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Daily Digest - Feb 11

Tuesday, February 10, 2009, 6:45 PM
  • Pink Slips At Wal-Mart HQ
  • UBS to Cut 2,000 Jobs After a Huge Loss
  • SIRIUS Bankruptcy
  • Boomers - your crisis has arrived
  • China Needs U.S. Guarantees for Treasury Bond Holdings, Yu Says (Hat Tip Homosapiens)
  • Russia Companies Asked by Banks to Hold Debt Talks
  • Four Bad Bear Markets, Down 1929-1932; S&P 500 1973-1974; 2000-2002; 2007-2009 (Update)
  • Wholesale Sales (Durable vs. Non-Durable Goods
  • Revolving Credit Free Fall
  • More...
  • Revolving Credit Free Fall (Article)
  • Fannie, Freddie Funding Needs May Pass $200 Billion, FHFA Says
  • FT's Wolf: U.S. Too "Politically Frightened" to Admit Truth About Banks, Part I (Hat Tip GThomson)
  • Embrace Your Inner Fear! (Video, Hat Tip GThomson)
  • Why Obama's new Tarp will fail to rescue the banks
  • 21 days to failure
  • Can We Fix the Banks, Help Homeowners, and Rebuild the Mortgage Markets? Can Do. (Hat Tip GThomson)
  • The Rorschach plan
  • Secretary Geithner Introduces Financial Stability Plan
  • "Fact" Sheet
  • The Financial Crisis Is Driving Hordes of Americans to Suicide (Hat Tip Yoshhash)
  • Cluster*** to the Poor House - The Death of Hope (Humor, little vulgar, skip if nesc.)
  • Solving the Economic Crisis (Humor)
  • Gun dealers experiencing shortages of bullets (Hat Tip Mike Pilat)
  • Recession? No, It's a D-process, and It Will Be Long (Hat Tip Heather)

Economy 

Pink Slips At Wal-Mart HQ? (WMT) 

Wal-Mart Stores Inc. (NYSE: WMT) was supposed to be a winner in the economic slide as the "trade down" shopping destination. It goes without saying that Wal-Mart has more than a few critics. Now it looks like it will get a few more employee relations problems. The reason: LAYOFFS. 

The Arkansas Democrat Gazette has reported that Wal-Mart has started layoffs to to the tune of 700 to 800 jobs in the Bentonville, Arkansas headquarters. The paper reports that the cuts are coming in merchandising, real estate, marketing, support, and some corporate functions. It also notes that it plans to move more employees to New York for its apparel operations.

700 or 800 may not sound like much for the size of the company. But this is out of 14,000 that work at the HQ. Out of some 2 million workers, any additional pressure on spending may only bring more cuts. That might only bring on more labor problems. That would be our guess any how as the company is under new management and has been cutting its new store openings.

This truly is worse for the economy than a zero-sum game if Wal-Mart has to start laying people off. That new "Save Money. Live Better." slogan may have to change to "Make Less. Spend Less." 

UBS to Cut 2,000 Jobs After a Huge Loss 

ZURICH -- Swiss banking giant UBS AG announced more staffing cuts at its investment-banking operation, saying it would cull more than 2,000 jobs as it reported the largest annual loss ever by a Swiss company. 

Only four months after turning to the Swiss government for a financial-aid package, the bank on Tuesday reported a larger-than-expected net loss of 8.1 billion Swiss francs ($6.96 billion) for the fourth quarter of 2008, bringing its loss for the entire year to 19.7 billion francs. UBS also said it would sharply reduce bonus payments as part of an agreement with Swiss regulators, paying out ... 

SIRIUS Bankruptcy (SIRI, SATS) 

Sirius XM Radio Inc. (NASDAQ: SIRI) is being quoted on TheStreet.com, New York Times, the WSJ, and elsewhere as either "filing for bankruptcy protection" or that it was "near to filing for bankruptcy protection." 

I had just returned a call to Michael Hartleib of SaveSIRIUS.org, a group he is leading against the company and its current path, as this news was coming across the news tape. Needless to say, Mr. Hartleib did not exactly sound too happy. That was why he was calling.

Sirius is part of our "companies that won't make it" for 2009, which is a list of 10 stocks that have operating business but may file for bankruptcy protection or worse. Bankruptcies are almost never any good for shareholders of common stock. Not unless they need a big tax write-off against capital gains.

Hartleib has also noted some issues about conflicts of interest over the SIRIUS debt purchases by EchoStar Corp. (NASDAQ: SATS). 

BOOMERS - YOUR CRISIS HAS ARRIVED 

"There is a mysterious cycle in human events. To some generations, much is given. Of other generations, much is expected. This Generation has a rendezvous with destiny." Franklin Roosevelt - 1936 

China Needs U.S. Guarantees for Treasury Bond Holdings, Yu Says (Hat Tip Homosapiens) 

Feb. 11 (Bloomberg) -- China should seek guarantees that its $682 billion holdings of U.S. government debt won't be eroded by "reckless policies," said Yu Yongding, a former adviser to the central bank. 

The U.S. "should make the Chinese feel confident that the value of the assets at least will not be eroded in a significant way," Yu, who now heads the World Economics and Politics Institute at the Chinese Academy of Social Sciences, said in response to e-mailed questions yesterday from Beijing. He declined to elaborate on the assurances needed by China, the biggest foreign holder of U.S. government debt.

Benchmark 10-year Treasury yields climbed above 3 percent this week on speculation the government will increase borrowing as President Barack Obama pushes his $838 billion stimulus package through Congress. Premier Wen Jiabao said last month his government's strategy for investing would focus on safeguarding the value of China's $1.95 trillion foreign reserves. 

Russia Companies Asked by Banks to Hold Debt Talks 

Russia's government and most companies and banks have accumulated sufficient foreign currency to cover about $135 billion of foreign corporate debt due this year, Aksakov said.

"The banking association isn't empowered to hold talks, it can make suggestions, but the creditors themselves would be responsible for restructuring," he said in an interview with Bloomberg Television today.

HSBC fell 2.9 percent and Deutsche Bank added 0.2 percent in European trading.

