Yesterday supposedly the U.S. start market bounced on the news the China economy was getting a stimulus.
But is it a hollow hurrah?
Buried in the WSJ is a blurb mentioning investors fears of insolvencies in China and how due to Chinese bankruptcy laws, they will not be able to recover a thin dime.
Here is what Roubini had to say on the Chinese stimulus:
Emerging markets, most notably China, helped to create the macroeconomic backdrop for the current financial crisis by subsidising interest rates and consumption in the US.
Even worse, the reason they did so was in reaction to contagion, a very nasty by-product of globalization as well to avert the 1997 Asian financial crisis.
The top U.S. diplomat says Washington must incur more debt to China to boost the ailing U.S. economy and stimulate demand for Chinese products. She says it would not be in China's interest if the U.S. is unable to get its economy out of a recession.
China is the largest holder of U.S. Treasury bonds. Clinton says China's continued investment in U.S. Treasuries is a recognition of the interconnection of the U.S. and Chinese economies.
Chinese Foreign Minister Yang Jiechi told Clinton Saturday that both countries should boost economic policy coordination and reject protectionism in trade.
"To rescue the ailing U.S. economy by increasing government borrowing will create a record-high federal deficit," said Yu Zuyao, economist with the Chinese Academy of Social Sciences, a government think tank.
"This can further lead to catastrophic consequences such as serious inflation and U.S. dollar depreciation," he said Tuesday.
"Buying U.S. government bonds amid an economic downturn, [a purchase] that is not based on the sound performance of the U.S. economy itself, indicates a huge bubble," said Zuo Xiaolei, chief economist of China Galaxy Securities.
e in the interests of the United States and other countries and would exacerbate the crisis."
An almost incomprehensible destruction of wealth has taken place. Stephen Schwarzman, Chairman of The Blackstone Group said that "40% of the world's wealth was destroyed in the last five quarters". Let me repeat that: "40% of the world's wealth has been destroyed in the last five quarters."
At a meeting in Davos, Switzerland, world leaders met to discuss the condition of the world. Putin of Russia said: "the existing financial system has failed." Growth was based on greed. One partner printed money and consumed wealth while the other manufactured cheap goods and saved money. These comments were swipes at the United States and China.
Uh, I believe much of that was fictional money to begin with...let's talk derivatives, hedge funds, housing bubbles....
One cannot argue the Chinese really don't mess around on corporate crime. Death over Chinese Milk:
Death penalty over Chinese milk
Breaking News
One man has been given the death penalty and another a life sentence for their involvement in China's contaminated milk scandal.
Zhang Yujun and Zhang Yanzhang were accused of involvement in producing a melamine-laced powder that enabled milk to appear higher in protein.
The so-called "protein powder" was then sold to dairies, and led to the deaths of six children and made 300,000 ill.
Several other businessmen and executives are due to be sentenced.
The death sentence of Zhang Yujun was the first to be handed down by Shijiazhuang Intermediate People's Court in northern China, where the Sanlu dairy, which was at the centre of the scandal, is based.
In the US voters opted for "Change we can believe in". In China, according to Bloomberg, workers are taking a rather more direct route:
Labor strife is a ``top concern'' as the job outlook turns ``grim,'' Yin Weimin, head of the Ministry of Human Resources and Social Security said today at a briefing....
It's a ``challenge to the regime's legitimacy when economic growth slows,'' said Joseph Cheng, a politics professor at City University of Hong Kong....
``People losing their jobs could well lead to more protests,'' said Kevin O'Brien, a professor of political science at the University of California, Berkeley ....
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A survey of 84 cities showed demand for workers fell 5.5 percent in the third quarter, the first decline in years....
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The United Nations is telling China to Spend More on Public Services in order to sustain economic growth and notes the economic disparity of the Nation.
China needs to spend more on education, health care and social welfare to sustain economic expansion as a global recession looms, the United Nations said in a report today.
The fruits of China's rapid growth haven't spread equally, and disparities limit continued expansion, according to the China Human Development Report. Shanghai and Beijing compare in development to European countries such as Cyprus and Portugal, while inland provinces like Guizhou in the southwest are closer to African economies like Botswana and Namibia, it said.
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