Another Flight to Treasuries: Avoiding a Summer Storm? [View article]
Well said.
On Jul 09 01:14 PM Dave Wrixon wrote:
> So a flight from the disappointment of a delusional recovery into > a haven of delusional safety. The education gap in the US is truly > astonishing!
Vultures Circling Commercial Real Estate May Be a Good Sign [View article]
I don't have that information and I doubt it's available without a lot of granular research. You would have to go back to individual loan files and build from there.
I can tell you that I was in the business of financing commercial real estate at this point in time and from around 2003 or 2004 on, the percentage of deals that relied on proforma NOI growth to justify the deals steadily increased. The industry split with some lenders going all in on the concept and others saying no way, no how. Certainly, the securitization market was much more open to the concept. Eventually, the banks came around as that was the only way to keep generating loan volume.
I can assure you that it became prevalent in purchase transactions.
On Jul 09 12:18 PM REITBull wrote:
> Tom, > > Do you happen to know how many loans were underwritten with pro-forma > cash flows? I was curious if anyone might have this number as a % > of loans. I can see it being used for construction/rehab loans or > properties that were in the process of lease-up. But I wonder if > pro-forma underwriting was really that prevalent in the large scheme > of things.
Boston Fed: We Don't Understand Foreclosures [View article]
If there's a reduction in principal the asset is written down and the charge is recorded either against the loan loss reserve or income. Most likely the loan loss reserve but remember that account is funded by income.
Private label means it's not securtized and is on the books of the bank.
If the loan is securitized the bondholder would see a reduction in his collateral and income from that loan. The overall effect on the bondholder is going to depend on which tranche he holds and the overall performance of the entire portfolio. Given enough defaults even those holding the most senior tranches could begin to see cash flow fall below contractual rates.
Vultures Circling Commercial Real Estate May Be a Good Sign [View article]
Agreed on the point that CRE is more attractive to large investors in that you have transparency and ease of management. However, many of the loans now in trouble were underwritten not to existing cash flows but to proforma projections. CRE dropped its standards too much and effectively created its own version of liar loans. That's a big part of the problem and one of the reasons valuations have plunged so dramatically.
On Jul 08 08:44 PM Mark54 wrote:
> Too many people think CRE similar residential real estate. Commercial > properties are underwritten to different standards and are largely > based off cash flow. There are no NINJA loans, no liar loans and > financials are regularly updated. This is more attractive to large > investors than residential due to the transparency and investment > size. (No large investor wants to monitor and dispose of a pool > of $250,000 properties). Bottom line is that CRE has the benefit > of the natural institutional investor base where residential is dependent > on the psychology and resources of individuals.
Interesting take on the subject and one with some merit. I still have doubts about their ability to stimulate internal demand and even more about legal, political and demographic hurdles they face.
Though looking at your profile, you seem to have a unique perspective, so I would be interested in further thoughts.
On Jun 29 10:55 PM Steven Hansen wrote:
> There is a big difference between china and usa / germany - china > is a growing and evolving economy. the usa / germany are mature. > > > a growing debt in china will be consumed in under a decade of growth. > america's debt will continue to grow.
Zombie Community Banks Still Lining Up for TARP Funds [View article]
Good thoughts. Thanks.
On Jun 28 03:41 PM Mad Hedge Fund Trader wrote:
> they're not all in trouble. I had to listen to Midsouth Bank CEO > Rusty Cloutier when he spoke on CNBC. His 24 branch bank, with a > market cap of only $103 million, is based in Lafayette, LA, one of > my old stomping grounds and home of the world’s greatest étouffée > and shrimp gumbo. He says that “Unless we break up the big banks > and get back to sound banking principles we are going to relive this > over and over again….Free enterprise has to have the right to fail….Allan > Greenspan and his administration have some problems they have to > ‘fess up to.” With the current system of megabanks “they get the > gain and we get the pain….I’m regulated now by 13 agencies of the > US government and I don’t know that I need a 14th.” There’s no one > who can read you a riot act like a Southern regional banker.