"People expect that part of these debts were from the European banking system," said Sebastien Barbe, a strategist at Calyon in Hong Kong, the investment banking unit of France's Credit Agricole SA. "You already have a very weak banking system in Europe. If you have these Russian issues, the next step would be questions about whether similar problems will come out of other eastern European countries."

Russia will enter a recession and run a federal budget deficit this year for the first time in a decade, according to the government. The ruble tumbled 35 percent against the dollar since August, as the central bank drained more than a third of the country's foreign-currency reserves to stem the decline.

Charts:

Four Bad Bear Markets, Down 1929-1932; S&P 500 1973-1974; 2000-2002; 2007-2009 (Update)

Wholesale Sales (Durable vs. Non-Durable Goods

Revolving Credit Free Fall

Revolving Credit Free Fall (Article) 

Inside ARM reports (bold mine): 

With banks freezing credit lines and the economy tanking, consumer credit in the U.S. declined in December 3.1 percent for the third straight month. It's the longest slide in consumer since 1991.

The Federal Reserve reported late Friday that overall consumer credit outstanding in the U.S. dropped by $6.6 billion in December, or at an annualized rate of 3.1 percent. The Fed's consumer credit report, called the G.19, does not include debt backed by real estate.

Most of the decline was in revolving credit, most commonly comprised of credit card debt. Revolving credit fell $6.32 billion, or 7.8 percent annualized (5.3% annualized over the quarter), to a total of $963.55 billion outstanding in December. In November, revolving credit declined 8.5 percent. 

Fannie, Freddie Funding Needs May Pass $200 Billion, FHFA Says 

Feb. 10 (Bloomberg) -- Fannie Mae and Freddie Mac, the mortgage-finance companies seized by regulators, may need more than the $200 billion in funding pledged by the U.S. government if the housing market continues to deteriorate, Federal Housing Finance Agency Director James Lockhart said. 

The companies' needs will depend largely on the direction of home prices, Lockhart said in an interview in Las Vegas yesterday. His comments followed statements from Fannie Mae in November and Freddie Mac Chairman John Koskinen last week that the government's funding commitment through 2009 may fall short of what the companies need to make good on their obligations.

"When we sized the amount in September, we obviously looked at stress tests and what was happening in the marketplace," Lockhart said. "There's been some significant events since then that weren't in our forecast."

The U.S. housing market lost $3.3 trillion in value last year and almost one in six owners with mortgages owed more than their homes were worth, according to a Feb. 3 report from Zillow.com. Following a record boom, home prices are down 25 percent on average since mid-2006 amid a tightening of lending standards and an economic recession, the S&P/Case-Shiller Composite 20-city price index shows.

FT's Wolf: U.S. Too "Politically Frightened" to Admit Truth About Banks, Part I (Hat Tip GThomson)

Embrace Your Inner Fear! (Video, Hat Tip GThomson)

Cluster*** to te Poor House - The Death of Hope (Humor, little vulgar, skip if nesc.)

Solving the Economic Crisis (Humor)

Why Obama's new Tarp will fail to rescue the banks 

Under the second view, a sizeable proportion of financial institutions are insolvent: their assets are, under plausible assumptions, worth less than their liabilities. The International Monetary Fund argues that potential losses on US-originated credit assets alone are now $2,200bn (€1,700bn, £1,500bn), up from $1,400bn just last October. This is almost identical to the latest estimates from Goldman Sachs. In recent comments to the Financial Times, Nouriel Roubini of RGE Monitor and the Stern School of New York University estimates peak losses on US-generated assets at $3,600bn. Fortunately for the US, half of these losses will fall abroad. But, the rest of the world will strike back: as the world economy implodes, huge losses abroad - on sovereign, housing and corporate debt - will surely fall on US institutions, with dire effects. 

Personally, I have little doubt that the second view is correct and, as the world economy deteriorates, will become ever more so. But this is not the heart of the matter. That is whether, in the presence of such uncertainty, it can be right to base policy on hoping for the best. The answer is clear: rational policymakers must assume the worst. If this proved pessimistic, they would end up with an over-capitalised financial system. If the optimistic choice turned out to be wrong, they would have zombie banks and a discredited government. This choice is surely a "no brainer".

The new plan seems to make sense if and only if the principal problem is illiquidity. Offering guarantees and buying some portion of the toxic assets, while limiting new capital injections to less than the $350bn left in the Tarp, cannot deal with the insolvency problem identified by informed observers. Indeed, any toxic asset purchase or guarantee programme must be an ineffective, inefficient and inequitable way to rescue inadequately capitalised financial institutions: ineffective, because the government must buy vast amounts of doubtful assets at excessive prices or provide over-generous guarantees, to render insolvent banks solvent; inefficient, because big capital injections or conversion of debt into equity are better ways to recapitalise banks; and inequitable, because big subsidies would go to failed institutions and private buyers of bad assets.

Why then is the administration making what appears to be a blunder? It may be that it is hoping for the best. But it also seems it has set itself the wrong question. It has not asked what needs to be done to be sure of a solution. It has asked itself, instead, what is the best it can do given three arbitrary, self-imposed constraints: no nationalisation; no losses for bondholders; and no more money from Congress. Yet why does a new administration, confronting a huge crisis, not try to change the terms of debate? This timidity is depressing. Trying to make up for this mistake by imposing pettifogging conditions on assisted institutions is more likely to compound the error than to reduce it. 

21 days to failure

Per Paul Kedrosky, Obama is out in the media trying hard to make nationalization of the money-center banks look impossible. so far from being impossible, it is necessary -- but it is becoming clearer now that the democrats will have to be dragged to a meaningful solution of this nation's financial and economic problems kicking and screaming like little children, while the financial system remains paralyzed and the economy falls into a deep depression for a lack of real leadership.

 

Can We Fix the Banks, Help Homeowners, and Rebuild the Mortgage Markets? Can Do. (Hat Tip GThomson) 

"The economic spiral starts and ends with housing. If we do not slow and stop the erosion of the ad valorem tax base in this country, we are going to have really serious problems. If you put the mortgage credit relationship and the servicing back into the hands of the local bankers who know the market and the people, we can save millions of home owners from foreclosure and dozens of banks from failure. We may never be able to resurrect the asset securitization market as it was, but we can stabilize the housing market and the local tax base by getting these assets back into the hands of bankers who understand how to manage credit. I've had transient customers along the Mexican border who would disappear for months at a time and then reappear at my office with six months of mortgage payments in cash. Only local bankers have these kind of relationships. You cannot manage a credit or really service a loan over the telephone. Give America's community bankers these toxic assets and we'll make the most of these credits."

