Saturday Reads Around The Internets for January 22, 2011

Welcome to the weekly roundup of great articles, facts and figures. These are the weekly finds that made our eyes pop.

Banks Want Pieces of Freddie & Fannie Mae

The New York Times reports Banks want to securitize mortgages with a government guarantee:

Wells Fargo and some other large banks would like private companies, perhaps even themselves, to become the new housing finance giants helping to bundle individual mortgages into securities — that would be stamped with a government guarantee.

The banks have presented their ideas publicly through trade groups. Housing industry consultants and people familiar with recent meetings at the Treasury Department say these banks view the government’s overhaul of the mortgage market as a potential profit opportunity. Treasury officials have met with executives from several institutions, including Wells Fargo, Morgan Stanley, Goldman Sachs and Credit Suisse, according to a public listing of the meetings.

Incredible, instead of regulating derivatives which caused the Financial Crisis, banks now want to make them and get the government to guarantee them.

We Gives Businesses Our Money, They Move to China

The American People Are Not At The Table, China Is


As CEOs descend to pay tribute to China in the White House and all Hail the Chief at a Celebrity filled state dinner, the American people are once again left out in the cold. Literally, Barack Obama denies China has captured American manufacturing and our jobs along with it.

Obama and Hu greeted the CEOs in a room in the Eisenhower Executive Office Building (the mammoth building next to the White House that looks like a Victorian-era hotel) and made a few remarks before leaving for their presser.

“I think our goal here today was to make sure that we break out of the old stereotypes that somehow China is simply taking manufacturing jobs and taking advantage of low wages,” thereby straining the U.S. employment base, Obama said. “The relationship is much more complex than that, and it has much more potential than that.”

“I also have a message to American entrepreneurs,” Hu added. “That is, we welcome you as companies to China….We will, as always, try to provide a transparent, just, fair, highly efficient investment climate to U.S. companies and other foreign companies.”

Nice huh? China wants what is left of American innovators. Obama rolls out the red carpet to have a meet and greet.

If You Can't Build an Economy, Steal One

The United States International Trade Commission released a report on China's intellectual property rights infringement against U.S. firms. To no surprise, the report describes how China's refuses, isn't capable to either enforce U.S. intellectual property rights and in some cases, outright steals them.

Infringement of intellectual property rights (IPR) in China reduces market opportunities and undermines the profitability of U.S. firms when sales of their products and technologies are undercut by competition from illegal, lower-cost imitations.

To make matters worse, the Chinese courts are a hydra of rules and for small companies it is simply too expensive to try to do anything about the latest rip off.

China also enacted indigenous intellectual property policies, which is a glorified way of requiring advanced R&D be done locally in order to be recognized. Imagine (the good news for U.S. workers), if the United States required all advanced R&D to be done locally and by Americans to be considered valid. That's what China is doing.

“Indigenous innovation” policies, which promote the development, commercialization, and purchase of Chinese products and technologies, may also be disadvantaging U.S. and other foreign firms and creating new barriers to foreign direct investment (FDI) and exports to China.

Remember Those Green Jobs? Might Label Them Made in China

Remember all of those green jobs hyped up during campaigns that would save the economy?

Remember how we learned 84% of Stimulus money for green jobs went offshore?

We have a new added dimension. China is subsidizing it's green industries unfairly.

The U.S. Steelworkers made a trade compliant about China and the Obama administration took it on:

All praise from here for President Obama’s courageous decision Friday to proceed with an investigation of China’s opportunistic and illegal trade practices in the clean energy sector. Those of us dedicated to supporting U.S. workers, U.S. jobs and U.S. manufacturing owe him an enormous debt of gratitude.

The Administration deserves a tremendous amount of credit for considering this case on its merits, rather than letting some overarching philosophy dictate the outcome. Demonstrating a willingness to challenge China’s cheating could make a huge difference for American workers and businesses in the clean energy manufacturing sector. And if the Administration’s efforts with China are successful, the ultimate result will be more American jobs.

China Raises Rates, the World Freaks Out

China raised rates by a quarter percent. The move made headline news, currencies jumped, stocks tanked. Do we have yet another freak out over nothing? Or is it more China holds the globe's economy by the short hairs?

Firstly, the interest rate was about their housing market, which is overheated and to curb inflation, which has risen the most in 2 years.

China’s central bank unexpectedly announced Tuesday that it would raise interest rates for the first time in nearly three years, apparently in the hopes of dampening inflation and cooling off this country’s hot property market.

MarketWatch is reporting the dollar jumped 1.4% against a basket of currencies.

The U.S. dollar jumped 1.4% against a basket of currencies on Tuesday as a rate hike by China fueled worries that the world’s fastest growing economy was trying to slow down

The sudden interest rate increase happened at the same time The World Bank issued a new report, East Asia Pacific Update and China's GDP and CPI numbers are due out this week. The World Bank expects China's GDP to be 9.5% this year.