Iraq is nearly over. BTW we won.

[tw]

Originally Posted by xoxoxoBruce

I think he's referring to the fact that China has bought a large share of the US government bonds used to finance the military.

China has long believed they were being helpful by returning boatloads of dollars to America by buying US government bonds. Unfortunately, this has further made Cheney, et al feel that massive deficits don't matter. If China did not buy so much American debt, then Cheney, et al would have to come to grips with a government without cash.

Well, the Highway Trust Fund has already been so depleted and having trouble meeting next month’s payments. States are complaining that Highway fund payments are no longer arriving in a timely manner. Even with China, et al massively buying American government debt, the government was still having cash flow problems in some locations. What happens if foreigners stop financing the George Jr administration? Well what do we stop funding? Infrastructure and education - or troops on the other side of the world?

The reason that George Jr (Cheney) could spend like drunken sailors? China, et al made Enron style accounting appear to be balanced. Without China, et al, the American government could not spend $2 trillion to bail out Wall Street.

[xoxoxoBruce]

Originally Posted by tw

...the American government could not spend $2 trillion to bail out Wall Street.

Really, is that what the final tab will be?

[tw]

Originally Posted by xoxoxoBruce

Really, is that what the final tab will be?

It's currently just under $1trillion. This is what happens when accounting standards and regulation enforcement change to make Enron, et al acceptable and when government throws money at elite member of the economy (ie tax cuts, welfare to Halliburton) to make the economy look good.

Why not just pay everyone to rip up and replace their front lawn every year? It would have accomplished this same thing but made the little people richer.

BTW, the stock market goes down the year after a new Republican president gets elected. It happens every time. Can things get worse?

[glatt]

Originally Posted by tw

Can things get worse?

They can always get worse.

[Shawnee123]

Originally Posted by tw

China has long believed they were being helpful by returning boatloads of dollars to America by buying US government bonds. Unfortunately, this has further made Cheney, et al feel that massive deficits don't matter. If China did not buy so much American debt, then Cheney, et al would have to come to grips with a government without cash.

Well, the Highway Trust Fund has already been so depleted and having trouble meeting next month’s payments. States are complaining that Highway fund payments are no longer arriving in a timely manner. Even with China, et al massively buying American government debt, the government was still having cash flow problems in some locations. What happens if foreigners stop financing the George Jr administration? Well what do we stop funding? Infrastructure and education - or troops on the other side of the world?
The reason that George Jr (Cheney) could spend like drunken sailors? China, et al made Enron style accounting appear to be balanced. Without China, et al, the American government could not spend $2 trillion to bail out Wall Street.

bold text mine

My question is, and I am starting out professing I am no expert on this subject, what happens when China calls in the loans? Are we really immune to a takeover? Will China own us?

Also, why did everyone in the know walk around with their heads up their asses until the crisis got THIS BAD? Why is this typical of the Bush administration? Until things hit rock bottom, they're counting birds in the sky or something.

[tw]

Originally Posted by Shawnee123

My question is, and I am starting out professing I am no expert on this subject, what happens when China calls in the loans? Are we really immune to a takeover? Will China own us?

They are not loans. For example, when America was on the verge of fiscal responsibility, we stopped selling 30 year bonds. But now that we must mortgage America's future to pay for fiascos (ie tax cuts to the rich, 50% of companies paying no taxes, “Mission Accomplished”), the Chinese, et al are buying America’s 30 year bonds.

Bond's are not mortgages. A bond promised to pay the holder years or decades later. However, China can choose to sell those bonds to others.

A more serious problem is so many American dollars held in overseas banks. What happens if the world decides to no longer buy oil in dollars? Suddenly the dollar has even less value. What happens when countries such as China fear the American dollar is overvalued? They dump dollars causing same problems.

Some say the lower dollar creates more American exports. They also forget that most of those exports are dependent on imports that would cost more. What would result is massive inequities in the American economy as businesses constantly change prices or scramble for new suppliers or customers.

Confused? Well it gets even more complex. This is only a snapshot of chaos should the American economy suddenly have less value to foreign dollar holders.

Those maybe three American companies every week being sold to foreigner? Just like in the 1970s, America had to sell itself to pay for the party and resulting hangover. Back then, the world's third largest industrial base was American owned foreign industries. We had to sell them off to pay for our fiscal mismanagement. What do we sell off this time?

Snapshots of what might happen. Appreciate why deficits do matter after Cheney is long gone. Many will forget to blame the economic hardships on Cheney just as so many forgot to blame Nixon and other bad management in 1979.