The Rorschach plan 

An old joke from my younger days: What do you get when you cross a Godfather with a deconstructionist? Someone who makes you an offer you can't understand. 

I found myself remembering that joke when trying to make sense of the Geithner financial rescue plan. It's really not clear what the plan means; there's an interpretation that makes it not too bad, but it's not clear if that's the right interpretation. 

Secretary Geithner "Introduces" Financial Stability Plan

"Fact" Sheet

The Financial Crisis Is Driving Hordes of Americans to Suicide (Hat Tip Yoshhash) 

The body count is still rising. For months on end, marked by bankruptcies, foreclosures, evictions, and layoffs, the economic meltdown has taken a heavy toll on Americans. In response, a range of extreme acts including suicide, self-inflicted injury, murder, and arson have hit the local news. By October 2008, an analysis of press reports nationwide indicated that an epidemic of tragedies spurred by the financial crisis had already spread from Pasadena, California, to Taunton, Massachusetts, from Roseville, Minnesota, to Ocala, Florida. 

Gun dealers experiencing shortages of bullets (Hat Tip Mike Pilat)

Selling bullets may be the most secure job in Florida as long as supplies last.

After months of heavy buying, gun dealers across the state are experiencing shortages.

Some say it began with the election of President Barack Obama. Others say it's about the economic downturn or fear of crime. Whatever the reasons, ammunition has been selling like plywood and bottled water in the days before a hurricane.

"The survivalist in all of us comes out," said John Ritz, manager of East Orange Shooting Sports in Winter Park. "It's more about protecting what you have."

Demand for bullets is so strong that suppliers are restricting deliveries.

"Where we used to get 20 to 30 cases [in a shipment], we may get two to three cases now," said Vic Grechniw of Florida Ammo Traders in Tampa. "The supply just isn't there. . . . Everybody is pretty much rushing out to get their hands on whatever they can."

Most in demand is handgun ammunition, including 9 mm and .45-caliber for semiautomatic pistols and .38-caliber for revolvers. Clerks at local Walmart stores, including Apopka and Kissimmee, say those sizes, along with .22-caliber, are on back order at the chain's warehouses.

American gun owners buy about 7 billion rounds of ammunition yearly, according to the National Rifle Association. It has been warning its several million members that Obama favors raising taxes on bullets to make them prohibitively expensive.

"Anecdotal evidence certainly suggests that the demand for ammunition is continuing to increase, and that is certainly attributable to gun owners' concerns with the current administration," said Ted Novin, a spokesman for the National Shooting Sports Foundation, a trade association representing 4,700 members.

Recession? No, It's a D-process, and It Will Be Long (Hat Tip Heather) 

Where is the U.S. and the rest of the world going to keep getting money to pay for these stimulus packages? 

The Federal Reserve is going to have to print money. The deficits will be greater than the savings. So you will see the Federal Reserve buy long-term Treasury bonds, as it did in the Great Depression. We are in a position where that will eventually create a problem for currencies and drive assets to gold.

Are you a fan of gold?

Yes.

Have you always been?

No. Gold is horrible sometimes and great other times. But like any other asset class, everybody always should have a piece of it in their portfolio. 

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55 Comments

Davos's picture
Davos
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Re: Daily Digest - Feb 11

op

 

 

timmie-in-trouble.png

Knowing how he is invested, I can't help but wonder if this is Dick Cheny's art and what he does now that he is retired...

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Re: Daily Digest - Feb 11

Wholesale Sales (Durable vs. Non-Durable Goods)

More alcohol & drugs are yet another sign of depression for me...

More machinery... Does this includes weapons?

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Ruhh
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Re: Daily Digest - Feb 11
fujisan wrote:

Wholesale Sales (Durable vs. Non-Durable Goods)

More alcohol & drugs are yet another sign of depression for me...

More machinery... Does this includes weapons?

Machinery = Goverment? Tongue out

 

Wow. Been waiting for this story to start. I was wondering why Gold climbed so much today.

 

Davos's picture
Davos
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Re: Daily Digest - Feb 11

I posted this in yesturday's comments. Take care...

http://blogs.wsj.com/economics/2009/02/11/fed-looking-unlikely-to-buy-treasurys/

Used to be: "Inflate or die," I suppose they shortened it from 3 words to one.

Acceptance of a terminal disease or another hair brained Bernanke concoction? 

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Re: Daily Digest - Feb 11

US bank bosses acknowledge bailout bonus anger

Top executives of the biggest banks in the United
States have acknowledged public anger over the use of government
bailout money to pay bonuses and provide entertainment for staff.

Appearing before a congressional committee, the executives insisted
they did not line their own pockets with the public funds, and promised
to pay back the money as soon as possible.

The chief executive of Goldman Sachs, Lloyd C Blankfein, says bankers have to work hard to rebuild public trust.

The head of Citigroup has apologised for planning to buy an $80 million corporate jet at the height of the financial crisis.

- AFP

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Re: Daily Digest - Feb 11

Very good interview of Jim Rogers on Bloomberg TV this morning dicussing Geitner, bailouts, etc.

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Re: Daily Digest - Feb 11

Hello JoeManC:

Says it all, posted on the blog of the 11th, thank you for yet another great hat tip, take care 

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Re: Daily Digest - Feb 11
Quote:

China Needs U.S. Guarantees for Treasury Bond Holdings, Yu Says

How about the same guarantee for all the rest of us that are holding Treasury instruments?  Just make them all TIPS and include any devaluations in the inflation number used to keep the principal and interest rate whole. If China gets a guarantee then so should the US public.

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Re: Daily Digest - Feb 11
Quote:

 China Needs U.S. Guarantees for Treasury Bond Holdings, Yu Says

FT: 
China to stick with US bonds 
... Luo Ping, a director-general at the China Banking Regulatory Commission, said after a speech in New York on Wednesday that China would continue to buy Treasuries in spite of its misgivings about US finances. ... Mr Luo, whose English tends toward the colloquial, added: “We hate you guys. Once you start issuing $1 trillion-$2 trillion [$1,000bn-$2,000bn] . . .we know the dollar is going to depreciate, so we hate you guys but there is nothing much we can do.” ... 