Appraisals: The Latest Housing Battlefield Heats Up [View article]
A number of others have opined like you as to the definition of fair market value in the various posts I've had on this subject. So let's set the record straight. Here is the definition of market value from the Uninform Standards of Professional Appraisal Practice:
"the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus."
It is not what the buyer and seller agree to. Also please keep in mind that appraisals in most single family real estate transactions are done for the benefit of the lender not the buyer or seller. It is intended to provide a guide to the lender in evaluating its collateral.
On Jun 27 11:48 AM mrlucky2day wrote:
> The author of this article and the design of the rules of the HVCC > completely ignore the basic principle of Real Estate Appraisal. > The basis of valuing real estate is "fair market value" that is > "The price at which a buyer is willing to buy and a seller is willing > to sell, UNDER NORMAL circumstances and after the property has been > exposed to the market for a reasonable time" The HVCC process avoids > this basic fact by counting "foreclosures" in the analysis. This > goes completely against the basic rule as stated above as these sales > are all "distressed" sales and not derived through normal due process > of consideration as stated above in "fair market value". This distortion > of the market, will deprive a real estate and thus the broad economy > recovery. The banks, fanny and freddy and other interested parties > can protect themselves by simply requiring a reasonable down payment, > requiring the applicant have a job and reasonable credit history, > it's really that simple whereas, before, the banks completely closed > their eyes to these basic requirements. While it is true that mortgage > loan reps did pressure appraisers to meet the sales price and of > course this is wrong, that does not mean that you change the basis > of the traditional meaning of "fair market value" used in the valuation > of real estate for over 100 years! Instead, fire the offending > loan officers, appraisers and real estate agents that would dishonor > the practice of real estate. If the government over kills the industry, > it will kill what they are trying to preserve.
Appraisals: The Latest Housing Battlefield Heats Up [View article]
Thank you for your comment. The point about the intended user of the appraisal report is quite important. I agree that the law needs to be tweeked or compensation adjusted to ensure that professional appraisals are being delivered but do you really think that the present situation is worse than where we came from? I have my doubts on that one.
On Jun 26 11:58 PM User 437377 wrote:
> As a "typical" appraiser, I agree that buyers invest quite a bit > of time in the examination of listings and selection of their home. > However, even with over 32 years experience in residential real estate > appraisal, there's no way I can produce an appraisal report in two > hours. > > Part of the process in the development of the appraiser's opinions > and conclusions about the property involve an examination and analysis > of the purchase and sale agreement. Also considered is the listing > and sales history of the property appraised and several comparable > sales; usually many more than are included in the appraisal report. > The fact the sales price is negotiated by the buyer and seller is > considered by an appraiser. We understand that the buyer may be comfortable > with the price. However, the appraisal is not completed for the buyer's > benefit; the appraiser's client in most mortgage appraisal assignments > is the lender. The appraisal is part of the process to provide the > mortgagee with an opinion of the value of the collateral for the > loan. Along with the qualifications of the borrower, the value of > the collateral is considered in underwriting the loan. > > The goals of the HVCC is to correct a very real problem. The solution > imposed by the HVCC, however, causes another set of problems that > may be even more detrimental to the lender and the borrower. Specifically, > the huge number of appraisal assignments placed by Appraisal Management > Companies. Due to their fee structure, it's much more likely the > appraiser will have less experience and spend closer to two hours > preparing the appraisal report to the detriment of accuracy, credibility > and the safety of the investment made by both the lender and the > homebuyer. > > Frank > > On Jun 26 03:50 PM A home buyer wrote:
NAR on Existing Home Sales and Low Ball Appraisals [View article]
Drew,
Thanks for taking the time to write your well reasoned comments.
Although it's not mentioned in this article my other posts on this subject have been critical of the loophole that allows the banks to own appraisal management companies. It's simply a testament to the power they still wield in Washington.
I am going to defer to you on the issue of whether they are in fact stacking the deck in favor of low ball appraisals. I have my doubts since this runs counter to their best interests but you're closer to the market on this one than I am.
That having been said, I don't want to see the industry revert to the old standard. I was in the business then and the abuses were appalling. This might not be perfect but to my mind it is a step forward -- I'll take conservative appraisals over inflated appraisals any day.
