Sub-prime Meltdown Hits Thailand With Force

[midas]

Jan Hatzius, chief economist at Goldman Sachs Group, said at the root of the problem is that many sophisticated investors and hedge funds made billions of dollars of investments with the belief that U.S. home prices would never decline. This widely held view is now being called into question, as economists say there is a strong chance that the median price of U.S. homes could decline this year.

A paradox if ever there was one

[wilko]

I don't understand - a member of the cabinet assured everyone week before last that it would not affect Thailand as they hadn't invested in sub-primes so we are all OK........you're not saying he was WRONG are you???? :D

Edited September 3, 2007 by wilko

[Carmine6]

I don't understand - a member of the cabinet assured everyone week before last that it would not affect Thailand as they hadn't invested in sub-primes so we are all OK........you're not saying he was WRONG are you???? :D

Subprime itself will go over with a big yawn in Thailand. Even if the banks have bad subprime related holdings, they'd take a hit to income and the balance sheet and move on. It would only matter to the shareholders of which there are not too many. Might make for sexy headlines, but no real impact. Since they appear to hold just a little or none, not so much to worry about.

But subprime got to be a problem because of lower US housing prices. To the extent that the softer housing market affects the US consumer and economy, there could possibly be some affect on Thai exports or tourism. Also the reaction in the financial markets has been to be extremely tight with lending now, including lending to other banks. This could possibly affect Thai banks. Also some of the more catastrophic global economic predictions would obviously affect Thailand.

I think whatever issues there are pale in comparison to the situation in Thailand, including the effect of movements in the baht or the outcome of the pending election. Although, don't underestimate the opportunity to somehow blame subprime for any problems.

[LaoPo]

I don't understand - a member of the cabinet assured everyone week before last that it would not affect Thailand as they hadn't invested in sub-primes so we are all OK........you're not saying he was WRONG are you???? :D

Subprime itself will go over with a big yawn in Thailand. Even if the banks have bad subprime related holdings, they'd take a hit to income and the balance sheet and move on. It would only matter to the shareholders of which there are not too many. Might make for sexy headlines, but no real impact. Since they appear to hold just a little or none, not so much to worry about.

But subprime got to be a problem because of lower US housing prices. To the extent that the softer housing market affects the US consumer and economy, there could possibly be some affect on Thai exports or tourism. Also the reaction in the financial markets has been to be extremely tight with lending now, including lending to other banks. This could possibly affect Thai banks. Also some of the more catastrophic global economic predictions would obviously affect Thailand.

I think whatever issues there are pale in comparison to the situation in Thailand, including the effect of movements in the baht or the outcome of the pending election. Although, don't underestimate the opportunity to somehow blame subprime for any problems.

Thailand has just a minor sub prime connection, through Bankthai (some US$ 50 Million) but a relatively high 21 per cent of its own equity:

Our fragile economy

Thailand's economy, encumbered by political uncertainties and falling domestic demand, puts the nation among "the most vulnerable countries in Asia" to a decline in global economic growth, Fitch Ratings warned on Monday.

Rest article:

http://www.bangkokpost.com/topstories/tops...s.php?id=121324

LaoPo

[lannarebirth]

Isn't it funny how all such crises always occur in Aug, Sept., Oct. ?

[LaoPo]

Bernanke's Pledge Fails to Dispel Pessimism...

Ben S. Bernanke, chairman of the U.S. Federal Reserve, arrives at the Reserve's annual retreat at Jackson Lake Lodge in Teton National Park, Wyoming, Sept. 1, 2007.

Sept. 3 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke's pledge to stop the credit-market rout from wrecking the economy failed to quell concern at the Fed's Wyoming summer retreat that the U.S. is heading for recession.

``I came to Jackson Hole thinking there would be no recession, but I'm leaving thinking we could well have one,'' said Susan Wachter, a professor at the University of Pennsylvania's Wharton School, who co-wrote the first academic paper presented at the conference.

This year's theme -- Bernanke said organizers had ``outdone themselves'' with a relevant topic -- was housing and monetary policy, eliciting forecasts of sliding home prices and criticism the Fed should have done more. Martin Feldstein of Harvard University warned of a ``very serious downturn'' and called on policy makers to cut interest rates by 1 percentage point.

