Korean Job Discussion Forums

[bacasper]

Uh-oh...

China asks local lenders not to lend to U.S. banks: report

By V. Phani Kumar
Last update: 10:28 p.m. EDT Sept. 24, 2008


HONG KONG (MarketWatch) -- Chinese regulators have asked domestic banks to stop lending to U.S. financial institutions in the interbank money markets to prevent possible losses during the financial crisis, the South China Morning Post reported Thursday. The China Banking Regulatory Commission's ban on interbank lending of all currencies applied to U.S. banks, but not to lenders from other countries, the report added, citing a source.

[sojourner1]

Uh, oh, Shit's about to hit the fan now that America's credit line from China is being turned off. Of course, in the short term, China's money will flow through England and other countries, but they will turn it off once they see that we can't continue buying all their exports at a high level our credit previously supported. This is another reason to not pass the $700b, because Uncle Sam has to borrow from China too. There is no federal reserve or adequate tax monies to support bailing out the crooks. I say let it fall and self correct itself despite how painful that is, because the bailout will only help in the short term and then we can't pay, because we're maxed on out debt. America thinks it needs credit to continue operating, but the reality is, credit is not a solution. Only producing jobs and profitability will help us get out of this mess.

[khyber]

I do feel bad for the retirees whose savings may be in limbo (my parents being a good example).

[blade]

China denies telling banks not to lend to US banks 6:36 PM, 25 Sep 2008By Langi Chiang and Zhou Xin of Reuters


BEIJING - The China Banking Regulatory Commission (CBRC) denied a newspaper report that it had told Chinese banks to stop lending to US banks in the interbank market. A spokesman for the regulator strongly condemned the article in Thursday's South China Morning Post, calling it irresponsible.

"The CBRC has never, through any channel, issued a statement or told domestic commercial banks not to lend to or borrow from US financial institutions," the spokesman said in a statement on the agency's website.

http://www.businessspectator.com.au/bs.nsf/Article/China-denies-telling-banks-not-to-lend-to-US-banks-JT9SS?opendocument&src=rss

[bacasper]

Given how far up the US' wazoo China is, I am not totally surprised that the original story was overblown, if not completely false.

[mises]

I believe the story is true because the flow of money from Chinese banks to American and European banks has essentially stopped. Only the central bank continues to send cash to the US.

[bacasper]

Can anyone confirm the story one way or the other?

Is the truth then that the banks have stopped lending of their own accord and not at the behest of the CBRC? And is it only to US banks or European ones, too?

[Ya-ta Boy]

Who in their right mind would be sending money to the US now?

[mises]

I don't know if the order was given, but they have stopped lending.

Many European banks are in significantly worse shape than American ones. Including Lehman and Bear. Many will fail.

This will be a global "shadow banking system" crises. It's gonna get real nasty in Europe.

[Ya-ta Boy]

Sorry, Mr. Austrian School of Economics, but I have to ask. Is your avatar meant to be ironic?

[mises]

I dogmatically adhere to Austrian ideas? Nah, I go with what works. You think I am incorrect about major EU banks?

http://shop.ceps.be/downfree.php?item_id=1712

Look at all that leverage... Now, Austrian economics teaches us that such leverage is totally unsustainable. If it is right, then the following banks are at acute risk of collapse:

UBS
ING Group
HSBC Holding
Barclays Bank
BBV Argentaria
Deutsche Bank
Fortis
KBC
Lloyd's TSB
RBS
Credit Agricole
BNP Paribas
Credit Suisse

Let's wait and see if I'm being 1) dogmatic or 2) consistently correct.

[Ya-ta Boy]

Defensive, are we?

It was an innocent question.

[mises]

When those banks fail you'll start going on about Regan/Thatcher etc and not understand why this is happening. You don't get it. The problem in this crises is central banking.

[Ya-ta Boy]

Perhaps I should tell you this:

Anytime someone tells me they 'understand' a situation, I automatically go on BS alert, especially when that person spouts any dogma whatsoever.

I learned a looooooooooong time ago that no one/no theory knows what is going on in any field where there is a diversity of schools. If 'facts' were facts, there would be only one school per field.

So when someone in....let's say for the sake of discussion,... economics, then I want to know first what flavor the Kool-aid is that they drink.

Second point: It isn't always the analysis of the problem that is what is under discussion. It is often in the answer that the problem lies.

It doesn't take 20-20 hind sight to know that when a couple is unemployed they maybe shouldn't be moving to a larger and more expensive apartment. Lots of people can figure out the problem.

Call me silly and uneducated, but when someone can solve the world's problems in two words, I'm not convinced they have both feet on the ground. They just might be missing a detail or two. It's just a thing I have about distrusting snap answers.


(two words = gold standard)

[mises]

Gold standard? huh?