American Capital Strategies, Ltd. (ACAS)

All Comments on ACAS

  • commenter
    TomArmistead
    Sep 09 08:41 PM
    My Website
    Global Capital Asset Death Spiral [view article]
    I agree with all the comments that mentin mark to market as the surce of the problem. Once the CADS gets rolling, the mark to market keeps it rolling and exacerbates the problem. The solution is easy - any bond that is not in default, if the holder is able and willing to hold to maturity, is booked at amortized value. Reply
  • commenter
    JadedConsume
    r
    Sep 09 07:13 PM
    My Website
    American Capital Agency: Making Money the Old-Fashioned Way [view article]
    You can't suffer realized losses waiting for information on making a more confident buy decision. Whether AGNC has something strange in its revenue stream that produces unexpected lumpiness is something we will definitely have to wait to see. Being conservative is a way to avoid losing money, and avoiding losing money is a key to building more of it. Reply
  • commenter
    bellard
    Sep 09 05:55 PM
    Global Capital Asset Death Spiral [view article]
    'd say yes. If it were worth more, wouldn't someone have stepped forward to pay more for your neighbor's house?

    Just the facts.
    My idea is that the asset owner(home owner), should be allowed to value the asset using a cash flow model. In the above 250K home selling for 20K, one more data point is in that area the new rents for these homes is 2,000 per month.

    Now using the PV of future cash flows the home would be worth more than 200K. This is the same as the cash flow example I provided from ACAS......     Reply
  • commenter
    Jacker2
    Sep 09 05:34 PM
    Global Capital Asset Death Spiral [view article]
    Should the government bail out persons. When is the government going to bail people like me who have lost money in my stocks? Never, and I do not expect it to. It seems grossly unfair to me that those of us who have lost money in stocks, mutual funds, IRAs, and 401Ks are not getting our losses covered. Meanwhile, incompetent and greed managers, home owners who have overbought, and greedy real estate investors are targets for government generosity. Is this fair?

    In my opinion, the fairest way to settle the credit squeeze is for the government to give a tax credit of 10% for individual savings. This will make a lot of investment money available, and help the credit squeeze. It also gives the poor an opportunity to benefit from being part of the solution.
    Reply
  • commenter
    Jacker2
    Sep 09 05:33 PM
    General Discussion on ACAS
    As a person who has lost money on the stock market, when is the government going to bail me out of my losses? Answer, it is not. I have a choice. I can either sell now and take some big losses, or accept my dividends and hope the market goes up. The government either should bail out everyone, or no one. Making taxpayers who have already taken losses on their stocks, mutual funds, 401Ks, etc. bail out incompentent managers, home owners who over bought, and greedy real estate speculators is simply not fair. Show me a really good bargain, and I consider buying with some of my hard earned savings. In the meanwhile, most persons are paying their mortages off. Mortage holders can accept this income and pay at least part of their bills. Reply
  • commenter
    nilogram
    Sep 09 05:03 PM
    Global Capital Asset Death Spiral [view article]
    Just because a distress sale yielded $20K does not mean your house next door is worth $20K - you really cannot approximate a line with one data point. And where does this author get the 10% national price reduction? Paulson is correct - there is no national real estate market; just a lot of local markets. Look at Pennsylvania - pretty good. Look at Nevada - horrible. The problem is too many properties are heaped into mortgage pools and no one really knows what is in these pools. Do the groups who bought Merrill's mortgage back securities think they overpaid at $.22 on the dollar?

    Have Freddie or Fannie missed any payments or obligations? Isn't this really a liquidity issue that the Fed is trying to keep from being a margin call?

    Remember the headlines that 2008 Q2 would be flat or no growth but came in with growth that is not at all recessionary? Maybe a little positive attitude will cause a little more positive real estate market.     Reply
  • commenter
    StockMongerC
    om
    Sep 09 04:52 PM
    My Website
    Global Capital Asset Death Spiral [view article]
    Nice explaination. Obviously this short-term wait and see until next year plan amidst broken/black box balance sheets is a recipe for uncertainty and bear pourage. Next the auto companies will be lining up, and then the auto loan companies, and then the credit card companies, and then the homeless deadbeat on the corner will vote them out because his patrons will have nothing left after taxes to give him. The goverment better auction the mortgage products off instead of having a trigger finger on the supply of homes to shoot down prices at their whim. Reply
  • commenter
    Just The
    Facts
    Sep 09 03:59 PM
    Global Capital Asset Death Spiral [view article]
    >>> If your home is worth around 250K, but the person next door goes bankrupt, and the home goes into foreclosure and sells for 20K - does that mean the new value of your home is now 20K? <<<


