The recent economic slow-down in economy and its far reaching effects in other industries and nations, point towards structural issues in banking and real estate industry.
Rapid real estate growth without long-term, intergrated, multi-sector growth strategy...may yield un-predictable market crashes.
The cumulative slump in real estate industry drag down banks that provided loans and used the papers in the wall street. This is a pattern of lending and real estate in many countries. But when market slump moves as under-current in the economy is not addressed reagionally and at sector level, it affect the whole economy. During the recession, even unrelated sectors use the weekness as reason for government bail outs or bridge loan requests.
The commercial papers generated within a sector like 'real estate' shall be evaluated at a different rate and not be overly (beyond a ratio) used for investments in other sectors. Un controlled use the real estate commercial paper in equity market is not advisable. When the real estate sector slump occur, that momentum drags down the other sectors which use those 'poorly performing' commercial paper from real estate.
yes. create housing banks, industrial banks, auto banks etc. etc. as specialized banks to deal each value chain, debt or credit issues seperately...is a good approach. Instead of having over-grown, un-focused, growth hungry, overarching, multi-national banking firms... with all the bad apples in the single basket. These are the learning points... Unlike in schools, we cannot mix good students and bad students in same classes and always expect good results...some gets stressed out wthout incentives, some good ones perform poor, some bad performers gain the same glut...
The cumulative slump in real estate industry drag down banks that provided loans and used the papers in the wall street. This is a pattern of lending and real estate in many countries. But when market slump moves as under-current in the economy is not addressed reagionally and at sector level, it affect the whole economy. During the recession, even unrelated sectors use the weekness as reason for government bail outs or bridge loan requests.
The commercial papers generated within a sector like 'real estate' shall be evaluated at a different rate and not be overly (beyond a ratio) used for investments in other sectors. Un controlled use the real estate commercial paper in equity market is not advisable. When the real estate sector slump occur, that momentum drags down the other sectors which use those 'poorly performing' commercial paper from real estate.
yes. create housing banks, industrial banks, auto banks etc. etc. as specialized banks to deal each value chain, debt or credit issues seperately...is a good approach. Instead of having over-grown, un-focused, growth hungry, overarching, multi-national banking firms... with all the bad apples in the single basket. These are the learning points... Unlike in schools, we cannot mix good students and bad students in same classes and always expect good results...some gets stressed out wthout incentives, some good ones perform poor, some bad performers gain the same glut...
