Silicon Investor (SI) -- The First Internet Community

STOCKTALK

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 -- Ignore unavailable to you. Want to Upgrade?

To: patron_anejo_por_favor who wrote (148087)	9/19/2008 1:30:58 PM
From: XoFruitCake	Read Replies (1) \| Respond to of 306849

" would caution against using the RTC-1 historical analogy here. This is not yer father's bail out......." I think what you are describing is the bear case for housing which I agree 100%.. But the issue is the price at which government buy this paper vs what the paper will recover in 15 years. If government buy paper at low enough price, even if we continue the housing price downward spiral until the traditional mortgage guideline can support the lower home price, the purchase can still make a bundle.. I thought JC flower bought a bundle of problem loan from ETFC when they are in trouble at a very severe marked down of 15-22 cents on the dollars? Banks are unwilling to sell at the bid price because the sales would lead to bk. But if they can raise capital after the sales (or in conjunction with the sales), all it does is dilute the existing shareholders, but the franchise is saved (and they are the hero). Everyone will come out happy (especially the bank exec, since they can start taking stock options again 8-)). So the key is that government do get the right price when they make the deal and it is up to the deal maker that work underneath Treasury Secretary.. And I have no idea who the next Tresury Secretary. For all we know it can be someone clueless and decide to either punish all the banks or give handout to all the banks.. I would love to see Paulson stay until he can get all the major deal going...

To: patron_anejo_por_favor who wrote (148087)	9/19/2008 1:37:27 PM
From: Jim McMannis	Respond to of 306849

RE:"I would caution against using the RTC-1 historical analogy here. This is not yer father's bail out......." What? a hundred times more properties?

To: patron_anejo_por_favor who wrote (148087)	9/19/2008 1:56:08 PM
From: GraceZ	Read Replies (1) \| Respond to of 306849

Some first hand history via AG on the RTC, from the "Age of Turbulence": "The RTC had a professional staff, but for me by early 1991 being on the oversight board was almost like having a second job. I spent large amounts of time poring over detailed documents and attending meetings. The vast numbers of uninhabited properties we managed were deteriorating rapidly from lack of maintenance, and unless we moved quickly to get rid of them, we would end up with one huge write-off. Moreover, we would probably have been saddled with a bill to tear a lot of them down. I kept adding up the cost in my mind. It was not a pretty thought. S&L mortgages that were still paying interest had sold off readily in the market. But now the RTC had gotten down to the assets nobody seemed to want: half-built malls in the desert, marinas, golf courses, tacky new condo complexes in overbuilt residential markets, repossessed half-empty office buildings, uranium mines. The scope of the problem beggared the imagination: Bill Seidman, who chaired both the RTC and the Federal Deposit Insurance Corporation, calculated that if the RTC sold off $1 million of assets a day, it would need three hundred years to sell them all. Clearly we needed a different approach."