Please everyone try to follow along, there is a point to all of this.

China banks told to halt lending to US banks-SCMP
Wed Sep 24, 2008 9:52pm EDT
http://www.reuters.com/article/marketsNews/idUSPEK16693720080925

Bush: Bail Out Economy, or Face 'Long and Painful Recession' 24 Sept. 2008
http://abcnews.go.com/Politics/Vote2008/Story?id=5879591&page=1

China denies shunning foreign banks
Thu Sep 25, 2008 6:44am EDT
http://www.reuters.com/article/ousiv/idUSTRE48O2PZ20080925

China posts fake rocket launch story: September 26, 2008
http://www.news.com.au/dailytelegraph/story/0,22049,24406028-5006003,00.html?from=public_rss

What do these stories have in common?

Here is a post I came across, I thought this was pretty compelling, which ties the above news together:

Good! I hope China does not lend the US any more money. I am disgusted the US government sold the United States out to China for greed, bribes, personal wealth. Seduced by the dragon.

Fannie Mae and Freddie Mac “wove a mantle of invincibility” through lobbying according to a September 8 Wall Street Journal “Deal Journal” blog post. According to the Journal’s Heidi N. Moore, the mortgage giants had $170 million in lobbying bills in the past decade and spent $3.5 million on lobbying just in this year’s first quarter, spreading their largesse among 42 outside lobbying firms. Their lobbying successfully deregulated the markets enough for the elite to become extremely rich, at the cost of our economy. Our greed within our government and corporations alike has destroyed us.

The strategic intention of China to silently gain control of the US via its financial system has worked. China owns us, our debt. That is leverage. Our politicians (Clintons, are big ones), were selling the US out to the communists taking bribes, lobbying money for pro China bills, by China's proxy agents embedded in our society, our country has become pimped out. Pimped by those we gave control over OUR purse strings. I hope this countries economic system crashes (IT WILL), I hope it all goes down. May be then we will all wake up to the realization that we all have veered so far from the framers intentions of the constitution and now have become subject to a socialist state where our own government owns the financial markets and we, our children, and their children will be forever enslaved in debt owed to China.

I know Bill and Hill are not the only ones to blame. They did have more media attention by schmoozing with China, and signed in the biggest declassification of our secrets. The Clinton administration had reset long-standing policies relating to technology transfers. By March of 1994, the administration had abolished the COCOM system that had safeguarded technology transfers from Western countries to East Bloc or communist nations; Clinton gave control of the Panama Canal to China; On March 23, 1998, The Washington Times revealed a secret Clinton Administration proposal to sell advanced missile technology to China; Under Clinton, 47 supercomputers have been sold to China, most for use by the Red Army; in early 1997, with news that a Justice Department investigation had uncovered evidence that agents of China sought to direct contributions to the Democratic National Committee (DNC) in violation of U.S. laws regarding foreign political contributions. While the Chinese government denied all accusations, twenty-two people were eventually convicted for fraud or for funneling Asian funds into the United States elections, specifically the Clinton Campaign. This goes on and on...

The US congress, in August 2008, was considering imposing sanctions on China to force a yuan revaluation, alleging China was manipulating its currency. Two officials at leading Communist Party bodies have given interviews in warning that Beijing may use its $1.33 trillion of foreign reserves (US Debt)as a political weapon to counter pressure from the US Congress. Described as China's "nuclear option" in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels.

It would also cause a spike in US bond yields, hammering the US housing market and perhaps tipping the economy into recession. It is estimated that China holds over $900 billion in a mix of US bonds. $900. billion is pretty close to the $700.00 billion "bail out" in the news. I wonder if this "nuclear option" has indeed been exercised by China.

Even Hillary during her campaign stated that foreign control over 44% (now about 50%) of the US national debt had left America acutely vulnerable.

Henry Paulson, the US Treasury Secretary, said any such sanctions by congress would undermine American authority and "could trigger a global cycle of protectionist legislation". Yes, because we would have to insulate our now globalized corporations and financial markets which are buried deep in debt to China.

Mr Paulson is a "China expert" from his days as head of Goldman Sachs. Goldman Sachs has a very large stake in China, with offices and major investments in China. We all know Goldman Sachs is on the bail out list. Even billionaire Warren Buffet dumped 5 billion into Goldman Sachs. Buffet does not invest in something unless he knows he will make money.

While the US sells out its banks and corporations to China, China protects its homeland interests. Foreign firms are restricted to owning 33 percent of an investment-banking venture and 20 percent of a brokerage. China closed the window on future partnerships by barring any more overseas firms from buying domestic brokerages.

To the "now retracted" statement that China will no longer lend money to US banks... Yeah, right. Just like A news story describing a successful launch of China's long-awaited space mission and including detailed dialogue between astronauts launched on the Internet Thursday 9/25/08, hours before the rocket had even left the ground.

