The Great Debate UK

from The Great Debate:

Let housing find its clearing price

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James Saft Great Debate -- James Saft is a Reuters columnist. The opinions expressed are his own --

The U.S. government should just get out of the way and allow the crash in U.S. housing; the market is too big, has too far to fall and Americans' finances are too strained.

President Barack Obama's measures, unveiled on Wednesday, are part of a $275 billion plan to try and stabilize the housing market and prevent foreclosures. It aims to encourage lenders and their agents to cut repayments for homeowners in difficulties to lower, more affordable levels as well as other steps.

The reasoning is that there is a largish group of borrowers within the U.S. real estate market who may slide into default because their loans are too big and expensive or because they have run into temporary cash flow issues.

Give them a cheaper loan and you break the circuit of foreclosures, more stock coming on to the housing market driving prices down further and giving other mortgage borrowers more incentive to simply walk away from their debts.

from The Great Debate:

Say it with philanthropy

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combojulie- Matthew Bishop and Michael Green are the authors of "Philanthrocapitalism: How the Rich Can Save the World." They blog regularly at Philanthrocapitalism. Their views are their own. -

Bankers keep telling us how sorry they are for getting the world into the current economic mess, but the public doesn't seem to want to accept their apology. To show they mean it, the rich need to discover philanthrocapitalism and start to give back to society - for their sakes and ours.

from The Great Debate:

Goodbye to rugged American individualism?

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Bernd Debusmann - Great Debate-- Bernd Debusmann is a Reuters columnist. The opinions expressed are his own. --

Shock!! Horror!! The United States is becoming more like Europe! The rugged individualism that makes up part of the country's self-image may be doomed. Paternalism threatens to throttle enterprise and initiative.

That has been the reaction of Republican leaders to the $787 billion stimulus package President Barack Obama signed this week after a contentious debate that echoed arguments made more than 80 years ago on the eve of the Great Depression.

from The Great Debate:

Geithner’s hair of the dog plan for banks

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jimsaftcolumn-- James Saft is a Reuters columnist. The opinions expressed are his own. --

U.S. plans for a public-private fund to buy up toxic assets are likely to amount to a fig leaf with which to hide subsidies to failing banks.

It is also, inevitably, an entirely new subsidy to outside investors, who by definition will only participate if they get better terms than now available in what we formerly thought of as the free market.

from The Great Debate:

First 100 Days: Obama’s foreign policy challenges

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Willis Sparks-- Willis Sparks is a Global Macro analyst at the political risk consulting firm Eurasia Group. The views expressed are his own. --

Few things in life amused my dad more than a good karate movie. I once asked what he found so funny about Bruce Lee’s jaw-dropping display of poise and power. “Nice of the bad guys to attack him one at a time,” he said. In the real world, threats don’t arrive single-file, like jets lining up for takeoff.

from The Great Debate:

Financial strains show first sign of easing

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John Kemp Great Debate-- John Kemp is a Reuters columnist. The views expressed are his own --

The volume of excess reserves commercial banks are holding with the Federal Reserve System has declined by $275 billion (31 percent) over the last five weeks, in what could be the first sign of stabilization within the core of the banking system (https://customers.reuters.com/d/graphics/RESBAL.pdf).

Reserve holdings are still at exceptionally high levels, but a clear downtrend has emerged since the start of the year.

from The Great Debate:

First 100 Days: The next steps in the Middle East

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President Barack Obama, Secretary of State Hillary Clinton and George Mitchell in the Oval Office of the White House.

President Barack Obama inherits a distinctly gloomy outlook for progress in settling the Israeli-Palestinian conflict. Is change really possible?

Reuters asked Oliver McTernan, the director a UK charity called Forward Thinking and two experts from the Brookings Institution in Washington -- former Ambassador to Israel Martin S. Indyk and Kenneth Pollack -- what steps the Obama administration should take next in the Middle East.

from The Great Debate:

Clean up Washington: mission impossible?

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Bernd Debusmann - Great Debate-- Bernd Debusmann is a Reuters columnist. The opinions expressed are his own. --

Can any U.S. administration avoid the fate spelled out in the following 12 words? "We were elected to change Washington and we let Washington change us."

from The Great Debate:

Bankers can’t kick the sporting habit

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Alex Smith-- Alexander Smith is a Reuters columnist. The opinions expressed are his own --

People are up in arms about bankers receiving bonuses when the banks they worked for have gone down the pan. But isn't it just as shocking that so many state-backed financial firms still subsidize the eye-popping wages of sporting superstars through rich sponsorship deals?

It's the same story on both sides of the Atlantic. Citigroup, which received $45 billion from the U.S. government, is sticking with a $400 million marketing deal from 2006 which includes the naming rights for the new home of the New York Mets baseball team, which will be called Citi Field.

from The Great Debate:

Goodbye bonuses, hello hedge funds

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James Saft Great Debate -- James Saft is a Reuters columnist. The opinions expressed are his own --

The argument about bank bonus payments is as sterile as it is backward looking; compensation at government insured institutions is going nowhere but down.

The real action will be at those places like hedge funds, private equity houses and boutiques, which will try and trade less insurance for more autonomy and which will capture more market share, take on more risk and offer more reward. The question is how will they be regulated, how will they fund themselves and how will the rest of us be protected from the systemic risk they could easily represent.

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