George Soros on how to get out of the crisis
Published by MartinVarsavsky.net in General with No Comments
Soros: There are five major elements.
— First, the government needs to recapitalize the banking system by buying equity stakes in banks.
— Second, interbank lending needs to be restarted with guarantees and bringing LIBOR (London Interbank Offered Rate) in line with Fed funds. This is in the works. It is going to happen.
— Third, we must reform the mortgage system in the U.S., minimizing foreclosures and renegotiating loans so that mortgages are not worth more than houses. Stemming foreclosures will cushion the fall of housing prices.
— Fourth, Europe has to fix a weakness of the Euro by creating a safety net for its banks. While initially resisting this, they have now found religion and done it at their meeting in Paris on Sunday.
— Fifth, the IMF must deal with the vulnerability of countries at the periphery of the global financial system by providing a financial safety net. This is also in the works. The Japanese have already offered $200 billion for this purpose.
These five steps will start the healing process. If we implement these measures effectively, we will have passed through the worst of the financial crisis. via Huffington Post
George Soros was my first investor at Viatel. I disclose this because you may think that my agreement with his plan may have something to do with that. But that was in 1995 and if I post his comment, which is something I rarely do in this blog. It’s because I agree with them.
Now to add something that Soros left out, I believe that another needed element to get out of this crisis is to sort out who will run USA. The combination of such a horrendous crisis with a US President with the lowest ratings in history and two extremely different candidates competing for what is now going to be the toughest job in the world adds tremendous uncertainty to the purchase of any assets. I wish they could move the US elections forward.
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Lasse Enersen on October 21, 2008 ·
If governments are to buy equity in banks, they should already be openly discussing these things:
– Which assets?
– At what prices?
– How to minimize conflicts of interest?
If these highly important subjects are not open to the public who pay for them, it shows incredible lack of professional attitude, and is just terrible handling of the common affairs.