CANARY IN THE COAL MINE

Bank of China has cut its portfolio of securities issued or guaranteed by troubled US mortgage financiers Fannie Mae (NYSE:FNM) and Freddie Mac by a quarter since the end of June.
The sale by China's fourth largest commercial bank, which reduced its holdings of so-called agency debt by $4.6bn, is a sign of nervousness among foreign buyers of Fannie and Freddie's bonds and guaranteed securities.

Foreign investors have been a mainstay of the market for such debt, but uncertainty over the mortgage financiers' capital positions and the timing and structure ofa potential government rescue has made some investors reassess their exposures. Asian investors in particular have become net sellers of agency debt, said analysts.

http://news.yahoo.com/s/afp/20080830/bs_afp/britaineconomypolitics_080830090401;_ylt=AinBtNkIPpOJIYffRdz9UiymOrgF bristish economy in WORST downturn in 60 YEARS?

Talked to a MAC mechanic tonight....they arent selling and they arent getting the volume in repair work.......... (truckers)

DOUG NOLAND REMINDER TO READ THIS SHIT over coffee in the AM....
http://www.prudentbear.com/index.php/commentary/creditbubblebulletin?art_id=10104

Returning back to my initial paragraph, these days the economy and markets don’t appear all that bad - certainly nothing as nasty as we dour prognosticators have been forecasting. I’ll warn, however, that there are some very dangerous “Ponzi Finance” Dynamics Still very much At Play. The most obvious resides with the GSEs. And there are closely related Bubbles throughout the agency and Treasury bond arena. Meanwhile, a view has gained adherents that the U.S. economy is actually in much better shape than Europe and elsewhere. The reality that Europe is not buoyed by their own government-sponsored mortgage behemoths and that their economies are more manufacturing based (and thus vulnerable to cyclical downturns) are only short-term relative disadvantages