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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 389.75+0.5%Dec 1 4:00 PM EST
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To: TobagoJack who wrote (10573)10/25/2006 8:42:50 PM
From: energyplay  Read Replies (1) of 218135
 
I don't know where Stratfor gets their financial history, but what China is doing by buying out the NPLs is pretty much the same as what the US Reconstruction Finance Corporation RFC - did for the S&L mess, and what Japan did to some degree.

Differences is the RFC would often pay only 80 cents on the dollar of nominal value, and then the thrift regulators were in a position to force a merger with a better run (or more politically connected) bank. The bad guys get fired, RFC slowly auctions off the properties as the real estate market improves (avoiding dumping in most cases). RFC recovers most of the taxpayers money, the new bank or thrift makes better loans to people who actually intend and have the means to pay the money back, and life goes on.

The banks doing IPOs have cleaned up balance sheets, they have been designated as "winners" or "survivors" by the central government, and they have foreign expertise and much more equity post IPO.

They will likely be the beneficiaries of additional consolidation.

I guess the Stratfor people were expecting a Russian type outcome - the whole banking system sold for 10% of actual value ?
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