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Re: Daily Digest - Feb 11

US gambles freedom on risky printing press policy
David Hirst
The Age
February 5, 2009

Andrew Linden helped research this article. David Hirst is a journalist, documentary maker,
financial consultant and investor. His column, Planet Wall Street, is syndicated by News
Bites, a Melbourne-based sharemarket and business news publisher.


The end of an unwritten, 15-year-old agreement brings great uncertainty.

IS THE US not just thinking but doing the unthinkable? Is the assumption that has
underpinned the world economy since China emerged as the new and great Asian
powerhouse and the buyer of US Treasuries over?

Do the actions of the US in repeatedly accusing China of currency manipulation and enacting
protectionist policies represent a deliberate move to press the economic nuclear button and
bring on "mutual assured destruction" (MAD) of the 15-year arrangement whereby China
provided the US with cheap consumer goods and purchased US securities and Treasury
bonds to prevent America's financial collapse?

The answer appears to be yes.

In what would be the most catastrophic and world-changing move in recent memory, the US
appears to be committed to replace China's purchase of its securities with printed money,
thereby moving to end the fundamental underpinnings that have governed relations between
the most two important economies of the world.

Steve Keen, from the University of Western Sydney, said yesterday the US treasuries auction
market was now a sideshow.

Associate Professor Keen said by way of evidence, the US money supply doubled between
1994 and 2008 and "Bernanke has doubled it again in just the past four months".

"The US has essentially abandoned conventional ways of raising money," he said.

Asked about US Treasury Secretary Tim Geithner's attack on China's currency manipulation,
Keen said that the rules of the game had now fundamentally changed and the US was, in
expanding its money supply, pursing a policy eerily similar to Fed policies that preceded the
Great Depression.

Keen, who last week was interviewed by The Wall Street Journal and is fast becoming a
world-recognised economic authority, outlined in his recent Debt Watch Report that
Bernanke's famous "helicopter drop doubling of base money will be impotent against the
US's credit crunch".

Most economists believe the US and China are bound irrevocably by US debt and China's
continued purchase of that debt. They assume the US, with 46 states insolvent or
approaching insolvency, will suffer immediate MAD if China ends the long financial
arrangement.

But with the US entering a period of deflation, its economic leadership appears to be doing
the unthinkable — going it alone and letting the electronic printing presses take care of the
huge sums required to keep the nation afloat. The consequences for the world economy are
incomprehensible as China's purchases of US treasuries underwrite the US's unquenchable
demand for money to service its multitrillion-dollar public debt, which President Obama said
recently would reach $US11 trillion ($A17 trillion) this year.

Faced with the huge sinkhole created by the financial meltdown and the prospect of deflation,
US Fed boss Ben Bernanke has been printing money so rapidly that the US is being flooded
with liquidity. This is beyond unprecedented.

Many Americans believe printing money can free the country from the suffocating embrace of
mutual dependence with China. In his blog earlier this week, Brad Setser from the US
Council on Foreign Relations, and one of the world's most respected China commentators,
outlined the US position: "Exchange rate policies can also influence the allocation of
resources across sectors. China's de facto dollar peg is an obvious example … it is hard for
me to believe that as much would have been invested in China's export sector if China had
had a different exchange rate regime …

"Those who attribute the growth of the past several years solely to the market miss the large
role the state played in many of the world's fast growing economies."

Setser and others close to policymakers are realising the boom in China may not be a rerun
of the Japanese and German postwar economic miracles but more akin to the creation of a
giant sweatshop for the benefit of Western companies and the Chinese Communist Party.
But this required US consumers to play their role as the linchpins. Now the linchpin has
broken. There is no way the old arrangement can continue and the US is realising the system
will end. By reverting to the printing press it can free itself from dependency on China.

The risk is massive inflation but that has never been a matter to concern Bernanke nor, it
seems, the team President Obama has assembled. And US debt can be paid with inflated
dollars. China is onto the tactic, which explains why it is keen to convert its dollars into iron,
coal and, I suspect, vast amounts of mineral wealth as well as property overseas. China must
act, however, while the US dollar is strong. Don't be surprised if the Chinalco deal is but the
first of many and keep your eyes on our resource stocks. There are many games being
played at a geopolitical level and many a twist and turn to come.
Davos's picture
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Re: Daily Digest - Feb 11

I'll post on the 12th's but this was better than 5am coffee, and I like my coffee!

http://www.youtube.com/watch?v=FLtieiyCFMw&eurl=player_embedded 

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Re: Daily Digest - Feb 11
Davos wrote:

... but this was better than 5am coffee, and I like my coffee!

Yes it is! ...  I don't drink coffee, but it sounds better than that warm Dr. Pepper that was coming out of your nose a few nights ago!

Cat

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Re: Daily Digest - Feb 11

Thank God I wasn't drinking coffee when I read that Cat, take care

_______________________________________________________

Hyman Minsky’s 7th/final bubble stage:

Stage seven – Revulsion

Sometimes, panic of the insiders infects the outsiders. Other times, it is the end of cheap credit or some unanticipated piece of news. But whatever may be, euphoria is replaced with revulsion. The building is on fire and everyone starts to run for the door. Outsiders start to sell, but there are no buyers. Panic sets in; prices start to tumble downwards, credit dries up, and losses start to accumulate. 

http://www.pacificviews.org/weblog/archives/003679.html 

Davos's picture
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Re: Daily Digest - Feb 11

Mad Science, Yahoo

Well, I see Yahoo Finance figured out the banks are insolvent, how long will it be before they figure out that the US is as insolvent as Enron was? 

...and I do believe they will care about BOM in the coming weeks (when it falls on it's collective but)

cat233's picture
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Re: Daily Digest - Feb 11
Davos wrote:

Thank God I wasn't drinking coffee when I read that...

Yes, thank God.  The other night I was enjoying a Dr. Pepper myself, and after reading your words, I almost had like results.

