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China Boldly Goes (Again) Where Moody's Has Never Gone Before, Downgrades US From A+ To A, Outlook Negative

Tyler Durden's picture




 

As was predicted last week, China's rating agency Dagong, unlike its worthless western counterparts, has come through on its threat to downgrade the US in the event a subpar debt ceiling deal was hammered out. As Xinhua reports, 'Dagong Global Credit Rating Co. said Wednesday it has cut the credit rating of the United States from A+ to A with a negative outlook after the U.S. federal government announced that the country's debt limit would be increased." Confirming that not being branded a NRSRO is the only thing that allows a rater to still think straight (and not in terms of lost client revenue if one goes ahead and tells the truth), Dagong's decision was spot on: "The decision to lift the debt ceiling will not change the fact that the U.S. national debt growth has outpaced that of its overall economy and fiscal revenue, which will lead to a decline in its debt-paying ability, said Dagong Global in a statement." So while Moody's, which is now certified as the laughing stock of the sheep herd (sorry Mark Zandi, you will never be promoted to anything in this administration - we promise you), pretend that all is well and that the only thing better than $14.3 trillion in debt is $16.8 trillion, China demonstrates what happens when a rating agency actually knows how to do addition and/or long division.

And just to make sure that China's intentions are (once again) very clear, the PBOC earlier said that is will continue diversifying its reserve assets and will “closely observe” the implementation of U.S. debt-limit agreement, welcoming the law as ensuring the market functions effectively and investing in Treasuries as safe. The odd sentence out was this: "China will also try to strengthen risk management and minimize effect of fluctuations in global financial markets on its economy." Is the PBOC in the process of implementing a MOVE vol threshold for its bond holdings? It would be interesting if China's dumping of Treasurys is directly proportional to the amount of HFT algos trading them. Then again, that is one sure way of eliminating the high frequency parasites from any market once and for all...

From Xinhua:

The U.S. House of Representatives on Monday approved legislation to raise the U.S. debt limit by at least 2.1 trillion U.S. dollars and cut federal spending by 2.4 trillion U.S. dollars, one day before a threatened default.

 

The downgrade is a result of fights between U.S. political parties over debt issues, which reflects the government's inability to completely solve the debt problem, said Dagong Global.

 

The interests of the country's creditors are short of systematic protection both politically and economically, said the agency.

 

China is by far the largest holder of U.S. debt, with holdings amounting to 1.15 trillion U.S. dollars as of the end of April.

 

Dagong announced last month that it had put the U.S. credit rating on negative watch for a possible downgrade on expectations of a long-term economic recession in the world's largest economy, partially caused by its economic governance and policies.

 

Dagong downgraded the U.S. rating from AA to A+ in November of last year after the U.S. government announced a second round of quantitative easing.

 

The agency said the approval to raise the debt ceiling indicated that there will not be any positive changes in factors that will influence the country's debt-paying ability in the long run.

And elsewhere, from the PBOC, google translated of course.

People's Bank of China Governor Zhou Xiaochuan accept the "Financial Times" reporter, on August 2, U.S. Congress passed the "2011 Budget Control Act," answered a reporter's question.

 

Governor Zhou Xiaochuan said, we note that on August 2, U.S. Congress passed the 2011 Budget Control Act, the debt ceiling increase long-term deficit reduction plan and the development progress. We welcome this. For details of the bill and phased implementation process, we will further study and close attention. In recent years, Sino-US strategic economic dialogue (S & ED) under the framework of U.S. financial officials to maintain effective communication and mutual understanding.

 

U.S. Treasury bond market is the world's leading investment and trading products, the U.S. Treasury market volatility and uncertainty will affect the international monetary and financial system stability, and drag the global economic recovery. We hope the U.S. government and Congress from their own and global interests, adopt responsible policy and practical measures to properly deal with debt problems, protect the safety of U.S. treasury bonds and the market run, maintaining global investor confidence, to achieve a strong consensus in the G20, sustainable and balanced growth.

 

From the domestic point of view, we will take effective measures to maintain stable and rapid economic growth, preserve our economic and financial security. Foreign exchange reserve management will continue to adhere to the principle of diversification, strengthen risk management, minimize volatility in international financial markets, the negative impact on me.

