... before, and have not "stopped buying" Treasuries as an "attack" now.

Those make for far more dramatic headlines ... but the Chinese have been pegging their currency at a discount on foreign exchange markets for over twenty years now, and this is just more of the same.

When the Chinese were running massive trade surpluses, the normal effect of that would be to run up their exchange rate, which they prevented by creating Yuan/Renminbi and buying foreign exchange with it. That was the official purchases of the US$.

Now, the Chinese have a much smaller trade surplus, as exports have fallen and, with domestic focused stimulus, imports have continued to rise. So the pegged exchange rate is much closer to where the floating exchange rate would be, and there is very little need to buy foreign exchange to maintain their peg.

In the Chinese world, after all, the United States is not the center ... China is.

The big shock was not this last week ... it was several years ago when China shifted their peg from a US$ peg to a peg against a "basket" of currencies. That allows them to shift away from the US$ and into the Euro and/or Yen as their main reserve currencies by a series of very small incremental moves, with no single move dramatic enough to attract attention.

But of course, since understanding that shock requires something more than following headlines, its not something we are likely to hear about on the floor of Congress.

There is a host of "policy" at conferences which talk about "global migration" as a "win-win". I'm not making this up.

They completely ignore, communities, family, personal life, uprooting people, national boundaries, stability and the financial toll that takes.

They push continually for this idea of "trading people" as guest workers through trade agreements and "immigration reform" to allow 100% open borders or free movement of people. Even more distressing, they try to spin this as being "all good" for workers.

IBM just fired a ton of people and said they could have jobs....if they moved to India AND took Indian wages....

now this is with a PPP of the United States. i.e. Americans have American retirement, American credit card debt, American families, American tuition...

Then, many companies demand people travel and frankly a lot of it is stupid power office politics...the task can easily be accomplished with a video conference or even a phone call, but lordy, lordy, gotta get that person on a plane, flying all over hell to the point they have no life at all.

Another is commute. Demanding someone drive 2-3 hrs one way just to show up in some cube from 8-6 because some manager needs to "see" that person, it's a control thing, which becomes increasingly evident with the refusal to use modern technology...which makes the 8-6 office obsolete.

I could go on and on, but in 2001 and this story was seriously repressed. 50% of all techies were drummed out of their careers. I was there and the U-hauls lining the streets of San Francisco make it look like a modern Oakie exodus...

yet that story was repressed, not reported and seriously under reported....how? They use guest workers in unemployment statistics....so let's say you are displaced by a foreign guest worker....the actual employment statistic will not have you show up in the stats due to the aggregate numbers of counting the guest worker.

The 3 job sites chosen by about.com as getting the best results for job seekers -

www.linkedin.com (professional networking)
www.indeed.com (agregated listings)
www.realmatch.com (matches you to jobs)

good luck to all.

I'm going to do a detailed post on this bullshit, but now Obama is claiming Americans need to "retrain". How can one retrain people with PhDs Masters degrees, years of experience that frankly are rare as it is?

This retraining blow off also happened to be straight from the corporate lobbyists press kits (along with calling everyone racist xenophobes when they try to stop this massive global labor arbitrage).

I need someone to find this for me, but on that Fox Business Channel (Dish Network has been acting wonky on me, it was either that or Rachael Ray) had on a "friend" of one of the major GM bond holders. As you know, the major investors in GM's bonds who aren't TARP-bound, already said to the President they won't go down like Chrysler. They want their money back. So the anchor, can't think of his name but he's the only British guy on the network that I'm aware of, goes on about how the company's factories here wouldn't fetch much to recoup the bondholders. You know what this bondholder reply was?

They would go after GM's money making parts in Asia first, they've already received bids from other foreign automakers for those Korean and Chinese plants. Of course this wouldn't sit well with GM, as they would be left with mainly their US-based assets by the time the bondholders were done.

Personally, I don't know if that's 100% true. But the news posted here about this offshoring brings up two important points. But first let me say that I have a mea culpa to do. As many know, I pushed for a bailout for the automakers, because well as many here pointed out, a collapse would have been catastrophic. Yet as we are beginning to see, it seems we're going to see this economic disaster anyways. So yeah, I'm going to admit right here that I was wrong about promoting the bailout of GM and Chrysler. Actually now rethinking of buying a Ford hybrid instead of the Chevy Volt now.

Now on to the two points I wanted to bring up. The first is that we now see that the UAW was nothing more than the macro version of a human shield for GM. And honestly, it was well played. GM's management figured, and rightly so, that so long as their fortunes were tied to the Democrat's major constituency, they would get support. Do you really believe, after what two lousy business plans, that the Democratic Congress would give more money if it was made that that the UAW's fortunes were not akin to that of GM's? I doubt it.

Lastly, we are seeing a major inflection point, where the needs of the company have diverged from that of labor. For the company, it is survivability and that means turning a profit. Now we can't put the blinders on, anyone hired to turn the company around would come to a similar realization. Indeed, that specialist would immediately seek to cut down its liabilities linked with the unions. They would shut down shop in states like Michigan and (assuming they wished to maintain US manufacturing base) head to places like Tennessee or Alabama where foreign automakers like Toyota have more "friendly" deals. Of course this also assumes that the company is not majority owned by the UAW or a coalition of the union and the government (especially one friendly to organized labor). If they did find themselves possibly heading in that situation, they have only one recourse...bankruptcy.

Think about it, if you were to start a new General Motors, what would you need? Don't think about it from the perspective of saving union jobs or the middle class (especially in states like mine). Think globalization and markets, think insuring ROI, competition with foreign automakers. General Motors, well really the Fortune 500 stopped being "American companies" a long time ago. So that's my challenge to you, if you were to reboot GM what would you need to do?

We've needed an industrial policy since the end of Vietnam, but didn't have one. Japan did. China does. What does that mean? It means taking a long-term collective interest in what happens and how social costs are allocated. The way we're doing it doesn't work and we've accrued no sovereign wealth as a result of NOT having an industrial policy. Instead, we've lost all of our major industries and we're losing our auto industry. Ralph Nader and Pat Buchanan have been harping about this for years, and no one listens because the corporate lobbyists are so short-sighted.

They have until October.

Politics always trumps Free Markets and it's all calculated!

If this fiasco hasn't turned-around by then, the O-Team will send in "The Cleaner" and the Election Cycle will rein.

Result:
- End of '09, bargaining and hope will be lost and heads will roll (i.e., L.S. and T.G. are out and the nation is a step closer to socialism)
- 2010 will bring depression and will end with acceptance
- 2011 re-election campaign kicks in with promises of "Road to Recovery"
- 2012 Capital gets the backseat with Labor in the drivers seat. O-Team is re-elected with majorities in both Houses.

The fate of capitalism as we know it, will have forever changed!

Peter

is what is really the labor costs to manufacture. What is the real percentage vs. their inane supply chain, plus their billions invested in plants, overproduction trying to capture some of these emerging markets. I know they must be selling Aeros in China below cost, they go for $1200 dollars in China.

I don't know why they don't list us. Maybe you can give it a try and ask them. I tried a long, long time ago and got no response. I like Yves and NC....they are so "on it" in terms of digging in an investigative fashion on the financial crisis....they do an exceptional job.