Would be nice if the congressman's attitude displayed in the video was always the
case, in all aspects of his representation of his constituents interest.  If there were term limits and the elected officials had X terms to get
their job done. I think we would be seeing medicine that was good for the country
and not just words that are going to get officials re-elected.
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Re: Daily Digest - Feb 11

Cat: Agreed. It's hard to prevent corruption when representatives know that they can stay in office for 30+ years.

I enjoyed watching the banksters get attacked by Congress, but the we also must recognize that the structure of our system imposes debt-growth. As resources limitations kick in, can we hardly be surprised that banks would start taking outrageous risks in the pursuit of the same growth the system demands? I could be wrong (and please let me know if I am), but I don't think a single politician has an understanding of the type of material that Albert Bartlett presents on exponential growth. Once you understand that, there's not much room to argue the merits of monetary expansion.

Cheers,

Mike

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Obama should have told us the whole sad truth

Mike,

I am trying to do what I can do, this morning I emailed Mr. Rollins CC information.  At least he isn't totally clueless.

http://www.cnn.com/2009/POLITICS/02/11/rollins.obama/index.html

By Ed Rollins
CNN
Contributor
Editor's note: Ed Rollins, who was
political director for President Reagan, is a Republican strategist who was
national chairman of former Arkansas Gov. Mike Huckabee's 2008 presidential
campaign. 

NEW YORK (CNN) -- President Obama
had his first prime-time news conference Monday, and 60 million viewers tuned
in.

They wanted to hear him and see him in action and hope that
things weren't as bad as they were hearing every day from the media and in their
hometowns.

He was glib, rambling, a little long-winded and very
defensive. But he is a talent and very likeable even when he is being serious.
And he had plenty to be serious about.

On numerous occasions, he made sure reporters and the
millions tuning in knew that he had inherited a mess, the Republicans weren't
helping him at all, and things were tough.

After spending hundreds of millions of dollars and traveling
thousands of miles over the past two years running for this office, did he think
he was going to get the big plane, the big house, the box at the Kennedy Center
and Camp David without the heavy lifting? Well, maybe not this heavy a load.

This is a president who has promised transparency. He
promised that we as a nation will know what our government is doing and what we
are spending. Just go to the Internet, and it will be there. But not quite
yet.

The president gave us a lot of rhetoric on Monday night.

Four million jobs will be created or saved, with 90 percent
of them in the private sector. He didn't tell us how. Just trust me, and we will
get you out of these tough times.

I know a president needs to be a cheerleader sometimes, but
right now, I want a truth-teller.

He said, "at this particular moment, with the private sector
so weakened by this recession, the federal government is the only entity left
with the resources to jolt our economy back to life. It is only government that
can break the vicious cycle where lost jobs lead to people spending less money
which leads to even more layoffs."

I ask, what resources does the federal government have? We
are broke, too!

Real transparency would have been walking to the podium and
saying, "Friends: This thing is a lot worse then I thought. Just like many of
you, we are way over our budget. Some of you bought houses you couldn't afford.
Many of you spent more money than you made and put the stuff you couldn't afford
on your credit cards. The banks were irresponsible, and Wall Street was greedy,
but I have to admit to you, the guys and gals over in the Congress have been
spending at record rates, too. And they still have a bunch of pet projects they
want to spend on, too. That's why this bill got bloated.

"And, oh, by the way, the $800 billion that Nancy Pelosi and Harry Reid want to spend
is money we don't have. The U.S. is broke just like you are, and the banks that
I have to borrow from are thousands of miles away in China. We are going to
spend $1 trillion-plus more than we take in this year in revenue, and next year
it will be $2 trillion. That's on top of the $10.8 trillion that we owe in
national debt.

"And if you don't think the banks have any money, the Federal Reserve is loaning them
trillions."

But he could have closed out that depressing little litany
by saying, "Together, we are going to get out of this thing!"

Obviously, our new president is still a stranger to us. We
like him. Many trust him. We all hope he will succeed. But we don't know a lot
about his management style or the people he picked as his team (except that a
few of them didn't pay all their taxes.)

But in the world of politics, you seldom get a second chance
to make a good impression.

The president's news conference was the beginning of the
selling process. It was a fair performance, and by the end, the stimulus bill
designed by Speaker Pelosi and Appropriations Chairman Dave Obey was owned by
him.

The new Treasury secretary was the man who was supposed to
lay out the plan to rescue the banks the next days. Secretary Tim Geithner's
performance Tuesday was a disaster, and his plan was nonexistent. And the market
tanked.

The Democrats will get their bill, and the president will
sign it quickly. More money will have been committed in a shorter period of time
than ever in our history.

It will be declared a great victory for the new team. And we
and our kids will be paying for it for a long time. I hope it works, because
there is no money to try again! We will quickly learn whether social engineering
really works and whether all these Keynesians are right.

The opinions expressed
in this commentary are solely those of Ed Rollins.

 

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Re: Daily Digest - Feb 11

I agree with term limits, but I think the way the Drudge Report pictured it was comically pointful. Here is the headline:

capt.2d083ae448fe47089cfb094d967b64ac.obama_flcd131.jpg?x=400&y=214&q=85&sig=V9NNw4apaorY1NeCpKLdpg--

THE BIG TAX BREAK: WORKERS GET $13 MORE A WEEK! 

Subliminal political message here? Huge airplane to fly one Democrat and we get enough to put 1/2 a tank of gas in our car.

Perhaps. But I think there is a bigger story: Something is broken, or someone is broke, morally and fiscally. 

I hate to say it but I don't know who is a bigger crook: The armed bank robber Congressman Caupano is referring to here

is in jail for robbing a bank with a gun, the "banksters" for getting "bailout" money (our tax bucks and Gawd I hate calling it that - because it is anything but a bailout) or Congressman Caupano and his gang of 535 for being so f&*(ing stupid for listening to Bernanke, Paulson and Geithner and giving them our dollars to "zombie-ize" the banks.

It should be criminal to be this stupid. The punishment should be a prefrontal lobotomy or tongue removal - both would impair them from jacking things up more, or from continuing to rob us and our kids and their kids.

The banks, and the U.S. of A. are broke.

Period.

5 trillion in income and 70-80 trillion in debt is nothing but insolvency. It is the same debt to equity ratio that Enron had before people realized there was a problem with Enron.

