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Obama, Geithner and Bernanke: America's Top Bond Salesmen Pitch No. 1 Client

Posted Nov 19, 2009 12:47pm EST by Heesun Wee in Investing, Newsmakers, Recession, Banking

As President Obama wrapped up his first trip to China this week, there was plenty of talk about partnerships but few concrete agreements reached on (1) whether or not China will let its currency float freely (2) and China's concerns about U.S. debt.

"Obama, Geithner and Bernanke, they're the three bond salesmen of the U.S. They're going to see our best client and hoping our client is happy," says Peter Boockvar, equity strategist at Miller Tabak. "Apparently they're not happy and the question is what do we do to make them happy?," Boockvar tells Aaron.

Of course, Boockvar is talking about the fact that China is the largest foreign lender to the United States. With Obama heading to visit America's largest creditor, it was no coincidence both Bernanke and Geithner publicly expressed support for a strong dollar during the past week, he says.

But Boockvar says anger about a depreciating dollar is aimed at the wrong direction. "Blame the Fed, don't blame the Chinese," he said. "The Fed is the one that's artificially depressing the dollar."

Furthermore, chatter about China allowing the renminbi to float is a "red herring," Boockvar says, noting Americans can't afford a price spike in imports. 

Bottom line: There's growing global competition for capital and the U.S. ultimately will have to play ball. So who will blink first?

99 Comments

Yahoo! Finance User
Yahoo! Finance User - Thursday November 19, 2009 12:52PM EST

Have your bought your version of Rosetta Stone 'Learn to speak Chinese" yet? Little Timmy looks like he needs a diaper.

Terry
Terry - Thursday November 19, 2009 12:54PM EST

I would love to have a week when we don't have a politician in our face giving us their BS version of life. Maybe they'll give us all a holiday gift and stay home.

ezshooter
ezshooter - Thursday November 19, 2009 12:58PM EST

International game playing. Obama has saved us from a Great Depression by spending during this deflationary cycle. When inflation returns, he will have to cut spending. Savings and deficit reduction should be possible when health care reform is passed and energy alternatives are in commercial production in a few years. Obama is dragging us into the future to compete with other nations, move forward in technology. The right wing would do the opposite: cut spending as Hoover did and cause a depression, live in the past, ignoring science and technology while the rest of the world overtakes our markets. Obama is the right person for the Presidency and is doing a great job.

Tex
Tex - Thursday November 19, 2009 12:59PM EST

I don't agree. The first thing we need is a rise in the price of imports so that our manufacturing becomes more competitive here in good ol' USA.

shags1_23
shags1_23 - Thursday November 19, 2009 01:04PM EST

"Furthermore, chatter about China allowing the renminbi to float is a "red herring," Boockvar says, noting Americans can't afford a price spike in imports." ============================================ How would a price spike in Chinese goods be a bad thing for us? Does that mean I can't afford to buy lead-paint toys for kids anymore? What about my cheap anti-freeze toothpaste? How else will I cool down my teeth? And I don't trust any good not made by children or convicts because that's all they do - make things! They don't get distracted at work because of "problems at home" or "being treated poorly" or "dangerous work conditions". No, they just make the same thing until it kills them. That's what I call dedication!

Rosepw
Rosepw - Thursday November 19, 2009 01:07PM EST

Stop the tax cuts for the Rich that the Busheess put in place and use that money for the real America. Like healthcare and lowering the inflationary cost of food and doc and vet.People are putting so many breaks on progress. Fear is screamed at them from the hate mongers until they believe all that stuff.