The normally academic tone of the Kansas City Fed's symposium was replaced this year by concern that the sudden increase in the cost of credit to people and companies will hurt spending and investment. Consumer confidence dropped by the most in two years in August, the Conference Board reported on Aug. 28.

``There are no optimists in the crowd here,'' said Ethan Harris, chief U.S. economist at Lehman Brothers Holdings Inc. in New York and a former head of domestic research at the New York Fed. ``There's a pretty strong consensus that this has gotten a lot more serious.''

As officials and professors debated lessons from the housing slump, New York Fed President Timothy Geithner and Governor Randall Kroszner were spotted on their mobile phones. Geithner is the central bank's liaison to Wall Street, while Kroszner heads the Fed board's banking supervision committee.

`Very Serious'

``The economy could suffer a very serious downturn,'' Feldstein, president of the National Bureau of Economic Research in Cambridge, Massachusetts, told the conference. The NBER dates American economic cycles. The last recession was from March to November 2001.

Bernanke, dressed in a dark grey suit that stood out from the typical dress of polo shirts, jeans and khakis at the Grand Tetons gathering, said in the opening speech that the Fed will ``act as needed'' to protect the expansion.

That didn't assuage critics such as Edward Leamer, the head of an economic forecasting group at the University of California at Los Angeles. He wrote in one of the conference papers that the Fed merited an `F' for failing to prevent the housing bubble and then not reducing rates as it burst.

`Lesser of Two Evils'

Feldstein called for ``a major reduction now in the federal funds rate, possibly by as much as'' 1 percentage point from the current level of 5.25 percent. While that may push up inflation, it's the ``lesser of two evils,'' he said in a Sept. 1 speech.

Fed policy makers next meet on Sept. 18. While central banks pumped $350 billion in emergency funds into money markets last month, signs of stress continue.

Commercial paper, a short-term financing tool, declined by $244.1 billion, or 11 percent, in the three weeks to Aug. 29, the most in at least seven years, Fed data show. Three-month Treasury bill yields had their biggest drop since 2001 in August as investors sought safety in government debt.

Delinquencies on subprime mortgages, the origin of the turmoil, are likely to climb further as variable-rate loans reset higher, Bernanke said.

Even so, ``global financial losses have far exceeded even the most pessimistic projections of credit losses on those loans,'' he said. That's because of difficulties in setting prices for complex securities and concerns that housing will hold back economic growth, the Fed chief said.

`Gloomy as I'

``I rather expected that I would come out and find that people weren't quite as gloomy as I was, and I didn't find that,'' said former Fed Governor Lyle Gramley, now a senior economic adviser at Stanford Group Co. in Washington. ``So it confirmed my own concerns about the economy.''

Attendees nevertheless sounded confident that the global economy, which has relied on the U.S. to drive growth for much of the past decade, is strong enough to cope with the slowdown.

In China, where the economy expanded at the fastest pace in more than 12 years in the second quarter, manufacturing unexpectedly quickened in August. While business confidence in Germany, Europe's largest economy, fell last month, it was still better than most economists had forecast.

``The world economy is still very robust and growth is much more evenly spread than it was a few years ago,'' Otmar Issing, former chief economist at the European Central Bank, said in an interview.

That was little comfort to most at the conference as they debated the impact of the housing recession on consumer spending, in between hikes along trails near Yellowstone Park.

Yale University professor Robert Shiller said house prices in some U.S. cities may fall by as much as half, while Leamer predicted declines in some areas of 30 percent to 40 percent. Feldstein saw the chance of a ``substantial decline'' in spending because consumers won't be able to borrow as much against the value of their homes.

Source: http://www.bloomberg.com/apps/news?pid=206...&refer=news

LaoPo

[wilko]

the sub-prime connection is minimal in Thailand - but to sugest that it is sheltered from the ramification is ludicrous - chai mai?

[A_Traveller]

the sub-prime connection is minimal in Thailand - but to sugest that it is sheltered from the ramification is ludicrous - chai mai?

There may be more of a connexion than one expects, the use of CDO's means that the derived instruments were viewed as a useful investment by many, not just retail banks. It has been suggested that more active institutions may have exposure from their 'proprietary' trading, however since most central bank trading is closely held, the public may never know of the impact.

Regards

[LaoPo]

the sub-prime connection is minimal in Thailand - but to sugest that it is sheltered from the ramification is ludicrous - chai mai?

