192 World's fastest train: made in China, using Siemens & Kawasaki designs (from Germany & Japan)

World's fastest train: made in China, using Siemens & Kawasaki designs (from Germany & Japan)

(1) China launches world's fastest train ... "built using Siemens designs from Germany"
(2) Siemens exports high-speed trains to Spain, China & Russia
(3) Guangzhou high-speed trains made in China but "developed in cooperation with Siemens and Kawasaki"
(4) Japan's Shinkansen exported to Taiwan, China, & UK (as Class 395 Javelin trains)
(5) Britain's fastest train made in Japan
(6) China  dismisses international pressure to revalue its currency
(7) Australian household debt (mortgage, credit card & personal loan) now exceeds GDP
(8) Gilts sell-off as Britain joins Italy in debt house
(9) Banking system still fragile: RBS's balance sheet exceeds UK GDP
(10) A Bank's Balance Sheet: Assets and Liabilities
(11) Eliot Spitzer: Bush Admin stopped States from limiting Predatory Lending practices

(1) China launches world's fastest train ... "built using Siemens designs from Germany"
From: Wolfram Grätz - Sui Juris <wolfram1@aaahawk.com> Date: 29.12.2009 01:47 PM

Peter, you totally ignore the fact, that China applied GERMAN TECHNOLOGY Made by Siemens to build its new trains.  When Siemens sold the first electric trains to Red-China, they were contractually obligated to also turn over all drawings and patents for these electric trains.

All what the Chinese do is, they COPY old GERMAN designs.

Reply (Peter M.):

Wolfram, why do the Germans just hand over their technology? The Japanese, having reverse-engineered German, British etc designs, try to stop China doing it to them in turn.

Germany itself does not run trains over 300km/hr; apparently it's because of the voltage (15 KV) and frequency (16.7 Hz) there. The fastest trains run on 25 KV AC (or higher): http://en.wikipedia.org/wiki/25_kV_AC

(2) Siemens exports high-speed trains to Spain, China & Russia

http://en.wikipedia.org/wiki/Siemens_Velaro

Siemens Velaro is a family of German high-speed EMUs. They are based on Deutsche Bahn's ICE 3 high-speed trains. Unlike the ICE 3, the Velaro is a full Siemens product.

In July 2006 a Siemens Velaro train-set (AVE S-103) reached 403.7 km/h (250.8 mph). This is a world record for railed and unmodified commercial service trainsets.

Spain's RENFE was the first to order Velaro trains, known as Velaro E, for their AVE network. Wider versions were ordered by China for the Beijing-Tianjin high-speed rail (CRH 3) and Russia for the Moscow - Saint Petersburg and the Moscow - Nizhny Novgorod routes (Velaro RUS). ...

This page was last modified on 27 December 2009 at 12:49.

(3) Guangzhou high-speed trains made in China but "developed in cooperation with Siemens and Kawasaki"

http://en.wikipedia.org/wiki/Wuhan%E2%80%93Guangzhou_High-Speed_Railway

The Wuhan–Guangzhou High-Speed Railway ... is the world's fastest train service,[2] using coupled CRH2C and CRH3C trainsets which average 313 kilometres per hour (194 mph) in non-stop commercial service.

The line is part of the future 2100-km long Beijing-Guangzhou High-Speed Railway ... The trains use technology developed by China Railway High-speed and technologies developed in cooperation with Siemens and Kawasaki. The trains used on the line are manufactured completely in China.[2][4] ...

This page was last modified on 28 December 2009 at 23:10.

(4) Japan's Shinkansen exported to Taiwan, China, & UK (as Class 395 Javelin trains)

http://en.wikipedia.org/wiki/Shinkansen

Railways using Shinkansen technology are not limited to those in Japan.

Taiwan High Speed Rail operates 700T Series sets built by Kawasaki Heavy Industries.

The China Railways CRH2 EMU, built by a consortium formed of Kawasaki Heavy Industries, Mitsubishi Electric Corporation, and Hitachi, is based on the E2-1000 Series design.

Class 395 EMUs were built by Hitachi based on Shinkansen technology for use on high-speed commuter services in Britain on the High Speed 1 line.