 

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Tue, 08/02/2011 - 20:42 | 1519116 nwskii
nwskii's picture

Dagong Bitchez

Tue, 08/02/2011 - 20:51 | 1519135 gdogus erectus
gdogus erectus's picture

Moody Bitchez.  And we're not talking about PMS.

Tue, 08/02/2011 - 20:56 | 1519163 km4
km4's picture

AA to A+ to A from Nov 2010 to Aug 2011.....when will see the B's

Tue, 08/02/2011 - 22:39 | 1519387 Zone1
Zone1's picture

Getting cut from numba whon A+ Bond really hurts.

Wed, 08/03/2011 - 04:16 | 1519735 TwoShortPlanks
TwoShortPlanks's picture

Long American Mail Order Brides...yeah, flee dat US Bitchez!!!!!!
http://www.rosebrides.com/american-brides.html

Wed, 08/03/2011 - 02:13 | 1519653 phraseshifter
phraseshifter's picture

Da-Gong Show USA!

Tue, 08/02/2011 - 20:45 | 1519126 caerus
caerus's picture

this is bullish for kung pow

Tue, 08/02/2011 - 20:46 | 1519127 nonclaim
nonclaim's picture

Da gong tolls...

How will they rate the Chinese reserves since they are the second largest bag holder after the Fed?

Tue, 08/02/2011 - 20:58 | 1519167 caerus
caerus's picture

they won't have to...everything will be rated in terms of the renminbi...

Tue, 08/02/2011 - 23:34 | 1519472 trav7777
trav7777's picture

yeah, lord knows they don't print that or have a massive NPA problem with THEIR loans..LOL

Tue, 08/02/2011 - 22:13 | 1519340 disabledvet
disabledvet's picture

They tried the "Double D" rating. Unfortunately...
http://www.youtube.com/watch?v=ol_aamH2mHM&feature=player_detailpage
just caused more buying. must be trying to be like our "treasury complex." i swear to God when i asked where the bond vigilantes in the USA were this was where they sent me!

Tue, 08/02/2011 - 20:47 | 1519128 Prometheus418
Prometheus418's picture

And after a short rest, the Au/Ag mountin climbing expedition resumes.

Tue, 08/02/2011 - 20:47 | 1519129 zorba THE GREEK
zorba THE GREEK's picture

So in effect, China just downgraded the value of their largest holdings.Smart move.

Tue, 08/02/2011 - 20:52 | 1519146 chump666
chump666's picture

It's confusion and distraction.  China plays the rating game, they will lose. 

Tue, 08/02/2011 - 20:47 | 1519131 caerus
caerus's picture

fuck i guess there's an a in there...this is bearish for moody's...

Tue, 08/02/2011 - 20:48 | 1519132 buzzsaw99
buzzsaw99's picture

Bang Dae Gong

Wed, 08/03/2011 - 00:26 | 1519548 MsCreant
MsCreant's picture

Get it on, Bang Dae Gong, get it on...

http://www.youtube.com/watch?v=bBin9qC5dKg

Tue, 08/02/2011 - 20:48 | 1519133 papaswamp
papaswamp's picture

So I'll believe their downgrade is they stop buying treasuries and go 'Russian'. 

Tue, 08/02/2011 - 20:54 | 1519154 LongBalls
LongBalls's picture

No...They are going oil. The deal with Iran will be where they sink their "barter items". 

Tue, 08/02/2011 - 23:06 | 1519424 Ying-Yang
Ying-Yang's picture

Ahhh... as Jim Rodgers says "I'm in commodities... either way it swings prices will be going up. Gold, silver copper, agriculture, energy and anything that is a real asset." Seems to me if China is flush with $1.15 trillion stashed in the US they would do the same as most ZH'rs. Buy gold, guns and fast women before the bottom falls out.

Tue, 08/02/2011 - 21:00 | 1519175 papaswamp
papaswamp's picture

is=if....my edit function vanished.