There may be more of a connexion than one expects, the use of CDO's means that the derived instruments were viewed as a useful investment by many, not just retail banks. It has been suggested that more active institutions may have exposure from their 'proprietary' trading, however since most central bank trading is closely held, the public may never know of the impact.

Regards

At your service, Sir

SEC warns of additional sub-prime fallout

Fund managers should increase their awareness of portfolio risk, considering the turmoil in the worldwide markets due to the collapse of the US sub-prime mortgage market, the Securities and Exchange Commission warned yesterday.

Thirachai Phuvanatnaranubala, the SEC secretary-general, said the sub-prime crisis would take time to ease, and could explode anew as hedge funds and institutional investors assess their losses from the downturn in the US housing market.

Volatility in international markets has eased in recent weeks thanks to efforts by central banks to inject liquidity.

But Mr Thirachai, speaking at a seminar at the SET yesterday, warned that risks remain, and urged local institutions to review their portfolios to guard against future downturns.

He also expressed concern about how four Thai banks that have investments in overseas collateralised debt obligations (CDOs) calculated their portfolios and whether values were marked to market or based on investment costs.

Rest:

http://www.bangkokpost.com/Business/04Sep2007_biz41.php

LaoPo

[VegasVic]

" threatens to end 600 years of Western economic domination

and while China and India focus on trade and industrial policies and turn out competent workers who put in

long hours at a fraction of American wages, the U.S. " struggles with crushing trade and budget deficits, a

zero savings rate, failing schools, dwindling investments in scientific training and research, a collapsing

dollar and a debt-dependent economy that will face an "economic 9/11" once foreign creditors bail out ".[/b]

Your opinion of this person's views?

Mr. Prestowitz while a prolific book writer, and someone who I admit has put forward a few good ideas ( particularly in the area of tax policy and spending restraint) regarding what the U.S. needs to do to adress its trade deficiets, is also someone who has been beating the same drum for the last 20 years. He was indeed an advisor on trade negotiations for a few years in the Regan administration, and when he left the administration in the late 1980,s I can remember his book "how we are giving our future to Japan and how to reclaim it" and what I remember thinking at the time is, here is the guy who just negotiated these lousy trade agreements with Japan and China and now he wants to profit by telling us how we are getting screwed. Mr. Prestowitz went on shortly there after to initiate the push for NAFTA and thats where I lost any respect I had once had for him. From 1990 onward Mr. Prestowitz has made his living by writing different versions of the same book multiple times over, his latest gems have been "the rougue nation" and "three billion new capitalists". Clyde Prestowitz's only claim to fame is that brief stint in the Regan administration where he was part of a trade negotiating team that started to give away the store, he has built his book writing career on the notariety he gained during those few years in the Regan administration, if this is what you consider an impressive resume then you must have very low standards. By the way, early on in his book writing career Mr. Prestowitz had his books translated into Japanese, Chinese and Korean and had strong marketing in Asia, so from the begining Mr. Prestowitz was pandering to an Asian audience and hence the tilt of his books. Mr. Prestowitz has been out of the circle of power for 20 years and the fact that many of his literary works have been backhanded by those in power has left Mr. Prestowitz a little bitter and this bitterness comes through very clearly in "three billion new capitalists". For the sake of argument let me take your side and lets say the U.S. heads into a prolonged and deep recession or better yet as Mr. Prestowitz puts forward in his book the possibility of a depression worse than the 1930's, now if either of these situations actually occur just what do you think the fallout would be for China, Japan, Europe, India and the rest of the world? While I do understand some of the European and Asian posters here and their disdain and hatred of the U.S. and what they see as American arrogance, I often wonder if they ever think about the consequences of what would happen to the worlds' economies if any of these scenarios that they seem to wish on the U.S. so regularly actually happened. The old saying "be careful what you wish for young lady, for you may surely get it" comes to mind!

[VegasVic]

the sub-prime connection is minimal in Thailand - but to sugest that it is sheltered from the ramification is ludicrous - chai mai?

There may be more of a connexion than one expects, the use of CDO's means that the derived instruments were viewed as a useful investment by many, not just retail banks. It has been suggested that more active institutions may have exposure from their 'proprietary' trading, however since most central bank trading is closely held, the public may never know of the impact.

Regards

At your service, Sir

SEC warns of additional sub-prime fallout

Fund managers should increase their awareness of portfolio risk, considering the turmoil in the worldwide markets due to the collapse of the US sub-prime mortgage market, the Securities and Exchange Commission warned yesterday.