A "credit crisis" is a symptom of insolvency. Not being able to put 2+2 together is sympton of "Fuzzy Numbers"/Enron-esq cook books (GDP and off balance obligations, inflation figures, unemployment figures etc.) and pure f*&^ing stupidity.

Absolute MORONS! (Save for Paul and the handful like him). Absolute criminals whether by intention of PF stupidity.

It is one thing to be a crook and know it and own up to it (the blatent armed bank robber). It is another to be a crook and con money from tax payers (CEOs and the Madoff's of the world). But there is no excuse for stealing our money and ruining the country and and not even knowing it (Congress). I have more respect for the armed robber, at least that SOB has a shred of honesty about it. He storms in and says he is a robber and brandishes a weapon to prove it. I have slightly more respect for the CEO who knows he is conning the political system for financial gain, at least somewhere in his gut he knows he is a crook. But I have no respect for a crook who is too stupid to know he is a crook.

The video I posted is good, but in my not so humble opinion the joke is on Congressman Caupono and us. 

That's my rant for the day. 

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Re: Daily Digest - Feb 11
Davos... I enjoyed that rant, rant all you want!... I can see you don't
need coffee, Dr. Pepper.  I am on my way with a bottle of rum.
And you have cause for celebration, SOME of the economic news this morning
wasn't as bad as expected.
January Retail Sales +1.0% vs -0.8% consensus, prior revised to -3%
from -2.7%
January Retail Sales ex-auto +0.9% vs -0.4% consensus, prior
revised to -3.2% from -3.1%
Initial Claims 623K vs 610K consensus, prior revised to 631K from
626K
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Re: Daily Digest - Feb 11

I'm not very savvy with Global Economics, but I have a question;

What happens if all these junk assets and debts we're selling China turn out to be valueless?

What recourse does China have against us?

I don't know if that's been discussed, but it seems like it might be critically important.
Especially considering they have a military that numbers in the millions, and 1% arable land.

Cheers?

Aaron

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Re: Daily Digest - Feb 11

Cat, I hope those are not fuzzy numbers, :-(

 

545 PEOPLE
> By Charlie Reese
>
> Politicians are the only people in the world  who create
> problems and then
> campaign against  them.
>
> Have you ever wondered, if both the  Democrats and the
> Republicans are
> against  deficits, WHY do we have deficits?
>
> Have you  ever wondered, if all the politicians are against
>  inflation and
> high taxes, WHY do we have inflation and  high taxes?
>
> You and I don't propose a federal  budget.  The
> president does.
>
> You and I don't  have the Constitutional authority to
> vote on 
> appropriations. The House of representatives  does.
>
> You and I don't write the tax code,  Congress does.
>
> You and I don't set fiscal policy,  Congress does.
>
> You and I don't control monetary  policy, the Federal
> Reserve Bank does.
>
> One  hundred senators, 435 congressmen, one president, and
> nine Supreme
> Court justices  545 human beings  out of the 300 million
> are directly, legally, 
> morally, and individually responsible for the domestic
> problems that plague
> this country.
>
> I  excluded the members of the Federal Reserve Board
> because that problem
> was created by the  Congress.  In 1913, Congress delegated
> its  Constitutional
> duty to provide a sound currency to a  federally chartered,
> but private,
> central bank.
>
> I  excluded all the special interests and lobbyists for a
> sound reason. They
> have no legal  authority.  They have no ability to coerce a
>  senator, a
> congressman, or a president to do one  cotton-picking
> thing.  I don't care if they
> offer a  politician $1 million dollars in cash.
> The politician has the power to accept or reject  it. No
> matter what the
> lobbyist promises, it is the  legislator's
> responsibility to
> determine how he votes.
>
> Those 545 human  beings spend much of their energy
> convincing you  that what
> they did is not their fault.    They cooperate in this
> common con regardless
> of  party.
>
> What separates a politician from a  normal human being is
> an excessive amount
> of  gall.  No normal human being would have the gall
> of a Speaker, who stood up and criticized the  President
> for creating
> deficits.  The  president can only propose a budget.  He
> cannot force the Congress
> to accept it.
>
> The  Constitution, which is the supreme law of the land,
> gives sole
> responsibility to the House of  Representatives for
> originating and approving 
> appropriations and taxes.  Who is the  speaker of the
> House?  Nancy  Pelosi.  She
> is the leader of the majority  party. 
> She and fellow House members, not the president,  can
> approve any budget they
> want. If the president  vetoes it, they can pass it over
> his veto if  they
> agree to.
>
> It seems inconceivable to me  that a nation of 300 million
> can not replace
> 545 people  who stand convicted -- by present facts -- of
> incompetence and
> irresponsibility.  I can't  think of a single domestic
> problem that is not
> traceable  directly to those 545 people.  When you fully
> grasp  the plain truth that
> 545 people exercise the power of  the federal government,
> then it must follow
> that what  exists is what they want to exist.
>
> If the  tax code is unfair, it's because they want it
> unfair.
>
> If the budget is in the red, it's because  they want it
> in the red .
>
> If the Army &  Marines are in  IRAQ , it's because
> they  want them in IRAQ.
>
> If they do not  receive social security but are on an elite
> retirement  plan
> not available to the people, it's because they want  it
> that way.
>
> There are no insoluble government  problems.
>
> Do not let these 545 people shift the  blame to
> bureaucrats, whom they hire
> and whose jobs  they can abolish; to lobbyists, whose gifts
> and advice  they
> can reject; to regulators, to whom they give the  power to
> regulate and from
> whom they can take this  power.  Above all, do not let
> them con  you into the
> belief that there exists disembodied  mystical forces like
> "the economy,"
> "inflation," or  "politics" that
> prevent them from doing what they  take an oath to
> do.
>
> Those 545 people, and  they alone, are responsible.
>
> They, and they  alone, have the power.
>
> They, and they alone,  should be held accountable by the
> people who are their
>  bosses.
>
> Provided the voters have the  gumption to manage their own
> employees.
>
> We  should vote all of them out of office and clean up
> their  mess!
>
> Charlie Reese is a former  columnist of the Orlando
> Sentinel  Newspaper.
>
Greg

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Re: Daily Digest - Feb 11

Greg, I am SURE those were fuzzy numbers.

