Thought that my job at Wallie world was safe. But with these guys saying China will recover next year makes me scared shit less. Just who is China going to ship their stuff to? Broke dicks in Florida? How about all those peons in California? Where is all the trade credit coming from? I think my future bonuses are toast until we get over the next few years of national bankruptcy.
We have been "officially " in recession for 12 mos. We are just feeling the effects right now. Are you feeling upbeat? Want to buy a house for twice what you can finance it for? How about a car you can't afford to repair. Let alone insure. How about that great shopping? This year will be better than expected because the stores are practically giving stuff away to empty stuffed warehouses that cost so much to keep open. Need to generate the income to pay those inventory loans you know.
China needs to stay strong so they can buy more of our bail out induced treasury debt. For themselves they need to create another 100 million jobs or so to stave off overthrow. Imagine that coming at you. These people are hungry and are moving into the cities to cause all kinds of unrest. Ain't enough cops on the planet to hold off this golden horde.
We have been "officially " in recession for 12 mos. We are just feeling the effects right now. Are you feeling upbeat? Want to buy a house for twice what you can finance it for? How about a car you can't afford to repair. Let alone insure. How about that great shopping? This year will be better than expected because the stores are practically giving stuff away to empty stuffed warehouses that cost so much to keep open. Need to generate the income to pay those inventory loans you know.
China needs to stay strong so they can buy more of our bail out induced treasury debt. For themselves they need to create another 100 million jobs or so to stave off overthrow. Imagine that coming at you. These people are hungry and are moving into the cities to cause all kinds of unrest. Ain't enough cops on the planet to hold off this golden horde.
China's currency falls by record against U.S. dollar - MarketWatch
Analysts said the current downturn in China's manufacturing sector is likely to deepen, triggering more cuts in production and employment.
"We expect the Chinese economy to slow further for another several months before a rebound in mid 2009," wrote Merrill Lynch economists headed by Ting Lu in a note Monday. "It's our view that China's massive fiscal stimulus plan will help buffer the slowdown."
Morgan Stanley's Wang said he expects the weakening of the Chinese currency against the dollar to be temporary. A longer-term devaluation would run the risk of sparking capital outflows, copy-cat devaluations of regional currencies and renewed trade tensions with the European Union, the U.S. and other big trading partners.
He added fundamentals don't support a major softening of the yuan against the greenback, given China's large trade surplus.
"I don't think there is a foundation for the [yuan] to depreciate on a sustained basis," Wang said.
Analysts said the declines in the yuan were likely driven in part by state intervention and traders anticipating a weaker outlook for the manufacturing-dependant Chinese economy. End of Story
Chris Oliver is MarketWatch's Asia bureau chief, based in Hong Kong.
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Comments: 79
Welcome to the world of competitive devaluations, a race to the bottom where everybody's a loser. As the Yuan is already undervalued against the dollar, massively so, this simply tells us the state of desperation in the CCP. They know that there will...
- capncaveman
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Drystacked 2 hours ago
Even (3 Up / 3 Dn)
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The Chinese are smart and very sneaky. They've been eating our lunch for quite awhile. While we're fighting about our differences and individuality, they're unified and kicking our butt.
Whether that will continue or not will be determined by our future decisions. Hopefully we can get our government to serve the people's needs instead of corporate America.
EDIT: Thumbs down huh? Wow, apparently 1 person has their head in the sand!
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EconomicWars 2 hours ago
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Well I just have to say that I think the author is wrong. I think that from now on Chine’s currency is going to start going down against the dollar and this trend may continue for a few years to come. What I see happing with Chine’s currency is that in the mid 2009 chine currency prices are not going to start rebounding just because the world economy is going to start recovering. I do not see that happening; in my opinion this is not going to happen because chine is just starting to go through it version of mortgage crisis, plus a lot of factories are only now starting closed in chine etc…... So even as prices of things and demand starts picking up again in mid 2009 I do not see the chine’s government been able to pick up its currency even if they wanted to by that time, its economics fundamental may not let them. What I see happing then is a rebound in inflation, prices of manufacture things are going to start going up in chine. This time around the inflation in the manufacturing part of Chine’s economy maby be stronger than the inflation in the food part of Chine’s economy.
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sobeachbiz 2 hours ago
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Sorry Guys, I read these posts full of bravado and I have to laugh.
Have any of you been to China? I was there on business and I can tell you there is no way the chinese economy is "Going Down". The fact is that as usual the chinese Govt is tilting the table unfairly in their direction again. This is why China, not the US, owns 1.5 Trillion of our debt.
This is why they are a net exporter not importer like the US. This is why they can have a $585 Billion dollar stimulus package and not borrow it on the backs of their children like we do and have been doing for some time.
Don't fool yourself into thinking the chinese story is done, it has just begun, and unless we start demanding fair trade and currency, then one day we will be resigned to making firecrackers and other cheap throw away junk.
EM 1 hour ago
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No, the reason China is running a surplus is because of excessive consumption in the United States first and second, because US companies export back here instead of producing the goods locally.
Joe_Bourbon 32 minutes ago
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The reason there is excessive consumption is that there has been excessive credit available to consumers. Do NOT blame the US consumer, any population faced with decade after decade of easy credit (that $1.5 trillion financed by the Chinese) and artificially low pegged imports (again from China) is going to have a percentage of people that will just buy and buy until there is no more credit.
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poweroutoftheblueski 1 hour ago
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Thumbs up Sobeach: if only you turn down the fear part, I think you are tight on the mark.