Thirachai Phuvanatnaranubala, the SEC secretary-general, said the sub-prime crisis would take time to ease, and could explode anew as hedge funds and institutional investors assess their losses from the downturn in the US housing market.

Volatility in international markets has eased in recent weeks thanks to efforts by central banks to inject liquidity.

But Mr Thirachai, speaking at a seminar at the SET yesterday, warned that risks remain, and urged local institutions to review their portfolios to guard against future downturns.

He also expressed concern about how four Thai banks that have investments in overseas collateralised debt obligations (CDOs) calculated their portfolios and whether values were marked to market or based on investment costs.

Rest:

http://www.bangkokpost.com/Business/04Sep2007_biz41.php

LaoPo

There is no need for these CDO's to be marked to market, when they can hold them for the duration and recognize the loss at some furture date

[midas]

now if either of these situations actually occur just what do you think the fallout would be for China, Japan, Europe, India and the rest of the world? While I do understand some of the European and Asian posters here and their disdain and hatred of the U.S. and what they see as American arrogance, I often wonder if they ever think about the consequences of what would happen to the worlds' economies if any of these scenarios that they seem to wish on the U.S. so regularly actually happened. The old saying "be careful what you wish for young lady, for you may surely get it" comes to mind!

thanks for your response..............

VegasVic in this posting and in your previous postings you have made similar

suggestions that contributors to this thread wish to see the US fail.

I'm certainly not in that category because as you say it will affect every economy.

I'm not sure either if anyone else could be described as " hating America "

America has achieved so much over 230 years and of course is to be commended for that.

But while new economic and political forces gather momentum throughout the

world the USA sometimes comes across as automatically

still wishing to be seen as the most powerful country and that its perception of things

is always the right perception ? I just think that will no longer be the case

from much longer......

[VegasVic]

now if either of these situations actually occur just what do you think the fallout would be for China, Japan, Europe, India and the rest of the world? While I do understand some of the European and Asian posters here and their disdain and hatred of the U.S. and what they see as American arrogance, I often wonder if they ever think about the consequences of what would happen to the worlds' economies if any of these scenarios that they seem to wish on the U.S. so regularly actually happened. The old saying "be careful what you wish for young lady, for you may surely get it" comes to mind!

thanks for your response..............

VegasVic in this posting and in your previous postings you have made similar

suggestions that contributors to this thread wish to see the US fail.

I'm certainly not in that category because as you say it will affect every economy.

I'm not sure either if anyone else could be described as " hating America "

America has achieved so much over 230 years and of course is to be commended for that.

But while new economic and political forces gather momentum throughout the

world the USA sometimes comes across as automatically

still wishing to be seen as the most powerful country and that its perception of things

is always the right perception ? I just think that will no longer be the case

from much longer......

You could be right Midas, but then the reason to be careful what one wishes for is even more important! I am a Milton J. Friedman free market capitalist all the way, however currently in the U.S. the far left and the far right have only one common ground and that is a strong belief in trade barriers and isolationisim. Should events unfold in a way that causes the U.S. to turn inwards and become isolationist and renig on their debts (just as other countries have done since after WW1) then that could be a very troubling situation for the rest of the world. The U.S. is blessed with natural resources both in agricultural production, energy (in coal alone the U.S. has a 300 year energy supply), fresh water, ect. ect. so it would have no problem surviving all on its own. Imagine the worlds largest market just shutting down one day, and not only that but any money you had invested in this market or IOU's from this market were all of a sudden worthless. Not a pretty picture now is it! Fortunately this is not very likely to occur, nor is a deep and long recession or depression likely to occur. We are currently in the 5th year of economic expansion (despite the current liquidity crisis, inflation is low,unemployment is low and corporate profits remain strong), and most expansions last 7-8 years, so I would expect a recession around 2009-2010 time frame, but not later this year as many are predicting. The U.S. is most certainly not always right, and I can give you a list as long as my arm of things that are currently wrong in the U.S., but with that said the last time I looked the U.S. had the worlds largest economy by a factor of 3 over #2 Japan and it remains as the only military superpower left in the world, this perception is the same no matter if you view it from China, Japan, Russia, Germany or anywhere in the world. Now I do agree 50-60 years from now that perception could change, but thats a long way off and I certainly won't be around to see it, I just hope my grandkids are

[chinthee]

VegasVic gets my vote again for most lucid on this thread. Everyone says isolationism will never happen again to the USA, but don't be so sure. The US could revamp its relationship with Mexico, turn it into its own private China, and say goodbye to everybody, except of course, the oil producers.