I don't have time now but tomorrow I will visit your blog and leave some further comments if I have anything substantive to add.
Once again thank you for adding a lot to this conversation.
Tom
On Jun 24 11:08 PM Loan Survivor wrote:
> With all due respect to the writer and ALL those posting comments, > none of you has bothered to get all the facts about what the Home > Valuation Code of Conduct (seekingalpha.com/symbo...) is > really about and the issues the real estate community is dealing > with concerning appraisals. > > As an aside, I agree that NAR always pushes their kool-aide too much > to have any real credibility. > > FACT - appraisals were over inflated during the hyper-appreciation > years and buyers, homeowners doing cashout refi's, Realtors, loan > originators, banks, FNMA/FHLMC and the government ALL didn't care > until the bubble burst. > > HVCC was created when the NY Attorney General got his hands on emails > from WAMU directing an Appraisal Management Company (seekingalpha.com/symbo...) > to bring in appraisals at inflated values or else. > > HVCC was originally designed to separate those ordering appraisals > from the appraisers. No direct contact was to be made. Appraisals > would be ordered through neutral AMC's and randomly assigned to appraisers > via computer. Banks and mortgage brokers were to all play by the > same rules, none could own any part of an AMC. > > Well, something funny happened on the way to the forum. The final > version of HVCC issued by FNMA that went into effect May 1st, allowed > BANKS to circumvent this system and use their own appraisers. Not > only that, banks were allowed to own AMC's! > > Hmmm, a bank called WAMU got busted inflating appraisals, but banks > get to stick to biz as usual. Something's rotten in Denmark! > > Not surprisingly, banks are now calling the shots even more so on > appraisals. They are telling, supposedly independent appraisers, > what comparables to use, how recent the sales have to be, what adjustments > to make, etc. Each bank also has their own special rules about these > requirements so there's no consistency in appraised values. > > If an appraiser does an honest appraisal and challenges a banks requirements, > they're black-balled and put out of business. > > Banks have now gone from controlling the inflation of appraisals > to controlling the deflation of appraisals. It's WRONG EITHER WAY > as neither allow an independent valuation of a property. > > But, he who has the gold, and uses it to bribe/lobby the government, > get's to make the rules. No surprise there. > > What has surprised me is that you all appear to have shot from the > hip without any research on the topic. > > Tom, I started following you because you always seemed to be right > on in your perception of housing. I'm hoping this article is just > an aberration on your part due to your disdain of NAR. > > I highly recommend everyone Google HVCC and read for yourselves the > issues honest real estate professionals are dealing with concerning > appraisals. > > For even more details on the problems with HVCC, read my blog:<br/>drewsmortgagenews.blog...
Will Commercial Real Estate Crisis Demolish Community Banks? [View article]
If you go back to the beginning of this debacle you will find a lot of opinions that commercial real estate would weather the downturn fairly well. Obviously, they were wrong. I am still somewhat surprised that the commercial real estate market is crashing so violently. With the exception of retail, it wasn't that overbuilt. I guess it just points out the severity of the recession.
On Jun 23 04:17 PM Larrysyr wrote:
> "This wasn’t supposed to happen. Time and again we’ve heard from > government officials, banks and so-called experts that the one fairly > bright spot was commercial real estate." > > I don't understand this statement. Brick and mortar retailers are > going down, malls are dying, and consumers are overspent. We have > known this for a long time. Commercial real estate has always been > one of the pieces destined to fall. The losses will be staggering. > But they should not be surprising.
Three TARP Banks Already Classified as Deadbeats? Uh-Oh [View article]
Levin,
I don't think I said that all of the community banks were in trouble. I did say that the system would seem to be deteriorating given that there appears to be a problem with some banks repaying their TARP funds. Note that this money was doled out only late last year. Also note that while the WSJ article only names three banks, the Treasury said a number of banks were not paying the required dividends.
