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China's About to Give Global Finance the Chance of a Lifetime

37 points by devy 8y ago

EwanG 8y ago
So I'd go read this, except that Bloomsburg seems to have decided to go the NYT and WSJ route - which probably wouldn't bother me if they weren't $30+ dollars a month.
- deleted 8y ago
  [deleted]
bsder 8y ago
So, basically China has realized that their finance sector is a pile of fraud and they're looking to find suckers to pawn it off onto. Then they will "repurchase in the name of national security", at significant state discount, the ones with good health and leave everybody else holding the bag. Good for them. Unfortunately, our "too big to fail" banks are likely to purchase large tranches of this garbage.
- mistermann 8y ago
  You can hardly blame our banks from licking their licks at the prospect of this...if all goes well they can make huge profits. If it's a debacle, they can get bailed out by the taxpayers again, followed shortly thereafter by giant bonuses for amazing performance recovering from the massive losses to massive (taxpayer funded) profits. Will be interesting to see if any voices of concern make it outside of internet forums.
  - adventured 8y ago
    The bailouts have been a taxpayer bonanza of profit in fact. It's already over $350 billion, including the TARP profits. Taxpayers made money on the bank bailouts. TARP was a profitable program, generating $15.6 billion in a short amount of time. As a consequence of that mess, the US banking system was brought under considerably tighter control and oversight of the Fed. America's banks are now the strongest - by far - in the world, and are highly capitalized. The overall bailouts, which included home owners, and far exceeded the bank bailouts by about 30 fold, produced closer to $350 billion in 'profit' for the taxpayer. Fannie and Freddie have printed tens of billions in profit for the taxpayer and continue to. US taxpayers received the largest bailout in world history: the trillions of dollars the Fed spent to stabilize the housing market, which is the foundation to the $100 trillion in US household assets. The Fed removed vast amounts of junk mortgages from the market and immediately began providing a base for the housing market to recover from. "TARP, which peaked at $411 billion despite having been authorized to spend $700 billion, was less than 3 percent of taxpayers’ bailout exposure, which totaled $14 trillion" "The actual taxpayer profit on the bailout is about $350 billion" https://www.washingtonpost.com/business/economy/bailout-highly-profitable-for-taxpayers-when-you-look-at-the-right-numbers/2015/01/01/dc2a05a6-8fa5-11e4-a412-4b735edc7175_story.html https://www.washingtonpost.com/business/economy/bailout-high...
    - patrickg_zill 8y ago
      No. (source to follow) What is the daily interest, at even 0.25% annually, on $16 Trillion USD? https://www.forbes.com/sites/traceygreenstein/2011/09/20/the-feds-16-trillion-bailouts-under-reported/#3f22e55e26b0 https://www.forbes.com/sites/traceygreenstein/2011/09/20/the... Is my math correct? Over $100 Million USD per day in interest, even at 0.25% per year simple interest? https://www.wolframalpha.com/input/?i=0.0025+*+16+trillion+%2F+365.25 https://www.wolframalpha.com/input/?i=0.0025+*+16+trillion+%...
      - thedailymail 8y ago
        It turns out that $110 million per day yield $350 billion in about 8.7 years – not too far from when TARP funds were distributed (around 9.5 years ago) https://www.wolframalpha.com/input/?i=350+billion%2F110+million%2F+365.25 https://www.wolframalpha.com/input/?i=350+billion%2F110+mill...
        patrickg_zill 8y ago
        Are you making this your argument?
    - mistermann 8y ago
      On one hand yes, however: a) this is because it turned out ok, which was far from certain. Success or failure, the banks win, as usual. b) this completely overlooks the harmful distortions in the overall economy from massive injections of liquidity and negative real interest rates for a decade. This is not "no big deal". This (now) seems to be less of a problem in the US, and you guys never reached the heights of distortion we're enjoying in Canada, but in our major cities, we have an entire generation of people who will most likely never be able to afford a home (or feel secure enough to have children), at least not proportional to their income on a historic basis. It's easy to hand wave this away with statistics, but it's a real problem. Otherwise, why not just print, print, print our way to riches for everyone?
- daxfohl 8y ago
  So let's put our money into bitcoin! Oh wait, the mining was all financed by misc China loans as well. Proof of wor...corruption?
  - adventured 8y ago
    Bitcoin is a meaningless fraction of global finance. Less than 0.1%. It's also a meaningless fraction of finance in the US and China. I fail to see how it's relevant at all to the discussion.
- madshiva 8y ago
  Like your bank is not fraud too...
deleted 8y ago
[deleted]
thisisit 8y ago
And much vigilance is required too. Timing of the documentary "The China Hustle" couldn't be more perfect: https://www.youtube.com/watch?v=55892jT06aI https://www.youtube.com/watch?v=55892jT06aI

