
> to stop their blatant attacks or risk military intervention. What
> is happening now is tantamount to an embargo on America....nay....it
> is worse. And if an embargo is considered an act of war, then currency
> manipulation with the sole purpose of boosting domestic manufacturing
> at the expense of foreign manufacturing should also be considered
> an act of war.
>
> Just my thoughts....

How Apple's Market Share Will Propel Stock to $500, Part 1

All good and well, one important point is that Apple targets high end segment and with 91%, there isn't much room to grow. How will Apple compete with Windows at the low end of spectrum if it choose do so? Will entry into low end machines threaten its dominance in the high end market.

Three Reasons the Stimulus Will Fail

Looks like China is the only country left that can buy the US debt, but given their own issues and dramatic drop in trade, why would they buy US debt. What would happen if no one buys US debt?

Disappointed with Obama as he done nothing different - no change. US needs to bite the bullet and realized the losses, let companies go into receivership and nationalization. Investors and bond holders will get wipe out, but with the tax payers and their kids will not get the short end.

The Fate of General Motors' Rick Wagoner

Yep, I agree his arrogance did himself in. May its a new leader(ship) that is required.

The End of the Credit Crisis

I'm no tax expert but a bit lost....

buyers will only pay 100k for bad $500k loan which is worth $300K...

but willing to pay $300K for a good $300K loan...

Ignoring tax benefits, why would the buyer not pay $100k for bad $500K loan and writedown the $200K. Hence get a good $300k loan for $100K and make 200% profit? Why not write down the loan to $200K - super save - and make 100% profit?

Isn't this the crux of stumbling block, banks are not willing to sell their loans for the fraction of what they paid for it nor reduce the principle? The $500K loan has a good part (repayable without foreclosure) so why is it worth only $100K unless that is what the expected repayment is.

Bad bank idea is simply a "covert way to recapitalize banks by paying more for the assets than the market would," Meredith Whitney tells Fortune. Besides which, it won't even work.

Agree with MW analysis of the situation, the problem is way beyond bank lending and more about 3rd party default given the business environment is so bad. No banks will take the risks of extending credit lines and are in fact have decreased credit lines to point where it is impossible to keep the business running given the possible low volume of business hence massive closures and redundancies. In a way it is self fulfilling by banks by cutting credit lines they cause the defaults.

Pricing was the stumble in the first round so how is Obama's team going to solve this question is the key.

I agree just give the people and business the money instead of the banks so money is directly injected into the markets.

Obama's Speech Struck the Right Tone

If he can see 2 trillion dollars in next 10 years why not act now and save this 2 trillion ASAP? When does he expect to start? 9th year "in" office?

Two Ways to Restart Small-Business Lending

Totally agree with analysis of the situation of the SME, however the ones I know are also struggling to get orders hence also high risk of default.

Foreclosure Moratoriums: It's Time to Get Real

In 2001, I did exactly that - rented my flat out as I could afford the mortgages after loosing my job. With the interest also falling, I was able to make difference in rental income and mortgage and keep until 2008, when I should my property for 30% face value profit. Off course I moved into a much cheaper apartment and still live there now.

As an alternative, why don't the banks spin of the mortgages into asset company/ vehicle and sell shares in open market. Similar to REIT vehicle. I am sure their will be buyers if interest /dividends are good. This way the mortgages can be extended to longer period, income from IPO can be used to readderess some of foreclosures, turn mortgages in rentals, recapitalise the banks, etc. Much better then let mortgages sit on balance sheets, don't re-arrange loans to more affordable repayment levels and wait it out.

Will There Be an Obama Bounce?

I tend to agree the bounce has occurred. PE Obama has said in his speeches that it may take 2 terms of office to solve the crisis, so hope for too much too soon as he paints a not so pretty picture.

It's What Apple's Not Doing That Has Analysts Worried

Too much expectations is not a good thing. The launch of the iPhone has been very successful, most Apple and non-apple users willing and available will have already made the change to the iPhone. Available in the sense that most people sign up with carrier which has a contract of 12, 18, 24, etc. months and their contacts have ended.

What is missing is China has just issued its 3G license and the phone companies are ready to launch. China Mobile will sell the iPhone - the next major impact to iPhone sales??

What Do We Need In 2009? More Failure

Great article. More failures will occur in 2009 unfortunately it will be small guys/ companies. Similar to 2008, the big companies will get their bailouts and grow even bigger.

Still Waiting for the Bottom

Now we have a clearer picture of Obama's solutions it looks like another free fall from here onwards. Any bullish moves has been very weak.

Unemployment (and reemployment) rates is probably the key as consumer confidence will lift turnover, margins and profits. Unless you can see a relatively prosperous future then you will not spend.

An Obama Speech to Light Wall Street on Fire

Another ranting article written by someone who wants their stocks to go back up.

Real value of the banks - how can you do that without market to market. Value base on purchase prices, face value, end value!? When the underlying is falling the assets are not worth what was paid for instead they worth the sale value which are probably less then 50cnt to the dollar. The rules can be changed but does reality change? The cat is out of the box. Liquidity can only address by open market auction. Buyers will want some return for the risk they are taking.

Your article is correct in that short term solutions are not going to hold water as in the case of AIG exemplifies.

Nationalization would be better since that is what is happening but without the control. $180 billion in AIG is not taking over the company? Shareholder dilution is sad but necessary part of the game. Shareholders should have got out long time ago. Looks like Uncle Sam and the whole system is in for shock if the stories of $60 billion losses are true.

Why Bank Nationalization Will Never Happen

Failure of the biggies would mean no company is safe. Given the current sentiments everyone will be holding cash or gold. Too many people, pensions, etc., will be wiped out. Great great depression!