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American Pie – June 24th.

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America’s best newspapers digest:  The Washington Post, The New York Times and The Los Angeles Times 

Canada’s conservative approach to mortgage finance could provide model for U.S.

TORONTO — When he bought a home last week with a 40 percent down payment, lawyer Kevin Fritz didn’t see the transaction as particularly relevant to the debate over global financial stability.

But consider: With U.S. home sales and prices still shaky, Fritz bought in a Canadian market that already has rebounded beyond pre-crisis levels. Without the key tax advantages available to U.S. home buyers, he amassed as much as possible for the down payment, and he expects to pay off his 15-year mortgage with the same bank that gave him the loan — a rarity in the United States, where finance companies typically resell mortgages.

“Canadians are debt-averse,” said Fritz, an attitude that’s part cultural and part shaped by banking practices and regulations designed to keep people out of homes unless they can clearly afford them. “People here don’t leverage.”

As President Obama and other Group of 20 leaders gather in Toronto to continue the debate over ways to avoid future financial crises, they have a ready-made example in Canada, where a quaintly old-school approach to mortgage finance helped their host country avoid the worst of the recent turmoil.

“It is a regulatory structure in Canada that created the Canadian mortgage system, and it was a regulatory and political structure in the U.S. that created the U.S. mortgage system,” said Ed Clark, chief executive of TD Bank. With the United States now leading a discussion on how to increase the stability of the financial system, he said, “the irony is . . . that one of the primal causes of the crisis was the U.S. mortgage system.”

Canada, as a major U.S. trading partner, did not escape unscathed from the global downturn. The country also suffered a recession, and its Conservative-led government intervened with tens of billions of dollars in extra spending to boost the economy.

But the experience here was dramatically different from the United States’, and it offers a study in how policy, regulation and consumer behavior combine to create economic conditions that allow homeowners like Fritz to enjoy steady price appreciation, while their U.S. counterparts suffer through years of uncertainty. Despite hope that an economic recovery is taking hold in the United States, sales of new homes in May hit a record-low annual pace of 300,000, undercut by the expiration of a buyer tax credit.

Heading into the crisis, banks here were under stricter rules, forced to set aside more capital than U.S. firms and managed with a more conservative bent. Government agencies such as the Canada Mortgage and Housing Corp. hewed closely to policies in which they supported the housing market by offering mortgage insurance, but unlike Fannie Mae and Freddie Mac in the United States, they were never expected to encourage homeownership as a social or economic end. Read more in The Washington Post.

Petraeus Is Now Taking Control of a ‘Tougher Fight’

KABUL, Afghanistan — In late 2008, shortly after he had helped pull Iraq back from the brink of catastrophe, Gen. David H. Petraeus prepared to turn to that other American war.

“I’ve always said that Afghanistan would be the tougher fight,” General Petraeus said at the time.

Now the burden falls to him, at perhaps the decisive moment in President Obama’s campaign to reverse the deteriorating situation on the ground here and regain the momentum in this nine-year-old war. In many ways, General Petraeus is being summoned to Afghanistan at a moment similar to the one he faced three years ago in Iraq, when the situation seemed hopeless to a growing number of Americans and their elected representatives as well.

But there is a crucial difference: In Iraq, General Petraeus was called in to reverse a failed strategy put in place by previous commanders. In Afghanistan, General Petraeus was instrumental in developing and executing the strategy in partnership with Gen. Stanley A. McChrystal, who carried it out on the ground. Now General Petraeus will be directly responsible for its success or failure, risking the reputation he built in Iraq.

General Petraeus, 57, brings an extraordinary set of skills to his new job: a Boy Scout’s charm, penetrating intelligence and a ferocious will to succeed. At ease with the press and the public, and an adept negotiator, General Petraeus will probably distinguish himself from his predecessor with the political skills that carried him through the most difficult months of the counteroffensive in Iraq known as the surge.

In those months of 2007, when American casualties were the heaviest of the war, General Petraeus not only prosecuted the strategy but also reassured his superiors, including President George W. Bush, in regular videoconferences from Baghdad.

In Iraq, General Petraeus helped turn the tide not just by sending 30,000 more American troops into Baghdad, but also by fostering deals with insurgent leaders who had spent the previous four years killing Americans. As much as the surge, the movement in Iraq known as the Sunni Awakening helped set in motion the remarkable decline in violence there that has largely held to this day.

By helping to pull Iraq back from the edge, General Petraeus won a reputation as a resourceful, unorthodox commander and has since been mentioned as a candidate for president.

But Afghanistan is a very different war in a very different country. Where Iraq is an urban, oil-rich country with an educated middle class, Afghanistan is a shattered state whose social fabric and physical infrastructure has been ruined by three decades of war. In Iraq, the insurgency was in the cities; here, it is spread across the mountains and deserts of the country’s forbidding countryside.

Indeed, to prevail in Afghanistan, General Petraeus will need all of his skills — and a dose of good fortune at least as big as the one he received in Iraq. At the moment, every aspect of the war in Afghanistan is going badly: the military’s campaign in the strategic city of Kandahar has met with widespread resistance from the Afghan public; President Hamid Karzai is proving erratic and unpredictable; and the Taliban are resisting more tenaciously than ever. Read more in The New York Times.

A rapid-fire chain of events led to Gen. McChrystal’s downfall

Stanley A. McChrystal’s troubles began with fact checks by Rolling Stone for an upcoming article that angered Obama and culminated in the general’s loss of his command of the Afghanistan war.

Reporting from Washington — Gen. Stanley A. McChrystal’s team knew it had a problem on its hands last Thursday, when fact checkers for Rolling Stone magazine sent in questions for an upcoming cover story.

Did the Afghanistan commander’s inner circle really refer to itself as “Team America”? read one question that landed on the desk of McChrystal’s press aide, Duncan Boothby.

It was hardly the most explosive revelation in the piece, but it served as an early warning that McChrystal’s decision to allow generous access might have backfired.

By Monday, an advance copy of the article was in the hands of a press aide for President Obama, setting in motion a chain of events that culminated less than 48 hours later with McChrystal’s ouster and Obama seeking to reassert control over a military leadership that appeared disdainful of civilian authorities.

The article caught the White House wholly unprepared. “There was no forewarning,” a senior administration official said in an interview. “It was like, ‘Holy —-!’ ”

Vice President Joe Biden was flying home from Chicago aboard Air Force Two on Monday when McChrystal called to apologize. But Biden didn’t know what the general was talking about — he had no inkling that the article existed.

Soon enough he would learn the reason for the call. Aides scrambled to get him a copy of the story, in which one McChrystal aide derisively referred to Biden as “Bite Me.”

As an executive, Obama has little tolerance for what he calls “unforced errors” — mistakes that are entirely preventable. In that regard, McChrystal’s team had committed an unforced error on a major scale and at the most inauspicious time.

The White House is struggling with an unending oil spill in the Gulf of Mexico and an unemployment rate hovering near 10%. Now Obama was confronted by a challenge to a cherished constitutional principle: civilian control of the military.

In a series of interviews Wednesday, several senior administration officials who declined to be identified because of the sensitive nature of the topic recounted the rapid-fire events stemming from a profile in a rock and politics magazine that led to the ouster of America’s top battlefield general. Read more in The Los Angeles Times.

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Written by Theophyle

June 24, 2010 at 1:28 pm

One Response

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  1. good

    haniyeh

    April 14, 2011 at 12:58 pm


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