Anyway, these are just ramblings. China needs the US. The US needs China. The whole world needs a strong and stable US. The world's oil supply needs to be in stable and in rational hands. How many of you believe Iran is a stable hand? Would you want them controlling most of Middle east oil, or the US and its friends?...he he, but I digress...

[wilko]

", I often wonder if they ever think about the consequences of what would happen to the worlds' economies if any of these scenarios that they seem to wish on the U.S. so regularly actually happened. The old saying "be careful what you wish for young lady, for you may surely get it" ohmy.gif comes to mind!"

an example of US arrogance?

[lannarebirth]

Speaking of reneging on debts, there's about 1 TRILLION dollars worth of commercial paper coming due in the next 6 weeks. Let's see how that shakes out. Should be smooth sailing after.

[Carmine6]

VegasVic gets my vote again for most lucid on this thread. Everyone says isolationism will never happen again to the USA, but don't be so sure. The US could revamp its relationship with Mexico, turn it into its own private China, and say goodbye to everybody, except of course, the oil producers.

Anyway, these are just ramblings. China needs the US. The US needs China. The whole world needs a strong and stable US. The world's oil supply needs to be in stable and in rational hands. How many of you believe Iran is a stable hand? Would you want them controlling most of Middle east oil, or the US and its friends?...he he, but I digress...

Well the way the US election is looking, isolationism just may move a step closer. The rhetoric about China and the outsourcing to India uproar from 4 years ago is from the Democrats. Particularly the northeastern Democrats. They have big support from labor unions so play to that crowd.

They're the ones who keep worrying about "mortgaging our children's future to the Chinese" and trying to force China to strengthen the yuan. One of them talked of testing every Chinese toy for lead paint. They've been harping on screening every single shipping container as well which would bog down international trade. Union worker's dream.

Right now, Bush will veto any of that stuff, but come January 2009, there could be a Democrat in the White House and a Democrat majority in Congress.

[midas]

Well the way the US election is looking, isolationism just may move a step closer. The rhetoric about China and the outsourcing to India uproar from 4 years ago is from the Democrats. Particularly the northeastern Democrats. They have big support from labor unions so play to that crowd.

They're the ones who keep worrying about "mortgaging our children's future to the Chinese" and trying to force China to strengthen the yuan. One of them talked of testing every Chinese toy for lead paint. They've been harping on screening every single shipping container as well which would bog down international trade. Union worker's dream.

Right now, Bush will veto any of that stuff, but come January 2009, there could be a Democrat in the White House and a Democrat majority in Congress.

The USA surely couldnt afford to close the doors on Middle East or Russian oil supplies ?

[LaoPo]

Everyone says isolationism will never happen again to the USA, but don't be so sure. The US could revamp its relationship with Mexico, turn it into its own private China, and say goodbye to everybody, except of course, the oil producers.

Anyway, these are just ramblings. China needs the US. The US needs China. The whole world needs a strong and stable US. The world's oil supply needs to be in stable and in rational hands. How many of you believe Iran is a stable hand? Would you want them controlling most of Middle east oil, or the US and its friends?...he he, but I digress...

If you have a good look into these statistics, it's not so easy for the US, or any other country, to survive on it's own....:

Imports of Goods by End-Use Category and Commodity

http://www.census.gov/foreign-trade/Press-...elease/exh8.pdf

It (Isolationism/Protectionism) would be a worldwide disaster and, talking about a deep, wide and long recession.....Brrrrrrr.

And: WHAT would happen to America's exports ?

Exports of Goods by End-Use Category and Commodity

http://www.census.gov/foreign-trade/Press-...elease/exh7.pdf

An interesting read about Protectionism:

Protectionism - the real threat to growth, stability

http://www.chinadaily.com.cn/bizchina/2007...ent_6010634.htm

If USA's Isolationism/Protectionism would become reality the complete world would collapse and be in serious, very serious, trouble and recession.

The US, EU, Japan, China, India, Middle East and the rest of the world knows that and it is a very unlikely scenario.

But I agree with VegasVic that not just the US (enormous decline in production, jobs, income) would suffer; the rest of the world will suffer also and bad, very bad.