Japan is currently promoting its Shinkansen technology to the Government of Brazil for use on the planned high speed rail link system set to link Rio de Janeiro, São Paulo and Campinas.[12] ...

The U.S. Federal Railroad Administration is in talks with a number of countries with high speed rail, notably Japan, France and Spain. ...

On 1 June 2009, the Chairman of Central Japan Railway Company, Yoshiyuki Kasai, announced plans to export both the N-700 high speed train system and the JR-Maglev to international export markets, including the United States.[18]

Vietnam Railways will use Shinkansen technology for a high-speed rail link between the capital Hanoi and the southern commercial hub of Ho Chi Minh City ...

This page was last modified on 28 December 2009 at 01:42.

(5) Britain's fastest train made in Japan

http://en.wikipedia.org/wiki/British_Rail_Class_395

British Rail Class 395[2] ... along High Speed 1 ... trains were built in Japan by Hitachi and shipped to England to operate new high speed domestic services. The trains are the fastest operating domestic service trains in the United Kingdom, running at a maximum speed of 140 mph (225 km/h).

During the 2012 Summer Olympics, Class 395 trains will be used to provide the Javelin shuttle service for visitors to the Olympic Games' main venue in Stratford[3] ...

This page was last modified on 27 December 2009 at 13:38.

(6) China  dismisses international pressure to revalue its currency

From: geab@leap2020.eu <geab@leap2020.eu> Date: 29.12.2009 02:25 PM

Wen dismisses currency pressure

Financial Times, FT.com

http://www.ft.com/cms/s/0/3069c326-f2e5-11de-a888-00144feab49a.html
http://www.cnn.com/2009/BUSINESS/12/27/china.wen.currency.ft/index.html

Wen dismisses currency pressure

By Geoff Dyer in Beijing.

December 27, 2009

{caption} China has effectively repegged its currency to the U.S. dollar, despite international pressure. {end}

Beijing, China (FT) -- Wen Jiabao, China's premier, has said Beijing would not give in to foreign demands for its currency to strengthen, taking an increasingly defiant tone amid mounting international pressure.

In an interview published by the Xinhua news agency on Sunday, Mr Wen said some of the demands for China to let its currency appreciate were an effort to contain the country's development.

"We will not yield to any pressure of any form forcing us to appreciate. As I have told my foreign friends, on one hand, you are asking for the renminbi to appreciate, and on the other hand, you are taking all kinds of protectionist measures," he said.

By keeping the Chinese renminbi stable against the US dollar, China was contributing to the recovery in the global economy, he said. "The purpose [of these calls for appreciation] is to hold back China's development," he added.

China dropped its formal dollar peg in 2005 and has since allowed the renminbi to trade within a narrow band. But since the middle of last year it has operated a de facto peg. This has meant that the renminbi has depreciated about 9 per cent against the currencies of its main trading partners since early this year, even though the Chinese economy has rebounded quicker than any other major economy.

However, Chinese officials argue that its exchange rate against its trading partners is roughly in line with its level at the start of the global financial crisis in September last year, when the US dollar initially strengthened.

In recent weeks the demands for China to appreciate its currency to help rebalance the global economy have come not only the US and the European Union but also developing nations such as Brazil and Russia.

A few economists had predicted that Beijing might begin to shift policy early in the new year on the grounds that it needed to head off incipient inflationary pressures and because any change in policy nearer the June G20 summit might appear to the domestic audience as giving in to foreign pressure.

Mr Wen indicated that the government might accelerate measures to prevent the economy from overheating. The government was worried that property prices in some parts of China had risen too quickly, he said, and that bank lending this year had been too excessive. However, he added that the authorities were already taking measures to moderate the level.

"It would be good if our bank lending was more balanced, better structured and not on such a large scale," he said. There were no immediate signs of inflation, he said, but the government had to be watchful because "inflation may emerge".

According to Xinhua, Mr Wen also said China would continue to fight for "its due rights for further development" in future climate change talks. China has received stinging criticism from some participants of the Copenhagen talks who accused Beijing of blocking a broader deal. Even Barack Obama, the US president, chided China for "skipping negotiations", a likely reference to one meeting involving Mr Obama to which Mr Wen sent a deputy foreign minister in his place.

