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To: Sam who wrote (2939)	1/8/2001 2:45:01 PM
From: Henry Volquardsen	Read Replies (2) \| Respond to of 3536

I'll await your comments later but will make one comment about Reagan administration culpability in the S&L crisis. I got into the banking in the late 70s. One of the first things I learned was to avoid the S&L because they were 'dead men walking'. This was a couple of years prior to Reagan. The roots of the S&L crisis go back a very long way. I'm not giving Reagan's team a complete pass however. What happened in the mid 80s threw fuel on an already burning fire. And my recollection was that it had pretty bi-partisan support. After all it required legislative action and got through a Democratic controlled Congress. The S&L lobby was very strong back then, particularly on a state level. They had a strong voice with both parties. And there was enough blame to go around. Henry

To: Sam who wrote (2939)	1/9/2001 9:52:44 PM
From: Zeev Hed	Read Replies (1) \| Respond to 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