The pink sheets would include a universe of diverse companies from which drawing any conclusions on a small sample would be an error. However, we have not only the evidence of three seemingly healthy banks but the Treasury's assertion of a number of others having problems servicing their debt but the constant drumbeat of FDIC closings to give us some idea of the problems in banking. Unlike the pink sheets this is a homogeneous group of companies and it's logical to assume that the problems of a few could quite easily be spread throughout the industry.
On Jun 23 02:53 PM levin70 wrote:
> Tom: > > What about mis-management at the three banks in question? Why is > that not listed as a possibility? It may not be that the world is > falling apart for small and regional banks, it could be that for > the three banks in question, that they have made bad lending decisions > and now see the fruit of their mis-management come home to roost. > > > You've jumped to a conclusion that small and regional banks are in > trouble (all of them) based on the results of three small banks. > > > Thats the equivalent of me picking three pink sheet stocks that I > think will go down 20% and saying that I thought the entire US stock > mareket would have to go down also as a result. Its simply not a > valid argument. > > Regards
Cash for Clunkers Meant for Detroit, Not the Environment [View article]
Sorry, they anticipated that. You have to have owned the car for a year and have insured it for a year.
On Jun 20 06:29 PM Chancer wrote:
> I have not seen any details, like a requirement that you had to own > the clunker for a set period of time. > > I could buy a clunker for $500 or less, and get up to $4500 in voucher > value for a new car. Right? > > I have a low mileage(43,000) 2000 Camry that Toyota dealer offerred > me $5,000 cash for with no expiration on the cash offer. > > I could sell Camry to dealer for $5,000 cash. > Buy clunker for 500 > Get a voucher on trade-in for 4,500 > Buy new Scion for 16,000 > Net cash cost 7,000 > > Or just keep driving Camry for another 10 years, since I drive it > less than 5,000 miles per year. I also have a backup 1992 Toyota > 4WD pickup with 100K miles that I drive less than 1,000 miles per > year.
Spain Calls It Quits on Fiscal Stimulus [View article]
Does anyone have any idea of how to deal with solvedfg and all of the other aliases he slithers around the site under. The spamming is getting annoying. Since he's operating on behalf of just one site there should be some way to totally disrupt their operations. Any ideas?
Is China Playing the Protectionist Card? [View article]
Nicely done!
On Jun 18 12:14 AM HaavBline wrote:
> Finally, the Chinese has joined the developed world and follow the > American leader. > > They finally understand the meaning of "If you can't beat them, join > them!". Since we are sticking with our "Buy American" policy and > they figured they can't make our congress change anything. (Nobody > can.) They will just have to join the most advanced country in the > world and copy our "Buy xxx" program. > > Someone please investigate whether they are infringing on our Interlectual > Property Rights.
Another Flight to Treasuries: Avoiding a Summer Storm? [View article]
On Jul 09 01:14 PM Dave Wrixon wrote:
> So a flight from the disappointment of a delusional recovery into
> a haven of delusional safety. The education gap in the US is truly
> astonishing!
Vultures Circling Commercial Real Estate May Be a Good Sign [View article]
I can tell you that I was in the business of financing commercial real estate at this point in time and from around 2003 or 2004 on, the percentage of deals that relied on proforma NOI growth to justify the deals steadily increased. The industry split with some lenders going all in on the concept and others saying no way, no how. Certainly, the securitization market was much more open to the concept. Eventually, the banks came around as that was the only way to keep generating loan volume.
I can assure you that it became prevalent in purchase transactions.
On Jul 09 12:18 PM REITBull wrote:
> Tom,
>
> Do you happen to know how many loans were underwritten with pro-forma
> cash flows? I was curious if anyone might have this number as a %
> of loans. I can see it being used for construction/rehab loans or
> properties that were in the process of lease-up. But I wonder if
> pro-forma underwriting was really that prevalent in the large scheme
> of things.
Boston Fed: We Don't Understand Foreclosures [View article]
Private label means it's not securtized and is on the books of the bank.
If the loan is securitized the bondholder would see a reduction in his collateral and income from that loan. The overall effect on the bondholder is going to depend on which tranche he holds and the overall performance of the entire portfolio. Given enough defaults even those holding the most senior tranches could begin to see cash flow fall below contractual rates.