    I'd say yes. If it were worth more, wouldn't someone have stepped forward to pay more for your neighbor's house?     Reply
  • commenter
    bellard
    Sep 09 03:24 PM
    Global Capital Asset Death Spiral [view article]
    Read the following fasb created stupidity forced on ACAS. From the jadedconsumer blogsite:

    "[A]t the end of the first quarter of 2008, the Company held an investment in a commercial real estate collateralized debt obligation (CRE CDO) which had been depreciated $209 million from its inception to date, including $160 million in the first quarter of 2008. The investment is currently producing approximately $8 million per quarter of cash flow but its current fair value determined in accordance with GAAP is $11 million due to a lack of liquidity in the financial markets for CDO investments which has caused investment spreads to widen. However, the Company anticipates realizing its $220 million investment on settlement or maturity based on its assumptions of future credit losses, which includes a recession over the life of the investment.
    via ACAS' Form 10-Q filed May 6, 2008."     Reply
  • commenter
    User 258576
    Sep 09 01:57 PM
    Global Capital Asset Death Spiral [view article]
    A very good suggestion and one with the probability of achieving what you outline. However, does our government have sufficient foresight to adopt a plan like this? Or, will there continually be short-term, 'fix-it' solutions, somewhat similar to curing an alcoholic's hangover by providing him or her with a drink? Reply
  • commenter
    bellard
    Sep 09 01:53 PM
    Global Capital Asset Death Spiral [view article]
    "Mark to market nonsense"

    Fasb 157 was created in part because firms such as Enron. The gov't can't stop fraud with new regulations IMHO. My article was not blaming the theory of mark to market, just its apparent inflexibility. If some markets have ZERO bids - then what is the real value?

    If your home is worth around 250K, but the person next door goes bankrupt, and the home goes into foreclosure and sells for 20K - does that mean the new value of your home is now 20K?



     Reply
  • commenter
    E Nuff Sed
    Sep 09 01:47 PM
    Global Capital Asset Death Spiral [view article]
    I believe the fix is slowly being put in place. The treasury just turned fannie and freddie into a resolution trust for mortgages. Once the new govt. is in place they can set about putting together a resolution trust which then start to buy other assets on the cheap. Reply
  • commenter
    GlobalTrekke
    r
    Sep 09 12:39 PM
    Global Capital Asset Death Spiral [view article]
    I'd have to strongly disagree, and I see this directly in our business every day. Overruling FASB is like blaming the tighter regulations for accounts reporting after Enron. Wall Streeters are always blaming the messenger. This crisis started largely because of three things: unnaturally cheap credit; insufficient moral hazard; and banks and other investment firms being able to hide their illiquid, usually artificially valued manufactured investment vehicles in ways that let them virtually make up the vehicles' valuations. Now you want to give access to the hen-house back to the fox. That's ridiculous. SIVs and other artificial constructions were created *specifically* to hide from the mark to market rules (among other related reasons). You really don't get it. And those who don't are doomed to repeat the same follies. We don't have to worry about China's and Russia's rising economic might because we do it to ourselves. "Mark to market nonsense," jeez, you create a non-straightforward security to get around all kinds of reporting and tax regulations such that no one can find it or understand it, and then you whine like little children when someone in charge demands that you price it via the market. So typical: everything is solved by the markets, except when it's inconvenient. You want capital markets to form price-creation except when you don't like the results. What hypocrisy. Reply
  • commenter
    Post
    American
    World
    Sep 09 12:23 PM
    Global Capital Asset Death Spiral [view article]
    F7 = spell check. Be sure to turn on the grammar option. Reply
  • commenter
    henarl
    Sep 09 11:34 AM
    Global Capital Asset Death Spiral [view article]
    Exactly. If the government is going to intervene, it needs to overrule the FASB and eliminate the mark to (no) market rules. Reply
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