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Strategies & Market Trends : Currencies and the Global Capital Markets

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To: Sam who wrote (2939)	1/9/2001 9:52:44 PM
From: Zeev Hed	Read Replies (1) of 3536

Sam, I think that the S&L crisis was a pure "accident' caused by sudden (and retroactive) taxation change of the "at risk" rule. When that happened, a lot of real estate that might have been priced "right" under the old law (because of the tax benefits) was no longer so, and borrower walked away from the properties, leaving thew S&L people holding the bag (often at valuations much higher than justified by the new law, and having lent out close to 100% of the excessive value). You do not turn a huge ship on a dime, and that was the fault of this new tax regime, if they had implemented the new rule gradually, the market would have had a chance to adjust, the sudden shift, killed it. Zeev

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