Aaron, I think some things should not be discussed including any military recourse from China... One area not open to transparency is the defense of this nation....Those who have the knowledge are not at liberty to tell us what they know.  This is one area in my opinion that shouldn't be open for discussion...  You are opening a can of worms.

Loose lips, sink ships.

 

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Re: Daily Digest - Feb 11

The Cult of the Presidency

Cato Institute
February 12, 2009

 http://www.infowars.com/the-cult-of-the-presidency/

Greg

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Re: Daily Digest - Feb 11

Ethanol, Just Recently a Savior, Is Struggling

A Savior?!

http://www.nytimes.com/2009/02/12/business/12ethanol.html?_r=2&ref=business

Greg

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Re: Daily Digest - Feb 11

Cat,

Good call.
All the same, it's worth some introspective consideration.

Cheers!

Aaron

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Re: Daily Digest - Feb 11

Davos wrote:

"I'll post on the 12th's but this was better than 5am coffee, and I like my coffee!"

WOW! That's even better than anything else I heard from a politician for a long time. What a refreshment!

Tom in Colo - Growth is not an option.

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Re: Daily Digest - Feb 11
Aaron Moyer wrote:

What recourse does China have against us?

I don't know if that's been discussed, but it seems like it might be critically important.
Especially considering they have a military that numbers in the millions, and 1% arable land.

Cheers?

Aaron

I'll only say this much - China has a military that numbers in the millions and no capability for forward deployment, airlift or sealift.

Otherwise Taiwan would not be independent.

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Re: Daily Digest - Feb 11
cat233 wrote:

Loose lips, sink ships.

So do submarines.......Cool

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Re: Daily Digest - Feb 11
Davos wrote:

It should be criminal to be this stupid. The punishment should be a prefrontal lobotomy or tongue removal - both would impair them from jacking things up more, or from continuing to rob us and our kids and their kids.

A "credit crisis" is a symptom of insolvency. Not being able to put 2+2 together is sympton of Fuzzy Numbers/Enron-esq cook books (GDP and off balance obligations, inflation figures, unemployment figures etc.) and pure f*&^ing stupidity.

Absolute MORONS! (Save for Paul and the handful like him). Absolute criminals whether by intention of PF stupidity.

That's my rant for the day. 

I like it - rant away Davos. Cat only lets me have little rants - otherwise we can't be in the same room while the news is on.

I think the news is interactive (hollering and yelling at the glossy-lipped idiots who are reading the teleprompters), Mrs. Dogs thinks I should just shut up and listen.

So I will take part in your ranting - if vicariously.

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Re: Daily Digest - Feb 11

agreed, I like this side of Davos.

On the tv news...I just can't handle the stupidity unless I'm at the gym and can watch it from a treadmill or something. When sitting at home, I personally feel I've just got better things to do with my time.

 

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Re: Daily Digest - Feb 11

Hello DIAP and Mike:

Marsh shuts me up pretty quick, ergo my rant here. At first post I thought Caupona was my hero of the day and then I got to thinking about it....the guy I think doesn't even know he is shop lifting and it is, as some economist are calling it (James Quinn I think) the heist of a century.

You guys sound like me with the news :) it is great to know I'm not alone. Cat, later on I'll change my liquid diet and get off some cafine. Take care 

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Re: Daily Digest - Feb 11
cat233 wrote:

Loose lips, sink ships.

 

 

So do submarines

Dogs

We called anything that floats "targets" when I was on a sub.

Greg

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Re: Daily Digest - Feb 11
gregroberts wrote:
cat233 wrote:

Loose lips, sink ships.

 

 

So do submarines

Dogs

We called anything that floats "targets" when I was on a sub.

Greg

Hey Greg.... 

You know what I call submariners.... Bubble-heads Tongue out

Ask Dogs.

Yeah, yeah, yeah.... I know you have heard it all before.

 

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Re: Daily Digest - Feb 11
Dogs_In_A_Pile wrote:
Aaron Moyer wrote:

What recourse does China have against us?

I don't know if that's been discussed, but it seems like it might be critically important.
Especially considering they have a military that numbers in the millions, and 1% arable land.

Cheers?

Aaron

I'll only say this much - China has a military that numbers in the millions and no capability for forward deployment, airlift or sealift.

Otherwise Taiwan would not be independent.

Agreed... China has traditionally focused on deterrence.  Though with their recent interest in aircraft carriers and such, who's to say that policy might not see a radical shift?...

- Nickbert

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Re: Daily Digest - Feb 11

Oh no!
TWO Submariners! They're surrounding us from the inside! =)

Nickbert, that was my intuition as well.
Scarcity of resource has spurred two world wars in the past...

Worth considering.

Aaron

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Re: Daily Digest - Feb 11

Question for all: Does anyone think we are going to get in another space race of sorts with China this time?

China is showing a lot of interest and advancement in this area, though there are mixed signals coming from the US as to how much money we are willing to spend on this. Last I heard, our Orion project has been cycling between various states of commitment and partial retreat.

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Re: Daily Digest - Feb 11
Mike Pilat wrote:

Question for all: Does anyone think we are going to get in another space race of sorts with China this time?

China is showing a lot of interest and advancement in this area, though there are mixed signals coming from the US as to how much money we are willing to spend on this. Last I heard, our Orion project has been cycling between various states of commitment and partial retreat.

Completely off topic here, but some fun trivia:

US spacemen are called astronauts.

Soviet/Russian spacemen are called cosmonauts.

What are Chinese spacemen called?

Virtual kewpie doll to the first correct poster.

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Re: Daily Digest - Feb 11

Greg -

What boats?  I think the more politically correct terminology when referring to skimmers is "Mark 48 or ADCAP absorption device"

Nickbert -

Aircraft carriers are one thing for local CVBG ops, but even then you need capable and sustainable blue water ASW. 

Power projection requires the above plus sealift and amphibious capability that China currently does not have.

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Re: Daily Digest - Feb 11

taikonauts

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Re: Daily Digest - Feb 11

Hey Greg.... 

You know what I call submariners.... Bubble-heads Tongue out

Ask Dogs.

Yeah, yeah, yeah.... I know you have heard it all before.

