SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : The Residential Real Estate Crash Index
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: bentway who wrote (151186)9/27/2008 1:19:54 PM
From: neolibRead Replies (3) of 306849
 
You are attributing 100% of the problem to "bad assets" and 0% of the problem to accounting rules. The accounting rules affect asset prices, which goes a long way towards determining if the assets are "bad" or not.

Do a few thought experiments to understand this. Stocks are typically valued based on the last transaction although certain last transactions are more important than others (like the close of the market) which of course leads to manipulation (painting the tape). Damn, who could have thought that an accounting rule could motivate manipulation? RE is typically valued by looking at averages for comparable properties and adjusting for all the factors (size, condition, location, etc). This introduces both spatial and temporal averaging. Why not instead value RE like stocks and set it (still compensating for all the condition variables) by only THE LAST PROPERTY SOLD (no temporal or spatial averaging) or by all properties sold yesterday (no temporal averaging, but extensive spatial averaging) or by only the last 10 properties sold withing a certain distance (which would be some spatial and some temporal averaging), etc. What is the effect of spatial and temporal averaging, and why would a prudent person use them? When you answer that one, please tell us WHAT spatial and temporal averaging extent God wants us to use, because FASB 157 is God, and God is part of the problem currently.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News