On Mar. 13, China's Premier Wen Jiabao ramped up the rhetoric some more. Wrapping up the annual session of China's Parliament, Wen took a swipe at the U.S., which has depended largely on Chinese investment in Treasury bonds to fund its large budget deficit. Over the past few years, China has built up the world's largest foreign reserves, totaling $1.95 trillion, with some two-thirds of that held in U.S. assets, mainly Treasuries. As the global economy has weakened, the value of China's investments has decreased. "We have lent a huge amount of money to the United States," Wen said at a press conference in Beijing's Great Hall of the People. "I am a little bit worried. I request the U.S. to maintain its good credit, to honor its promises, and to guarantee the safety of China's assets."
HONG KONG — China has bought more than $1 trillion of American debt, but as the global downturn has intensified, Beijing is starting to keep more of its money at home, a move that could have painful effects for American borrowers.
Oh, and about stopping those loans....
Quote:
BEIJING, Sept 25 (Reuters) - Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday.
The Hong Kong newspaper cited unidentified industry sources as saying the instruction from the China Banking Regulatory Commission (CBRC) applied to interbank lending of all currencies to U.S. banks but not to banks from other countries.
"The decree appears to be Beijing's first attempt to erect defences against the deepening U.S. financial meltdown after the mainland's major lenders reported billions of U.S. dollars in exposure to the credit crisis," the SCMP said.
AFP - China warned Wednesday it would not keep lending money to the US economy indefinitely, even as new data showed it had consolidated its position as the top buyer of American government bonds.
"China's increased purchase of US Treasury securities should not be interpreted as an endorsement of the assumption that the US can borrow its way out of the current financial crisis," the China Daily said in an editorial.
The worry I've heard expressed is that China will come to a point where it won't be willing to lend to America at 2% interest. They will want more for their investments. Also, the interest on these loans will have to be paid. Other than the Pentagon every other area of Government is expanding. Obama will have to raise taxes to pay the interest on these loans and maintain his expanded government. Probably that will mean oppressive energy taxes. What better excuse to increase taxes than to say you are doing it to save the planet?
France will walk away from this week's G20 summit if its demands for stricter financial regulation are not met, the finance minister has told the BBC.
Christine Lagarde told Hardtalk that President Nicolas Sarkozy would not sign any agreement if he felt "the deliverables are not there".
Strengthening financial regulation will be one of the key issues at the G20.
France wants a stronger global financial regulator than the US and the UK would like....
...President Sarkozy has previously spoken out against "Anglo-Saxon" economies, as has the prime minister of Luxembourg, Jean-Claude Juncker.
"This crisis started in the United States. The Anglo-Saxon world has always refused to add the dose of regulation which financial markets, the international financial system needed," Mr Juncker said last week.
Can someone explain to me what exactly is wrong with this threat? Wasn't lack of regulation one of the contributing factors that got us into this mess? Shouldn't strict regulations be a top priority?
What's the issue from the US/UK POV? More regulation inhibits money flow?
Can someone explain to me what exactly is wrong with this threat? Wasn't lack of regulation one of the contributing factors that got us into this mess? Shouldn't strict regulations be a top priority?
What's the issue from the US/UK POV? More regulation inhibits money flow?
No kidding. I've been harping on this for at least a month now.....that the US isn't taking the proper steps to make sure something like this doesn't happen again.
But, spending trillions upon trillions is going to solve all of this.
WASHINGTON — The massive programs designed to rescue the nation's financial sector are operating without adequate oversight, with vague goals and limited disclosure of their details to the taxpayers who are paying for them, government watchdogs told a Senate panel Tuesday.
The Troubled Asset Relief Program, or TARP, was launched in the midst of last fall's collapse of the nation's banking system and is designed to get loans flowing to businesses and individuals.
But "without a clearer explanation" about parts of the program, "it is not possible to exercise meaningful oversight over Treasury's actions," said Elizabeth Warren, a Harvard Law School professor who leads a special congressional oversight panel monitoring the TARP program. Her comments came in a Senate Finance Committee hearing on the bailout program.
Noting that TARP passed Congress six months ago, Warren said that her group has repeatedly called on the Treasury Department to provide a clear strategy for the program — and that "the absence of such a vision hampers effective oversight."
Last year alone, more than 200 House lawmakers, both Republicans and Democrats, awarded bonuses totaling $9.1 million to more than 2,000 staff members, according to a Wall Street Journal analysis of office-disbursement forms. The money comes out of taxpayer-funded office budgets, and is surplus cash that would otherwise be forfeited if not spent.