I've been called worse,some of the guys had ballcaps made that said "Bottom Gun", took people a while to figure it out. I was a NAVET on a Sturgeon Class, right behind the Quartermasters when we'd pull into port.

Greg

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Re: Daily Digest - Feb 11

Okay, if I knew how to post a picture, Greg (near Redding) would win the kewpie doll.

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Re: Daily Digest - Feb 11

Aaron,

That's my primary worry, that they are gearing up for a resource grab. Not necessarily looking to tangle with the US, but their smaller neighbors or unstable resource-rich nations elsewhere might be too tempting to pass on.  Their level of civil unrest is already getting worrisome, but it would pale in comparison to what they'd see if energy supplies and raw materials become scarce and their economy completely tanked.  So they may see it as their only option.  And even if they don't WANT to confront the US or other larger nations, war has a funny way of getting everyone involved.  Sigh...

Dogs,

I agree, I just used aircraft carriers as one example. Unfortunately they also seem to putting more emphasis on their sub program too (and I think it was last year in the news that a new Chinese underground nuclear sub base was found to exist?).  Can't speak for their amphibious and sealift capability and what they have there (I'm sure some of the secret squirrel folks know), but I wouldn't be the least bit surprised if they aren't making or attempting to make rapid progress in those areas too.  Perhaps even moreso than the US and most Western nations, they are stuck in that 'grow or die' trap, and will likely make every effort to stay on the 'grow' path.  So I don't worry about them doing something nuts NOW, but I do see that possibility happening in several years down the road once they develop the capabilities.  I really hope I'm wrong, but it seems a very likely path at this point.  Double sigh....

 - Nickbert

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Re: China

China might not have their own means of deployment but they do have friends!

The Shanghai Cooperation Organization (SCO) is basically a counter to NATO. There's enough info and speculation out there to keep anyone busy reading/speculating for a good while.

For those interested in Geo-strategic Politics etc. I'm partway reading Parag Khanna's book The Second World: Empires and Influence in the New Global Order and even though it already feels a little out of date it's quite good so far (at least to someone like myself that knows very little history. I
was never interested in it back in school but now I can't get enough of
it). Anyone else heard of him?

 

 

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Re: Daily Digest - Feb 11
nickbert wrote:

That's my primary worry, that they are gearing up for a resource grab. Not necessarily looking to tangle with the US, but their smaller neighbors or unstable resource-rich nations elsewhere might be too tempting to pass on.  Their level of civil unrest is already getting worrisome, but it would pale in comparison to what they'd see if energy supplies and raw materials become scarce and their economy completely tanked.  So they may see it as their only option.  And even if they don't WANT to confront the US or other larger nations, war has a funny way of getting everyone involved.  Sigh...

That is an interesting scenario - assuming SHTF and they do start spilling out of their borders in a land and resource grab.  However, societal disintegration continues on and erupts into full blown and violent civil disobedience.  At what point would they have to abandon their external pursuits to come back and quell the uprising?  And wouldn't that likely cause the collapse of everything Sino?

 

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Re: China
Ruhh wrote:

China might not have their own means of deployment but they do have friends!

The Shanghai Cooperation Organization (SCO) is basically a counter to NATO. There's enough info and speculation out there to keep anyone busy reading/speculating for a good while.

Ruhh - thanks for the link to the author's site.

I think "friends" may be a bit of a reach given the 300 years of mistrust and disagreement over the Russo-Sino, (Sino-Soviet) border.  Cooperative adversaries perhaps??  Russia and China still have around 50 divisions between them stationed at their common border full of troops waiting for a reason to use their Kalishnikovs or QBZs.

But politics makes for strange bedfellows so you never know how things are going to fall out. 

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Re: Daily Digest - Feb 11

It seems Judd Greg is withdrawing from his nomination as Commerce Secretary over differences regarding the stimulus: http://www.bloomberg.com/apps/news?pid=20601087&sid=a_SVQ5EHLUh4&refer=home

 The Bush Administration had way more than its fair share of firings, lawsuits and mysterious "resignations". It doesn't seem Obama is off to a great start in this respect: The results of Richardson, Daschle, Judd Gregg, and Geithner (though still in office) don't seem like they would enhance the faith people feel in the administration.

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Re: Daily Digest - Feb 11

I don't see China and Russia ever being "friends." They are each too large and proud to sacrifice much for the other.

That said, economic cooperation, or cooperation against a common threat seems more likely. Russia's got the oil and resources, China's got the manufacturing capability. They really could accomplish a lot if they could get along...

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Re: China
Dogs_In_A_Pile wrote:

But politics makes for strange bedfellows so you never know how things are going to fall out.

Maybe not so strange

WEF 2009: Russia and China blame West for economic crisis
http://www.telegraph.co.uk/finance/financetopics/davos/4381464/WEF-2009-Russia-and-China-blame-West-for-economic-crisis-Davos.html

This is curious too...

Russia defence spending soars
http://www.telegraph.co.uk/news/worldnews/europe/russia/4361792/Russia-defence-spending-soars.html

The Bear grows hungry after a short hibernation?

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Re: Daily Digest - Feb 11
Dogs_In_A_Pile wrote:

That is an interesting scenario - assuming SHTF and they do start spilling out of their borders in a land and resource grab.  However, societal disintegration continues on and erupts into full blown and violent civil disobedience.  At what point would they have to abandon their external pursuits to come back and quell the uprising?  And wouldn't that likely cause the collapse of everything Sino?

What if they drafted those millions of restless farmers into their already large standing army? Then they would have plenty of cannon fodder when "they do start spilling out of their borders in a land and resource grab."  Just a thought.  Undecided

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Re: China
Ruhh wrote:

Maybe not so strange

WEF 2009: Russia and China blame West for economic crisis
http://www.telegraph.co.uk/finance/financetopics/davos/4381464/WEF-2009-Russia-and-China-blame-West-for-economic-crisis-Davos.html

This is curious too...

Russia defence spending soars
http://www.telegraph.co.uk/news/worldnews/europe/russia/4361792/Russia-defence-spending-soars.html

The Bear grows hungry after a short hibernation?

Excellent point.  Easy to dismiss as typical international rhetoric, but the times, they are a changin'.  (Sorry Bob)

And could the bear of today be the new sleeping giant of 1941?

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