Government regulations regarding liquidating assets

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The US Treasury asked Congress for a blank cheque – the power to inject unlimited amounts of additional capital into Fannie and Freddie, arguing that if the market knew that the Treasury had a ‘bazooka’ instead of a ‘squirt gun’, it was substantially less likely that the Treasury would be required to provide any financial assistance at all.

Congress gave the Treasury that authority on 30 July 2008.

China’s Securities Law defines debtor and guarantor rights, including rights to mortgage certain types of property and other tangible assets, including long-term leases.

Chinese law does not prohibit foreigners from buying non-performing debt, which can only be acquired through state-owned asset management firms.

Real estate prices continued to collapse in early 2008, resulting in billions of dollars of additional CDO markdowns, the collapse and rescue of Bear Stearns, and extraordinary measures by the Federal Reserve to de-stigmatise the discount window for commercial banks and make emergency liquidity facilities available to the large investment banks.

When real estate prices began to collapse in the second half of 2007, some investors started shorting real estate markets.Investors often complain that compensation in these cases has been nominal.In rural China, land use rights are more complicated.China’s Property Law stipulates that residential property rights will renew automatically, while commercial and industrial grants shall be renewed if the renewal does not conflict with other public interest claims.A number of foreign investors have reported that their land use rights were revoked and given to developers to build neighborhoods slated for building by government officials.

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