Tue, 08/02/2011 - 20:50 | 1519136 Hard1
Hard1's picture

"The United States is screwed and is so we are....we should will ask to physical delivery for on our treasury certificates for the use as paper toilet. " (sic)

 

Zhou Xiaochuan (circa 2011)

Tue, 08/02/2011 - 22:42 | 1519397 Save_America1st
Save_America1st's picture

that was damn hilarious...go long toilet paper...

Tue, 08/02/2011 - 20:49 | 1519137 youngman
youngman's picture

Kind of interesting actually...since they do hold so much of our paper---or so they say...I still think they have our gold held in reserve as a guarantee for buying our paper....

Tue, 08/02/2011 - 20:56 | 1519162 LongBalls
LongBalls's picture

No way dude. Paper is meaningless to the banks. Especially the US. All they need to do is print. Gold on the other hand!

Wed, 08/03/2011 - 01:30 | 1519612 Frankie Carbone
Frankie Carbone's picture

You grossly underestimate the resiliency and tenacity of central bankers, and to your own demise.

As far as I am a aware of there is still ample tungsten and Krylon Gold Flake Spraypaint in the world.

And if that runs out then they'll wrap gold foil around Hersey bars if they have to.

Be careful of asking too much for a Gold Standard. They might put their heads together and decide that it's a good idea after all.

Tue, 08/02/2011 - 20:58 | 1519166 jdrose1985
jdrose1985's picture

Hilarious...back to the US/THEM binary spoken of here earlier today..

Wed, 08/03/2011 - 01:50 | 1519630 piceridu
piceridu's picture

You might be on to something...maybe all that paper is pledged for something of real value...like ports, arable land, gold and silver, mines...real shit

Tue, 08/02/2011 - 20:49 | 1519138 caerus
caerus's picture

does anyone really listen to these assholes anymore?  this is bearish for the bank/rating agency clusterfuck

Tue, 08/02/2011 - 21:05 | 1519139 Juan Wild
Juan Wild's picture

 

 

Fuckin' Aa- Bubba! I love to hear TRUTH. If its from China's mouth, so be it!

Tue, 08/02/2011 - 20:51 | 1519142 JustACitizen
JustACitizen's picture

We should all welcome the eastern powerhouse's downgrade. Perhaps their fiat currency will appreciate against our fiat currency. Perhaps after they have sucked all of the ideas and innovations out of the various corporations they will happily go their merry way. Perhaps we will have to accept a new paradigm in which we do not throw things away. Quality was once a respectable word in marketing...

NAH!

Wed, 08/03/2011 - 08:44 | 1520066 Max Hunter
Max Hunter's picture

Perhaps after they have sucked all of the ideas and innovations out of the various corporations

I'm sorry.. I must have missed that gun pointed at the head's of American businesses that bolted over to sell the stuff back here.. I feel so sorry for them, against their will and all.. you know... just sayin..

Tue, 08/02/2011 - 20:51 | 1519143 Yes_Questions
Yes_Questions's picture

 

 

Unhappy Downgrade.

Tue, 08/02/2011 - 20:53 | 1519148 Scisco
Scisco's picture

I have a question, where is the US going to get the RMB to keep funding their trade imbalance if China stops purchasing treasuries? The States would have to begin exporting something other than debt no?

Tue, 08/02/2011 - 20:54 | 1519156 caerus
caerus's picture

just go to chinatown and get yourself a checking account and a massage

Tue, 08/02/2011 - 20:52 | 1519149 PaperBugsBurn
PaperBugsBurn's picture

fuckin aaa!

Tue, 08/02/2011 - 20:53 | 1519152 Diatribe
Diatribe's picture

AAA, AA, A, next stop college ball

Wed, 08/03/2011 - 01:26 | 1519609 zorba THE GREEK
zorba THE GREEK's picture

I only gave you up vote because of hot chick wiggling boobies.

Tue, 08/02/2011 - 20:54 | 1519155 slow_roast
slow_roast's picture

What kind of ratings does Dagong have across Chinese municipalitles?  Curious if their sharp swords cut at home as well.

Tue, 08/02/2011 - 21:01 | 1519178 chump666
chump666's picture

They are all junk.  So once a Western rating agency returns fire it will be directly at those - Art of War in full effect.  China's crash is primed now.  The markets are going to get so chaotic, volatile and nutso gonna be fascinating.

