Another shoe drops: China shuts it's wallet
 

http://www.reuters.com/article/companyNewsAndPR/idUSPEK16693720080925?rpc=64

Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday.

The Hong Kong newspaper cited unidentified industry sources as saying the instruction from the China Banking Regulatory Commission (CBRC) applied to interbank lending of all currencies to U.S. banks but not to banks from other countries.

"The decree appears to be Beijing's first attempt to erect defences against the deepening U.S. financial meltdown after the mainland's major lenders reported billions of U.S. dollars in exposure to the credit crisis," the SCMP said.

A spokesman for the CBRC had no immediate comment.

Now they deny it...

http://news.xinhuanet.com/english/2008-09/25/content_10113092.htm

I'm not so sure China has a lot of other options on the table. There's a reason why they've been buying our bonds, even with such a low return. Their banks have plenty of their own problems and their money is safer offshore.

Yes, China's feeling their own economy slow. So it makes a lot of sense to take some of their previous U.S.-bound money off the table.

I'm about to buy my flight to China for our Xmas trip there. My wife's parents assure her it's a lot more expensive than the last time I was there two years ago. Still, it was so ridiculously cheap, that I don't think paying $5 for a huge feast and booze in a restaurant is gonna hurt me much more than paying $3.50 did.

I find this interesting. If you look at the DOW, and then look at the European market and the Asian market, to me they look as bad or worse than ours.

China purchasing managers index actually went <50 in Jun and Jul, indicating contraction in manufacturing.

China economy is extremely dependent on US and W Europe economies. They have every reason to not destabilize the Western economies, especially the US.

There is a bank run going on at Bank of East Asia in Hong Kong.

China is not without its problems.

FYI here are some good blogs I found on Chinese economy - if anyone interested

http://www.piaohaoreport.sampasite.com/

http://chinaeconomywatch.blogspot.com/

http://china-economics-blog.blogspot.com/

As I have said many timnes before if the US goes down so does everybody else. If that sense the USA is too big to fail. Every country in the world will do its utmost to bail the US out. However no country is as large so we have to do it ourselves.

This could be the end of the Global Economy as we know it....the Global Economy is a creation of the US and is AKA The American Empire.

We have built a house of cards and we may very well destroy it.

It will be 20 years before a new order of things starts to take shape. So forget about those golden years spent on the beach somewhere, or on the golf course. Think more in terms of a 2 room cold water flat somewhere, where eating something other than dog food will be considered to a dining experience.

Tabs exaggerates..but I agree that we likely will be heading into depression.

I see someone has been reading their Dickens.

Exaggerates....didja ever listen to your old grandpas & grannys stories of the Great Depression. Well this one will be worse.

We are throwing in everything but the kitchen sink to keep it from happening...and Bernanke is an EXPERT on the Great Depression....and is largely why we have not yet succumbed.

And the little monkeys fiddle in Washington while the markets burn.