Posted on 02/10/2010 5:33:32 AM PST by Leisler
Dollar-denominated risk assets, including asset-backed securities and corporates, are no longer wanted at the State Administration of Foreign Exchange (SAFE), nor at China’s large commercial banks. The Chinese government has ordered its reserve managers to divest itself of riskier securities and hold only Treasuries and US agency debt with an implicit or explicit government guarantee. This already has been communicated to American securities dealers, according to market participants with direct knowledge of the events.
It is not clear whether China’s motive is simple risk aversion in the wake of a sharp widening of corporate and mortgage spreads during the past two weeks, or whether there also is a political dimension. With the expected termination of the Federal Reserve’s special facility to purchase mortgage-backed securities next month, some asset-backed spreads already have blown out, and the Chinese institutions may simply be trying to get out of the way of a widening. There is some speculation that China’s action has to do with the recent deterioration of US-Chinese relations over arm sales to Taiwan and other issues. That would be an unusual action for the Chinese to take–Beijing does not mix investment and strategic policy–and would be hard to substantiate in any event.
We are now in a very, very dangerous dance with China.
Um, this may become verrrrrrry interrrrresting....
Why would the Chinese want to buy ANY securities from a communist country run by a bunch of Chicago kleptokrats?
Can we start that trade war now?...
AMERICA FIRST.
Taiwan has been a large part of their goal (total hegemony of the Asia-Pacific region) from the beginning.
I’m convinced they purchased our debt knowing we couldn’t repay and that our economy would become too weak to finance another war and in the morally precarious position of having to thwart the plans of creditors we cannot repay. This enables them to simply move in and take Taiwan while we sit and watch.
Maybe they thought they were helping build the Great East-Pacific Co-Prosperity Sphere?
( Hey, Stalin and Adolph were once admirers too. People change. )
Obama is bored with his job and doesn’t really seem to care.
“Why would the Chinese want to buy ANY securities from a communist country run by a bunch of Chicago kleptokrats?”
We have a winner!
They should study Lincoln’s finance of the Civil War. Further, when we say China, we really mean a small( for China ) group of lieing, murderous, thieving tugs. The kind Hank Paulson, the Bush family, almost all financial and business elite just...love.
It seems that if you are a lefty popular murderous thug, Hugo, Allende, Castro...the lefties love you. And if you are a greedy, slave population thieving do business thug, the righties love you.
Haven’t you ever been in a Post Office/DMV... and seen the affirmative action hires? Their paychecks come in every two weeks, and in twenty they retire.
His whole life has been as a prop. Playing the safe negro to the delusions of lefty trust fund pot smokers. Of course he would be bored. He has basically taken a in the Plantation House welfare route. Be clean, be safe be respectable to the white welfare plantation masters and he’ll get the easy, inside job.
Who here ever would have thought the Chinese would do us a favor?
And they are leading.
But hey, we’ve got lots of cheap stuff from China on the shelves.
“our economy would become too weak to finance another war “
Tough fighting a war with an enemy that manufactures a good number of your military parts as well.
The PRC has painted itself into a corner on Taiwan.
As have we with our debt.
No, he's stupid when it comes to the economy.
Yesterday he said this: "THE PRESIDENT: The small businesses I talk to --- and I've been talking to a lot of them as I've been traveling around the country over the last several months -- their biggest problem is right now they can't get credit out of their banks so they're uncertain about that. And they're still uncertain about orders -- do they just have enough customers to justify them doing more. It's looking better at this point. But that's not the rationale for people saying, I'm not hiring. Let me put it this way. Most small businesses right now, if they've got enough customers to make a profit and they can get the bank loans required to boost their payroll, boost their inventory, and sell to those customers, they will do so. Okay?"
He can only think in terms of banks vis-a-vis the economy. He's telling us that small businesses are telling him (liar!) that if they could only borrow money they'd be profitable. How this dumbass expects us to believe anything he says is beyond me. It's all about the banks to him. He really has no clue. Not one clue as to how the U.S. economy works.
“He can only think in terms of banks vis-a-vis the economy. He’s telling us that small businesses are telling him (liar!) that if they could only borrow money they’d be profitable. How this dumbass expects us to believe anything he says is beyond me. It’s all about the banks to him. He really has no clue. Not one clue as to how the U.S. economy works.”
I run a small business and we are paying down debt as fast as humanly possible. I would be crazy to borrow money to hire someone in this environment. When ongoing, paying business is in the door with their checkbook out, and the check clears, then I’ll hire. The only nice thing—hiring goes fast. There are a lot of well-qualified folks looking for a job.
Just a threat IMHO. US Dollar is up today despite this fake news. ChiComs will dump a little bit to make their point and that will be it
Finis — end of story
**** If gold was down around $800-$950 this story would be more logical because the Chinese are very interested in gold at that price. So they would dump US holdings and buy AU.
It’s too high for them now. They want to ace India and get in cheaper
**** I read the Russians are buying Canadian Treasuries. Smart move
Bump
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