Archive for the ‘#Banking’ Tag

Advocates and Bankers Join to Fight Loan Rules –   Leave a comment

In the US  : “Republicans in Congress and the Obama administration have vowed to get the government out of the mortgage business, letting the private market take over Fannie and Freddie’s functions of supporting the market for home loans. But lenders and consumer advocates say any privatizations could disrupt lending, making matters worse and outweighing the protections they were designed to offer.”

via Advocates and Bankers Join to Fight Loan Rules –

This is the crux of the balancing act required to keep the housing market fluid and bouyant in the US. The housing market is so crucial because :

1. People need places to live.

2. It is a huge economic driver

3. There needs to be new housing stock created  ( population is growing and moving significantly to the urban centers ) not just resell of existing stock.

4. This is a significant part of the financial sector as well and needs liquidity .

5. The need to offset lender risk needs to be balanced with the need to ensure that buyers dont have to wait excessively to build up downpayments all the while not shifting all the risk to the Federal Government  .

“The initial proposals on “risk retention” by sellers of mortgage-backed securities are likely to have limited effect, largely because Congress provided an exemption for loans that are sold to the Federal Housing Administration and Ginnie Mae, the Government National Mortgage Association. Regulators want to extend that exemption to Fannie Mae and Freddie Mac. Those and other government-sponsored housing finance enterprises currently purchase about 90 percent of new mortgage loans made today.”

Posted June 1, 2011 by arnoneumann in Housing

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The Euro Zone’s Structural Problem – Room for Debate –   Leave a comment

“European banks have very low levels of capital, meaning they are highly leveraged – having a great deal of debt relative to their equity. They are not in a position to withstand losses on their large portfolios of European government securities if, as seems likely, Greek problems cause a fall in the market price of Spanish, Italian, Belgian, or other euro zone sovereign debt.

The banks convinced themselves – and their regulators – that lending to all these governments was “riskless.” This was the structural mistake at the heart of the euro zone.”

via The Euro Zone’s Structural Problem – Room for Debate –

This is a very critical analysis and simple deduction. The global financial situations have to look past the proverbial “finger-in-the-dyck ” solutions . They have to, as this authir has done, get to the core matter and the priority solutions and grapple with the structural matters.

Cities ( wherein  over 50% of the world’s population resisde ) are facing an “Infrastructure Deficit ” ie they have crumbling and aged : roads, bridges, transportation systems, sewer , water and utilities and not enough capital allocated to the building and re-building of these critical infrastructure components.

Posted May 25, 2011 by arnoneumann in banking

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