Vultures Circling Commercial Real Estate May Be a Good Sign [View article]
On Jul 08 08:44 PM Mark54 wrote:
> Too many people think CRE similar residential real estate. Commercial
> properties are underwritten to different standards and are largely
> based off cash flow. There are no NINJA loans, no liar loans and
> financials are regularly updated. This is more attractive to large
> investors than residential due to the transparency and investment
> size. (No large investor wants to monitor and dispose of a pool
> of $250,000 properties). Bottom line is that CRE has the benefit
> of the natural institutional investor base where residential is dependent
> on the psychology and resources of individuals.
China’s Bank Lending Spree [View article]
Though looking at your profile, you seem to have a unique perspective, so I would be interested in further thoughts.
On Jun 29 10:55 PM Steven Hansen wrote:
> There is a big difference between china and usa / germany - china
> is a growing and evolving economy. the usa / germany are mature.
>
>
> a growing debt in china will be consumed in under a decade of growth.
> america's debt will continue to grow.
Zombie Community Banks Still Lining Up for TARP Funds [View article]
On Jun 28 03:41 PM Mad Hedge Fund Trader wrote:
> they're not all in trouble. I had to listen to Midsouth Bank CEO
> Rusty Cloutier when he spoke on CNBC. His 24 branch bank, with a
> market cap of only $103 million, is based in Lafayette, LA, one of
> my old stomping grounds and home of the world’s greatest étouffée
> and shrimp gumbo. He says that “Unless we break up the big banks
> and get back to sound banking principles we are going to relive this
> over and over again….Free enterprise has to have the right to fail….Allan
> Greenspan and his administration have some problems they have to
> ‘fess up to.” With the current system of megabanks “they get the
> gain and we get the pain….I’m regulated now by 13 agencies of the
> US government and I don’t know that I need a 14th.” There’s no one
> who can read you a riot act like a Southern regional banker.
Appraisals: The Latest Housing Battlefield Heats Up [View article]
"the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus."
It is not what the buyer and seller agree to. Also please keep in mind that appraisals in most single family real estate transactions are done for the benefit of the lender not the buyer or seller. It is intended to provide a guide to the lender in evaluating its collateral.
On Jun 27 11:48 AM mrlucky2day wrote:
> The author of this article and the design of the rules of the HVCC
> completely ignore the basic principle of Real Estate Appraisal.
> The basis of valuing real estate is "fair market value" that is
> "The price at which a buyer is willing to buy and a seller is willing
> to sell, UNDER NORMAL circumstances and after the property has been
> exposed to the market for a reasonable time" The HVCC process avoids
> this basic fact by counting "foreclosures" in the analysis. This
> goes completely against the basic rule as stated above as these sales
> are all "distressed" sales and not derived through normal due process
> of consideration as stated above in "fair market value". This distortion
> of the market, will deprive a real estate and thus the broad economy
> recovery. The banks, fanny and freddy and other interested parties
> can protect themselves by simply requiring a reasonable down payment,
> requiring the applicant have a job and reasonable credit history,
> it's really that simple whereas, before, the banks completely closed
> their eyes to these basic requirements. While it is true that mortgage
> loan reps did pressure appraisers to meet the sales price and of
> course this is wrong, that does not mean that you change the basis
> of the traditional meaning of "fair market value" used in the valuation
> of real estate for over 100 years! Instead, fire the offending
> loan officers, appraisers and real estate agents that would dishonor
> the practice of real estate. If the government over kills the industry,
> it will kill what they are trying to preserve.
Appraisals: The Latest Housing Battlefield Heats Up [View article]
On Jun 26 11:58 PM User 437377 wrote:
> As a "typical" appraiser, I agree that buyers invest quite a bit
> of time in the examination of listings and selection of their home.
> However, even with over 32 years experience in residential real estate
> appraisal, there's no way I can produce an appraisal report in two
> hours.
>
> Part of the process in the development of the appraiser's opinions
> and conclusions about the property involve an examination and analysis
> of the purchase and sale agreement. Also considered is the listing
> and sales history of the property appraised and several comparable
> sales; usually many more than are included in the appraisal report.
