I can't help but shake my head (and occasionally, my fist) at these people who can't just accept that this is a permanent state of affairs. This decline/adjustment is permanent. The previous Walmart buying sprees are over. Credit is over. The only credit that is now created is that made especially so that the banks can steal it. This is the era of legal national treasury robbery (here you may replace the word "robbery" with "bailout", if you feel so inclined).

Vinny G. — modern-day realist, coffeeshop philosopher, dispeller of ignorance, and above all, bestower of common sense…

At the same time, local governments have been less than thrilled about their enterprises trying to grab share by undercutting prices — cutting a large source of de facto trade subsidies.

Finally, many Chinese firms that shipped goods on credit to buyers have been burned as the buyers failed to pay — leaving them with uncollectable debts.

Vendors are now more careful, and are insisting on confirmed Letters of Credit or cash even if the order apparently originated with a large, known foreign firm like Home Depot.

Here is the history: Trade fell fast because it was a depression, countries started putting in protectionist measures (not just the US) to protect their jobs (beggar thy neighbor)… this exacerbated the trade downturn and made a ‘pretty good’ depression a ‘great’ depression.

This protectionism especially hurt the US because we were very export dependant at the time relative to our European trading partners… so Smoot-Hawley was us shooting ourselves in the foot, while the Europeans pulled out of the depression much faster

And since people don’t change… today we have China (hugely export dependent) putting in all kinds of protectionist measures while their developed world partners are resisting since we have been there before. However, if they do it enough their trading partners will have to respond in kind. It is a prisoners dilemma… work together and it is not as bad, look out for yourself and everyone is screwed.

Here is the history: Trade fell fast because it was a depression, countries started putting in protectionist measures (not just the US) to protect their jobs (beggar thy neighbor)… this exacerbated the trade downturn and made a ‘pretty good’ depression a ‘great’ depression.

This protectionism especially hurt the US because we were very export dependant at the time relative to our European trading partners… so Smoot-Hawley was us shooting ourselves in the foot, while the Europeans pulled out of the depression much faster

And since people don’t change… today we have China (hugely export dependent) putting in all kinds of protectionist measures while their developed world partners are resisting since we have been there before. However, if they do it enough their trading partners will have to respond in kind. It is a prisoners dilemma… work together and it is not as bad, look out for yourself and everyone is screwed.

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Thanks. Saw Meriwether article, not China one.

1/ Failed bond auction in China (China's $4.1 Billion Auction of Yuan Debt Falls Short)

2/ John Meriwether Said to Shut JWM Hedge Fund

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