PRESIDENT GEORGE W. BUSH Message Board

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Politics : PRESIDENT GEORGE W. BUSH

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To: DavesM who wrote (309580)	10/17/2002 11:56:10 PM
From: David Lawrence	Read Replies (1) of 769670

>>I don't think that was the case. I seriously doubt that bondholders or stockholders of Savings & Loans taken over by the Feds got much if anything. It was the depositors that were kept whole. Not equity holders. You are correct for the most part. The other beneficiaries were the last sellers of the commercial properties that were mortgaged by the S&L's. They got paid in full by the last buyers, utilizing funds borrowed from the S&L's. The last buyers were foreclosed on by the S&L's carrying the paper, and the properties ultimately wound up owned by FSLIC, FDIC, RTC (Resolution Trust Corporation), and HUD. They in turn auctioned off the properties right back to the same thugs who had bid up the property values beyond their true economic value in the first place. Naturally, they were sold off at hugely discounted prices compared to their previously appraised values. All in all, a sad page in our country's history. It is unlikely that these specific circumstances will be repeated since the advent of the REIT has reformed (and sophisticated) the valuation models, and largely removed the speculative aspects that ran rampant in the early eighties.

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