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The glory of capitalism meets own ruins:

Shanghai breaks with market principles

[In] plain language, the Shanghai government demands the relevant authorities to consider launching a policy to restrict non-Shanghai residents from buying housing in the city. The circular goes so far as to stipulate clearly that it overrides any previous rules. If Shanghai implements the measure, it will be the first city to impose a ban on non-local Chinese buying housing in its territory.

The country has already imposed restrictions on foreigners and overseas Chinese from buying housing in major cities, one of the measures taken to cool the urban real estate market.

How Wall Street broke the free market

[Less] than two decades after the collapse of the Soviet Union and the West's gleeful jig dancing on the grave of communism, state capitalism is suddenly threatening the autonomy of the global "free" market. Wall Street's elite banks, longtime freedom fighters for deregulation and scorners of all government intervention in the marketplace, are now begging, cup in hand, for aid from a gallery of regimes that includes some of the most authoritarian and undemocratic governments on the planet.

[For] some conservative commentators, the clash of civilizations isn't just about geopolitical control of crucial assets, but raises serious ideological questions that many thought had been decisively settled. Wringing their hands with a flutter bordering on hysterical, they worry that the influx of cash from national governments making decisions for strategic reasons, rather than purely economic, will upset the efficient workings of global markets.

[It would be accurate] to say freer markets lost the day. The root of Wall Street's woes leads back directly to their own strategic missteps, greed, speculation-run-amok, and lack of appropriate supervision. The brightest minds in finance had exactly what they wanted, a playground where the monitors were looking the other way, and they blew it. When the China Investment Corp. pumps in $5 billion to Morgan Stanley, we are not witnessing the triumph of state capitalism, but rather, the embarrassing, humiliating failure of Reagan-Thatcher style unregulated capitalism. So now the U.S. buys Chinese toys at Wal-Mart, and China uses the resulting cash to buy American banks. Hey, anything's fair in love and war and free markets.

by das monde on Tue Jan 15th, 2008 at 08:42:34 PM EST

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