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Meltdown

Started by BachQ, September 20, 2007, 11:35:04 AM

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BachQ

#3900
March 16, 2010, 07:10:50 PM
Tarriffs on Chinese exports?  Hmmm ..... things could get interesting ... if trade wars heat up.

Reuters -- Senate bill would penalize China over yuan

Quote9:06pm EDT

By Doug Palmer and Paul Eckert

WASHINGTON (Reuters) - Members of Congress on Tuesday threatened Beijing with duties on some of its exports if it fails to revalue its currency, pressuring the Obama administration to label China a currency manipulator.

A bipartisan bill introduced in the Senate merges previous legislative efforts to press China to change policies that critics say keep its yuan currency cheap, effectively subsidizing Chinese exports and taxing competing imports.

"When there's a 20 percent or 30 percent undervaluation that reduces the price of a product coming in, that's not fair. That's cheating," Democratic Senator Debbie Stabenow, a co-sponsor of the legislation, told a news conference.

"If they're not going to do it, we're going to force them," Republican Senator Sam Brownback added.

The bill, a rare show of bipartisan accord, reflects widespread concern about high U.S. unemployment. It follows two days after Chinese Premier Wen Jiabao dismissed U.S. complaints about China's exchange-rate policy as protectionist.

It also is likely to weigh on the Obama administration's deliberations whether to label China a currency manipulator in a semiannual Treasury Department report due on April 15. In the background is the realization that China is a major holder of U.S. debt.

Many U.S. lawmakers, with strong backing from economists, believe the yuan is undervalued by 25 percent to 50 percent, giving Chinese companies an unfair price advantage in trade --- a situation seen as more acute now that the U.S. economy is struggling to recover from the worst downturn since the 1930s.

***

...The legislation was crafted by Senators Charles Schumer, a Democrat, and Lindsey Graham, a Republican. The two got 67 Senate votes in 2005 for a bill threatening to put a 27.5 percent tariff on all Chinese goods.

"This is a good coalition to make something happen in the Senate, and I hope our colleagues in the House will follow," said Graham.

Senate Majority Leader Harry Reid said the bill was "something that committees with jurisdiction should take a look at."

***

Coopmv

#3901
March 16, 2010, 07:27:18 PM
Quote from: dm on March 16, 2010, 07:10:50 PM
Tarriffs on Chinese exports?  Hmmm ..... things could get interesting ... if trade wars heat up.

Reuters -- Senate bill would penalize China over yuan

DM,

Great catch and this is long overdue.  What is significant is a number of the pro free-trade Republicans actually joined rank with the Democrats to put together this 2/3 majority.  The House is generally much less free-trade oriented and will no doubt passes its version of the bill.  The pundits who claim the Chinese may dump treasuries on a massive scale to retaliate.  Not so fast, the Chinese are too crafty to shoot themselves on the foot.  It is not clear if they want to take tens of billion dollars in losses since they no doubt bought the treasuries at relatively high prices.  Savings that many American have squirreled away since fall of 2008 can probably help soak up any treasuries the Chinese will dump.

Coopmv

#3902
March 16, 2010, 08:08:42 PM
DM,  Deal or no deal - it is looking more like the Hummer story by the day - no deal.  This article was from a Chinese daily, so there was no western propaganda there ...   ;)

Geely faces hurdles in quest for Volvo

Coopmv

#3903
March 19, 2010, 07:17:38 PM

Coopmv

#3904
March 19, 2010, 07:20:39 PM
DM,  Even the Democrats in NJ realize they have to cut benefits for the public employees but those idiots in CA still refuse to acknowledge the truth ...    ;)

New Jersey Teachers Face Health Costs Under Curbs (Update2)

Coopmv

#3905
March 20, 2010, 06:54:53 AM
DM,  Good article but can you track down Parts I & II and post them?  I am too lazy to do this at the moment since I have had a rough workweek ...    ;)

China's Fragile Economy, Its Housing Bubble, and What It Means To Us: Part III

Coopmv

#3906
March 20, 2010, 08:27:21 AM
DM,  Germany and France are better off letting IMF do the bailout or the political parties that are in power now will be in serious trouble with their voters.  I will be equally irate if the federal government decides to bail out CA one of these days. 

Pressure mounts on EU states to bail out Greece

Coopmv

#3907
March 20, 2010, 08:01:53 PM
DM,  This is absurd.  Germany and France should just convince IMF to step in and allow the latter to demand the Greek government to impose a 30% across the board budget cut in exchange for an IMF bailout, end of story. 

Greek leader warns Berlin that EU at risk if no aid

Coopmv

#3908
March 21, 2010, 03:50:30 AM
DM,  Both of us would love to see the US and the EU taking some meaningful actions.  Talk is cheap ...

China warns US against sanctions over currencyChina warns US against sanctions over currency dispute, says may report trade deficit in March

BachQ

#3909
March 21, 2010, 04:19:17 AM
Quote from: Coopmv on March 20, 2010, 06:54:53 AM
DM,  Good article but can you track down Parts I & II and post them?  I am too lazy to do this at the moment since I have had a rough workweek ...    ;)

China's Fragile Economy, Its Housing Bubble, and What It Means To Us: Part III


Coop, did you see this article in Business Week/Bloomberg?  To call China's current manic expansion the "greatest bubble in history" is quite an assertion ... but there are many analysts that agree with him ...  We know that there's a huge bubble in China, but if it's bigger than the US housing bubble, then China will have serious problems ...