> The fact the sales price is negotiated by the buyer and seller is
> considered by an appraiser. We understand that the buyer may be comfortable
> with the price. However, the appraisal is not completed for the buyer's
> benefit; the appraiser's client in most mortgage appraisal assignments
> is the lender. The appraisal is part of the process to provide the
> mortgagee with an opinion of the value of the collateral for the
> loan. Along with the qualifications of the borrower, the value of
> the collateral is considered in underwriting the loan.
>
> The goals of the HVCC is to correct a very real problem. The solution
> imposed by the HVCC, however, causes another set of problems that
> may be even more detrimental to the lender and the borrower. Specifically,
> the huge number of appraisal assignments placed by Appraisal Management
> Companies. Due to their fee structure, it's much more likely the
> appraiser will have less experience and spend closer to two hours
> preparing the appraisal report to the detriment of accuracy, credibility
> and the safety of the investment made by both the lender and the
> homebuyer.
>
> Frank
>
> On Jun 26 03:50 PM A home buyer wrote:
NAR on Existing Home Sales and Low Ball Appraisals [View article]
Thanks for taking the time to write your well reasoned comments.
Although it's not mentioned in this article my other posts on this subject have been critical of the loophole that allows the banks to own appraisal management companies. It's simply a testament to the power they still wield in Washington.
I am going to defer to you on the issue of whether they are in fact stacking the deck in favor of low ball appraisals. I have my doubts since this runs counter to their best interests but you're closer to the market on this one than I am.
That having been said, I don't want to see the industry revert to the old standard. I was in the business then and the abuses were appalling. This might not be perfect but to my mind it is a step forward -- I'll take conservative appraisals over inflated appraisals any day.
I don't have time now but tomorrow I will visit your blog and leave some further comments if I have anything substantive to add.
Once again thank you for adding a lot to this conversation.
Tom
On Jun 24 11:08 PM Loan Survivor wrote:
> With all due respect to the writer and ALL those posting comments,
> none of you has bothered to get all the facts about what the Home
> Valuation Code of Conduct (seekingalpha.com/symbo...) is
> really about and the issues the real estate community is dealing
> with concerning appraisals.
>
> As an aside, I agree that NAR always pushes their kool-aide too much
> to have any real credibility.
>
> FACT - appraisals were over inflated during the hyper-appreciation
> years and buyers, homeowners doing cashout refi's, Realtors, loan
> originators, banks, FNMA/FHLMC and the government ALL didn't care
> until the bubble burst.
>
> HVCC was created when the NY Attorney General got his hands on emails
> from WAMU directing an Appraisal Management Company (seekingalpha.com/symbo...)
> to bring in appraisals at inflated values or else.
>
> HVCC was originally designed to separate those ordering appraisals
> from the appraisers. No direct contact was to be made. Appraisals
> would be ordered through neutral AMC's and randomly assigned to appraisers
> via computer. Banks and mortgage brokers were to all play by the
> same rules, none could own any part of an AMC.
>
> Well, something funny happened on the way to the forum. The final
> version of HVCC issued by FNMA that went into effect May 1st, allowed
> BANKS to circumvent this system and use their own appraisers. Not
> only that, banks were allowed to own AMC's!
>
> Hmmm, a bank called WAMU got busted inflating appraisals, but banks
> get to stick to biz as usual. Something's rotten in Denmark!
>
> Not surprisingly, banks are now calling the shots even more so on
> appraisals. They are telling, supposedly independent appraisers,
> what comparables to use, how recent the sales have to be, what adjustments
> to make, etc. Each bank also has their own special rules about these
> requirements so there's no consistency in appraised values.
>
> If an appraiser does an honest appraisal and challenges a banks requirements,
> they're black-balled and put out of business.
>
> Banks have now gone from controlling the inflation of appraisals
> to controlling the deflation of appraisals. It's WRONG EITHER WAY
> as neither allow an independent valuation of a property.
>
> But, he who has the gold, and uses it to bribe/lobby the government,
> get's to make the rules. No surprise there.