Tue, 08/02/2011 - 20:55 | 1519159 Bolweevil
Bolweevil's picture

Pfft! Moody's AND S&P will downgrade their asses.

Tue, 08/02/2011 - 20:58 | 1519168 Bolweevil
Bolweevil's picture

(Don't make me bust out my Egan-Jones.)

Tue, 08/02/2011 - 20:55 | 1519160 jdrose1985
jdrose1985's picture

LoL.

And China and its subcorporations have more than ZERO credibility...exactly how?

Wed, 08/03/2011 - 07:29 | 1519869 Pay Day Today
Pay Day Today's picture

They are not $17T in hock. Or just about to be.

They hold more in foreign reserves than the US has just increased its debt ceiling by.

They have an economy which has been growing at 10% pa for the last 25 years.

Do you require more? (And I'm not underestimating all the problems they are facing, they are facing lots).

Tue, 08/02/2011 - 20:56 | 1519164 chump666
chump666's picture

jeez anyone watching the CHF v's GBP?  Doomsday baby, bear market overkill kicking in. 

Tue, 08/02/2011 - 20:57 | 1519165 Alex2245
Alex2245's picture

Ok one last article for you guys. This one is BIG. too much evidence to not be something!!! Please check this out

 

http://theintelhub.com/2011/08/02/multiple-military-train-convoys-filmed...

 

Clyde Lewis, a veteran radio host, has had multiple callers report military movements seen in both Portland and Oregon City, Oregon.

As reported on Ground Zero, troop movements and or military movements have been reported on Ground Zero for several nights now. A caller phoned in that she witnessed that largest movement of Military vehicles, (Tanks, cannons, and other vehicles) through Portland and then southbound.

Another listener Jim sent us three known videos of this train From You Tube and the shots from witnesses are nothing short of breathtaking. Each video shows the movement of Military vehicles not painted for desert operations, but with digital or city camouflage. The question is where are these hundreds of vehicles going and for what reason?

From No Fly Zones, to miliary train convoys in Washington, to convoys along the Tennessee/ Kentucky border, all the way to military personal in fatigues seen in white vans in Arkansas City, reports of suspicious domestic troop movements skyrocketed.

Tue, 08/02/2011 - 21:09 | 1519197 EvlTheCat
EvlTheCat's picture

They are on their way to Alabama to break the bad news that SNAP is broke.

Tue, 08/02/2011 - 21:43 | 1519276 Cathartes Aura
Cathartes Aura's picture

Sabotage by an insider at a major utility facility, including a chemical or oil refinery, could provide al Qaeda with its best opportunity for the kind of massive Sept. 11 anniversary attack Osama bin Laden was planning, according to U.S. officials.

http://abcnews.go.com/Blotter/terror-alert-warns-insider-threat-infrastr...

First Ever National Emergency Alert System Test Scheduled for November 9, 2011

http://wp.pierce.ctc.edu/blog/coe/2011/06/29/intergovernmental-advisory-...

tenth anniversary of nine eleven, FEMA (emergency government) planning a drill on 11.9.11.

good to pay attention to the multiple news stories converging of late. . .

thanks for the link Alex.

Tue, 08/02/2011 - 20:58 | 1519172 gwar5
gwar5's picture

.

 

Once again, the smartest person in the room is 1.3 billion Chinese.

I knew we were in trouble when, in Spring 2009, Geithner was literally laughed off the stage at the University of Beijing by the economics students, shouting, "Where's the numbers?! Ha!  Where's the numbers?!?"

Tue, 08/02/2011 - 21:01 | 1519177 EvlTheCat
EvlTheCat's picture

So we can expect that Putin will have some new insult for the U.S. by tomorrow morning? 

Something like, he has uncovered that our population is nothing but a bunch of invading Martians who have been slowly trying to genetically manipulate the wold to worship the color green through our reserve currency.

See shit is getting more predictable.

Tue, 08/02/2011 - 21:06 | 1519188 knukles
knukles's picture

Dude, check out David Icke.

Tue, 08/02/2011 - 21:16 | 1519213 EvlTheCat
EvlTheCat's picture

hahaha.. I only wish I could ascribe to his level of crazy.  Maybe I wouldn't have to drink so much.

