So is China at the verge of a financial crisis?

Credit plays a pivotal role in stimulating imbalances in the economy while the level of public debt governs the degree of responsiveness vis-à-vis fiscal stimuli amidst recessionary episodes. One of the key takeaways from the past crises that the world has experienced is that recessions triggered by financial frictions are deeper and subsequently the path to recovery is longer.

Since 2008, private debt in China has growth by more than $12 trillion compared to $4.5 Trillion value addition to GDP. The ratio of private debt to GDP is ~211% compared to 146% in the pre-crisis United States. The Chinese economy has undercut its growth prediction from 7.4% per annum to a 7% (lowest in 11 years). Private debt growing faster than GDP accompanied by declining commodity prices signal the surge in bad debt. Weak domestic demand and rate cuts by the PBOC to stimulate a perhaps waning economy sends out distress signals.

So is China at the verge of a financial crisis?

My take on student loan crisis/student loan forgiveness discussion

A lot of graduates with student loans who advocate for student loan forgiveness feel that they are the victims of a scam, and to renege on their debt is to be revolutionary. In my opinion student loans are in a lot of ways a good program, or at least started with good intentions, as well as a uniquely American privilege. In almost no other country in the world are 18-year-old students extended that kind of credit. Rather than college being only affordable to the rich, student loans allows for everyone to have the opportunity. There are many nuanced reasons for student loans ballooning into a looming crisis and the blame lies with both the party and counter party.

China: To short or not to short?

China; the birthplace of Kung Fu, fireworks, hot asian women, and fake Louis Vuittons. It's meteoric rise in power is unparalleled throughout history.

Though largely hated in the old world, some say that it’s the future, the new frontier, the place where dreams come true and fortunes are to be made.

I absolutely agree, I think it's a great short.

Inside the Meltdown: PBS Program

This is a bit old but in case you haven't seen it here you go:

BB Dreams, MM Nightmares

My question in summary: Can I get to a BB from a dwindling MM firm?

Sorry. I had to edit this. I distorted some of the facts in my original post to conceal my identity, but I still think I put out too much information.

Thanks for your responses. It's really appreciated.

Credit Crisis Question

I have a question regarding the credit crisis that I am hoping you guys can help me answer.

What was the reason large commercial banks like UBS, Bank of America, and JP Morgan invested so heavily into CDOs and other "toxic assets?"

If the whole purpose of securitization is to get rid off risk by packaging different debt obligations and selling them off to other investors, why did these large banks end up buying other CDOs and exposing themselves to the same kind of risk they were trying to diversify away?

If anything, I would have expected the banks to be the least affected because they should have used these derivatives to get rid off risk and not put it back on their balance sheet?

Troubled Assets Relief Program Summary, 2008 TARP Legislation Guide

The Guide to Understanding TARP

Want to impress your colleagues and interviewers with how much you know about this $700 Billion (and counting) behemoth of legislation? Curious where all your tax dollars are going? Then this troubled assets relief program guide is for you. This guide is a concise but thorough TARP legislation summary. Check out the Free Sample Chapter.

In order to foster intelligent debate on the relative merits of the Troubled Asset Relief Program, it is first necessary to present an unbiased overview of the plan in plain English. To that end, we have endeavored to present the facts in an orderly, understandable format.

This guide is a primer on the genesis and execution of the Troubled Assets Relief Program as it is set forth in Public Law 110-343 approved on October 3, 2008. The program falls under the authority of the more commonly known Emergency Economic Stabilization Act of 2008. This guide will highlight the salient points of the plan, how it has been implemented thus far, and what can be expected from this authority in the future. In short, it is a TARP legislation summary.

Get The Guide to Understanding TARP to Your Inbox Now

It is our hope that this Troubled Asset Relief Program guide will leave you with a greater understanding of the mechanisms of the government that were allowed to intervene when the mechanisms of the market appeared to be on the verge of failure. This guide was painstakingly researched over a period of almost five months, and it presents the facts, the hard figures, and the expert projections contained within the well over 1,000 pages of documentation and interviews that were compiled to produce it.

This 50+ page guide includes the following sections:
1. Introduction
2. Background on the Troubled Assets Relief Program (TARP)
3. Housing Bubble
4. A TARP is Born
5. The Evolution of the Troubled Asset Relief Program
6. Participation
7. Repayment
8. Oversight
9. Stressed Out
10. Controversy
11. Who’s Who of TARP
12. Confessions of a TARP Intern
13. Appendix: TARP Recipient List

University License Link for ejunkie:

Goldman Sachs Hate Blog, Unreal

Absolutely unreal what some people will do to get attention.


Just did a search on the topic of buy and hold and there is no thread on it and really wanted to start an in depth discussion on what I feel is the biggest scam in wall street. The myth that buy and hold is the most superior investment strategy.

Every day as I watch CNBC I have to listen to these so called experts that basically repeat the same garbage that Buy and hold is the best long term strategy. As the current financial crisis certainly shows that may not be the case.

Before I begin I am not in any way advocating that the polar opposite of buy and hold (daytrading) is the best strategy. I think they are extremes and my thoughts on extremes are that they are rarely optimal.