John S
John S - Thursday November 19, 2009 01:07PM EST

Go stuff that Keynesian drivel ezshooter. Your man isn't leading, he is merely reacting and hoping for the best. There is no happy ending to a credit bubble. Time will prove that.

teehikkles
teehikkles - Thursday November 19, 2009 01:09PM EST

maybe the Chinese will settle for California in exchange for debt

william
william - Thursday November 19, 2009 01:10PM EST

people... wake up to the new reality... Americans need to accept the new world order... both economically and geo-politically... America's Glory Days are behind them.... as an outsider.. America's solution is simple... instead of spending start saving... stop consuming and start investing... rip up your credit cards... pay cash.. it will force you to think twice before buying made in China "crap"... now, get on the train and hold on we're going for a ride.... choooo chooooo

BullyTheBear
BullyTheBear - Thursday November 19, 2009 01:10PM EST

"The 3 (W)horseMen" are DONE!!! BuckleUP..(GO SHORT)!!!

S
S - Thursday November 19, 2009 01:11PM EST

ezshooter is a complete retard.

donfurio
donfurio - Thursday November 19, 2009 01:13PM EST

"Blame the Fed, don't blame the Chinese," he said. "The Fed is the one that's artificially depressing the dollar." ------------------------------so pegging your currency does nothing? Of course the Chinese are part of it.

ilap2004
ilap2004 - Thursday November 19, 2009 01:15PM EST

exshooter spouts the usual left wing science fiction. Hoover jacked up income taxes substantially. As Obama is going to do, starting with allowing the Bush tax cuts to expire next year. Lefties seem to be genetically incapable of either understanding that or conceding that. The idea the proposed "health care reform" cuts spending is out there in the Twilight Zone. Just parrot whatever the Obama and Co. say. The part about "energy alternatives" doing anything to cut spending is likewise out there in la la land.

Simon
Simon - Thursday November 19, 2009 01:19PM EST

HEY ezshooter Obama hasn't saved anyone from anything or haven't you noticed ??? we are going down everyday with out a back stop, the real unemployment will end up being around 25% at this rate . folks are giving up while he's out playing community organizer. Hey Obama we need jobs jobs jobs not lip service.

Yahoo! Finance User
Yahoo! Finance User - Thursday November 19, 2009 01:19PM EST

Jim Chanos is seeing a Chinese crash and positioning his hedge fund accordingly. Google "Chanos and China" and learn the truth :)

Yahoo! Finance User
Yahoo! Finance User - Thursday November 19, 2009 01:21PM EST

ezshooter - Thursday November 19, 2009 12:58PM EST International game playing. Obama has saved us from a Great Depression by spending during this deflationary cycle. When inflation returns, he will have to cut spending. Savings and deficit reduction should be possible when health care reform is passed and energy alternatives are in commercial production in a few years. Obama is dragging us into the future to compete with other nations, move forward in technology. The right wing would do the opposite: cut spending as Hoover did and cause a depression, live in the past, ignoring science and technology while the rest of the world overtakes our markets. Obama is the right person for the Presidency and is doing a great job. **** buwahahahahaha.... I've got some beach front property in AZ for sale... You interested? ******

DONALD W
DONALD W - Thursday November 19, 2009 01:21PM EST

hold your nose We are going under

Clive
Clive - Thursday November 19, 2009 01:21PM EST

There is no way China will let their currency float until the US pays back their depts. Why? Because China will get less of their money back per US dollars otherwise.

Rightwheight
Rightwheight - Thursday November 19, 2009 01:21PM EST

With ALL this stupidity and GREED running rampid, as an American taxpayer--can I ask the GOV. for a 'gift' in a huge chested babe and some drugs? That way I can make as much sense as Washington and Wall Street. Why doesn't the financial world EVER talk about the Billions the tax payers are forced to piss away in the Middle East and Afganmountain land? Oh that's right--making money on an individual level outweighs the outcomes for the country. Oh yea--that's it. Ask a WW II vet--what's their take on morals in America today? I would bet ALL my money--they would say; "I'm glad to be dying , wouldn't want to be young right now"!

nate
nate - Thursday November 19, 2009 01:23PM EST

Really?? They're our "banker?" They only own a fraction less than 10% of our debt. The Fed is our banker. The information in this clip is important, but the hyperbole of the argument overshadows the important facts. Also, I agree it doesn't matter if we stop buying cheap imported goods. We're the biggest manufacturer in the world. This guy just wants to sell books.

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