You will see a bail out, I'm sure. I believe China is the main reason there will be a bail out. This is socialism for the rich. It’s bailing out the financiers, the banks, the Wall Streeters. The bail out will not benefit homeowners or help average citizens improve their standing for a home mortgage. It’s not bailing out the homeowners who are in trouble; It’s not bailing out people who want a mortgage; it’s just bailing out financial institutions. This is not my idea of the way things are supposed to be, but if that’s what America wants, you know, it can elect people who are going to do it.

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As soon as Bush came on the air to tell us that we need to bail out the financial crisis. China then denies releasing that statement... Coincidence? When China holds our credit purse strings that we need to borrow about 3 billion a day to support our foreign policies... I dont think so!
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Another blogger comment:

Do not allow the financial “bailout”. This is socialism for the rich. Our government restructured welfare for the poor. But now this is welfare for the rich. It is bailing out the financiers, the banks, the Wall Streeters. The bail out will not benefit homeowners or help average citizens improve their standing for a home mortgage. It’s not bailing out the homeowners who are in trouble; It is not bailing out people who want a mortgage; it is just bailing out financial institutions.

I say let the companies and institutions crash. That is what the legal system is for, to restructure and reorganize. Do not put this debt on the US citizens, our children, and our grandchildren.

We will pay for this when the tide turns in the stock markets, and that will only be temporary. Let the companies that allowed this to happen pay for it themselves. Americans can do much better learning to live within our means. More volatile credit, especially after this should be a lesson learned. Lets get back to the basics.

The government should now readdress the 1999 Deregulation Law and implement counter measures to protect the economy and financial system from themselves.

Congress needs to address the Gramm-Leach-Bliley Act (GLBA) which congress allowed commercial and investment banks to consolidate. For example, Citibank merged with Travelers Group, an insurance company, and in 1998

formed the conglomerate Citigroup, a corporation combining banking and insurance underwriting services. This completely undermines the Glass-Steagall Act of 1933. This was established by the Federal Deposit Insurance Corporation (FDIC) in the United States and included banking reforms, some of which were designed to control speculation. Some provisions such as Regulation Q that allowed the Federal Reserve to regulate interest rates in savings accounts were repealed by the Depository Institutions Deregulation and Monetary Control Act of 1980. Provisions that prohibit a bank holding company from owning other financial companies were repealed on November 12, 1999 by a bipartisan, conference committee version of the Gramm-Leach-Bliley Act signed by President Bill Clinton.

Please do not allow this “bail out” to happen. The American citizens did not do anything to deserve debt slavery for many generations to come. Congress needs to fix the problem they made back in 1999. Let the financial markets and corporations to be broken up and reorganized. Let the financial system reset itself.

TELL YOUR GOVERNMENT HOW YOU REALLY FEEL:
http://www.usa.gov/Contact/Elected.shtml

Lastly, I am no Ron Paul supporter. But after seeing this, I realize he was trying to tell us something for a long time. No one it seemed, wanted to listen. Like him or not he was/is right. Everyone needs to watch this

http://www.youtube.com/watch?v=nWyygiyPbdA

Are you a Ron Paul supporter now?

It does not matter who I support. That would be off the subject (respectively). The focus here is what is in this post, and this is the answer people need to hear.
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The posts from this blogger have been true. Looking into the "China Nuclear Option", it indeed has been executed by the Chinese. Something the blogger suspected but did not find the answer. HE WAS RIGHT!

...warning that Beijing may use its $1.33 trillion of foreign reserves (US Debt)as a political weapon to counter pressure from the US Congress. Described as China's "nuclear option" in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels. It would also cause a spike in US bond yields, hammering the US housing market and perhaps tipping the economy into recession. It is estimated that China holds over $900 billion in a mix of US bonds. $900. billion is pretty close to the $700.00 billion "bail out" in the news. I wonder if this "nuclear option" has indeed been exercised by China.

China threatens the nuclear option
Thu, 08/09/2007 - 1:44pm
http://blog.foreignpolicy.com/node/5788

Meltdown of U.S. Dollar Underway as China Dumps the Currency
Sunday, April 13, 2008
http://www.naturalnews.com/023005.html

Hitting the US where it hurts
Oct 19, 2006
http://www.atimes.com/atimes/China/HJ19Ad01.html

Fannie Mae Eases Credit To Aid Mortgage Lending

http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F9582 60&sec=&spon=&pagewanted=1

By STEVEN A. HOLMES
Published: September 30, 1999

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits....

The thing that we were assured would never actually happen, happened: The U.S. government took mortgage giants Fannie Mae and Freddie Mac into conservatorship--a fancy way of saying that U.S. taxpayers are now on the hook for as much as $500 billion in bad debt.

Wall Street responded with relief and a rally of 2% in one day. How long-lived this rally will be remains to be seen. Wall Street has been nothing if not volatile this year: Up 2% one day, down 3% the next. Whatever happens next, expect to hear the phrase "Fannie and Freddie were just too big to be allowed to fail," lots of times in the coming weeks from all sorts of public figures as they pat themselves on the back and reassure a jittery public that this is absolutely the right move and it absolutely had to be done.

