kotika98

Housing's Big Picture Isn't Pretty

what a bunch of bull! In America land is still unlimited, and home prices are a function of building cost only. You dont need to go back 50 or 100 years to try to guess what those costs are. Look at the annual report of DRHorton or Toll and you can find out precisely how much it costs to build every kind of house (depends on location a bit). Bare land values are 30-50K per lot and than cannot go neiter much lower not much higher. Bottom line - and those figures you cite confirm it, house prices go at the rate of inflation in the long run. Only in locations where land is no longer available without limit can prices become detached from building cost, and truly there is only Manhattan in the entire USA where there is not going to be an inch more of land to build.

Anatomy of a Giveaway, Or Why Stocks Soared Yesterday

by the way, it is this "back-to-normal" scenario that Krugman so much hates... he would like to see the government to run the banks directly for many years to come, and thats just not going to happen with the new Geithner plan.

Anatomy of a Giveaway, Or Why Stocks Soared Yesterday

this analysis is right only in spirit, even though it offers up a long winded numerical example. Of course it is the taxpayer who is stuck with the losses, we knew that all along, since October at least. But the particulars are not correct. I think the assets are going to be sold for cents on the dollar, meaning less than the 500K in your condo example. Why would the bank agree, you ask? It gets a clean balance sheet, and sudddenly their equity is worth something. Most importantly, from the management point of view, they get to keep their job and to go back to normal. Thats what they call a "win-win-win" situation, except of course it is paid for with taxpayer money, though not precisely in the way Rolfe described it.

America's Insolvent Banks

"preferred shares, which I, for one, consider much closer to being liabilities than equity as far as a bank is concerned"

uhh.. please ... open an accounting textbook, before you say nonsense. There are only two kinds of items in the balance sheet, ASSETS and LIABILITIES. Both preferreds and common equity are liabilities.

America's Insolvent Banks

"a world of much stricter bank regulation, which means less opportunity for banks to gouge consumers when it comes to fees."

Someone should run for congress on this slogan.

America's Insolvent Banks

Felix,
"retained earnings" are a component of shareholder equity, so are a liability not an asset.

Investment Banks, R.I.P.

Have you guys all forgotten that Citadel is the new investment bank? It is doing fine, thank you...

Another thing people forget is that sure, there were voices saying that investment banks and banks should stick to facilitating, and not turn themselves into a hedge fund risking their own capital. But the specific entities mentioned tended to be Deutche Bank and Goldman, not all these other guys who are now proven to have been clueless.