Monday, February 23, 2009

Chinese chums

How do you say 'pretty please' in Clintonese?
"We are in the same boat," she said. "Thankfully, we are rowing in the same direction, toward landfall."

In an interview with Yang Lin of Shanghai-based Dragon TV, Clinton said the Chinese understand that the United States "has to take some drastic measures" with the stimulus package to restore American spending, which in turn will help revive Chinese exports.

By continuing to buy U.S. Treasury bonds, "the Chinese are recognizing our interconnections," she said. She said that the purchases were a "very smart decision" because the bonds are safe and stable.
Naysayers, the club of which Blog Simple has been a member since its inception, beg to differ, we may be in the same boat with the Chinese, but it is not heading towards landfall, it's pointed downstream, where we can hear the roaring of the falls.

The Chinese can spend their money as they wish, and if they wish to continue to try to prop up a black hole with their hard earned money, it is their own business. It reminds me of those paintings by Dalí where clocks and shit are held up by crutches. All they can do by continuing to buy is delay the day of reckoning. Their fear of 'reckless policies' is very well founded, and the news out of Washington and New York just makes it all the more clear:
AIG may announce that it is converting the government’s preferred shares into common stock to relieve pressure on the New York-based firm’s liquidity, a person familiar with the situation said. AIG pays a 10 percent dividend on preferred stock, and none on common shares.
So AIG, which has basically been nationalized, except that the clowns that ran it into the ground are still running it, is going to decide what to do with the shares the government purchased to keep it afloat. Calling Mr. Geithner, is that OK with you? Yeah, I thought so.

Oh yes, and AIG also wants another $60bn. Maybe the Chinese would like to pony up? No, I thought not.


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