Tue, 08/02/2011 - 21:25 | 1519233 knukles
knukles's picture

Talk about drinking and crazy, one time (several centuries ago) back in college I came to one of numerous mornings (or whenever.... it was light) there was this thing in bed next to me.  Reptilian ugly, hairy... thank God it was at least female. 
Not good.
And that, my friend was as close to an Icke story as I can imagine.

Tue, 08/02/2011 - 22:20 | 1519354 papaswamp
papaswamp's picture

YEA! As long as it was happy who cares...chew your arm off and hit the next party.

Tue, 08/02/2011 - 23:49 | 1519490 MobBarley
MobBarley's picture

You won't have to for TOO much longer.

 

Course, I question my motives with this kind of statement.

Shadenfraude? Alerter of sheep...hard to say.

 

 

Tue, 08/02/2011 - 21:04 | 1519182 knukles
knukles's picture

Yeah. See.  If they'd just revalue their currency, that remindme yong somethin' or whatever it us, then nobody could afford them Dongalong ratings and it'd all just go away.

Holy shit! 
Talk about adding insult to injury!
Global markets see through the debt non-solution with a massive whooping today after all the drama and then WACKOSMACKO!!!!! the Chinese downgrade their best friend and ally, military partner, keeper of freedoms and liberty not to mention their largest buyers of the useless crap they make...
                  ...and it's all just appearances, anyway!

Talk about counting coup and defaming, defacing the opposition!

That's ballsy, baby.  Big cajones 

Tue, 08/02/2011 - 21:11 | 1519203 AmCockerSpaniel
AmCockerSpaniel's picture

Does any one realize that anyone elected to represent the people in congress other than a republican or democrat (Only those two parties have seats on the super congress), will NOT be able to speak by law (only vote)?

Tue, 08/02/2011 - 21:14 | 1519212 zen0
zen0's picture

I have heard that Asian erections may be smaller, but much harder.

Enter the Dragon.

Tue, 08/02/2011 - 21:54 | 1519295 Snidley Whipsnae
Snidley Whipsnae's picture

Perhaps you mean elections? Many Asians have a tough time pronouncing Rs.

Tue, 08/02/2011 - 21:15 | 1519214 sabra1
Tue, 08/02/2011 - 21:27 | 1519239 Jena
Jena's picture

Marketwatch headline:

http://www.marketwatch.com/story/chinese-agency-cuts-us-debt-rating-again-2011-08-02?reflink=MW_news_stm

 

It's being reported somewhere besides ZeroHedge...

Tue, 08/02/2011 - 21:49 | 1519284 km4
km4's picture

"The agency said the approval to raise the debt ceiling indicated that there will not be any positive changes in factors that will influence the country's debt-paying ability in the long run," Xinhua reported.

Tue, 08/02/2011 - 22:23 | 1519361 papaswamp
papaswamp's picture

This is a sign of the apocalypse! MW carrying something ZH reported?! 

Tue, 08/02/2011 - 21:38 | 1519265 Space Potato
Space Potato's picture

Well, regardless, China has been around about four or five thousand more years than the US of A. So has everyone else.  If this shit collapes after 200 years....well...tisk, tisk.

 

Tue, 08/02/2011 - 23:05 | 1519312 Rodent Freikorps
Rodent Freikorps's picture

The land yes, the government, no.

The US is the elder statesman of democratic republics in the whole world.

200 years is the historic average lifespan for democracies. We are actually doing better than most at around 235ish years, and still going.

Tue, 08/02/2011 - 22:24 | 1519367 papaswamp
papaswamp's picture

Don't think China's present type of government has been around that long.

Wed, 08/03/2011 - 07:35 | 1519884 Pay Day Today
Pay Day Today's picture

China has been around a long time as a contiguous nation state. But yeah, emperors come and go, governments come and go, politburos come and go.

