A solution to the US Economic problem - Chinese just have to have more kids

With Lehman sinking, AIG failing and now Reserve Money fund faltering, someone had to ask:


"Just wanted to ask you that how come lehman brothers could lend US4 600B to real estate with US$ 30 bln capital footing ? there must be some prudential regulation set by central bank or sec of USA regarding mantaining certain financial ratios or percentage of lending against capital base or backed by deposit? or even cap on lending x amount of money t a specific sector...

would appreciate if you shed some light on this being the expert..."

Such a complex financial question deserves a serious response so here goes:

"Good questions all.
Lehman is another example of the US being run by idiots.
The Regulators who regulate the banks ignored them because they didn't think that the banks were behaving badly by taking on bad loans and then parceling them out to investment houses like Lehman. Lehman also thought that stupid investors would keep buying their packages because they "very smartly" split up loans into smaller pieces, then bundled the good, the bad and the ugly loans together and convinced themselves and the investors that this reduced the risk without really understanding what the risk was. Result. The ugly loans crapped on the bad loans which blew out the good loans leaving Lehman and the rest of the US with blown out crap.
Now the US govt has a blank check to bail out these brokerage houses but the checks they are writing is from the money borrowed from the Chinese and the Japanese.

So the math is something like this. Every Chinese has now lent a $1,000 to his Uncle Sam ($1,000 x 1,000,000,000) or a total of about a trillion dollars. The American appetite however needs more money and this economy is incapable of supporting itself at this level.

So the solution, with the increasing appeal of the even more stupid leaders (McCain and Palin) to the populace (they are looking for a down to earth person who speaks in a folksy tongue), I believe the day is not that far away when the US will demand that the Chinese have more children so that they are able to lend more to the US.

Confused?

Well here is the Math, if each Chinese lends a $1,000 to the US, and you just get the Chinese to double their population, China will be able to lend twice as much. In other words the US can then borrow 2 Trillion fom the Chinese and continue to spend happily for another couple of years. After that I guess the pressure will be on the Japanese (who have lent almost as much) and when the Chinese and the Japanese are worn out, and the Viagra has stopped working, by then the US hopes that the Indians are on line and ready to produce more kids so that the US can borrow from them.

Make Sense! So did WMD in Iraq."

The Conception Pains of Democracy

Condy Rice considered Iraq to be undergoing the "birth pangs" of democracy when referring to the impregnation of Iraq by more than one hundred thousand soldiers. Soldiers who were asked not just to impregnate but also to play midwife to the birth. When their midwifery skills couldn't deliver a healthy baby a surge[on] was called in. Before Bush/McCain get carried away with prematurely celebrating the blossoming of a democratic baby on the banks of the Euphrates they should stop and ponder that the nutrients that this flower feeds on is composed of the remains of the hundreds of thousands killed by a criminal invasion.

So much for the birth pangs of democracy but democracy is not a word that should be used lightly. Civilization has paid a heavy price for achieving it, what is being forced upon Iraq is better described as "Democramy" - Cramming democracy down the throats of people you don't know and don't understand, with a toilet plunger.

Examining the "democratic" process in Pakistan, Rice's phrase "birth pangs" of democracy turns into "conception pains" of democracy. Musharraf, in all likelihood, would still be at the head of an autocratic government but for his rape of the Constitution of Pakistan as he, fearing the end of his rule, "fired" the judiciary of Pakistan.

While the lawyers movement in Pakistan was on course to bring a civilized democracy to Pakistan, what has now emerged is the unforseen metoric rise of Asif Zardari. Zardari’s election by a landslide through the legislative electoral college should not be construed as a nationwide referundum of his popularity. The widely held believe is that Nawaz would easily win in a one to one contest with Zardari and some dare to say that six months from now even Musharraf would outpoll Zardari.


With Zardari at the helm, with Gilani as Prime Minister, Dogar as Chief Justice and the People's party in control of the legislature it does seem as if Pakistan is now in the grips of Benazir's widower. Of course the military and the Intelligence services of Pakistan cannot be ruled out but with the US continuing to play a gorilla role and with Zardari firmly in the hands of the US, Pakistanis will, at least in the short run, see more democramy than democracy.