China violates global trade rules by requiring automakers operating there to buy components from local suppliers or face penalties, the World Trade Organization ruled on Friday.
Skip to next paragraph
The decision, issued in Geneva on a complaint brought by the European Union, the United States and Canada, is the first time China has lost a case since it joined the global trade arbiter in 2001
Note this is the first time China has lost.
Now read the last line in the article:
In April 2005, China began a system of levying tariffs on auto parts based on the amount of imports in the complete vehicle. Automakers must register with Chinese authorities and provide detailed information on the quantity and value of foreign parts used in their vehicles.
Yup, according to India, workers are just commodities to be traded and they are demanding unlimited guest worker Visas and calling any controls a barrier to trade.
Call it a positive effect on the falling US Dollar. Along with an increase activity by domestic manufacturers, foreign companies are now expanding their operations here in the US. Now, yes I understand that ultimately the money goes back overseas, but they are hiring folks who needed jobs. To me, that last part is what counts.
It's official, Toyota will make the Prius in the US!
Developing countries and food exporters from rich and poor nations called on Sunday for the United States and European Union to open up their farm markets and eliminate trade-distorting subsidies
and love this one:
The various alliances among the WTO's 152 members, from the Cairns group of food exporters to the African, Caribbean and Pacific (ACP) countries met on Sunday to plot their strategy
Banks holding volatile deposits gathered by third parties may be charged higher premiums to bolster the fund used to insure deposits at failed banks, the head of the Federal Deposit Insurance Corp said on Friday.
If I simply showed you the following graph of a stock market losing nearly 60% of its value in 9 months, you'd probably conclude that a bubble had burst, and that the country whose companies it represented was probably in for some big Hurting:
So why has China been immune from such analysis? Presumably because the "story" behind China's growth is so compelling. Just about everybody seems to agree that China is the emerging economic world superpower.
Well, it's difficult to imagine now what life would be like without the internet, and yet that didn't stop the dot-bomb crash of 2000-2002. And the Mississippi Land Bubble was based on the accurate belief that what is now the US midwest would someday be the breadbasket of the world. Unfortunately they were off by 150 or so years.
In The 1920s Credit Bubble, I explained how a credit binge gave rise to serial bubbles in housing, durable consumer goods, and the infamous stock bubble of the 1920s. Last week in The Panic of 2008: a Turning Point I gave a big picture overview of how our current credit crunch is unfolding. At that time I pointed out that there were some important differences between our credit crunch, and the collapse of the 1920s credit bubble into the Great Depression. The goal of this diary is to peer into our near future by means of a chronological examination of how the apparently mild if abrupt downturn that began in late 1929 transformed into a much more serious downturn that ultimately snowballed into the Great Depression, during the year following the stock market crash, 1930.
I. Introduction
Imagine it is a time like now, where there has been a remarkable credit binge that has ended in dramatic fashion, with the stock market suddenly crashing and losing 1/3 of its entire value. Consumers are saddled with debt, as are many who speculated on the newest baubles on offer by Wall Street. The assets pledged as collateral to back up the loans that went to buy both the consumer and financial baubles is caught in a vicious downward spiral. Eventually, and very soon, all of this bad debt is going to have to be liquidated, and both debtors and creditors may go under as a result.
The Economist has a new article out, End of Illusions. It goes over the history of Freddie Mac/Fannie Mae, how they operate and is implying the US financial system is a house of cards. (or in this case, Turtles propping up the world analogy, sorry Hindus!)
They (Freddie Mac, Fannie Mae) were set up (see article) to provide liquidity for the housing market by buying mortgages from the banks. They repackaged these loans and used them as collateral for bonds called mortgage-backed securities; they guaranteed buyers of those securities against default.
Eventually the unsustainable will end. It's an immutable law of both physics and economics. For the American dollar, it appears that this day of reckoning is approaching quickly.
Merrill Lynch has warned that the United States could face a foreign "financing crisis" within months as the full consequences of the Fannie Mae and Freddie Mac mortgage debacle spread through the world.
Recent comments