The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Jim McMannis who wrote (149031)	9/22/2008 2:34:09 PM
From: GraceZ	Read Replies (2) of 306849

OTOH, it's wishful thinking to think the taxpayer will get a good deal. Being a buyer of last resort has almost always ended up to be profitable. Think GS buying 135 million shares of DIS at 15 in 2001 from the Bass family, a price it never printed and never saw again. Of course, usually when the government gets involved it means they are buying assets that no private buyer can get involved with at a profit. As Mark Haines pointed out this morning, if this was such a good deal for the government why wouldn't a private buyer step up? Basically, I think what the investment banks are doing in changing to bank holding companies puts them in much better shape to hold assets that may end up being worth something because the switch allows them to use "hold to maturity" valuation methods as opposed to "mark to market". It is a serious stretch to think all mortgage assets are worth zero. Unfortunately, what I think we'll see is them holding on to all the profitable and only dumping the toxic sludge on the taxpayers. So I guess I agree with you!

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