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Saturday, November 20, 2010

While the Irish dust is still in the air above our heads


I couldn't help but notice that autocratic-capitalism China is raising reserve requirements, as its economy heats up.

There is plenty to dislike about China's government, but it sure is amazing to watch just what can be done.

As you know, U.S. banks let their reserves against bad loans, especially consumer credit, fall to a pittance, as they fueled a consumer-debt boom during a time of super-low, Greenspan policy rates.

Even after Greenspan started to raise rates, I'd love to see a chart of how many reserve requirements were actually waived. I do recall seeing a footnote in an annual report of one of the majors to that effect.