Tue, 08/02/2011 - 21:50 | 1519290 Snidley Whipsnae
Snidley Whipsnae's picture

The Pan Asia Gold Exchange will be opening Q4 this year. Should be interesting to see what impact it has on the CRIMEX and Looney Bin Major Asshats metals exchanges. Here is a link to Max Kaiser interviewing Ned Naylor-Leyland about the possible effects on the EE Exchanges.

http://www.youtube.com/watch?v=cU8VoafEb00

Tue, 08/02/2011 - 21:55 | 1519296 digalert
digalert's picture

only thing better than $14.3 trillion ?

Uh...stick in the eye?

 

p.s. Hoorah! The damn captcha is gone.

Tue, 08/02/2011 - 21:58 | 1519306 Rodent Freikorps
Rodent Freikorps's picture

Yeah, but you can't trust them either.

Tue, 08/02/2011 - 23:43 | 1519484 spdrdr
spdrdr's picture

We've always been at war with Eastasia.

Tue, 08/02/2011 - 22:01 | 1519315 putbuyer
putbuyer's picture

I have a call into Starfleet! keep you posted...

Tue, 08/02/2011 - 22:09 | 1519330 Mr Kurtz
Mr Kurtz's picture

You fuckee fuckee with our money, yankee and there will be a reckoning!

Tue, 08/02/2011 - 22:35 | 1519382 Inibo E. Exibo
Inibo E. Exibo's picture

This is bullish, right?

 

Tue, 08/02/2011 - 23:17 | 1519448 PulauHantu29
PulauHantu29's picture

Diogenes would be proud of The Dagong Rating Agency. More power to them!

"Fair & Balanced!"

Tue, 08/02/2011 - 23:54 | 1519498 Caviar Emptor
Caviar Emptor's picture

Maybe this is the start of a downgrade cold war, where rating agencies replace nukes. 

Wed, 08/03/2011 - 00:57 | 1519582 PulauHantu29
PulauHantu29's picture

Charlie Rose had a few economists on the other night who said it does not matter what the rating is....the question is whther The Deal cuts spending and increases revenue.

 

If the cost to service the massive deficit increases and there is no meaningful growth (and NOT consumer spending and Wall Street paper shuffling) then we are in a real bad pickle.

 

 

Wed, 08/03/2011 - 07:35 | 1519883 gwar5
gwar5's picture

.

 

I watch Charlie Rose sometimes for amusement, and appreciate your post, but Rose is a confirmed Bilderberg member with a straight CFR platform.

In 2006 the debt ceiling was $8.2 Trillion.  Now just 5 years later, here we are, doubling our total debt by raising the ceiling to $16.7 Trillion.  If government spending really created jobs and helped the economy we ought to be rolling in it with a 9% growth rate like China and 4% unemployment with that kind of dough.  Rose was cheerleading all that spending 3 years ago when we told him it was wrongheaded. So, now where's all that prosperity?

And where was Charlie Rose and those economists when we told them bailouts and a $1 Trillion stimulus was spending to nowhere? And where did all that money really go? How smart can Charlie's economists really be when they make even Sarah Palin look like the Amazing Kreskin compared to their analysis?

See, Charlie Rose and his economists are merely pretending to play monday morning quarterback. It was their job to help rig the game before it was even played, by helping you and John Q public buy into the nonsense in which we now find ourselves, and in which we are going. 

Wed, 08/03/2011 - 07:44 | 1519898 Pay Day Today
Pay Day Today's picture

"In 2006 the debt ceiling was $8.2 Trillion.  Now just 5 years later, here we are, doubling our total debt by raising the ceiling to $16.7 Trillion.  If government spending really created jobs and helped the economy we ought to be rolling in it with a 9% growth rate like China and 4% unemployment with that kind of dough. "

That level of spending could have created and sustained 40 million jobs.

Problem is, that's not what the goal of that borrowing was. Fighting wars and building F-22's is very expensive - and creates relatively few jobs per dollar. Having pallets of cash disappear in Iraq is also very expensive - and creates very few jobs. Handing over hundreds of billions to banks to shore up their balance sheets also creates very few jobs. 

Wed, 08/03/2011 - 02:25 | 1519663 JPMorgan
JPMorgan's picture

Dagong is bang on!

The US finances are in an mess.

All they have agreed to do is add yet more debt on just like a credit card junkie trying to buy his or her way out of trouble with yet another loan.

