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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Moominoid who wrote (149193)	9/22/2008 9:37:48 PM
From: neolib	Read Replies (1) \| Respond to of 306849

IMO, the problem is typified by Newt's article posted earlier. He does make some good points, but fails to see his own glaring contradictions. Mark to Market is a BIG issue when the markets are not liquid. But it is nonsense to think that allowing Mark to Fantasy coupled with zero cap gains tax is going to cure things. There is plenty of cash sitting on the sidelines, but it is not tax rates keeping it there. It is nobody trusts other peoples fantasies anymore, and for damn good reason. The solutions are not so simple.

To: Moominoid who wrote (149193)	9/23/2008 1:12:30 AM
From: GraceZ	Read Replies (1) \| Respond to of 306849

If buyers know that they could sell to the Treasury vehicle at some price maybe the government won't even need to deploy all the capital. If you are wondering what the various assets are currently being marked at, this is from Morgan Stanley's conference call: senior commercial are marked in the high 80s to low 90s; mezzanine marked in the low 70s, Alt A marked in the low 30s US residential in the 80s subprime CDO mezzanine in low teens Individuals would buy those assets at those prices if they knew there was a buyer of last resort, a market maker, if they needed to convert those assets back to cash in a hurry.

To: Moominoid who wrote (149193)	9/23/2008 4:05:30 AM
From: Elroy Jetson	Respond to of 306849

Paulson and other constantly express concern and hand-wringing that lending is not occurring and will not unless the government acts as a $700 billion repository for bad loans. But this is a very inefficient approach. Most of the funds will go toward making shareholder's whole at banks which should fail in bankruptcy - with only a fraction left over for lending. If increased lending is really the concern, the lending can either be done directly by a Fannie Mae, or the government could use a failed but still operating bank such as IndyMac already under government receivership, or wait for the eventual bankruptcy of Wachovia, Citibank or other large bank. If the failure of the preferred bank may take too long, the taxpayer could "give" the bank shareholders a "cash for keys" offer, similar to what their bank is offering to borrowers of foreclosed homes and their tenants. This way all $700 billion goes into lending, which Hank Paulson and others claim is their real concern. I suspect this proposal would dry up Hank's crocodile tears because his real concern is not lending to consumers and business - but certainly this should be the taxpayer's only concern. There's very little sense in bailing out bankrupt banks when they can simply fail with their lending operation continued under a new owner. .