Skip to comments.Germany’s HRE says rescue collapsed(German mortgage giant could go down)
Posted on 10/05/2008 5:39:56 AM PDT by TigerLikesRooster
Germanys HRE says rescue collapsed
By James Wilson in Berlin
Published: October 5 2008 10:07 | Last updated: October 5 2008 10:07
Hypo Real Estate was racing to find a way to save itself on Sunday after the German property lender revealed the collapse of a previous rescue plan.
A consortium of banks that was to provide HRE with an emergency liquidity line had now declined to do so, HRE said at the weekend.
The reversal threatens a dramatic escalation of the financial crisis in Germany and leaves HRE and the Berlin government scrambling to come up with an alternative plan before markets open on Monday.
The government had been an integral part of a 35bn package agreed last week to support the group, which was unable to find enough short-term unsecured finance to support borrowing needs at Depfa, its Irish public sector lending arm.
A failure of HRE, with its 400bn balance sheet, would be the biggest threat to the German financial system of the current crisis. Peer Steinbruck, finance minister, justified the governments intervention to support HRE by warning that its collapse could badly affect the real economy.
Since HREs original rescue plan was agreed a week ago some European governments have become increasingly interventionist in trying to overcome the financial crisis, nationalising a string of banks. But Berlin has appeared less keen on wholesale government intervention and made sure other German banks supported the HRE rescue attempt.
Under the original plan to save HRE, brokered by Berlin, a consortium of banks and the Bundesbank were to provide 35bn of liquidity while the banks and the government provided 35bn of credit guarantees, also backed by HRE collateral.
(Excerpt) Read more at ft.com ...
What a misnomer! The HRE was neither holy, Roman nor an Empire.
I loved how Germany and the euroweenies were screaming about how the US SHOULD fix the economy cause it affects the whole world!
But I thought we should be taking Europe as our model for social and economic role models. ha.
Soon to be American taxpayer dollars at work.
Part of our bail out is being giving to foreign investors/countries already.
Thank God Congress got involved!
Why should any other entity risk money bailing out BAD BUSINESSES when Congress has just given the Treasury Secretary the authority to do so!
We should all get in line, and “they” should give us whatever we ask for!
The euroweenies conveniently forget that when Chris Cox and the SEC halved the margin requirements for US investment banks, they were following the lead of EU regulators.
So, to whom are the euroweenies giving subprime loans? Muzzies?
One of the heavily cited reasons around here is the Community Reinvestment Act. I don't doubt that as a cause, government meddling will usually come to no good. But did Germany have it's own version? Did they have a housing bubble? Banks are failing in Britain, as well, that must be related.
It seems likely to me that the same forces causing our problems could be found to be at work in Germany & Britain, as well. What are they? Anyone?
And finally, the subsidary which drew HRE into the crisis was an Irish one, working with the US loans from there to dodge taxes in Germany. Good riddance, I say. I hope they either get saved by the Deutschland AG or rather not at all, and no one wastes tax money on this.
AFAIK they have been trading the same subprime US packages as everyone else. A bad loan goes around the world.
Global economy? What a great idea.
Adding this to the Timeline Project / Link List of Bailout History:
Ha! We sure screwed them, didn't we? Here Germany, wouldn't you like to buy some mortgages? Ha Ha!
I don't understand why people don't look favorably on us.
No really, they were just as greedy and as short sighted as everyone else who does that kind of speculation on grossly overblown bubbles without any second thoughts or appropriate securities. I don’t think anyone is making the USA responsible for the fact that banks are too greedy.
Here comes the Chinese / Russian backed AMERO to save the day. Old W is going to get his way after all.