China has tried to fight back. Measures included a long article on Xinhua which said Mr Wen had not been informed of the "mysterious" meeting with Mr Obama.

© The Financial Times Limited 2009

(7) Australian household debt (mortgage, credit card & personal loan) now exceeds GDP

{The First Home Owner Grant, rather than being a blessing, has been a curse. It pushed house prices up by more than the Grant, so buyers were no better off. And they still have to pay interest on the increase, over the next 30 years. Sellers and Agents took the Grant as a deposit, meaning that buyers need not save the deposit themselves. Australia is heading for a GFC like the US one - Peter M.}

http://news.smh.com.au/breaking-news-national/aussies-12-trillion-in-debt-20091227-lfx1.html

Aussies $1.2 trillion in debt

December 27, 2009 - 6:44AM

AAP

In a new record, Australians now owe more in household debt than the country's entire economy earns in a year.

Reserve Bank figures show mortgage, credit card and personal loan debts now stand at $1.2 trillion, up 71 per cent from just five years ago and equating to $56,000 for every man, woman and child in the country, News Ltd says.

Our spending binge, fuelled most recently by the federal government's First Home Owner Grant, means personal debt now totals 100.4 per cent of Australia's annual GDP - one of the highest ratios in the developed world.

"It's the first time household debt has cracked 100 per cent of annual GDP and it's a terrible, terrible sign," University of NSW economics professor Steve Keen told News Ltd.

"It shows we are living beyond our means and many highly geared borrowers are now extremely vulnerable to further rate rises - they are already saturated with debt and will not be able to tolerate much of an increase to their repayments."

Australia's financial headache is likely to get worse before it gets better. The country is in the midst of the peak spending season, when billions goes on the plastic, yet the Reserve Bank data dates back to October's debt levels only, so that means there are another two months of First Home Owner Grant-fuelled mortgage activity still to be taken into account.

The extra cost is expected to add billions to the burgeoning debt tally.

© 2009 AAP

(8) Gilts sell-off as Britain joins Italy in debt house

The cost of borrowing for the British Government has surged to within a whisker of Italian levels as global markets issue their punishing verdict on the Government’s spending plans.

By Ambrose Evans-Pritchard, International Business Editor

Published: 8:17PM GMT 23 Dec 2009

http://www.telegraph.co.uk/finance/financetopics/recession/6874992/Gilts-sell-off-as-Britain-joins-Italy-in-debt-house.html

The yield on 10-year gilts spiked Wednesday to 3.97pc, 46 basis points higher than costs on French bonds. Britain and France were neck and neck as recently as last month, before Labour’s pre-Budget report raised deep concerns among Chinese, Arab, and Russian investors about the credibility of British state.

But what has caught market attention is the narrowing gap with Italian bonds, once mocked as the symbol of an ill-governed nation in thrall to the Dolce Vita.

Yields on 10-Italian treasuries have been hovering just above 4pc despite the eurozone’s Greek crisis, dropping as low as 3.98pc earlier this week.

Julian Callow, Europe economist at Barclays Capital, said Britain is nearing the eye of the storm as the Bank of England starts to unwind quantitative easing.

“The Bank has bought more gilts over the last nine months than the Government has issued. It has magically eradicated the cost of financing the deficits, but this is going twist dramatically the other way in early 2010. Markets know this. They are demanding a risk premium on sterling.”

“On top of this you have all the uncertainty over the election. We have the highest deficit in the EU as a share of GDP after Latvia and Ireland. It is not clear whether the next government will have the nerve to push through the tremendous fiscal tightening we need,” he said.

Britain is vulnerable to a “gilts strike” because foreign investors own £217bn of UK debt, or 28pc of the total. These are footloose funds and likely to sell large holdings if Britain loses its AAA rating.

They have other tempting places to park their money, such as Turkey, Brazil, or India, where demography is healthy and growth prospects are better. Chile has already undercut British debt yields on some maturities.

Simon Derrick, currency chief at the Bank of New York Mellon, said global markets are unimpressed by the pre-Budget report and do not believe the UK Treasury forecast for 3.5pc growth in 2011.

