America is China’s number 1 trading partner for China’s exports. I know this from all the research and reading I have done on China but I could have foregone all that and just made a trip to Wal-Mart or Target or, fill in the blank, because China’s name is on everything we buy.
China’s Communist/“free-market Capitalist” system allows them to execute their “rogue bankers,” in other words China’s Bernard Madoff’s get a worse deal then old Bernie did; even though it is obvious that Madoff will, more than likely, die in prison.

Here in America we frown on such behavior; we abhor such behavior; actually we cannot understand such behavior and would never “tolerate” it. C’mon, there would be newspaper editorials, television shows, violent protests, which in themselves might actually cause human deaths, and we would march on Washington until Bernie was, at the very least, ensconced in a “makeshift cage” (or a room at the Holiday Inn) until his sentence was commuted to “life behind bars” (with, of course, a chance of parole for good behavior after 125 years served, which is actually only about 2.5 years in actual prison-time) After all this is America; we have the right to be “thieves” and live rich off of it, as long as we don’t get caught. Why is this? Because our history is so filled with wealthy “entrepreneurs” getting away with it or because we, ourselves, still have that “dream.” C’mon, what American citizen has never “cheated” on their taxes? Or dreamed of idling away their last so-called “golden years” in the Cayman Islands? Why the Cayman’s, you say? Easier to hide your ill-gotten (or anyway gotten, they don’t care) gains there and, of course, you pay no taxes there.

What does this have to do with real estate and mortgages, or the current state of our economic woes, you may be wondering? Everything, because of these historical facts: Henry Paulson’s net worth approaches $1-billion dollars. Henry Paulson was the Treasury Secretary responsible for bailing out Goldman Sachs and AIG. The AIG bailout benefited Goldman to the tune of 13 billions dollars. Henry Paulson worked for Goldman/Sachs for 32 years, was the CEO for a decade just before becoming Treasury Secretary and before he was Treasury Secretary, as the CEO of Goldman he made almost 100 trips to China and is intimate with China’s wealthy, political elite.

Both Goldman/Sachs and JPMorgan Chase just posted profitable quarterly gains of over $3 Billion dollars in and both continue to revert to their old ways of doing business. They are both on record to also fire off a round of huge bonuses to their CEO’s and managers because of this gainful profit. They are beginning to pay back their Stimulus funds so that they can have all the government regulations and caps on pay almost totally removed, thus their reasoning behind their future bonuses. What they haven’t been saying but what is also true is that both banks are reporting higher losses in their consumer lending and credit card departments. In other words their investment banking side is producing all their profits. One of the main reasons for this is that the playing field has been substantially reduced, as Chase bought Bear Stearns at a fire sale price in 2008 and Lehman Bros. went under. Both these banks appear to forget the basic principles of economics, that they are, after all, banks but their revenue is coming from Capital gains and not from their loans or deposits and I predict that it won’t continue as they are foreseeing it; both banks predicting a huge profit in the next quarter.
What does this have to do with Realtors, mortgage brokers or the general home-buying public? And what does it have to do with Made in China? Well, what are the business models copied by the majority I ask you, and the answer is … of course, the big corporate successes; the Chases and the Goldman’s and this then is what is going to happen: The small mortgage bankers and brokers are going to copy Goldman and Chase and move backwards in time and begin doing business again as they did in the 2003-2007 boom, by charging more junk fees, the Realtors are going to push first-time homebuyers into using their $8,000 rebate as a bridge-loan down payment and then start pushing their clients to making multiple offers or losing out and the loan originators are going to scramble to make as much yield spread premium as they can before the rates go back up to curb the oncoming inflation and the economies in most States are going to have double-digit unemployment and, eventually, double-digit interest rates.

Made In China: China was very mad at America when they started printing money to bail out all the Big Boys because China does not want to see the American dollar become devalued because, in effect, China owns a huge chunk of that dollar … 1.4 Trillion of it, to be as exact as I can, through a little blood, sweat and research. Cheap Chinese labor has consistently made numerous American corporations highly profitable and, while the American corporations were counting their billions of dollars of profit, even as we know the Chinese Communist regime has taken a dirty (full of coal-dust) page from America’s child labor and sweat-shop mentality of the early 20th Century to produce all these ill-gotten gains, the Chinese monetary authorities were converting these export surpluses into dollar-dominated reserves.
In 2006, just three short years ago, China didn’t have one single bank among the top 20, measured by market capitalization, America had the top 2 and 7 of the top 20, Today, the top 3 are all Chinese and America has only 3 in the top 20, and the biggest JP Morgan Chase, is 5.
Christmas is approaching soon and then the New Year and it may not happen in the year 2010 but I expect that very soon after that we will be able to look at the dollar bill and it will say: “The United States of Chimerica.”