Schumer will not have to explain anything, because most of his constituency either doesn't take him seriously enough and/or they have other concerns. Also, it's pretty likely he was a chosen 'messenger' of some other faction /group. Maybe even Alan G or John Snow.
Schumer ain't Senator Hillary Clinton, or Senator John Corzine, former head of Goldman Sachs.
******
I may be reading something that is not there, but it seems there is a whole sense of an appropriate hierarchy and deference of certain questions to senior people in your statements -
>>>>On Shumer, he supposedly is not dense, certainly has been vocal, and must now explain to his constituency why he thinks a mere hint of a possible and if so, then certainly a minor adjustment to RMB:USD peg got him to turn tail. He will need to explain, then suggest resolution, to a problem he did not create, but took ownership of.
He should have realized that when successive presidents found it necessary to step down from their pre-election big talk, what is it the business of a senator to talk at all, much les big talk, and on topic that he cannot possibly appreciate while sitting at where he is on the big picture<<<<
#1 Every US Senator thinks they are Ciecero, Cato, and Demonthenes combined. There's even a special garage under the capitol so they can park their egos.
#2 Jay, I think you know the US doesn't work that way. Pretty much anyone can say almost anything on any issue, and unless they are someone's employee, or get sued for libel, they don't need to apologize or explain. Sometimes that messes up delicate negotiations. Sometimes that's the intent of the speakers ;-)
*******
>>>>"The media is not getting the nature of test or the character of the gambit, at least not yet"<<<<
My sense is Wall Street Journal, Financial Times, a number of financial newsletters and commnetators, including Larry Kudlow (bless his pointed little head and loud ties) get exactly the POSSIBLE implications for China's pile of US Treasury Bills and the US Dollar.
If by "media" you mean CNN, the major TV networks, and the New York Times....well, they have an important story about Tom Cruise to cover ;-)
******
The testing might go both ways - the US says no on Unocal on intentionally flimsy grounds, not real national security grounds.
Let us say CNOOC agrees to sell MolyCorp and US Gulf of Mexico assests, and maybe some of the sensitive stuff in Uzbeckistan or where ever. (I'm sure there are some very touchy items in that part of the world, but I don't know what they are)
Now : Does China trade USD for Euros, or for Japanese Yen, British Pounds, or Gold ? Where does the RMB go relative to the USD ?
That's maybe the brinkmanship option. I don't see that being likley to happen. However, I get the feeling there is something going on the either we don't know about or don't evaluate correctly yet.
*******
Clean test or Muddle ?
If Chevron gets a lot closer to the CNOOC bid, or if CNOOC puts some of the security type items back into the offer, the test then becomes much less clear....
If Chevron or another oil company were to then sell certain Asian assets to a Chinese company, say PTR, that would be even harder to read....
Independent of CNOOC-UCL, I think we might see some China joint venture with Timor oil and gas and/or New Guineea oil and Gas (think IOC) These avoid the Malacca Straights bottleneck, which worries everybody. This would also put a bit of Chinese presence next to Indonesia, which might be useful if Indonesia were to go unstable....
*******
Wrecking the WTO - the US has been doing a lot more bilateral trade agreements, where there is a lot of power imbalance -also known in Washington as a "level playing field". There have also been some massive aid deals, in addition to the usual ones.
I don't know enough to tell if this is being done just for the individual advantages of each agreement, some political strategic reason, or the creation of sort of a trading block.
Beneficiaries have been Chile, Poland, Turkey, Baltics, a little bit to Indonesia (most likely related to improving stability / war on terror) and possibly Central America with the CAFTA deal.
I don't get a coherent picutre from this, however.
I think the WTO will move from being something based on general 'free trade' principles to more and more detailed agreements with more specialized exceptions - for developing countries, fragile industries (especially those with political clout), etc.
There is now practical consensus that some forms of trade can be harmful, and "one size fits all" treaties don't fit every situation.
We can look at Europe to get idea of the arc of trade agreements - Starting with a very specfic European coal agreement, European trade agreements have become more general and more sweeping over 40 years, climaxing in a "constituion". Now, Europe's focus will shift back to specific policies, like the CAP agricultural policies.
That doesn't mean the end of Europe, just more tailored policies. Since the "consitution" ran 1,417 pages, they are headed in that direction already.
********
Gold might be a good idea....along those lines...
There's a short article in the latest Fortune magazine by Benoit Mandlebrot (discoverd fractals) and Naseem Taleb (wrote the book "Fooled by Randomness"). The make a strong case that the FINANCIAL world is not ruled by the bell shaped curve but by jumps and flat periods (what's called puntuated equilibrium, but that term is not in the article).
Therefore, investors need MORE diversification into MORE asset classes to both reduce risk and have a wider net to capture the positive results. |
