Reply #29: Citi urges governments to pull bank foreclosure trigger

[UpInArms]

http://www.reuters.com/article/newsOne/idUSTRE55L1VP20090622

LONDON (Reuters) - Toxic real estate mortgages are holding the global economy to ransom and the banking sector will not return to health without a purge of its distressed property assets, the CEO of Citigroup Property Investors said.

The burgeoning economic rally could fizzle out by the end of the year unless governments take more affirmative action to protect it, by forcing bailed-out banks to sell off distressed property, Roger Orf told the Reuters Global Real Estate Summit.

"Any time that you have got clouds on the horizon, it means there is not clear sailing ahead. And these are thunderclouds, maybe even a cyclone," Orf said.

"I personally feel the best way to do that is through creative destruction as opposed to a malaise where you let the air out of the tire over a number of few years," he said.

"Regrettably, governments are not forcing banks to sell assets and that's one of the fundamental things needed to restore equilibrium to property markets," Orf said.

Orf said he did not expect fully functioning property lending markets to return before 2011, by when he hoped banks will have completed repair of their capital bases through a wave of real estate sales.

Until then, any talk of a sustainable economic recovery was at best optimistic, and at worst naive.

"I don't think there are any greenshoots. These greenshoots are weeds," Orf said.

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shitibank fouled their nest and now blames the world for its own stink