World economy talk

[Ry_Tower]

Dapat lang no. The US repays debt by issuing more debt. Kung baga in credit card lingo puro na lang BALANCE TRANSFER!

Exxon Mobil is flooded with cash...

Sila ni Apple and grabe ang war chest eh.

[uls]

ano kaya reaction Asia market open

either wala lang or panic selling

[tidus1203]

ano kaya reaction Asia market open

either wala lang or panic selling

Our first chance to see would be in the FX market around 4AM Manila time on Monday that's when New Zealand opens the first market in the world to do so... Pero around 7AM siguro para we have Australia opening para mas accurate...

[tidus1203]

"China, the largest creditor of the world's sole superpower, has every right now to demand the United States address its structural debt problems and ensure the safety of China's dollar assets," it said.

It urged the United States to cut military and social welfare expenditure. Further credit downgrades would very likely undermine the world economic recovery and trigger new rounds of financial turmoil, it said.

China tells US 'good old days' of borrowing over - Business - GMA News Online - Latest Philippine News

I find the BOLD part interesting... Could be the slow shift of world powers...

[safeorigin]

Yip, the US is no longer the only power with stealth fighters(J-20, PAK-FA)

China is constructing carriers and developing the J-15 in conjunction.

That says a lot about the slow shift of global superpowers

[Ry_Tower]

IF the US economy continues on this trend and China continue to grow albeit not as fast as the past 5 years, how many years would China surpass the US in terms of economic wealth? Tagal pa siguro. Pero yung shift ng power medyo nakikita ko pa lang eh growing ang China.

[uls]

China is mad coz they have no choice but to hold US treasuries

kasalanan nila yan eh

China chose to run a trade surplus with the US

they sell stuff to the US but don't buy

so they ended up with trillions of dollars and have no place else to park those dollars except in US treasuries

don't tell me gold

there's not enough gold

if China use all their dollars to buy gold, the price of gold will skyrocket to the moon

US treasuries is the only asset class deep enough and liquid enough to absorb that amount of dollars

too bad for China they are now holding tons of previously triple-A paper

it's understandable why they're mad

[uls]

will there be massive dumping of US treasuries?

i don't think so

if the biggest holders of US treasuries are gonna sell, what are they gonna buy?

gold?

[uls]

expect Germany bonds to rally

some investors will seek diversification

Germany is an alternative

but compared to US treasuries, there's a smaller supply of Germany bonds

--

expect Fannie Mae, Freddie Mac, Ginnie Mae to get downgraded

[Monseratto]

THis week will indeed be a very interesting, especially on the negative side. Will the US dollar fall like a rock or just stay put?

[tidus1203]

China is mad coz they have no choice but to hold US treasuries

kasalanan nila yan eh

China chose to run a trade surplus with the US

they sell stuff to the US but don't buy

so they ended up with trillions of dollars and have no place else to park those dollars except in US treasuries

don't tell me gold

there's not enough gold

if China use all their dollars to buy gold, the price of gold will skyrocket to the moon

US treasuries is the only asset class deep enough and liquid enough to absorb that amount of dollars

too bad for China they are now holding tons of previously triple-A paper

it's understandable why they're mad

They could diversify into other bonds of other countries like Australia, Bunds, Gilts, JGB's and ROP's!

[tidus1203]

In comments emailed to CNBC, Guan Jianzhong, chairman of Dagong Global Credit Rating, said the currency is “gradually discarded by the world,” and the “process will be irreversible.”

Dagong made headlines last week when it became the first rating agency to cut its U.S. credit rating from “A+” to “A” after policymakers in Washington failed to act in a timely manner to lift its debt celing.

News Headlines

China is really on an offensive to its best customer!

[uls]

They could diversify into other bonds of other countries like Australia, Bunds, Gilts, JGB's and ROP's!

China owns Philippine bonds? hehe

anyway China already holds bonds of other countries but the majority of their reserves are parked in US treasuries

they can diversify slowly. if they dump treasuries suddenly prices will crash

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aside from the US downgrade, markets have to deal with Italy on Monday

it is acknowledged that the bailout fund isnt big enough to bail out Italy. it has to be increased

but Germany isnt backing the increase of the bailout fund

the amount needed is so big that it would put Germany's finances at risk

so that leaves the ECB

the ECB will buy Italy bonds to hold down interest rates

question is will that be enough to save Italy

[uls]

THis week will indeed be a very interesting, especially on the negative side. Will the US dollar fall like a rock or just stay put?

there are those who say there will be USD selling, treasuries selling, gold buying

but if there's flight to liquidity, everyone will go to USD cash and treasuries regardless of the downgrade

selloff in equities expected

CHF, JPY buying(but beware of intervention)

one thing for sure -- monday will be volatile

[tidus1203]

Gold is already up some $36 right now in thin trading from the New York closing price...

[tidus1203]

US stock futures down sharply too at the moment...

Dow futures down 214
S&P500 futures down 23
NASDAQ futures down 36.75

[uls]

ECB Moves to Prop Up Italy, Spain - WSJ.com

FRANKFURT—The European Central Bank signaled it would purchase government bonds of Italy and Spain on a large scale, in the most dramatic and controversial escalation of its nearly two-year effort to stem Europe's unfolding debt crisis.

[uls]

++++++++++++++++++++++++++++++++++++++

[tidus1203]

The Group of Seven nations is committed to taking coordinated action to ensure liquidity and to support financial market functioning, financial stability and economic growth, G7 finance ministers and central bank governors said in a statement.

News Headlines

G7 preparing coordinated intervention? Pero la na ako believe sa intervention, QE's and all that additional liquidity measures. Adding liquidity does not solve the fear of the markets...

[Ry_Tower]

China is mad coz they have no choice but to hold US treasuries

kasalanan nila yan eh

China chose to run a trade surplus with the US

they sell stuff to the US but don't buy

so they ended up with trillions of dollars and have no place else to park those dollars except in US treasuries

don't tell me gold

there's not enough gold

if China use all their dollars to buy gold, the price of gold will skyrocket to the moon

US treasuries is the only asset class deep enough and liquid enough to absorb that amount of dollars

too bad for China they are now holding tons of previously triple-A paper

it's understandable why they're mad

I like your point here. It's indeed understandable that they are mad but the bottom line is its their mistake as well.