So they should be downgraded unless they actually start demostrating some meaniful control that shows in the debt figures going down!

Wed, 08/03/2011 - 02:49 | 1519687 johny2
johny2's picture

promises, promises...we promise to pay you sometime in future for all the toys you made for us lately...

Wed, 08/03/2011 - 05:30 | 1519759 vato poco
vato poco's picture

hate to be the contrarian here, but maybe china isn't quite so wise and inscrutable as y'all are making them out to be.

* as zorba pointed out earlier, they in effect "downgraded the value of their largest holdings". * as a wise ol' Texas oilman (pronounced "ahl-man")(or was it trump?) once pointed out, if you owe a bank $10K, they've got you over a barrel. if you owe them $100MM, then YOU'VE got THEM over said barrel. and we owe them something like $3 trillion bucks, backed solely by the collateral of....the solemn oaths and honor of our politicians. best of luck with that, wu. * as any supplier to walmart can tell you, it's great to be a walmart supplier. until they cut back on the orders, or maybe even _cancel_ some of them. we're china's walmart. they just downgraded our debt. this will slow down our ailing aconomy even more - how much more is up for debate. wonder how that'll affect all those hundreds of millions they need to keep employed lest they get restive and start to get pissed off? wonder how that'll help fill up their ghost cities?

don't get me wrong - even if they're making strategic monetary blunders, china is still run by grownups; and peopled by folks who work their asses off and save 50% of their income. we used to be like that once, till we started letting our politicians buttfuck us in return for a check every month. but for all their thriftiness and willingness to take the long view, the thugs running china are still not that much different from the the thugs who've always run china - and made china a non-world power for 4980 of the last 5000 years. they're hacks and crooks, just like our guys, and sooner or later their tendencies to take their cut off the top is going to seriously wound their nation. witness the bullet train debacle. watch what happens in 20 years or less when the 3 gorges dam collapses. see how well they respond to the growing "don't buy chinese" movement as americans and europeans get tired of antifreeze in the toothpaste, or poison in the cat food, or toxic waste in the drywall, or sawdust in the pharmaceuticals, or shamelessly stolen intellectual property. yeah, yeah - they're buying up africa. if memory serves, that's pretty much what the USSR did back in the commie glory days. how'd that work out for them? answer: "africa wins again."

25 years ago, it was *Japan* who was going to rule the world. everyone knew what 'kaizen' meant. ellison wore kimonos and played samurai, according to forbes. whitebread execs learned 'go', and all solemnly agreed it was far superior to mere chess. they were patient, ruthless, took a VERY long view, (the chairman of sony - i think - was once asked how long their long-range plans went out. he replied "250 years". here in the real world, that kind of answer is what you'd expect from an egomaniac, or just an frickin' idiot.), they had 5 of the 7 largest banks in the world, and bought up every trophy property that came on the market, including most of hawaii. now they're stuck in a multi-decade stock market/economic rut; they're discovering they're in demographics hell, just like china will be quite soon; they've got 5 or 6 nuke reactors in meltdown and their strategy for dealing with 'em is "lie"; and even toyota & honda reliability is sliding down the toilet. what's to keep china from ending up the same way? will it be the universally acclaimed power of top-down centralized planning? the police-state tactics & brutality? the incredible pollution and environmental destruction? the remarkable degree of censorship?

Wed, 08/03/2011 - 07:57 | 1519934 YHC-FTSE
YHC-FTSE's picture

That's not contrarian. That's a mixture of wishful thinking and regurgitated msm propaganda. Whatever makes you happy dude, and you're certainly not alone in your outlook.

Wed, 08/03/2011 - 06:46 | 1519792 Byte Me
Byte Me's picture

If it's Dadung speaking...........

I'll have a number 23 with fried rice..

Wed, 08/03/2011 - 08:35 | 1520040 Downtoolong
Downtoolong's picture

Seems while our politicians were busy haggling over their emergency, 11th hour, save the nation agreement to issue more U.S. debt, they forgot to answer the most important question. Without the Chinese, Fed, and PIMCO, who ’s going to actually buy it?

Wed, 09/14/2011 - 04:36 | 1667307 chinawholesaler
chinawholesaler's picture

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