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

To: patron_anejo_por_favor who wrote (195985)	4/12/2009 2:36:07 PM
From: NOW	Respond to of 306849

Once you start thinking Enron…..man is it addictive. So, A third party of ex-Citi executives, CitiJR, is given $6.50 by Citi to bid $80 for assets worth $50. Sure enough, two years later they lose their $6.50. This isn’t allowed by the so-called rules. However… A third party of ex-Citi executives, CitiJR, bid $80 for assets worth $50. Sure enough, two years later they lose their $6.50. Now the FDIC is stuck holding a bunch of assets it didn’t want for $50. Why doesn’t CitiJR rebundle those loans into new loans and sell them back to Citi for the FDIC? Maybe they can get $53 dollars in return - A gift! There’s a slight fee CitiJR has to charge Citi though - $6.50. A third party of ex-Citi executives, CitiJR, bid $80 for assets worth $50. Sure enough, two years later they lose their $6.50. So goes price discovery. CitiJR looks to be doing poorly, but there’s a ton of human capital there that is worth a lot of money, so CitiJR is open to a bid for a takeover. Citi, now doing pretty well, shows up, offering to buy the firm outright for a price, let’s say of $6.50. A third party of ex-Citi executives, CitiJR, bid $80 for assets worth $50. Sure enough, two years later they lose their $6.50. CitiJR however, still has around $2.50 in working capital left over from this disaster at that point; Citi sells them some selected assets for that $2.50 that turns out, lo and behold, to be worth $9. Lose some, win some! A third party of ex-Citi executives, CitiJR, bid $80 for assets worth $50. Sure enough, two years later they lose their $6.50. Citi is very impressed with CitiJR’s keen analytical minds, and wants to bring them in to do some consulting work. They offer them a generous $0.50 per consultancy project, and they have 13 of them lined up to go. A third party of ex-Citi executives, CitiJR, bid $80 for assets worth $50. Sure enough, two years later they lose their $6.50…. Honestly, those four took me 90 seconds. And I’m not even very good at that stuff - wait till the lawyers get involved. If you have your own, please leave them in the comments. Right now there’s offices full of the best minds of my generation, paid handsomely, who will all get hundreds of millions of dollars if they can figure this one out. And they are putting in the overtime… rortybomb.wordpress.com