“The Government will have borrowed an extra £700bn by 2014. And the national debt will reach £1.5 trillion, which is equal £48,000 per head of the working population. The market response is entirely rational,” he said

Italy has its own problems, of course. Public debt was much higher before the crisis began. The IMF expects it to reach 120pc of GDP next year. However, this debt is mostly owned by high-saving Italians, who are less fickle than foreign funds.

Italy’s household debt was 34pc of GDP in 2007, compared to 100pc in the UK. “If you look at private and public debt together, they are in better shape,” said Marc Ostwald from Monument Securities.

“Unless our Government gets a grip soon were going to see Gilt spreads widen to 120 basis points over Bunds, with the risk of 150 if there is no clear winner in the election,” he said.

For Italy, this may just be the calm before the storm. Markets assume that Germany will ultimately bail out Greece if necessary, preventing contagion to the rest of the Club Med bloc.

This is a questionable judgement. Volker Wissing, head of the finance committee of the German Bundestag, said it must be made explicit that “Germany will not take responsibility for Greek debts”.

Mr Wissing said that ex-finance minister Peer Steinbruck was speaking for himself – not for the German state – when he hinted at rescues for eurozone laggards. His comments should be repudiated.

(9) Banking system still fragile: RBS's balance sheet exceeds UK GDP

Why the banking system won't be emerging from intensive care anytime soon

As the second anniversary of the credit crunch approaches and with another round of calamitous banking write-downs looming, it seems appropriate to revisit the question of what progress, if any, has been made in repairing Britain's profoundly damaged banking system. Can banks be weaned off publicly provided life support any time soon?

By Jeremy Warner
Published: 6:41PM BST 20 Jul 2009

{photo caption} RBS's balance sheet is bigger than UK GDP {end}

http://www.telegraph.co.uk/finance/comment/jeremy-warner/5872831/Financial-crisis-threatens-long-term-injury-to-the-economy.html

There are some grounds for optimism, with interbank lending rates returning to more normal levels, a limited revival in risk appetite, and some kind of an uplift in mortgage and business lending, albeit from exceptionally depressed levels. Yet the broader prognosis is still not at all encouraging.

By general agreement, a sustained economic recovery cannot take hold until private credit starts flowing again, so these questions are of rather greater importance than the distracting and largely irrelevant political debate over which institution – Bank of England or Financial Services Authority – should take charge of banking supervision.

The credit crunch was sparked by a sudden loss of confidence in the integrity of bank balance sheets brought on by the sub-prime mortgage losses in the US. Widespread use of complex derivative securities meant that nobody could be sure what individual bank exposures were.

Wholesale markets, depositors and investors withdrew their support en masse, and once-plentiful liquidity dried up. What began as a problem in funding fast became one of solvency, as rising impairment charges destroyed capital buffers, leaving assets short of liabilities.

The two problems – funding and solvency – are inextricable linked. If there are doubts about a bank's solvency, the markets will withdraw funding support. Problems in funding led to a credit squeeze, which helped tip the world economy into recession. As the downturn intensified, a more conventional bad debt experience took hold, further exacerbating the solvency problem. Credit creation, the lifeblood of any modern economy, stalled.

What made Britain particularly vulnerable, as the International Monetary Fund observed in its latest assessment of the UK economy, is the substantial size of our financial sector relative to national output, together with heavy reliance on cross-border funding. Traditionally a strength of the British economy, these characteristics have become a profound weakness.

Foreign banks, which in recent years have been substantial lenders to the UK economy, have withdrawn so as to fight their own battles back home. UK banks have meanwhile struggled to maintain their domestic lending at previous levels. With markets and depositors demanding their money back, banks have had little option but to liquidate lending positions and rein in credit wherever possible.

An extreme shortfall, or "funding gap", has opened up which taxpayers have had to fill. These actions have prevented a full-scale collapse, but the system of private credit creation remains badly injured with no obvious way of repairing the damage.

As the FSA's director of banking, Tom Huertas, has pointed out, the totality of this public support is already close to £1.3 trillion, or virtually as big as Britain's entire annual GDP. A bewildering alphabet soup of schemes has been put in place to counter the contraction in private provision of credit.

