“People are looking at what life looks like after nationalization (AIG, Freddy, and Fannie) makes people not enthusiastic about doing it.”

Quite wrong. In fact, opposition to nationalization is principally on political, real politik, or in the best of cases, practicality terms. Looking at what happens afterward is the least of the issues.

Twofish wrote:

“If we have a “garden variety recession” none of the top 19 banks are going to have huge problems.”

Perhaps on some planet, they’re having a “garden variety recession.” But certainly not this one.

Probably 10 years at the absolute earliest.

jolly: Also any predictions what position Geithner may get at Goldman Sachs after his stint at the Treasury?

He is probably going to academia like Sommers did. I don’t see any reason to think that Geithner is acting in self-interest against the national interest. He may be delusional about what the national interest is, but he isn’t getting bribed.

Also if he were getting bribed by GS, Citigroup, Morgan-Stanley and JP Morgan would have his head. Most of the complaints that GS was having too much of an influence under Paulson, really came from the other banks.

Finally, they choose Geithner because of all of the possible candidates, he is the one with the fewest conflicts of interests.

jolly: I’ve almost come to conclusion that Geithner will say all 19 banks passed the stress test, that way all the financials will continue to march in wonderland but the trust of the entire market will be shaken…

I don’t think so. There will be nothing unusual in any of the stress tests because any data from the stress tests you can figure out from the earnings reports. The markets are having more confidence because some of the more extreme scenarios seem unlikely. If we have a “garden variety recession” none of the top 19 banks are going to have huge problems.

jolly: we have gotten to a point where nobody knows what is on any ones balance sheet.

I think things are stabilizing because everyone knows what is on everyone’s balance sheets. The boogey-man looks less scary once you open the closets and see that there is a giant rat there rather than a man-eating monster.

jolly: sorry for being so off topic, but for god sakes just NATIONALIZE the damn banks (from Citi to Goldman, Goldman to BAC) and set the record. TG bro, make it happen and restore confidence in the United States! Once and for all!

Life doesn’t work that way. It’s not a movie where you “nationalize” and then that’s the end of the story. People are looking at what life looks like after nationalization (AIG, Freddy, and Fannie) makes people not enthusiastic about doing it.

the huge surge in lending may assist internal demand in 12 months out, but does that really assist us? what does the u.s. plan to export to China?

also any predictions what position Geithner may get at Goldman Sachs after his stint at the Treasury?

I’ve almost come to conclusion that Geithner will say all 19 banks passed the stress test, that way all the financials will continue to march in wonderland but the trust of the entire market will be shaken…
we have gotten to a point where nobody knows what is on any ones balance sheet.

sorry for being so off topic, but for god sakes just NATIONALIZE the damn banks (from Citi to Goldman, Goldman to BAC) and set the record. TG bro, make it happen and restore confidence in the United States! Once and for all!

“People’s Bank of China Zhou Xiaochuan called for the establishment of a “super-sovereign reserve currency” last month after Chinese Premier Wen Jiabao said he’s worried a weaker US dollar may hurt China’s investments. Inflation and a depreciating dollar would erode the value of US holdings owned by international investors.”

Again, Bloomberg:

“China, Japan and Korea should establish a routine mechanism to diversify the region’s reserve currencies away from the dollar”, the China Securities Journal reported, citing central bank adviser Fan Gang. “The Asian countries need to consider setting up a transitional arrangement to help reduce reliance on the dollar before the problems in the international financial system are resolved”.

http://www.counterpunch.com/

http://henryckliu.com/page186.html

Brzezinski’s vision of harmony with China is not shared by all in the US. Within days after Hillary Clinton’s maiden foreign visit to Beijing as Secretary of State, in which she declared US-China cooperation as imperative for enhancing the national interests of both countries and for pulling the world from the current financial crisis, the US Navy staged a provocative intrusion into Chinese territorial waters by a US low-frequency sonar surveillance ship near China’s submarine base on Hainan Island in the South China Sea, mapping deep-sea routes for submarines leaving and entering their base.

Press reports on computer hackers allegedly associated with the governments of Russia and China having embedded software in the US electricity grid and other infrastructure that could potentially disrupt service or damage equipment are suddenly appearing even though such concerns have been simmering for years within government security establishment. President Obama reportedly has started a 60-day review of all the nation’s efforts at cyber security that is expected to be completed by April 17.

Chinese Foreign Ministry spokeswoman Jiang Yu at a regular press conference on April 8 denied China had any involvement with mapping or hacking into the US electrical grid to leave behind software programs that could be used to disrupt the system, noting that the White House had denied the media reports.

China as Protector of Developing Countries

China’s view of itself is one of a natural member of what during the Cold War was called the Third World, now generally known as developing countries, in the struggle against Western imperialism, now known as neoliberalism, but not as its leader either by design or by default, as each country must seek its own way of struggle according to its historical conditions. Nor does China maintain a foreign policy of exporting revolution to other countries that do not want a revolutionary path. China has formally declared its determination never to seek hegemony and has openly declared a policy of no-first-use of nuclear weapons.

http://www.bloomberg.com/apps/news?pid=20601080&sid=aQwLEtKXXrlc&refer=asia

April 17 (Bloomberg) — China’s economy, the world’s third largest, may rebound this quarter as Premier Wen Jiabao’s 4 trillion yuan ($585 billion) stimulus package cushions the effects of the global recession.

Urban fixed-asset investment surged by almost a third in March and industrial-output growth accelerated, reports accompanying China’s gross domestic product figures showed yesterday. First-quarter GDP grew 6.1 percent, the slowest pace in almost a decade, as exports slumped.

“The economy has gained significant momentum since February,” said Sun Mingchun, an economist at Nomura Holdings Inc. in Hong Kong, who predicts the economy will expand 8 percent this year. “We still expect a V-shaped recovery.”

A pickup in China will contribute “strongly” to growth in the rest of Asia by increasing demand for commodities and products from around the region, according to the World Bank.

Barclays Capital raised its estimate for economic growth this year to 7.2 percent from 6.7 percent because of the first- quarter data. UBS AG increased its forecast to as much as 7.5 percent from 6.5 percent previously and Royal Bank of Scotland’s estimate rose to 7 percent from 5 percent.

Merrill Lynch expects second-quarter growth of 7.2 percent, climbing to 8 percent for 2009.

“China got its stimulus plan started months ahead of the U.S. and it’s really working,” said Frank Newman, chairman of Shenzhen Development Bank, who served as a deputy secretary at the U.S. Treasury from 1994 to 1995. “We see a lot of it in action because we are financing it.”

Economists have been increasing their forecasts since February. The median estimate of 15 surveyed by Bloomberg News before the release of yesterday’s data was for 7.7 percent growth this year, up from 7.2 percent in February.

Nissan Motor Co. said its sales of passenger cars in China rose 36 percent in March from a year earlier as stimulus measures boosted confidence and attracted more buyers into showrooms. Anhui Conch Cement Co., China’s biggest maker of the building material, said this month that sales volume jumped 15 percent in the first quarter from a year earlier.