[alloysteel]

China does not have a modern banking system. And therein lies the problem. They are awash with foreign earnings, and have no way to put them to work. There are huge public works programs in operation, that in scale, probably dwarf even the greatest undertakings of the New Deal days of FDR, back in the 1930's. There are also countless smaller enterprises that are being funded, but the difficulty is that there is no oversight, and many of the smaller loans are non-performing, essentially not being repaid, and there is no legal machinery in place to effectively foreclose on these loans to liquidate them.

China is headed for a huge banking collapse, and because so much of their business is tied to Western currencies, bodes ill for the world economy.

The Great Depression is going to look like practice, not even a full dress rehearsal for what is coming.

[The Duke]

Wise man say..."The bigger they are, the harder they fall!"

[.cnI redruM]

1) In the case of one of the companies mentioned, they were under investigation by the Chinese Gov. That doesn't make me think they are under malicious attack. If, for example, I were a Portuguese Fund Manager, I wouldn't be clamoring for shares of Global Crossings or Worldcom. There is a difference in reporting adverse information fairly and slandering injudiciously.

2) In the absence of information superiority, bad data will tend to more rapidly chase investors out of a stock. A newspaper isn't necessarily biased for reporting bad news. I'm not entirely sure that people are slandering these issues. Investors lack the knowledge to measure this info from perspective, therefore they will tend to dump on the first credible report of negative circumstance.

[Dr. Frank fan]

Bottom-line it for me: Are we all gonna die?

[mabelkitty]

It's not like Congress doesn't know this.
Look through Steve La Tourette's website and find co-sponsered by him on China honoring their bond payments to American investors.

Pretty amazing.

[maui_hawaii]

But I am certain that concern for the small American shareholder is not the motivating factor.

Wanna bet?

[Lockbar]

I agree completely. Stop attacking china! (I know this is stupid. I just can't help it sometimes.)

[ovrtaxt]

I do know that commodities like portland cement and metals have gone up in price because China is using so much of these items in their construction projects.

It's having an effect-- concrete pours have been delayed for weeks now, locally.

It was a mistake to engage them economically from the beginning. From MFN status to the HongKong handover, stupid mistakes. We should have taken a stance of economic aggression against the Communists. They probably would have fallen by now, with an emerging free market.