"September has arrived which means for Europe reality can, mercifully,
return. First on the agenda:
moments ago the French government suddenly
announced the nationalization of troubled mortgage lender Credit Immobilier de
France, which is also the country's second
lagrest mortgage specialist after an attempt to find a buyer for the company
failed. "To allow the CIF group to respect its overall commitments, the
state decided to respond favourably to its request to grant it a guarantee,"
Finance Minister Pierre Moscovici said according to Reuters. What he really
meant was that in order to avoid a bank run following the realization that the
housing crisis has finally come home, his boss, socialist Hollande, has decided
to renege on his core campaign promise, and bail out an "
evil, evil"
bank. Sadly, while the nationalization was predicted by us long ago, the reality
is that the French government waited too long with the sale, which prompted the
Moody's downgrade of CIF by 3 notches
earlier
this week, which in turn was the catalyst that made any delay in the
nationalization inevitable. The alternative: fears that one of the key players
in the French mortgage house of cards was effectively insolvent would spread
like wildfire, leading to disastrous consequences for the banking system. End
result:
congratulations France: your Fannie/Freddie-Dexia moment has finally
arrived, and the score, naturally: bankers 1 - taxpayers 0.
From Le
Figaro:
Here comes another crisis that the new government could do well without.
After the latest downgrade by Moody's, the fate of Crédit Immobilier de France
(CIF) was sealed. After failing to find a willing buyer, the lender called the
State to the rescue..."
at
http://www.zerohedge.com/news/september-arrives-does-french-dexia-moment-france-nationalizes-its-second-largest-mortgage-lend
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