Fannie Mae, Freddie Mac, Lehman Brothers, Merrill Lynch...

[Koxinga]

@IdahoMauleMan

Ding-ding-ding-ding-ding! Yes! That is the real red flag here. For years we’ve been debating to-and-for about the US current account deficit, the foreign financing of same, and speculated about when and how our line of credit would ever dry up.

I think it’s happening. Right now. I have no doubt that Lehman and Merrill hit the phones looking to raise more capital from overseas, and got a big ‘No’. That’s not exactly the same as China refusing to buy T-Bills, but it’s getting in the ballpark. Supposedly Paulson finally acted on FNMA because foreigners own a trainload of their bonds and wanted to know what the hell is going on.

Ah, yes. The day of reckoning. Margin call on Mortimer and Randolph Duke, for those of us who are ‘Trading Places’ afficianadoes. Let’s hope we’re at the bottom.

Not to dredge up not-so-ancient board history, but I think this earlier SDMB thread provides an interesting comparison of attitudes.

A few choice Doper quotes:

@Airman_Doors_USAF

Nobody will ever collect. I’ve said it before and I’ll say it here: countries loan us money, and they will never see any of it again. If they call in their markers they destroy their largest market, thus ensuring that not only will they not get their money back but they won’t make any more, either. Do you think that China will stop giving us money no matter how high the deficit gets? I think not. When they turn off the tap they get no return on investment, they have nobody to sell to, and they have no source of food to feed their people.

The game is fixed. We set the rules, and everybody has to play or everybody suffers. Who is beholden to who?

Yes, it’s cynical, yes, it’s elitist, but it’s also true.

@Fear_Itself

If I owe my creditors $1000, I have a problem. If the US government owes its creditors $53 trillion, the creditors have a problem.

@gravitycrash

Wow. And how exactly are these creditors going to collect? Yes we probably need to negotiate somewhat on certain terms of these loans but what are these counties going to do?
Foreclose?
Good luck with that.
Oh wait. China can fly a few fighters over here and intimidate us.
Go ahead and foreclose on those T-bills and loans. Watch which country it hurts the most.

@mazinger_z

No, but you get to declare bankruptcy. I just found out that one of my friends did that exactly, but it wasn’t like she purposely spent money. Though, on the other hand, she is now in a better position and will have her debt wiped away in two years, and she still owns her house. China on the other hand will be left holding the bag. Though, they much rather not have the US default, but they will be suffering from the rise in their currency and the shrinking of their markets, not to mention some heavy inflation and ultimately large unemployment. They will probably look back through a weepy tear and see their half-ass attempt to modernize their economy and their society stagnate.

They made their own bed, they should sleep in it.

None of these folks have appeared in this thread so far. Wonder what they’ll have to say now?