37 points by devy 8y ago

So I'd go read this, except that Bloomsburg seems to have decided to go the NYT and WSJ route - which probably wouldn't bother me if they weren't $30+ dollars a month.

deleted 8y ago
[deleted]

bsder 8y ago

So, basically China has realized that their finance sector is a pile of fraud and they're looking to find suckers to pawn it off onto. Then they will "repurchase in the name of national security", at significant state discount, the ones with good health and leave everybody else holding the bag. Good for them. Unfortunately, our "too big to fail" banks are likely to purchase large tranches of this garbage.

mistermann 8y ago
You can hardly blame our banks from licking their licks at the prospect of this...if all goes well they can make huge profits. If it's a debacle, they can get bailed out by the taxpayers again, followed shortly thereafter by giant bonuses for amazing performance recovering from the massive losses to massive (taxpayer funded) profits. Will be interesting to see if any voices of concern make it outside of internet forums.
- adventured 8y ago
  The bailouts have been a taxpayer bonanza of profit in fact. It's already over $350 billion, including the TARP profits. Taxpayers made money on the bank bailouts. TARP was a profitable program, generating $15.6 billion in a short amount of time. As a consequence of that mess, the US banking system was brought under considerably tighter control and oversight of the Fed. America's banks are now the strongest - by far - in the world, and are highly capitalized. The overall bailouts, which included home owners, and far exceeded the bank bailouts by about 30 fold, produced closer to $350 billion in 'profit' for the taxpayer. Fannie and Freddie have printed tens of billions in profit for the taxpayer and continue to. US taxpayers received the largest bailout in world history: the trillions of dollars the Fed spent to stabilize the housing market, which is the foundation to the $100 trillion in US household assets. The Fed removed vast amounts of junk mortgages from the market and immediately began providing a base for the housing market to recover from. "TARP, which peaked at $411 billion despite having been authorized to spend $700 billion, was less than 3 percent of taxpayers’ bailout exposure, which totaled $14 trillion" "The actual taxpayer profit on the bailout is about $350 billion" https://www.washingtonpost.com/business/economy/bailout-highly-profitable-for-taxpayers-when-you-look-at-the-right-numbers/2015/01/01/dc2a05a6-8fa5-11e4-a412-4b735edc7175_story.html https://www.washingtonpost.com/business/economy/bailout-high...
  - patrickg_zill 8y ago
    No. (source to follow) What is the daily interest, at even 0.25% annually, on $16 Trillion USD? https://www.forbes.com/sites/traceygreenstein/2011/09/20/the-feds-16-trillion-bailouts-under-reported/#3f22e55e26b0 https://www.forbes.com/sites/traceygreenstein/2011/09/20/the... Is my math correct? Over $100 Million USD per day in interest, even at 0.25% per year simple interest? https://www.wolframalpha.com/input/?i=0.0025+*+16+trillion+%2F+365.25 https://www.wolframalpha.com/input/?i=0.0025+*+16+trillion+%...
    - thedailymail 8y ago
      It turns out that $110 million per day yield $350 billion in about 8.7 years – not too far from when TARP funds were distributed (around 9.5 years ago) https://www.wolframalpha.com/input/?i=350+billion%2F110+million%2F+365.25 https://www.wolframalpha.com/input/?i=350+billion%2F110+mill...
      - patrickg_zill 8y ago
        Are you making this your argument?
  - mistermann 8y ago
    On one hand yes, however: a) this is because it turned out ok, which was far from certain. Success or failure, the banks win, as usual. b) this completely overlooks the harmful distortions in the overall economy from massive injections of liquidity and negative real interest rates for a decade. This is not "no big deal". This (now) seems to be less of a problem in the US, and you guys never reached the heights of distortion we're enjoying in Canada, but in our major cities, we have an entire generation of people who will most likely never be able to afford a home (or feel secure enough to have children), at least not proportional to their income on a historic basis. It's easy to hand wave this away with statistics, but it's a real problem. Otherwise, why not just print, print, print our way to riches for everyone?
daxfohl 8y ago
So let's put our money into bitcoin! Oh wait, the mining was all financed by misc China loans as well. Proof of wor...corruption?
- adventured 8y ago
  Bitcoin is a meaningless fraction of global finance. Less than 0.1%. It's also a meaningless fraction of finance in the US and China. I fail to see how it's relevant at all to the discussion.
madshiva 8y ago
Like your bank is not fraud too...

deleted 8y ago

[deleted]

thisisit 8y ago

And much vigilance is required too. Timing of the documentary "The China Hustle" couldn't be more perfect: https://www.youtube.com/watch?v=55892jT06aI https://www.youtube.com/watch?v=55892jT06aI