Yet mind-boggling though these numbers already look, they still understate the true magnitude of the problem. In promising that nobody will lose a penny as a result of the banking crisis, the Chancellor has in effect underwritten the liabilities of the entire UK banking system, amounting to a multiple of several times the size of GDP. The balance sheet of Royal Bank of Scotland alone is worth around 1.5 times GDP. Even the combined might of the British taxpayers would be incapable of honouring this promise, which therefore amounts to no more than a confidence trick. It's a bluff which the Government had better hope the markets never call.

In theory, there is a timetable for withdrawing much of the public support so far given. Both the "special liquidity scheme" and the "asset purchase scheme" are due to come to an end in two to three years' time. In its latest Financial Stability Report, the Bank of England warns the City that a funding gap of approximately £500bn (one third of GDP) will have to be filled at that point.

The options are limited. One solution is that banks might shrink their balance sheets to fit by selling or liquidating assets. That would turn the present scarcity in credit into an outright famine. Or they could find alternative sources of funding. Yet assuming the money was available at all, the markets would charge the banks an arm and a leg for it. The cost of credit would rise precipitously.

The Government may be willing to roll its support over, but this risks permanent damage to sovereign credit-worthiness at a time of already extreme concern in the capital markets over the public finances.

Alternatively, banks could raise even more equity. This wouldn't necessarily solve the problem either, even if investors were prepared to provide it. Ever greater quantities of equity are no panacea, as the British journalist Walter Bagehot, whose writings more than 100 years ago established the ground rules for dealing with banking crises, once remarked. To paraphrase, a well-run bank needs no capital, but no amount of capital will save a badly-run bank.

Some combination of all these things may be part of the answer, but until we can be certain of where the bottom in the economy lies, and therefore the eventual size of bad debts, there's going to be no politically acceptable, market-based solution to the funding problem.

All is not lost. Deprived of bank credit, business is finding other ways of obtaining the capital it needs to trade. Corporate bond markets have reopened and there has been a massive amount of new equity raised to replace the debt bankers can no longer provide.

Yet the funding gap is going to remain a heavy drag on the UK economy for years to come.

All the various proposals for reform of financial regulation we've seen to date, from Turner to the White Paper, from George Osborne yesterday to the Geithner proposals in the US, and even Europe's De Larosiere report, look reasonable enough as far as they go, but they also seem to miss the main point.

What they fail to address is the fact that many banks are simply too big. They are too big to manage – nobody can hope to understand the totality of the risks they are running – and they are too big to properly look after the customers they serve.

But most of all they are too big for the countries they are rooted in, with liabilities which, as in the case of RBS, dwarf the size of national economies. Governments have no option but to support banks which are central to their payments system even though the growth in their trading positions and international lending puts them beyond the ability of taxpayers to underwrite them. That's why the British banking system has such a massive funding crisis. Regrettably, this is going to be injurious to the UK economy for years to come.

Let's please learn the lessons and break up these goliaths, rather than fiddling around with capital controls and reform to banking supervision. Bankers will always find a way around those constraints.

(10) A Bank's Balance Sheet: Assets and Liabilities
Understanding a Bank's Balance Sheet

By Emil Lee
January 5, 2007

http://www.fool.com/investing/general/2007/01/05/understanding-a-banks-balance-sheet.aspx

A bank's balance sheet is different from that of a typical company. You won't find inventory, accounts receivable, or accounts payable. Instead, under assets, you'll see mostly loans and investments, and on the liabilities side, you'll see deposits and borrowings.

Let's take a closer look at the balance sheet of the fictional First Bank of the Fool.

12/31/2006 % of Assets

Assets
Cash 50 2%
Securities 500 22%
Loans 1,500 67%
Other Assets 200 9%
Total Assets 2,250 100%

Liabilities & Equity
Deposits 1,400 62%
Borrowings 600 27%
Shareholder's Equity 250 11%
Total Liabilities & Equity 2,250 100%

Cash
Surprisingly, cash represents only 2% of assets. That's because the bank wants to put its money to work earning interest. If the bank simply sticks its cash in a vault and forgets about it, it will have a hard time making a profit. Thus, a bank keeps most of its money tied up in loans and investments, which are called "earning assets" in bank-speak because they earn interest.

Securities
Banks don't like putting their assets into fixed-income securities, because the yield isn't that great. However, investment-grade securities are liquid, and they have higher yields than cash, so it's always prudent for a bank to keep securities on hand in case they need to free up some liquidity.

