U.S. subprime crisis has limited impact on China's economy

[Rubber Duck]

BEIJING, March 4 (Xinhua) -- China will maintain 10.4 percent to 10.5 percent of gross domestic product (GDP) growth this year amid a minor slowdown caused by the U.S. subprime crisis, a lawmaker said here Tuesday.

"The impact of the subprime crisis on China's economy is limited, only lowering the GDP growth rate by one percentage point," said Chen Jiagui, a deputy to the 11th National People's Congress (NPC) and vice director of Chinese Academy of Social Sciences (CASS).

He believed China's exports to U.S. will not be affected much since most of them are low-end products and will be popular as the sluggish U.S. economy drags down people's income.

Chen noted that the snowstorm in since January also had limited and temporary impact on China's overall economy as new demand for infrastructure construction will stimulate the economy.

He admitted that China still faces the pressure of price hikes, a major challenge for the macro-economy this year.

"The tendency of rising prices remains unchanged, a result of soaring global oil and grain prices and increasing consumers' demand caused by rising employment rate and income," he said.

He believed China should adopt a tight monetary policy and a stable financial policy to maintain the momentum of China's economy despite the minor impacts of the subprime crisis and the disastrous snowstorm.

http://news.xinhuanet.com/english/20...nt_7717749.htm

[Drewbert]

All these people that call it "subprime crisis" annoy me. It's not a "subprime" crisis, that's just where it showed up first. CRE is starting to die too, for chrissake.

[Rubber Duck]

You are correct. It is a credit crunch. Investors have weighed that the risk of advancing further loans outweighs the potential returns. Bernanke is solving the problem by reducing the rewards still further. Moron. What fucked up academic institution did he attend?

[tee1]

Harvard undergrad /
MIT Ph.D.

taught at Stanford, NYU, & Princeton. geez he should have padded his resume alittle bit
according to wiki

tee1

[Rubber Duck]

Well, perhaps they should give him a few weeks to attend some place where they know what the fuck they are talking about. I guess it is late in the day, but some understanding, anything, has to be better than Nadda!

Originally Posted by tee1

Harvard undergrad /
MIT Ph.D.

taught at Stanford, NYU, & Princeton. geez he should have padded his resume alittle bit
according to wiki

tee1

[Drewbert]

Don't knock Harvard. That's the Prez's party central!

[clipper]

Originally Posted by Rubber Duck

Well, perhaps they should give him a few weeks to attend some place where they know what the fuck they are talking about. I guess it is late in the day, but some understanding, anything, has to be better than Nadda!

He knows exactly what he's talking about:

http://federalreserve.gov/newsevents...e20080304a.htm

1. Increase taxpayer burden by expanding FHA loan limits and guidelines:

[R]eal relief for the mortgage market requires stabilization, and then recovery, in the nation's housing sector. Modernization of the FHA would be of help on this front as well. I am sure that the FHA and the Department of Housing and Urban Development, given the appropriate powers by the Congress, will make every effort to expand their operations and to help improve the functioning of the market for home-purchase mortgages.

Gotta love that term modernization. It means relax standards and increase risk.

2. "Nationalisation" of Fannie and Freddie (I love that euphemism; say socialize in America and everybody gets freaked out with images of Hitler, but if you call it nationalization, it just seems patriotic):

The government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, likewise could do a great deal to address the current problems in housing and the mortgage market. New capital-raising by the GSEs, together with congressional action to strengthen the supervision of these companies, would allow Fannie and Freddie to expand significantly the number of new mortgages that they securitize. With few alternative mortgage channels available today, such action would be highly beneficial to the economy. I urge the Congress and the GSEs to take the steps necessary to allow more potential homebuyers access to mortgage credit at reasonable terms.

This falls right in line with the plan: privatize profits, socialize costs.

Free markets...

OK, one ore edit... remember back when pundits would bring out pliers and tweezers every time Greenspan coughed to figure out whether the Fed was going to raise, hold or cut?

Bernanke is aking it easy:

Declines in short-term interest rates and initiatives involving rate freezes will reduce the impact somewhat...

Do I hear 0.75%?

[Lidador]

[youtube=425,350]AuPgdZeAFjA[/youtube]

the day the dollar falls

[Rubber Duck]

Time to start ignoring those that claim the Duck talks rubbish.