World wide economical sense will prevail, I hope

LaoPo

[LaoPo]

Is the worst over ?

Firms, banks begin to shed subprime caution

LONDON (Reuters) - Companies showed signs of shrugging off the caution that has enveloped the world economy since a credit crisis broke, as investors looked on Tuesday to U.S. data to gauge the likelihood of a Federal Reserve rate cut.

Sony Corp said it would list shares of its financial unit on the Tokyo Stock Exchange next month, raising up to 361 billion yen ($3 billion) in Japan's largest initial public offering this year.

There had been speculation Sony might delay the IPO because of market upheaval, as banks worldwide scrambled to calculate their exposure to mass defaults on subprime U.S. mortgages offered mainly to poor people.

In Germany, the European country hit hardest by the turbulence, its largest bank Deutsche said it was optimistic about the current quarter and saw signs the market was stabilizing.

Chief Executive Josef Ackermann told a banking conference the violent market conditions of August had affected his bank. But he added: "I am optimistic about the environment globally for financial institutions."

Two Germans lenders, IKB and SachsenLB, almost sank when investments linked to the U.S. home loan market turned sour, and several more have detailed billions of euros in exposure.

Ackermann said had there been any delay in a 3.5 billion euro bail-out of IKB by other German banks, the whole sector would have faced serious problems.

U.S. mortgage lender Thornburg (TMA.N: Quote, Profile, Research), which was forced to sell more than 35 percent of its assets and reduce borrowing to cut its risks, said it had completed the securitization of a $1.4 billion hybrid loan which will help it up its pace of lending.

Some investors now see opportunities in the fallout from the U.S. mortgage chaos.

Rest article here:

http://www.reuters.com/article/ousiv/idUSN...04?pageNumber=2

LaoPo

[highdiver]

I found some of the post of our american friends to be in com;ete denial to what realy going on.

U.S. NATIONAL DEBT CLOCK

The Outstanding Public Debt as of 04 Sep 2007 at 03:38:26 PM GMT is:

USD 8,996,443,170,246.85

The estimated population of the United States is 302,893,375

so each citizen's share of this debt is $29,701.68.

The National Debt has continued to increase an average of

$1.44 billion per day since September 29, 2006!

Americans are in complete denial of the situation... they are so in debt it can never be repaid. yet the shopping spree continues...

The amusing thing is the Vegas Vic along with many americans belive that the rest of the world will keep buying this increasing debt as they have no other option.. i wonder what will happen when the world will stop...???

[VegasVic]

", I often wonder if they ever think about the consequences of what would happen to the worlds' economies if any of these scenarios that they seem to wish on the U.S. so regularly actually happened. The old saying "be careful what you wish for young lady, for you may surely get it" ohmy.gif comes to mind!"

an example of US arrogance?

One mans view of reality is another mans arrogance!

[highdiver]

", I often wonder if they ever think about the consequences of what would happen to the worlds' economies if any of these scenarios that they seem to wish on the U.S. so regularly actually happened. The old saying "be careful what you wish for young lady, for you may surely get it" ohmy.gif comes to mind!"

an example of US arrogance?

One mans view of reality is another mans arrogance!

or denial...

USA has over 300 million residence and it can not produce enough food to feed them...

if the US economy does fall how will you feed those people when no one will sell you food for worthless dollars?

[LaoPo]

I found some of the post of our american friends to be in com;ete denial to what realy going on.

U.S. NATIONAL DEBT CLOCK

The Outstanding Public Debt as of 04 Sep 2007 at 03:38:26 PM GMT is:

USD 8,996,443,170,246.85

The estimated population of the United States is 302,893,375

so each citizen's share of this debt is $29,701.68.

The National Debt has continued to increase an average of

$1.44 billion per day since September 29, 2006!

Americans are in complete denial of the situation... they are so in debt it can never be repaid. yet the shopping spree continues...

The amusing thing is the Vegas Vic along with many americans belive that the rest of the world will keep buying this increasing debt as they have no other option.. i wonder what will happen when the world will stop...???

Try this clock..it's moving and seems to be a bit higher than the previous, mentioned, clock:

http://oddhammer.com/tutorials/debt_clock/

LaoPo

[chinthee]

highdiver, come on, the world's richest, most powerful nation by a huge margin, and with one of the most sophisticated agro-mega economies in the world can't figure out how to feed its people?

