Bloomberg – Billionaire investor George Soros said the current economic upheaval has its roots in the financial deregulation of the 1980s and signals the end of a free-market model that has since dominated capitalist countries.

Liberalization of the financial industry begun by the Reagan administration has led to a series of crises forcing government intervention, Soros told economists and bankers at a Feb. 20 private dinner at Columbia University in New York. The global recession, triggered by the collapse of the U.S. housing market, has “damaged the financial system itself,” he said.

Read Complete Article

Tags: 1980s, billionaire, capitalist countries, collapse, columbia-university, crises, economic upheaval, economists, financial deregulation, george soros, global recession, government-intervention, housing-market, investor, liberalization, market model, private dinner, reagan administration, roots, signals

Bloomberg – The U.S. Treasury and the Federal Deposit Insurance Corp. are considering a program that may offer about $500 billion in guarantees for troubled mortgages to stem record foreclosures, people familiar with the matter said.

The plan, which might put as many as 3 million homeowners into affordable loans, would require lenders to restructure mortgages based on a borrower’s ability to repay. Under one option, the industry would keep lower monthly payments for five years before raising interest rates, the people said.

FDIC Chairman Sheila Bair mentioned the program at an international deposit insurers conference in Arlington, Virginia, yesterday without offering details. “A framework is needed to modify loans on a scale large enough to have a major impact,” Bair said.

Read Complete Article

Tags: bad-credit, crises, currencies, dealer-operations, exigent-circumstances, expectation, henry-paulson, subsidiaries, swaps-and-other-derivatives