China in Midst of 'Greatest Bubble in History,' Rickards Says
March 17, 2010, 7:15 AM EDT

QuoteMarch 17 (Bloomberg) -- China is in the midst of "the greatest bubble in history," said James Rickards, former general counsel of hedge fund Long-Term Capital Management LP.  The Chinese central bank's balance sheet resembles that of a hedge fund buying dollars and short-selling the yuan, said Rickards, now the senior managing director for market intelligence at McLean, Virginia-based consulting firm Omnis Inc.

"As I see it, it is the greatest bubble in history with the most massive misallocation of wealth," Rickards said at the Asset Allocation Summit Asia 2010 organized by Terrapinn Pte in Hong Kong yesterday. China "is a bubble waiting to burst."  Rickards joins hedge fund manager Jim Chanos, Gloom, Boom & Doom publisher Marc Faber and Harvard University professor Kenneth Rogoff in warning of a potential crash in China's economy. The government has raised banks' reserve requirements twice this year after economic growth accelerated and property prices rallied.

--more--

Coopmv

#3911
March 21, 2010, 04:29:25 AM
Quote from: dm on March 21, 2010, 04:19:17 AM
Coop, did you see this article in Business Week/Bloomberg?  To call China's current manic expansion the "greatest bubble in history" is quite an assertion ... but there are many analysts that agree with him ...  We know that there's a huge bubble in China, but if it's bigger than the US housing bubble, then China will have serious problems ...

China in Midst of 'Greatest Bubble in History,' Rickards Says
March 17, 2010, 7:15 AM EDT

DM,  As the saying goes, the bubble ain't a bubble until it has burst.  Few in the US thought there was a housing bubble back in 2006 ...   ;D

Coopmv

#3912
March 21, 2010, 04:31:07 AM
Quote from: dm on March 21, 2010, 04:25:35 AM
Coop, this is just the tip of the iceberg ... Unofficial Problem Bank List increases to 653

These guys at the FDIC are working double overtime ...  LOL

BachQ

#3913
March 21, 2010, 04:44:55 AM
Mish Shedlock opines that Obamacare is a total mess, and he compiles a handful of articles to show how dysfunctional this issue has become.  "What a mess ! ! !"

Coopmv

#3914
March 21, 2010, 04:55:54 AM
Quote from: dm on March 21, 2010, 04:44:55 AM
Mish Shedlock opines that Obamacare is a total mess, and he compiles a handful of articles to show how dysfunctional this issue has become.  "What a mess ! ! !"

Obama, Pelosi and Reid just do not get it.  With over 50% of the population against the bill, they are determined to ram the bill through Congress anyway.  It will be bloodbath for the Dems who vote Yes today come November.  The voters do not forget ...

Coopmv

#3916
March 21, 2010, 05:31:24 PM
DM,   This Obama Administration is an unmitigated disaster.  Not good when the papers issued by a number of private US companies actually have lower yields than treasuries of the same maturity ...     :o

Obama Paying More Than Buffett as Bonds Show U.S. Losing AAA

BachQ

#3917
March 24, 2010, 05:02:28 AM
Quote from: Coopmv on March 21, 2010, 05:31:24 PM
DM,   This Obama Administration is an unmitigated disaster.  Not good when the papers issued by a number of private US companies actually have lower yields than treasuries of the same maturity ...     :o

Obama Paying More Than Buffett as Bonds Show U.S. Losing AAA


Yep.  First Greece was downgraded, now Portugal has been downgraded to AA- ... and the dominoes are beginning to fall ...

Bloomberg:
QuoteGreece "is going to default at some point," and Europe's failure to answer that challenge will hurt the common currency, UBS Investment Bank's London-based deputy head of global economics, Paul Donovan, said in an interview on Bloomberg Radio. "If Europe can't solve a small problem like this, how on earth is it going to solve the larger problem, which is the euro doesn't work," he said.

Coopmv

#3918
March 24, 2010, 05:14:46 PM
DM,  The Chinese somehow think it is only the US that is having problems with job losses because of the cheap Chinese imports, which is quite laughable.  My sense is once the US takes a tough line, EU may just fall in line quickly.  Can China really afford to fight a two-front large-scale trade war?  I think not.  It will probably swallow hard to put up with some job losses due to trade sanctions instead of losing tens of millions jobs to retaliate ...

Pressure growing on China to revalue currency
Congress told US could gain up to 1.2 million jobs from Asian currency revaluations

Coopmv

#3919
March 24, 2010, 07:28:59 PM
DM,  Angela Merkel knows full well if Germany were to bail out Greece, her party will be severely punished at the next election.  She would rather have the IMF step in to do the dirty work ...

Frantic EU seeks solution to Greek debt crisis
European try to find solution to Greek debt crisis as euro slides, Portugal downgraded
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