From Investors Insight this week:
"Asking the Chinese to Buy Our Mortgages?
"This all amusingly contrasts with the following news item today from Bloomberg, in the you can't make stuff like this up category. US Department of Housing and Urban Development Secretary Alphonso Jackson is in Beijing. He is meeting with various Chinese banking authorities, asking them to buy US mortgage-backed securities. Evidently he is doing this with a straight face. The same story goes on to talk about the collapse of the subprime market.
"On the one hand we have US Congressional leaders demanding that China let the dollar drop another 20% or so against their currency, and then another government official asking them to buy more US debt, which will drop 20% when they do allow their currency to rise. And they call the Chinese inscrutable?
"Has it come to this, that we have to have government officials going to China to ask (some would impolitely say beg) them to buy our debt? You do have to appreciate the irony. Then again, maybe they think it is their punishment for selling us bad pet food and toothpaste. You sell us unsafe products and you have to buy our mortgages."
For the financially clueless, the US sub-prime mortgage market is imploding. These securities the US is begging China to buy to try and stave off disaster here have been downgraded from AAA to Junk - all of it. The degree of the potential damage to the US economy has been under-estimated, and it will last for years longer than currently believed. This is going to hurt a lot of people, and perhaps be the fuse to the next recession.
This is a pretty good investment newsletter, btw, altho not a hot stock tip or how to make 200% per year newsletter. He's a Republican and a Bushie, but one of the more thoughtful and objective investment strategists out there (they're virtually ALL Republicans and Bushies, fwiw), and I've never seen him make a political statement in his newsletter.