... The purpose of holding securities is for the bank to have safe, liquid assets available, so the banks primarily hold Treasuries and agency debt (such as Fannie Mae- or Freddie Mac-issued debt), which yield around the rate of the current long-term U.S. Government yield, anywhere from 4%-6%.

Loans
Loans represent the majority of a bank's assets. A bank can typically earn a higher interest rate on loans than on securities, roughly 6%-8%. You can find detailed information about the rates earned on loans and investments in the financial statements.

Loans, however, come with risk. If the bank makes bad loans to consumers or businesses, the bank will take a hit when those loans aren't repaid.

Because loans are a bank's bread and butter, it's critical to understand a bank's book of loans. In their 10-Ks, banks characterize their loans in easily readable charts. For example, M&T tells us that at the end of its last fiscal year, 36.5% of its average loans were backed by commercial real estate. ...

Other assets
Other assets, including property and equipment, represent only a small fraction of assets. A bank can generate large revenues with very few hard assets. ...

Assessing assets
A bank's assets are its meal ticket, so it's critical for investors to understand how its assets are invested, how much risk they are taking, and how much liquidity the bank has in securities as a shield against unforeseen problems. ...

Now that we've looked at a bank's assets, we also need to understand the other side of the balance sheet -- its liabilities, which are how a bank finances its assets. ... ==

Understanding a Bank's Liabilities

By Emil Lee
January 8, 2007

http://www.fool.com/investing/dividends-income/2007/01/08/understanding-a-banks-liabilities.aspx

In a previous article, we took a look at the asset side of a bank's balance sheet. Now we take a look at the other side.

If a bank's yield-producing earning assets are its meal ticket, then its liabilities and shareholder equity are its lifeblood. Basically, a bank borrows at low interest rates from depositors, creditors, and other banks, and it lends at a higher interest rate to real estate developers, homeowners and small businesses (which is why banks are referred to as "spread lenders").

As a result, a bank's financing base is critical. The more financing it gets at a lower rate, the more money it can make by lending that money out and collecting the spread. The best way to judge the strength of a bank's financing base is to check out its "sources of funds" footnote.

Deposits
Deposits are a bank's most important source of financing. Not only do most checking, demand, NOW, and savings deposits yield low or no interest rates, which means the bank is paying almost nothing for the use of this money, but they are often a stable and growing financing base. ...

Comment (Peter M.):

What Emil Lee  omits here, is valuation. Banks lend against "market valuation", but during a bubble a positive feedback cycle seems to endorse rising valuations; thus they lend increasing amounts against the same asset over time. Borrowers assume that there'll always be a "greater fool" to take the asset off their hands if they need to sell.

Banks DO create money ex nihilo, eg as a deposit in a borrower's account. The borrower will pay it to the seller of a house, who will deposit it and receive interest. The bank will lend that deposit out at a lower rate of interest, making money on the spread. The more indebted we are, the more money the banks make - until the system crashes.

(11) Eliot Spitzer: Bush Admin stopped States from limiting Predatory Lending practices

From: Gary Kohls <gkohls@cpinternet.com> Date: 22.12.2009 01:10 AM

“When history tells the story of the sub-prime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably.”- Eliot Spitzer, 2-14-08

Predatory Lenders' Partner in Crime:

How the Bush Administration Stopped the States From Stepping In to Help Consumers

By Eliot Spitzer - Thursday, February 14, 2008

http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR

Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers' ability to repay, making loans with deceptive "teaser" rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home-buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.

Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers.

Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many sub-prime lenders that were engaged in predatory lending practices.

Several state legislatures, including New York's, enacted laws aimed at curbing such practices.

What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.

Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

Let me explain: The Bush administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.

In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.

But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.

Throughout our battles with the OCC and the banks, the mantra of the banks and their defenders was that efforts to curb predatory lending would deny access to credit to the very consumers the states were trying to protect. But the curbs we sought on predatory and unfair lending would have in no way jeopardized access to the legitimate credit market for appropriately priced loans. Instead, they would have stopped the scourge of

predatory lending practices that have resulted in countless thousands of consumers losing their homes and put our economy in a precarious position.

When history tells the story of the sub-prime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.

The writer is {was} governor of New York.