|
Commentary on “ Fengbo Zhang: Perspective on the United States subprime mortgage crisis”
Regarding Countermeasure to U.S. mortgage crisis, the Chinese media generally believed that the United States Government would take a tightening credit policy, and suggested China also follow suit. However, the United States has adopted a series of emergency credit lenient measures: including,
-- On August 17, the United States Federal Reserve suddenly announced monetary easing policy, reduced the basic discount rate;
-- On September 18, the United States Federal Reserve cut the rate for the first time in four years, and as big as 0.5%;
-- On September 19, the United States Office of Federal Housing Enterprise Oversight (OFHEO) relaxed limitation for the largest mortgage financial resources Fannie Mae and Freddie Mac to purchase subprime mortgage; relax the overly strict financial regulations; to support the subprime mortgage financing and refinancing;
-- The White House, the Federal Reserve and other government departments to take various forms, requirements, and called on financial institutions to relax lending conditions, help homeowners with refinance. Major banks to respond positively to take various measures to strengthen its efforts to support the subprime mortgage;
-- The United States Congress, the legislative body, has increased protection for subprime mortgage homeowners, and some financial institutions were prosecuted, due to discrimination against low to middle income borrowers with limited repayment ability.
As owner of this discussion, Dr. Zhang’s early opinion was correct. He advocates to protect the vast numbers of low - middle income people to purchase their first homes since “to ensure people’s safe living and successful business, and protect their basic right to survival, and maintain social stability, the United States has developed federal and local laws and regulations”, “In the financial crisis, these regulations did not change, the law enforcement agencies even have stepped up monitoring efforts. Due to the understanding that political stability is more critical than the financial markets fluctuation and the interests of financial institutions.”
The United States Government’s strategy in tackling the financial crisis should give us inspiration.
Source: <China Economy Forum> 2007-10-14
http://bbs.ce.cn/bbs/viewthread.php? Tid=247964
<China Finance Online>
http://post.cnfol.com/thread/535192.html
This article is written very thorough. Thank you share.
Source: <Wall Street> 2007-9-13
http://spaces.cnwallstreet.com/viewthread-10914
On October 10, the Bush administration announced the establishment of the mortgage industry association to help homeowners maintain housing. 11 banks sharing 60% of the national total mortgage loans have agreed to join. Paulson, Secretary of the Treasury hopes that more mortgage lenders will join.
On August 31, Bush indicated appropriate modification of the Federal Housing Authority standards, so that more people can obtain mortgages secured by the Authority.
The United States Congress is promoting legislation in order to help more people keep their homes. Bell, the executive of the Federal Deposit Insurance Corporation (FDIC) suggested that, if the borrower were the residents rather than speculators, they would adopt a more lenient standard.
Supported by the United States Treasury Department, the Federal Reserve, Citigroup etc. three major banks, it was decided last week to create 80 billion in funds to support the subprime mortgage, and ease market crisis.
Source: <People.com> 2007-10-20
Recently this matter is of less concern , and although the initial news has passed, the Significance is still vital.
Source: <TechWeb> 2007-10-31
http://biz.techweb.com.cn/thread-8504-1-2.html
|
Chinese Premier comments on China's housing problem
Singapore November 19 (Xinhua reporter Li Tao) Chinese Premier Wen Jiabao said here on the 19th: "Regarding people’s lives, I am most concerned about the housing problem."
In order to resolve the housing problems, Wen Jiabao mentioned four-points of consideration.
He stressed, first of all, that government’s most important responsibility is to make low-rent housing available for those who cannot afford to buy, such as the farmers and migrant workers. Therefore, the Chinese Government this year will provide 4.9 billion Yuan for the construction of low-rent housing; coupled with the local financial investment that will reach tens of billions. He said that next year we would intensify the building of low-rent housing.
Secondly, the construction of economy housing. He indicated economy houses are applicable for most of the middle class, as for many of them, the wages are not high. In China, 90 square meters is the appropriate size of an economy house, because in China, there are more people, but less land “the Government should provide and ensure the land for needs of low-rent housing and economy housing constructions. Of course, the land should be conservatively utilized"
He said that for high-grade housing, the reliance would mainly be on market regulation, "but there must also be the state's macroeconomic regulation and control, to prevent the use of real estate speculation causing market confusion."
