We may be getting to the bottom of how much AIG’s London “traders” actually lost … $500bn!! And in August 2007 they couldn’t imagine losing $1. That’s what their quantitative analysis was worth. (Go HERE)
And the Chinese want guarantees on the bonds they hold. Aren’t US Treasury bonds already guaranteed by the full faith and credit of the US government? What more do they want?
Their trade surplus is melting so their entire mercantilist model is in trouble. It is down 50% year over year and don’t forget 30% of all their production is for export. That’s a 15% hit on GNP.