"The Republican candidate proposes a plan to help homeowners who struggle with mortgage payments to avoid foreclosure.
" (2008-10-9)
October 9, 2008
McCain Proposes Mortgage Rescue Plan
Europe's governments struggle to cope with more financial turmoil
"Germany guarantees all retail bank savings, as European governments take more individual stepsAFTER stepping in to save five banks in seven countries in the past week, Europe’s governments had hoped to stop fear spreading through the continent’s financial system. They failed. Authorities are again busily trying to keep afloat several of the banks they had previously bailed out. The biggest of the bank rescues to flounder was that of Hypo Real Estate, a mammoth German property lender and financier of local governments. Hypo was deeply reliant on money markets to fund its long-term loans. Yet these have frozen in recent weeks. Paradoxically, the source of its weakness—its reliance on money markets—also made it too interconnected to fail. German authorities muttered darkly of their economy and financial system suffering a ripple of unpredictable consequences similar to those caused by the collapse of Lehman Brothers in America in mid-September, had they let it go down. ..." (2008-10-6)
October 8, 2008
Nearly 1 in 6 homeowners are ‘under water’
"The relentless slide in home prices has left nearly one in six U.S. homeowners owing more on a mortgage than the home is worth, raising the possibility of a rise in defaults." (2008-10-8)
China and crisis management
"China must do better at handling disasters“RIDICULOUS” is how China’s banking regulator, Liu Mingkang, recently described American lending practices that led to the current crisis. In private, some Chinese officials have expressed even greater contempt for the Western financial system. But while Communist bureaucrats are allowing themselves a little smugness, they have crises of their own to fret about and are struggling to learn—even from the West—how to manage them. Many a foreign businessman, in after-dinner speeches to colleagues, has observed that in China the word for crisis, weiji, contains the characters for danger (wei) as well as opportunity (ji). Their point is to show that the Chinese, unlike pessimistic Westerners, see crises as opportunities for improvement. But the crisis now besetting China’s dairy industry, involving the poisoning of tens of thousands of infants by tainted milk, show that lessons have not been learned (just as many after-dinner speakers have yet to learn that the etymology of weiji does not support their argument: in this context ji simply means “moment”). ..." (2008-10-8)
20 Steps to Toughen Up Against Hard Times
"Harder times appear to be on the way, even if lawmakers succeed in unclogging the nation's credit system. It's time to look around our homes and do what we can to cut costs, avoid unnecessary repairs and preserve cash.
" (2008-10-5)
'Hope for Homeowners,' Still Long in Coming
"We interrupt this financial crisis with a word from its sponsor: the families who are losing homes to foreclosure.
" (2008-9-28)
October 6, 2008
Big drop in home prices in England, Wales
"House prices in England and Wales fell at their sharpest rate in at least eight years in August, British government figures showed. Average house prices declined 4.6 percent from year-to-year in August, and 1.9 percent from the previous month, the Land...
" (2008-10-5)
As loan volume leaps, so do worries about FHA
"In the current credit squeeze, if you have less than a 20 percent down payment, there's pretty much only one major source of mortgage financing available: the Federal Housing Administration, a Depression-era home loan insurance agency that still offers 3...
" (2008-10-5)
Bail-out politics, continued: While Wall Street burns
"Lawmakers fiddle, then reach for the fire-hoseWHEN Congress does nothing, Americans usually breathe a sigh of relief. But when the House of Representatives failed to pass a rescue package for the financial system on September 29th, panic ensued. The stockmarket crashed: more than a trillion dollars in paper wealth evaporated in a single day. That, plus the shock waves that battered markets around the world, seems to have made lawmakers sit up and take notice. Before the vote, Barney Frank, the Democratic head of the House banking committee, observed that: “It is hard to get political credit for avoiding something that hasn’t yet happened.” Perhaps that is why the rescue plan was rejected, by 228 votes to 205. Some lawmakers simply weren’t convinced that disaster was imminent if they failed to act. ..." (2008-10-2)
Europe and America: Lessons from a crisis
"European Schadenfreude over the ills of American capitalism does not signify a dramatic move away from the free marketONE by one, European leaders have lined up to hail the triumph of welfare over Wall Street. “The idea that markets are always right was a mad idea,” declared the French president, Nicolas Sarkozy. America’s laissez-faire ideology, as practised during the subprime crisis, “was as simplistic as it was dangerous”, chipped in Peer Steinbruck, the German finance minister. He added that America would lose its role as “financial superpower”. The Italian finance minister, Giulio Tremonti, claimed vindication for a best-selling book that he wrote earlier this year about the dangers of globalisation.It would be wrong to exaggerate Europe’s sense of self-righteousness over Wall Street’s fall. This week governments in Belgium, France, Germany, Ireland and the Netherlands all scrambled to bail out their troubled banks (see article), confirming how exposed Europe’s economies are to knock-on effects from America. Even left-wing editorialists in France, quick to sneer at degenerate American capitalism, have tempered their glee. “There would be something comical, even pleasurable, in watching the frenetic agitation of the banking world”, wrote Laurent Joffrin, editor of Liberation newspaper, “if millions of jobs were not at stake, not to mention the economic balance of the planet.” ..." (2008-10-2)
Depression index
"Signs of a pending depression? The Economist's D-word indexMANY comparisons may be made between the devastation being wrought on America's financial system today and the Wall Street crash of 1929. One similarity that the world is desperate to avoid is a repeat of the depression of the 1930s. Hopes are pinned on the American bail-out plan that the House of Representatives is set to reconsider on Friday October 3rd. If the fear of depression is anything to go by, the future looks bleak. A survey of newspaper articles over the past two decades shows a sharp spike in mentions of the dreaded D-word, as commentators have started to think the worst. The prognostications may possibly turn out to be true, or perhaps the only thing we have to fear are the fears of journalists themselves. ..." (2008-10-2)
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