>
> What has surprised me is that you all appear to have shot from the
> hip without any research on the topic.
>
> Tom, I started following you because you always seemed to be right
> on in your perception of housing. I'm hoping this article is just
> an aberration on your part due to your disdain of NAR.
>
> I highly recommend everyone Google HVCC and read for yourselves the
> issues honest real estate professionals are dealing with concerning
> appraisals.
>
> For even more details on the problems with HVCC, read my blog:<br/>drewsmortgagenews.blog...
Will Commercial Real Estate Crisis Demolish Community Banks? [View article]
On Jun 23 04:17 PM Larrysyr wrote:
> "This wasn’t supposed to happen. Time and again we’ve heard from
> government officials, banks and so-called experts that the one fairly
> bright spot was commercial real estate."
>
> I don't understand this statement. Brick and mortar retailers are
> going down, malls are dying, and consumers are overspent. We have
> known this for a long time. Commercial real estate has always been
> one of the pieces destined to fall. The losses will be staggering.
> But they should not be surprising.
Three TARP Banks Already Classified as Deadbeats? Uh-Oh [View article]
I don't think I said that all of the community banks were in trouble. I did say that the system would seem to be deteriorating given that there appears to be a problem with some banks repaying their TARP funds. Note that this money was doled out only late last year. Also note that while the WSJ article only names three banks, the Treasury said a number of banks were not paying the required dividends.
The pink sheets would include a universe of diverse companies from which drawing any conclusions on a small sample would be an error. However, we have not only the evidence of three seemingly healthy banks but the Treasury's assertion of a number of others having problems servicing their debt but the constant drumbeat of FDIC closings to give us some idea of the problems in banking. Unlike the pink sheets this is a homogeneous group of companies and it's logical to assume that the problems of a few could quite easily be spread throughout the industry.
On Jun 23 02:53 PM levin70 wrote:
> Tom:
>
> What about mis-management at the three banks in question? Why is
> that not listed as a possibility? It may not be that the world is
> falling apart for small and regional banks, it could be that for
> the three banks in question, that they have made bad lending decisions
> and now see the fruit of their mis-management come home to roost.
>
>
> You've jumped to a conclusion that small and regional banks are in
> trouble (all of them) based on the results of three small banks.
>
>
> Thats the equivalent of me picking three pink sheet stocks that I
> think will go down 20% and saying that I thought the entire US stock
> mareket would have to go down also as a result. Its simply not a
> valid argument.
>
> Regards
Cash for Clunkers Meant for Detroit, Not the Environment [View article]
On Jun 20 06:29 PM Chancer wrote:
> I have not seen any details, like a requirement that you had to own
> the clunker for a set period of time.
>
> I could buy a clunker for $500 or less, and get up to $4500 in voucher
> value for a new car. Right?
>
> I have a low mileage(43,000) 2000 Camry that Toyota dealer offerred
> me $5,000 cash for with no expiration on the cash offer.
>
> I could sell Camry to dealer for $5,000 cash.
> Buy clunker for 500
> Get a voucher on trade-in for 4,500
> Buy new Scion for 16,000
> Net cash cost 7,000
>
> Or just keep driving Camry for another 10 years, since I drive it
> less than 5,000 miles per year. I also have a backup 1992 Toyota
> 4WD pickup with 100K miles that I drive less than 1,000 miles per
> year.
Spain Calls It Quits on Fiscal Stimulus [View article]
More Signs Recession Is Running Out of Steam [View article]
On Jun 18 05:07 PM Dave Wrixon wrote:
> That has to be the most screwed up metaphor I have seen in a while.
Is China Playing the Protectionist Card? [View article]
On Jun 18 12:14 AM HaavBline wrote:
> Finally, the Chinese has joined the developed world and follow the
> American leader.
>
> They finally understand the meaning of "If you can't beat them, join
> them!". Since we are sticking with our "Buy American" policy and
> they figured they can't make our congress change anything. (Nobody
> can.) They will just have to join the most advanced country in the
> world and copy our "Buy xxx" program.
>
> Someone please investigate whether they are infringing on our Interlectual
> Property Rights.