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Bruce Vanderveen  

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  • The Geithner Plan FAQ [View article]
    This reason private capital hasn't bought the toxic assets is because the financial institutions are unwilling to sell at a the price the buyers will pay. Sellers are holding out for the higher government price.


    On Mar 22 09:16 AM User 329713 wrote:

    > I keep re-reading the first paragraph:
    >
    > "The Geithner Plan is a trillion-dollar operation by which the U.S.
    > acts as the world's largest hedge fund investor, committing its money
    > to funds to buy up risky and distressed but probably fundamentally
    > undervalued assets and, as patient capital, holding them either until
    > maturity or until markets recover so that risk discounts are normal
    > and it can sell them off--in either case at an immense profit."<br/>
    >
    > However, I still don't understand why private capital hasn't already
    > bought these undervalued assets to make these profits?
    >
    > I certainly do hope those talking heads who are so smart will find
    > this program to be a sound approach. We NEED FOR THIS TO WORK!
    Mar 22, 2009. 11:26 AM | 14 Likes Like |Link to Comment
  • How Much Worse Can AIG Get? [View article]
    March 19 update: AIG insurance divisions may have big problems. See www.newsweek.com/id/18...

    This seems never ending.
    Mar 19, 2009. 10:21 PM | Likes Like |Link to Comment
  • Why AIG Wasn't Allowed to Fail [View article]
    Thanks for explaining this in a clear and concise way Felix. So, are CDSs no longer a systemic risk, thanks to US tax payers? Did we save the world?

    Is AIG out of this business now? I would think so, but not sure. Since the government owns AIG they certainly should be out of the CDS business? But, why does AIG still need help?
    Mar 17, 2009. 04:23 PM | 4 Likes Like |Link to Comment
  • Why Houses Now Are Like Stocks in 2002 [View article]
    I value houses based on what they rent for. You take a month's rent, multiply it by 100. If the house sells for that amount or less and is in good condition in a good middle-class area it is usually good buy.

    This valuation method does not work in lower or upper class neighborhoods.

    At the peak of the Florida boom the type house mentioned above was selling for some 200 times monthly rent, a sure sign of over value. Now, they sell for 100-120 times monthly rent, getting close to fair value again.
    Mar 16, 2009. 10:00 PM | 4 Likes Like |Link to Comment
  • What Could Have Averted the Housing Bubble? [View article]
    In 2006, somewhat after the peak of Florida's housing bubble, I had a somewhat beat up house for sale. The house needed more money and work than I wanted to put into it. I listed it at the lower end of the (then high) market for a quick sale.

    I was surprised at all the offers that came in, mostly 100% loans from people who worked at low paying jobs. I had the impression agents were pushing it because they knew these people could get the financing. It did sell on a 95% "FHA loan" in "as is" condition. They didn't make me fix anything to qualify the buyer.

    One of these days I will get the courage to drive by and see what house looks like now.
    Mar 16, 2009. 09:19 AM | 3 Likes Like |Link to Comment
  • Accounting Rule Changes Creating False Rally in Financials [View article]
    Well, sure, we've tried everything else. Lets try eliminating the M2M rule. I read, six months ago, when the crisis first started, an author postulated eliminating the M2M rule as the "fix".

    Simply call the "toxic" assets "non toxic". Now, who will buy at "face value" when they wouldn't buy at M2M value? Oh, I forgot, financial institutions are not selling now, they are waiting till maturity. Since the money supply will be inflated by then there should be no problem. Right?

    Hopefully, this isn't a ruse to get the government to buy this stuff at notional value.
    Mar 15, 2009. 10:08 AM | 5 Likes Like |Link to Comment
  • The End of (Most) Newspapers [View article]
    I'm sitting here this morning, my feet propped up on the desk, sipping coffee, and reading this article and comments on the internet. Also reading the St. Petersburg Times on my lap (a wonderful paper). I'm hoping the cat doesn't try to get on my lap also.

    I will be very sorry to lose the morning paper but Craigslist is decimating the classifieds and financial sites are devastating the business pages (just two examples). I wonder how long the papers can hold out.

    Later today I will haul approximately 60 lbs of old newspapers and ads to the recycling center. That, I won't miss. Plus, think of the trees and energy saved.

    Blogs and Financial sites like Yahoo Finance, Seeking Alpha, etc. are our future. They will continue to evolve with hundreds times more info than the paper could ever provide, and no recycling.
    Mar 15, 2009. 09:32 AM | 2 Likes Like |Link to Comment
  • Can the Credit Markets Be Fixed? [View article]
    If we have credit deterioration even with the $10 trillion US commitment things might indeed "spin completely out of control".

    Why can't the huge derivative positions of the large financial institutions with their counterparites be unwound?? We have known their danger for quite some time now.

    The derivative positions are a massive point of instability. Why aren't they being unwound? Banks should be making their money on interest spreads, the old fashioned way? Can someone educate me here?
    Mar 11, 2009. 03:30 PM | 2 Likes Like |Link to Comment
  • Quicksilver Resources' Barnett Shale Gamble [View article]
    Thanks everyone for the comments. I did not mean to be overly negative. The management and technical people may be great. I did, however, want to point out the timing the the Barnett Shale investment was bad. I might also note that Forbes ran an article at time questioning the price Quicksilver was paying (this while gas prices were still over $9). I chose not to include the Forbes article in the post.

    I too think gas prices will rebound big time, just doesn't seem anytime real soon.
    Mar 5, 2009. 06:01 PM | Likes Like |Link to Comment
  • Is It Time to Abandon the U.S. Dollar and Go for Gold? [View article]
    Governments can print money but can't print gold. True enough! But neither can they print all kinds of other non-paper assets. When I see real estate, my stamp collection, my brother's antiques, my neighbor's Lexus, oil stocks, standing timber, and the price of used clothes at Goodwill going up, then we have inflation.

    Sorry guys, NONE of that is happening now in the US. Maybe in the future, but not now. So, try to catch the falling knives if you can but don't complain about losing fingers.
    Mar 4, 2009. 09:22 AM | 3 Likes Like |Link to Comment
  • The Astonishing Budget Deficit [View article]
    We will see if he can pull off this miracle. I have my doubts, but maybe we get a "white swan" here.
    Feb 26, 2009. 01:22 PM | 1 Like Like |Link to Comment
  • Fannie, Freddie and the Ballooning U.S. Balance Sheet [View article]
    Good article! I wondered what happened to Fannie and Freddie after they were mostly swallowed by the US government, don't seem to hear much anymore.

    Of course all the trillions of dollars of debt is still there. Does anyone have a handle on what percentage is bad? Do we really want to know?
    Feb 21, 2009. 04:14 PM | 1 Like Like |Link to Comment
  • A Whiff of Reflation in the Air, Part II [View article]
    Small signs of hope. Don't declare victory yet though.
    Feb 20, 2009. 03:29 PM | 3 Likes Like |Link to Comment
  • Why Markets Dissed the Geithner Plan [View article]
    The politicians will never go for it but your plan makes a lot more sense than anything else I've seen.
    Feb 12, 2009. 06:14 PM | 1 Like Like |Link to Comment
  • Ultra ETF Promises Fall Short [View article]
    Did you take into consideration the "dividend factor". It is my understanding that ETFs often have a taxable distribution at the end of the year.
    Feb 11, 2009. 01:34 PM | 1 Like Like |Link to Comment
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