America Just Got Fucked Over

[berni_mccoy]

Sorry for the language, but there really is no other way to put it.

http://www.reuters.com/article/companyNewsAndPR/idUSPEK16693720080925

BEIJING, Sept 25 (Reuters) - Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday.

The Hong Kong newspaper cited unidentified industry sources as saying the instruction from the China Banking Regulatory Commission (CBRC) applied to interbank lending of all currencies to U.S. banks but not to banks from other countries.

This is going to push the credit crisis into overdrive. The bill just went from $700 Billion to $1.8 Trillion.

UPDATE: As a couple of posters noted below, there's an update to this story: China is now denying they told their banks to do this. However, the original report clearly had sources saying they did. So what's the real story here? A leak and a retraction sound like what has really happened. I still don't like the sound of this...

[WCGreen]

1. Shit meet the fan....

[Morning Dew]

2. cursing is entirely appropriate here.

we're fucked.

1.8 trillion - holy shit.

[OmahaBlueDog]

3. Oh, just pile it on to the already huge pile of debt

[Kerrytravelers]

4. Thank you for this link. This is just terrifying.

[PerfectSage]

5. What?

China and every country on the planet whose cental bank holds US dollars has been fucked over for 8 years. 20 years 30 years?

The free lunch is over.

I wonder what Sun Tzu would say about this? "Very interesting. Enjoy your ass fucking America"

:rofl:

[depakid]

6. That rumor has been DEBUNKED on LBN

[berni_mccoy]

8. Um, it's not a rumor. And it hasn't been debunked. WTF are you talking about?

[tkmorris]

10. Here

http://www.bloomberg.com/apps/news?pid=20601089&sid=aaxM3V9YhAwA&refer=china

[berni_mccoy]

14. Thanks. Now, what's the real story here. It's definitely not a Rumor, but a retraction by China's

regulator. What did they really tell Chinese banks and why are they back-pedaling now?

[depakid]

17. Please- it was an incorrect story on the wire- i.e. a rumor

If you knew anything about the global banking system, you'd understand why the Chinese wouldn't undertake such a policy.

Hint: it would be self destructive,

I realize that there are a disturbing amount of people here who want to see a global financial meltdown- and hasten the onset of a depression, but fortunately there are also more responsible folks who have an idea what would mean for everyone.

[Aqaba]

19. Hell no.. it was damage control

The original story was the gut reaction. The gut reaction is not good for the status quo, hence the retraction.

This shit is going to go down one way or the other, and that Reuter's article elucidates a valid reaction.

[lapfog_1]

18. Either a planned or unplanned warning shot.

planned - Chinese put the first story out to scare the congress critters into moving to bail out their holdings that have gone south... only to retract it minutes later to prevent a full stock market meltdown (costing China an enormous amount of money, btw) tomorrow.

unplanned - A high level official, but not from the central committee, doing his job to reduce exposure to the financial crisis in the US, issues a decision to halt lending... only to be overridden by central committee members who haven't yet got a plan B to selling to the US all of the crap that they make. They can't really afford us to tank either. The high level official will likely be in a re-education camp shortly... or simply disappear.

[depakid]

13. Of course it was a rumor- and not a very believable one

The banking regulator ``never, through any channel, announced or notified domestic banks to ban lending to U.S. financial institutions,'' China Banking Regulatory Commission spokesman Liao Min said in a statement on the commission's Web site today. The commission condemned the ``irresponsible'' report and reserves the right to take legal action, the statement said.

http://www.bloomberg.com/apps/news?pid=20601089&sid=aaxM3V9YhAwA&refer=china

It wouldn't have been in their best interests to have halted interbank lending- though floating a rumor might put pressure on Congress (if you're conspiratorially inclined) to get the deal done soon.

[berni_mccoy]

15. That's not a rumor. That's a leak with a retraction.

[KathieG]

7. This is going to require one hell of a large tube of lubricant

[NYC_SKP]

12. America, say hello to your very first Goatse.

[Life Long Dem]

9. Then no wasting time on photo-ops when we are on the brink of a nightmare.

[NYC_SKP]

11. I miss the the old China.

I miss American made dress shirts and mom and pop hardware stores.

I miss 20% down home loans, or less with good credit.

I miss having jobs with benefits and feeling that I could always count on Social Security in my late years.

I miss the old days, when China was the big scary Red enemy, but our economy was our fucking economy, not theirs.

[musicblind]

16. VERY good post. A Definite MUST READ!

Even though there was a retraction. This story is terrifying and everyone should read it.

This makes me sick.

[berni_mccoy]

20. Yep. The fact that China gov't retracted their statements makes me very uncomfortable.