Discussion for article #244452
Chinaâs economy is tanking and itâs bringing down the Dow? Thanks Obama!
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Youâd think the Chinese economy would continue to proper just from rebuilding the crap thatâs collapsed, blown up, or become hazardous through shoddy construction or poor regulations.
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Drudge had his usual thoroughly misleading headline on this yesterday, drafting off a link to a speech George Soros gave specific to the Chinese bubble bursting in which he compared that to his take on the US housing bubble burst - which really means this is relatively early in a Chinese markets deleveraging process thatâs going to take at least a number of months and more likely in the years to go thru. I have no idea if Soros would agree with me on this, but Iâd put whatâs been happening in China recently as, within the analogy Soros suggested, and somewhere around the spring of 2007 when the first shocks were hitting some of the Wall Street bankster houses that had yet to start off-loading their piles of steaming shit CDs onto AIG thru variations on the various contra bets that some hedge funds had been bringing into them since the first summer after GWB got re-âelectedâ. If thatâs about right, that means there are still a number âshockâ steps to come, including possibly -tho not nearly as inevitably as with the collapse here- a âBig Oneâ.
Itâll certainly have much bigger shocks on the Asia side of the Pacific Rim, but the one thing China has going for it is political controls. Weâve been led to believe that for a time from November 2008 when Obama knew he was elected into early spring 2009, the Obama transitional group and the incoming Obama WH economic team considered, how seriously I donât think we can know, ânationalizingâ the U.S. bank system (which I donât think was at all do-able give the near total quasi-religious denialism going on among GOP Congress critters, plus the fact that GWB had let Paulson drop hundreds of billions in essentially unstructured credit on the biggest bankster houses in addition to the Bush Bailout, IOW not just the political unity was lacking but the banksters could have just bought the frickinâ country at that point). Those factors just arenât present in the same ways in China: the oligarchs already own the whole show and have more than enough control over the media and armed forces, to re-asset the imposition of controls by just calling them ânationalizationâ.
The REAL threat I foresee with the China bubble bursting is yet another âflight of capitalâ from the so-called âemergingâ markets into U.S. assets, sparking a series of commodity bubbles here.
Good thing weâve broken up all the too-big-to-fail banks and financial institutions so that we wonât be called upon to bail them out again in the near-certain event of another financial meltdown at some point.
Oh, wait â we didnât?
Shit.
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Pressed by Bernie Sanders about the risk of âtoo big to failâ financial institutions, hereâs what Alan Greenspan had to say back in February 2000 (5:20 in the video):
âOur notion would NOT be the question of perceiving that an institution is too big to fail, and that therefore gets governement support.â
Nah, that would NEVER happen.
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Hard to figure out Chinaâs economy. Theyâve been fudging their 7-9% growth for at least three years now. They took off the circuit breakers in the last couple of days after stopping trading last week when their market dropped 7% in one morning. Now they want it to find a ânatural bottomâ so theyâre trying the free fall approach, crossing their fingers and praying it doesnât drop more than 10% before finding a bottom. .
Plus their stock market doesnât run efficiently at all so they have built in peaks and valleys. Was listening to a professor who teaches in Beijing. He was saying the stock market problems are overstated but was scared of a possible real estate bubble bursting. Have you ever seen their ghost cities and malls? Itâs like a bad trip without the Thorazine.
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