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crashhamster 2 hours ago
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"We expect the Chinese economy to slow further for another several months before a rebound in mid 2009," wrote Merrill Lynch economists
Where do these "economists" get these ideas - there is no way that anything is going to rebound in 6 months. Even basic economic theory tells us that economic cycles last a lot longer than 6 months to a year - no wonder things are such a mess with goons like this spouting trash like this. It also goes along with the UK govt which is thinking along the same sorry lines - they are going to be in lots of trouble as their forecast is also looking for a rebound in the 2nd half 09' - the poor misguided people.
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jonesreport.com 2 hours ago
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Barroso says crisis has brought Britain closer to euro
AFP
Monday, Dec 01, 2008
The international financial crisis has set off a radical change in thinking in Britain about the euro, EU commission chief Jose Manuel Barroso said Sunday.
While acknowledging the majority opposition in Britain to embracing the euro, Barroso told French radio: "We are now closer than ever before."
He added: "I'm not going to break the confidentiality of certain conversations, but some British politicians have already told me: 'If we had the euro, we would have been better off'."
Sterling has suffered major falls in the credit crunch which has seen Britain, like other governments, spend massively in recent months to support the banking system.
"The British have an enormous quality, one of many, that is they are pragmatic," Barroso said on an RTL radio/LCI television broadcast. "This crisis has emphasised the importance of the euro, in Britain as well."
Full article here
http://www.infowars.net/articles/december2008/011208Barroso.htm
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beeswax 1 hour ago
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China needs this devaluation. It would be devastating if the Renmimbi traded much higher. This is an export economy that gains when the dollar is higher. But the social pressures of a deflating currency at home is something the central bankers will be watching as they try to ramp up their own consumer economy.
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dow1 1 hour ago
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Wether WE like it or not "WE ARE HOOK on CHINESE CHEAP GOODS be it WALLYWORLD, TV, NOTEBOOK, NIKE's, CLOTHES, CELLPHONES, SHOES, and VICTORIA'S WOMEN I'll SAY, IT "PANTIES"." CHINA knows it that WE ARE like DRUG(CONSUMER) ADDICTS....
Okey here is the BIG PICTURE, CHINA already had $$630 Billion Econ Stimulus for CAPITAL INFRASTRUCTURES, CUT in INTEREST RATES, then there is the QUESTION what more can CHINESE POLICY Makers do to maintain 9%%% or HIGHER GDP Growth with out incurring DEFICITS on the CHINESE TREASURIES. We'll GUESS it, "DEVALUATION of the YUAN" through manipulation at it's open and rawest form. This move make CHINA appears as an advocate for a strong US$$.
Solely for the purpose of continued DEPENDENCY on CHINA's EXPORT ECONOMY, and maintaining 9%% GDP. Thus, continued CHEAP CHINESE Labor employment at
EXPORT ORRIENTED ECONOMIC SECTOR to avoid SOCIAL UNREST. On the other hand, YUAN DEVALUATION is the least path of resistance that will give their $$ the BIGGEST BANG for the BUCK... MANIPULATION of the YUAN vs the US$$ is one move that COST practically nothing. Except deep concern, dissapointments, continued addition to US Job losses, bbiittcch'n, & frustrations on the soon Obama Admin...
Good or Bad I guess it depends. The CHINESE BAIT(Expect Further Drop on Prices of Goods) is ON specially the big screen LCD's TV that is going to fall like a rock bottom prices in order to lure "US ALL" in to a BUYING FRENZIES.... Big Picture, drop in Raw Materials Globally + Devalued Yuan(Means Cheaper Chinese Labor) = MORE CHEAPER CHINESE GOODS(Watch out for the coming CHEAP Chinese Cars)...All pointing to a renewed/reborn/revival US Consumer(ADDICTION) Dependent Economy...
poweroutoftheblueski 58 minutes ago
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I didn't read you comment Dow1. When I see caps so generously supplied, the logic in thinking is usualy lacking. Could you tell us if you have thought about these feeling much?
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WatchnFedInDisbelief 1 hour ago
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If the Chinese currency keeps dropping, you can kiss the last remnant of the U.S. mfg. base goodbye. What the Chinese need to think about though is "If none of us has jobs, how will we buy their stuff?"
dow1 1 hour ago
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I totally agree with you WFD.....Yes US Manuf is doomed I guess. News is Chinese Car Companies are only making $$120 PROFIT per CAR. Then there is a THREAT to BOEING Co. of the coming CHINESE MADE JUMBO Commercial JET Production in 5 years.
It's All PAINFULL MEDICINAL REMEDIES for the USA. US can go the way of PROTECTIONISM & ISOLATIONISM(CUT/BAN IMPORTS or Higher Tarriffs on IMPORTS)... Cut WAGES in order to COMPETE in terms of LABOR COST in ALL US Manufacturing(CARS, BOIENG, TECHS, etc...) to $12 to $18 per hour STANDARD REGARDLESS .... DEFAULT on US IOU's or SEEK DEBTH FORGIVENESS.... BALANCE USA FISCAL BUDGET at ALL COST....DEVALUE US$$ to DISCOURAGE IMPORTS...The list goes on,...
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omnisight 1 hour ago
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I agree with WatchnFedInDisbelief. The Chinese think they can improve export revenue. Haven't they spare a thought about the terrible jobless rate? Very selfish.
Guess what.. most stocks and commodities already plunge; Gold worst hit -5.4% in the past 17hours.
If China continues to devalue Yuan in 2009, say goodbye to stocks and commodities. World's in total mess.
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