Wen Jiabao additionally pointed out that it is necessary to have the people understand China's national conditions. As China is a country with a population of 1.3 billion, we must reserve 18 million mu of cultivated land, to safeguard the "red line" that can feed the Chinese people. Each year, China’s newborn population is more than 10 million, and every year, the population from the rural areas into urban areas reached 18 million, which increases housing needs. Additionally, there are 21 million mobile workers, who also need livable conditions. Government should resolve all these problems comprehensively.
Source: (Xinhua) - November 20, 2007
http://news.xinhuanet.com/newscenter/2007-11/20/content_7108022.htm |
|
Author: nongming2008 in 2008-01-09 14:17:17.0 released from: |
|
|
Done. |
|
Posting the attached fig:
|
|
|
"Solve the low-meddle income families’ housing problems, ensure people's safe living and successful business." included in the “Government Work Report”
(http://news.xinhuanet.com/english/2008-03/19/content_7818043.htm) :
(“Government Work Report” is the most important Chinese Government document for 5 years term, delivered at the First Session of the 11th National People's Congress on March 5, 2008, by Wen Jiabao Premier of the State Council.)
We will promptly establish a system for ensuring housing for people. The general guiding principles for this work are as follows. 1) Taking into consideration the fact that China has a large population and relatively little land available for building housing, we need to foster a scientific and rational model for housing development and home ownership. We will vigorously work to build environmentally friendly buildings that conserve energy and land, increase the supply of small and medium-sized condominiums, and guide people to obtain housing they can afford. 2) We must ensure that the government and the market both play their due roles. The government's role is mainly to formulate plans and policies for housing and ensure that there is an appropriate supply of land, ensure that land is used intensively and oversee land use. Priority will be given to development of housing for low- and middle-income families. Demand for housing among high-income families will be met largely through the market. 3) We need to strengthen regulation and oversight of the real estate market, standardize and maintain order in the market and promote sustained, steady and healthy development of the real estate industry.
The following four measures will be adopted this year:
First, we will improve the system of low-rent housing, accelerate construction of low-rent housing, expand the supply of housing, and step up construction and tighten management of affordable housing to ease the housing difficulties of low-income urban residents. A total of 6.8 billion yuan will be allocated from the central government budget for the low-rent housing program this year, 1.7 billion yuan more than last year, and local governments will also increase funding in this area. In addition, we will work energetically to improve the living conditions of rural migrant workers in cities.
Second, we will increase the supply of low- and medium-price, small and medium-sized condominiums, establish a mechanism for making investments and raising funds in various ways, and help middle-income families meet their housing needs through a variety of channels. We will improve the supply structure of urban land to provide more land for building small and medium-sized condominiums.
Third, we will use a combination of tax, credit and land supply measures and improve the housing accumulation fund system to increase supply of reasonably priced housing, curb demand for high-end housing and prevent overheating in housing prices. Fourth, we will strengthen market oversight and strictly enforce the requirements for market access and the conditions for going out of business for real estate firms. We will investigate attempts to control the land and housing market through hoarding and speculation in land and housing and deal with violations in accordance with the law. In addition, we will improve planning and management of rural housing development and the safety of housing for the rural poor. We must unswervingly promote reform of the housing system and construction of housing in order to ensure people's safe living and promote successful business.
“Bush’s Comments left everyone astonishingly: The reason for the mortgage crisis is that Wall Street got drunk.” This became top news throughout the world medias.
Actually Dr. Zhang already pointed out early in this article:
“the United States mortgage market's fluctuations are very limited. The reality is, the main battlefield of this crisis is in the United States financial markets. Sub-prime mortgage securitization dealers, brokers and investors prefer the high-risk, short-term high return. The overly high expectations and fanatical devotion and hyping created the financial bubble speculation. Fluctuations in the housing market, with investor’s confidence shattered, led to the related enterprise bonds and asset valuation plunge, which resulted in panic, and a slumped USA stock market, and even the whole global financial market, strongly affecting global investors.
The billions of valuable housing property that turned worthless overnight by crazy financial markets, brings one of the greatest opportunities of a lifetime for sober and rational investors.”
Now Bush finally has awakened, the numerous medias, who were so puzzled by Bush’s comments, have still not woken up.
Participate in the discussion recommended
9-23-2008
Premier Wen Jiabao met with Fengbo Zhang and other overseas Chinese people kindly and warmly in New York. He delivered a long and passionate speech.
|