What you might not hear quite as often, if at all, is an explanation of precisely why it had to be done. Yes, part of it has to do with the size of Fannie and Freddie and the crisis in the financial markets, but pointing to that as the main issue actually begs the real question.

The real, $500 billion question, the one you probably won't hear batted around much is:

"Can the U.S. survive without Chinese money?"

No we can't, not for even a day.

The U.S. government is so dependent on constant infusions of Chinese money right now that if that single source of funds were to dry up, our government would experience such a severe shortfall it would shut down almost immediately. The financial pain we are currently experiencing would look like happy days, and the entire world would be thrown into a financial crisis so severe it would take decades, if not generations, to correct.

How can this be? We don't export all that much to China. Mostly we import cheap crap that fills our stores. China also provides the raw materials for the few manufactured items we do still produce here. Most of our steel now comes from China. Ditto fabric, computer chips, electronic circuits and car parts, and much more. But by far the most vital resource the U.S. receives from China is money.

The Chinese actually loan us most of the money we use to then buy their stuff. The recent tax rebate incentive package meant to stimulate the U.S. economy (by getting us all to run out and buy $600 worth of Chinese crap), was financed by, guess who? The Chinese!

China does not loan the U.S. money the way a bank loans money to an individual person. Instead, what China does is buy up U.S. debt in the form of mortgage-backed securities. China does this, not because China loves us so very much, but because, until recently, U.S. mortgage-backed securities were a great investment. The entire world widely assumed (until very recently) that U.S. homes only ever appreciate in value. Mortgage backed securities were a safe bet, and China made money buying them.

The fact that Chinese investment also allowed the U.S. financial system to function so that banks could extend credit to U.S. citizens and factories who then could buy up Chinese products by the ton, thus making a perfect economic circle, was frosting on the Chinese cake.

But when U.S. homes began to lose value at an alarming rate. so fast and so furiously that even 'good' loans held by Fannie and Freddie began to go 'upside down', the Chinese began to make nervous noises, and fear of a global slowdown began to spread.

The truth is, the U.S. had to bail out Fannie and Freddie not because Fannie and Freddie are too big to fail, but because the United States is too big to fail.

You might not hear it put exactly that way.

Yet.

http://hubpages.com/hub/What-Does-China-Have-To-Do-with-the-Fannie-Freddie-Bail-Out

Indeed, our exposure to the Chinese is frightening. The trouble is that we don't see politicians (who sell our future via debt to the Chinese) telling us that China needs no fancy new generation intercontinental missiles to completely wipe out the US as we know it. They need no space-based star wars programme. In fact, all that they need they have already got.

They could wipe us out, in terms of the US that we are so proud of, in a week simply by leaking the idea to a few key international officials that they are thinking of calling in the US debt. The dollar will go to hell in a hand-basket in short order, and with it our priveledged position on top of the pile. That wipe out would render us incapable of even sabre rattling, let alone waging more war.

Of course this would hurt that part of the Chinese investment also, but not wipe it out. Is this too high a price to pay to become the world's (only) new Superpower?? Maybe. Maybe not. But I bet that neither you nor I have the faintest idea of how the Chinese top echelon evaluates these options - but certainly not based on our own spoiled cultural norms.

That may well be. But there are people out there who are far more knowledgeable than I ever will be on such matters, who do not entirely agree with this explanation. It is too simplified and too 'politically convenient'. After all, who would disagree with an action designed to save our country.

To avoid advertising, I will not quote the source of the following views, save to say that he is a famous purveyor of wave analysis of financial markets. He may not call the market correctly every time, but his research is impeccable.

Here is just one point from a series of 28 questions published recently. “Who are the Homeowners that are being protected with taxpayer money?”

The Fed, Congress and the Presidency have repeatedly stated that this massive increase in liquidity and debt is to protect them, the home owners. Are they the people who signed the purchase deed and occupy the house? You know, those who we usually think of as being the home owner. The view of ordinary people is totally wrong. When politicians speak of protecting the home owner, they don’t mean the people inside watching TV. They mean the REAL owners. It is for THEIR protection that our money is being used. The real home owners are BANKS.

If you don’t believe me, go and check your mortgage document, and then ask your mortgage agent, who is it that currently holds your repayment risk. Not the one you made the deal with, but the one they sold it on to, who in turn packaged it and sold it on to …. a bank.

So here is the summary that does not agree that you and I are going into debt to save the United States:

“The real devastation is happening in banks’ portfolios and banks, not home dwellers, are the ones whom government is trying to rescue at other’s expense.”

Excellent thread and excellent post. I had stopped coming here because it was all too often just the same tired party cheerleaders saying the same ol' things over & over. But this is a fascinating bit of information, and I agree with much of what has been said. I absolutely agree that by being SO indebted to China (and others) our foreign and domestic polices have been adversely affected.

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"Tweeter was a Boyscout before she went to Vietnam and found out the hard way... nobody gives a d@mn."