U.S. Urges China to Buy Mortgage Securities Amid Subprime Woes July 13 (Bloomberg) -- The U.S. is urging China's central bank to buy more mortgage-backed securities after a surge in defaults by risky borrowers in the world's largest economy eroded demand for such instruments. ''It's not a matter whether they're going to do more business in mortgage-backed securities, it's who they're going to business with,'' U.S. Department of Housing and Urban Development Secretary Alphonso Jackson told reporters in Beijing. He met with central bank Governor Zhou Xiaochuan and Minister of Construction Wang Guangtao in the nation's capital this week. - China held $107.5 billion in U.S. mortgage-backed securities as of June 2006, up from $3 billion three years earlier, according to HUD's Web site. The figures include securities offered by Ginnie Mae, Fannie Mae and Freddie Mac, without providing a more detailed breakdown of each agency's holdings. HUD also plans to approach Chinese commercial banks such as China Construction Bank Corp. and ask them to buy mortgage securities, said Jackson. The housing department wants to sign a memorandum of understanding with construction minister Wang when he visits the U.S. in August, Jackson said without elaborating. The two nations face similar challenges in providing affordable housing to average citizens, he said. HUD also plans to approach Chinese commercial banks such as China Construction Bank Corp. and ask them to buy mortgage securities, said Jackson. The housing department wants to sign a memorandum of understanding with construction minister Wang when he visits the U.S. in August, Jackson said without elaborating. The two nations face similar challenges in providing affordable housing to average citizens, he said.
right. How do we expect to have a stable monetary system with these kind of crap ideas? We can't have goverments as dominate players in the capital markets. The private sector is the only area that can judge market risk or else we end up with complete central planning.
Complete central planning essentially started yesterday with Rio Tinto's asinine bid for Alcan. I have a question that is completely off topic but some of you may be able to help me out.. Why did Guiliani sell Milken out? It wasn't just Milken in on that. I'm really trying to see the big picture here, I'm slowly trying to put this all together.
Fed can't lower rates to help the banks so the government is using China to bail out the banks. LOL John
Yep. line up the foreign bag holders. If you want to manipulate your currency to defend your economy then you get lots of bad bad US debt. Congratulations.
NEW YORK, July 12 (Reuters) - Foreign central banks were net buyers of U.S. Treasury and agency debt securities in the latest week, Federal Reserve data showed on Thursday. The Fed said its holdings of Treasury and agency debt kept for overseas central banks rose $16.007 billion in the week ended July 11, to a total of $1.997 trillion. The breakdown of custody holdings showed overseas central banks purchased $11.664 billion in Treasury debt, for a total $1.252 trillion. The foreign institutions also bought securities from government-sponsored agencies like Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research), adding $4.343 billion to their holdings, for a total $744.998 billion. Overseas central banks, particularly those in Asia, have been huge buyers of U.S. debt in recent years and own over a quarter of marketable Treasuries.