Payments ranged from a few hundred dollars to $14,000. Lawmakers, at their own discretion, gave the money to chiefs of staff, assistants, computer technicians, and more than 100 aides who earned salaries of more than $100,000 a year.
No kidding. I've been harping on this for at least a month now.....that the US isn't taking the proper steps to make sure something like this doesn't happen again.
Dude, really? You too are buying into this mythical quest for "proper global regulations"? I am not surprised to see support for such a thing here, but I'd thought you know better than to expect people like Obama and Sarkozy to pull englightened overseekers of world's financial markets out of a hat...
Dude, really? You too are buying into this mythical quest for "proper global regulations"? I am not surprised to see support for such a thing here, but I'd thought you know better than to expect people like Obama and Sarkozy to pull englightened overseekers of world's financial markets out of a hat...
I don't expect them to do anything right. I think there are certain regulations that should be made, but nowhere near what they propose, or even WANT to do.
As much as I believe in less government intervention, and the free market economy.....I also believe that there should be 'some' regulations in place to prevent crashes in the banking system.
I also realize that it means the government should keep their hands out of loaning practices.
LONDON (AP) - Prime Minister Gordon Brown says leaders at the G-20 summit have agreed to give $1 trillion to the International Monetary Fund and the World Bank to help struggling nations around the world.
Brown also says the 20 countries at the summit will enact common policies to crack down on tax havens, regulate hedge funds, and rebuild trust in the financial system to "prevent a crisis such as this from happening again."
HONG KONG (AP) - World stock markets soared Thursday, with Hong Kong's benchmark vaulting more than 7 percent, as stronger-than-expected U.S. economic figures boosted confidence the world's largest economy is on the mend.
Huge gains in Asia and a strong open in Europe followed an overnight surge on Wall Street and extended last month's rebound in world equity markets amid tentative signs of stabilization in the hard-hit global economy and banking industry. It came as Group of 20 leaders met in London for a summit that aims to hammer out policies to combat the economic slump and reform the global financial system.
Nearly every sector in Asia charged higher, with carmakers like Toyota Motor Corp. (TM) and Nissan Motor Co. (NSANY) rallying on U.S. auto figures that were less dismal than feared. Exporters such as Sony Corp. (SNE) were lifted by the weakening yen.
Investors were encouraged after U.S. car sales jumped by nearly 25 percent last month from February, beating the typical rise and underpinning hopes of a turnaround in the American auto market - critical for Asia's giant auto companies.
NEW YORK (Reuters) - Stocks jumped on Thursday as changes in bank accounting rules boosted optimism the financial system may stabilize in the short term, while world leaders agreed on measures to fight the recession.
The Dow Jones industrial average (DJI:^DJI - News) gained 250.41 points, or 3.23 percent, to 8,012.01. The Standard & Poor's 500 Index (^SPX - News) jumped 25.86 points, or 3.19 percent, to 836.94. The Nasdaq Composite Index (Nasdaq:^IXIC - News) spiked 54.27 points, or 3.50 percent, to 1,605.87.
Anyone thinks this will sink the market back down to sub-7500 levels? I've been holding 15% cash just in case there is a sink, with particular interest in stock like Toyota (hoping TM crashes).
GM looks to be a planned bankrupcy right now
__________________
"With a coach and a player, sometimes there's just so much respect there that it's boils over"
-Taylor Hall
Oh and looks like the 19 major banks passed the quote, "stress test" - I know it has to do with how the banks hold liquidity, but can someone explain in laymnens terms what this "stress test" actually is?
__________________
"With a coach and a player, sometimes there's just so much respect there that it's boils over"
-Taylor Hall
April was Wall Street's best month in nine years _ offering some of the most powerful evidence yet that maybe, just maybe, the economy is about to begin a turnaround.
The Standard & Poor's 500 index, considered the most reliable measure of the broader market, climbed 9.4 percent in April, its best performance since March 2000, the peak of the dot-com bubble. The Dow Jones industrial average shot up 7.4 percent in April, on top of a 7.7 percent gain in March.
That's more than a relief for investors _ it's a potential economic indicator, because the stock market tends to get back on its feet before the economy does. In downturns over the past 60 years, the S&P hit bottom an average of four months before a recession ended and about nine months before unemployment hit its peak.
some of the best economic minds in the country, who gathered on stage at the Metropolitan Museum of Art to discuss solutions to the global economic crisis. The panelists unanimously agreed on two points: this is a global crisis, and we're not through with it yet.
The S&P has been going back and forth like crazy.....moreso that it ever did the past 60 years.
So, shooting up 7% in one month....as good as it might sound, it doesn't really mean much unless it KEEPS going up, and doesn't drop dramatically like it has until now.