You can do better than that if you want to American bash.

[LaoPo]

", I often wonder if they ever think about the consequences of what would happen to the worlds' economies if any of these scenarios that they seem to wish on the U.S. so regularly actually happened. The old saying "be careful what you wish for young lady, for you may surely get it" ohmy.gif comes to mind!"

an example of US arrogance?

One mans view of reality is another mans arrogance!

or denial...

USA has over 300 million residence and it can not produce enough food to feed them...

if the US economy does fall how will you feed those people when no one will sell you food for worthless dollars?

I'm not surprised anymore by Mr. VV's arrogance...

I am surprised though that he never ever states his views with facts, never ever.

LaoPo

[VegasVic]

Well the way the US election is looking, isolationism just may move a step closer. The rhetoric about China and the outsourcing to India uproar from 4 years ago is from the Democrats. Particularly the northeastern Democrats. They have big support from labor unions so play to that crowd.

They're the ones who keep worrying about "mortgaging our children's future to the Chinese" and trying to force China to strengthen the yuan. One of them talked of testing every Chinese toy for lead paint. They've been harping on screening every single shipping container as well which would bog down international trade. Union worker's dream.

Right now, Bush will veto any of that stuff, but come January 2009, there could be a Democrat in the White House and a Democrat majority in Congress.

The USA surely couldnt afford to close the doors on Middle East or Russian oil supplies ?

The U.S.A. could most certainly afford to close the doors on the middle east and Russian oil . In the short term the U.S. and Canada could enter into a quid pro quo on the Natural gas pipelines and tar sands oil from Canada, and immediate work would begin on coal gasification plants as well as bringing coal power plants back online and building new coal plants (the EPA regulations would go out the window) drilling would begin immdeiatly in Anwar and many offshore areas that were deemed ecologically sensitive. Energy is not a problem for the U.S. as I said there is a 300 year supply of coal within its boarders! Now to the political situation, what Carmine said is spot on, the first thing to go under Democrat control will be NAFTA and hard line trade policy will be the letter of the day. The one saving grace (for the U.S. and the world) is that the "Fair Tax" is gaining favor on both sides of the isle, this major change in the tax system in the U.S. could in one fell swoop discourage conspicous consumption, encourage U.S. savings and investment and bring the corporate tax to 0% thereby bringing all those outsourced jobs(both manufacturing and service) back to the U.S.. If this were to occur it would be a tremendous blow to Mexico and India in particular but China would also take a very big hit, however once things leveled off this would be a very good thing for the stability of the world economy going forward. Lets hope for the best possible outcome for everyone involved!

[highdiver]

highdiver, come on, the world's richest, most powerful nation by a huge margin, and with one of the most sophisticated agro-mega economies in the world can't figure out how to feed its people?

You can do better than that if you want to American bash.

I am not Amerciasn Bashing. i am realy afraid of what will happen.

I totaly agree with you that they are still the world most powerdfull nation.. as for Richest... we can debate if Rich means owing debts to the rest of the world a debt that will never be paid??

As for Sophisticated Agro mega..... nice try...

At the end of the day you still need to feed 300 million people and America is importing a substanial amount of food. those imports will stop once someone decides that they are not giving the american any more credit.

for America to continue business as usual someone needs to be able to continue running this credit line.

the implications are mind blowing... but if you see a financial brekthrough for this please share it with us...

[VegasVic]

", I often wonder if they ever think about the consequences of what would happen to the worlds' economies if any of these scenarios that they seem to wish on the U.S. so regularly actually happened. The old saying "be careful what you wish for young lady, for you may surely get it" ohmy.gif comes to mind!"

an example of US arrogance?

One mans view of reality is another mans arrogance!

or denial...

USA has over 300 million residence and it can not produce enough food to feed them...

if the US economy does fall how will you feed those people when no one will sell you food for worthless dollars?

Highdiver you really need to think (or do some research) before you post The U.S. is the breadbasket of the world, it can feed its entire population 2-3 times over! Ther are farmers in the U.S. that get paid not to grow so that grain, wheat, corn or soybeans can increase their price for export.

[chinthee]

Really, everyone on this board should be reading this thread and the other economic thread because the implications are so serious for everyone.

LaoPo, don't misplace arrogance for practicality. You can criticize the Americans as much as you want, but they are the world leaders at wealth creation, preservation and continuation.