[lbo-talk] Bearzilla and Asiazilla Show How It's Done

[dredmond at efn.org]

More confirmation, as if we needed it, that the semi-periphery finally has
its geopolitical act together:

http://www.bloomberg.com/apps/news?pid=20601087&sid=afbSjYv3v814&pos=6
"Paulson Says Russia Urged China to Dump Fannie, Freddie Bonds"

Note that the title is a bit misleading: what happened is that Russia told
China it was planning to back away from Agency debt, because the US
Government hadn't yet implicitly backed Agencies by nationalizing Freddie
Mac and Fannie Mae. Russia was just being a good neighbor, i.e. signaling
it wasn't going to try to crash the markets, which would've damaged
China's holdings. Later in 2008, Russia and China (just anyone else with
any financial sense at all) began to diversify out of Agencies into safer
T-bills, but at a slow and measured pace.

-- DRR