The next Bear Sterns will come from China
Why you should invest in subprime loans:
Because these loans are safe. They've always been paying us on schedule.
Reality: they've been paying us because we were dispensing new, bigger loans to them, so in fact it's we who've been paying ourselves.
Why you should invest in US treasuries:
Because treasuries are safe. The US has never defaulted on them.
Reality: the US never defulted on its treasuries because "we" were willing to buy more of them, so it's "us" who've servicing the US public debt for so many years.
The self-delusion of Asian central banks will end the same way as the self-delusion of NEW, AHM, FNM, FRE, AIG, LEH, WM, WB, MER, MS and other successful nominees for the Darwinian award in banking.