[Pico and ME]

Originally Posted by Shawnee123

bold text mine
Also, why did everyone in the know walk around with their heads up their asses until the crisis got THIS BAD? Why is this typical of the Bush administration? Until things hit rock bottom, they're counting birds in the sky or something.

I don't believe for one whit that they were clueless. In fact, I believe that they knew the risk (of deregulating the games that helped to create this mess) and had this back-up plan ready to go. Wall Street is so deeply embedded in our government that they feel they can pretty much do as they please.

I am in no way whatsoever an expert on these matters. This opinion is just my gut reaction. But tell me...when they started to dish out thousands of ARM's to low income people, didn't they know what was going to happen? That must be why these 'assets' were sold off so quickly.

[Shawnee123]

Originally Posted by Shawnee123

bold text mine

My question is, and I am starting out professing I am no expert on this subject, what happens when China calls in the loans? Are we really immune to a takeover? Will China own us?

Also, why did everyone in the know walk around with their heads up their asses until the crisis got THIS BAD? Why is this typical of the Bush administration? Until things hit rock bottom, they're counting birds in the sky or something.

Originally Posted by Pico and ME

I don't believe for one whit that they were clueless. In fact, I believe that they knew the risk (of deregulating the games that helped to create this mess) and had this back-up plan ready to go. Wall Street is so deeply embedded in our government that they feel they can pretty much do as they please.

I am in no way whatsoever an expert on these matters. This opinion is just my gut reaction. But tell me...when they started to dish out thousands of ARM's to low income people, didn't they know what was going to happen? That must be why these 'assets' were sold off so quickly.

Absolutely. Note the "in the know" portion of my post. They chose to walk around with their heads up their asses and only acknowledge any problems when it has become so big that even the typical non-financial American notices it's effed up. They KNEW KNEW KNEW they would get bailed out no matter how badly they effed it up. Fuck the rest of us, is exactly what happens.

[Pico and ME]

Originally Posted by Shawnee123

Note the "in the know" portion of my post. .

Yup, I was agreeing with you...

(Just sayin just in case)

[tw]

Originally Posted by Shawnee123

They KNEW KNEW KNEW they would get bailed out no matter how badly they effed it up.

Getting bailed out was not even in their mind. As America graduates more bean counters and less product people, this mindset of decisions based on spread sheets sees no risk.

Our current administration contributed massively to this. For example, previously, investment banks could only hold 12 times debt for one dollar. They got the administration to permit 30 dollars debt for one dollar. Some may have been in the $40 debt to $1 equity. Why? This administration believed the economy was healthy only because spread sheets showed higher profits. That is the myth even promoted by Carly Fiorina in HP - or why bean counters make the worst leaders in industry and government.

NINJA - issuing mortgages without any Income or Job Apparent? That too comes from new rules due to a myth that all deregulation is good. Where regulations must be largest are where (historically) the greediest and dumbest congregate. Finance industry. Look sometime in the WSJ at the full page of stock brokers prosecuted every month. Criminal mindset is highest among these people which is also why every stockbroker earns well over $200,000 annually. Bean counters doing no work (No Income No Job Apparent) were making massive incomes.

They knew nothing because they did not have to know. Unfortunately, the people who created this mess will mostly walk away richest. That stock broker that does almost nothing complains that he lost 40% in this crash? So now he is worth $60million instead of $100million. Woe is he?

[xoxoxoBruce]

Originally Posted by tw

Getting bailed out was not even in their mind. As America graduates more bean counters and less product people, this mindset of decisions based on spread sheets sees no risk.

But shouldn't these trained bean counters, more than anyone, see the risk of the voodoo acounting practices that have pervaded Wall Street?

[tw]

Originally Posted by xoxoxoBruce

But shouldn't these trained bean counters, more than anyone, see the risk of the voodoo acounting practices that have pervaded Wall Street?

Those trained bean counters were doing voodoo accounting because they could and because it was ordered by top management. Without any law enforcement to help them say "No", then bean counters even in AT&T, MCI, Enron, etc all had no choice but pervert the spread sheets. Yes, even AT&T was on the verge of bankruptcy when Sandy Weil was discretely told this by a lesser AT&T executive that AT&T could not meet their short term loan obligations.

BTW, how to get promoted? I will never forget that corporate president on the deck, while drunk, saying "____ makes the spread sheets say what they have to say." ____ knew why he had the #2 job. 85% of all problems are ...