Hedged.Biz

  • Disclaimer
  • About Us
  • Articles
  • Home
  • Articles
  • Western Bailout vs Chinese Bailout
June 7, 2026

Western Bailout vs Chinese Bailout

Western Bailout vs Chinese Bailout

by Burnham Banks / Wednesday, 19 August 2015 | 4:31 am / Published in Articles
image_pdfimage_print

The west dealt with its financial crisis by basically swapping treasuries for non performing loans. It allowed a wholesale transfer of problem debt to the public (taxpayers) balance sheet, funded by the issue of government debt which only the Fed (and some hostage buyers like commercial banks subject to enhanced capitalization requirements) were willing to buy.

China, unfortunately is less experienced in the management of bailouts. They have left problem loans on private balance sheets and tried instead to reclassify these loans as anything but non performing.

Private balance sheets are open to scrutiny or at the least, question. China has instead tried to fund the private balance sheets to allow them to hold these NPLs instead of simply buying them out at par.

The western solution is more effective because it removes the NPLs from prying eyes of private investors and puts them on the Federal balance sheet. Taxpayers can yell all they want but they have no sway over the government like investors might on a corporate entity.

Ten Seconds Into The Future

“Hello. I’m Burnham Banks and I studied economics in the late 80s and early 90s. I’m still studying economics today and am still no wiser. This blog is a journal, a record of my thoughts and experiences. If we are destined to repeat our mistakes, we should at least repeat them faithfully. If not, then perhaps the past is a mischievous guide and we should try something new.”

Meta

  • Entries RSS

Featured Posts

  • From Self Interest to Shared Interest: The Logic of Impact Investing

  • Ten Seconds Into the Future 2026 H2.

  • Fiction. The Stellar Needle. Siphoning Naturally Occuring Fusion.

  • AI: Criterion for General Artificial Intelligence

  • Fiction. Sentient AI

  • I Have Faith in Humankind

  • Hiring and Managing Investment Teams

  • Semi Liquid and Evergreen Funds

  • Towards a theory for impact capital

  • Market Outlook 2026

  • Ten Seconds Into The Future 2026

  • Purpose

  • AI, Entropy, and the Order of Knowledge

  • Impact Investing and Family Offices

  • How did we get here? Where do we go from here?

  • A Hundred Years of Capitalism: Fragile Prosperity

  • Free Markets, Capitalism and Inequality

  • Purpose

  • Why We Have Finite Lifespans

  • Ten Seconds Into The Future 2025 06

  • Long short, hedging and market neutrality under unruly markets

  • Ten Seconds Never Felt So Long. 2025 Trade War.

  • Tariff Wars. The Best Response to Tariffs is to Cut One’s Own.

  • 2025 Geo Macro Scenario A

  • Fiction. Foundation CG. 2025 02

Categories

  • Articles

Archives

  • RSS FEED

Copyright 2018 © Hedged.Biz All rights reserved

TOP