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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Steve Lokness who wrote (89661)	10/11/2008 12:50:08 PM
From: Dale Baker	Respond to of 541786

TARP is headed in the right direction since they can inject capital into the banks quickly and liquefy the mortgage securities at 60 cents on the dollar over a few months. The bank gets some cash but still takes a loss, FHA can refi the homeowner at current market value and we cut down on foreclosures. Just have to sit back and wait for it all to start working now.

To: Steve Lokness who wrote (89661)	10/11/2008 1:46:05 PM
From: Dale Baker	Respond to of 541786

Germany Stands Aloof By MOLLY NEAL Even if the U.K. government invests as much as £50 billion ($87.26 billion) in U.K. banks, that still wouldn't compare to the level of state control in the German banking system. In this context, Chancellor Angela Merkel's reluctance to make blanket guarantees to Germany's banks becomes more understandable. As other governments nationalize their most enfeebled banks, the German industry is in relatively good health because of the role the German state still plays in local financial markets, at the national and federal level. Municipally owned savings banks and the Landesbanken, lenders controlled by Germany's regional governments, still dominate the sector. Germany's five largest commercial banks account for less than 25% of the country's banking assets. These legions of domestically focused banks have proved conservative for the most part. Germany's state banks could offer cheaper financing than commercial banks until 2005, when the European Union phased out state guarantees, because of their top-notch credit ratings. With business strong, there was little incentive to move away from plain-vanilla interest-earning activities to the fatally-leveraged strategies favored by so many commercial banks in other countries. Germany has also avoided a housing bubble, unlike the U.S., U.K., Spain and Ireland, so banks have few bad housing debts. Home ownership isn't as widespread in Germany as the U.K. or U.S. Mortgage-loan to value ratios are typically lower than elsewhere in Europe. The German system doesn't come without its disadvantages. With around 440 different savings banks in addition to regional, co-operative and private banks, the sector is inefficient. Some German banks have made bad bets in recent years. Hypo Real Estate has just secured a government-backed €50 billion ($68.16 billion) emergency credit line. Midsize banks such as IKB Industriebank and Sachsen LB had to be rescued. But Germany is right to distance itself from the patchwork of industry-wide bailout plans that Europe's governments have hatched in recent days to save their banking systems from collapse. Germany may yet face more costly individual bank bailouts, but a Europe-wide rescue plan would see German taxpayers footing the bill for the reckless lending and borrowing of others.