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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: nextrade! who wrote (195238)4/7/2009 1:52:22 PM
From: Smiling Bob of 306849
 
Geithner painted himself in a corner and the banks now would be shooting themselves in the foot by revealing their balance sheets in bidding for(putting a value)these TA.
Even buying with taxpayer money, thy lose
Patron's banker Beal is on the money
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He thinks the government is going to be “disappointed” by its various programs to revive lending. He says Treasury Secretary Timothy Geithner’s new plan to guarantee loans to buyers of toxic assets won’t lead to many sales because the problem isn’t liquidity but price. They are not low enough. Half the country’s banks – 4,000 in all – would be bust, he says, if they marked their loans to what the loans would fetch in an auction. He says banks are fooling themselves by refusing to mark busted assets down.

“Banks are on a prayer mission that somehow prices will come back and they won’t have to face reality,” Beal says. And that reality, according to Beal, is going to get a lot worse. “Unemployment is going over 10%, commercial real estate hasn’t even begun collapsing and corporate credit defaults are just getting started,” he says. His prediction: depression, without bread lines this time, thanks to the government safety net, but with equal cost to society.
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