Just The Facts

Lehman, How Much Is Your Headquarters Worth?

What is "anything" worth? At what value should assets be carried on a balance sheet?


Someone posed the question a day or two ago (on another site I believe):


"If you live in a home that you paid $250,000 for and your neighbor defaults and his home is sold in a foreclosure auction for $20,000, does that then mean that your home is worth only $20,000?" (or words to that effect)


I said "yes".


If I'm right, then our real estate correction still has a long ways to go. And quite a few of our major banks are worth zero or less.


Would you be interested in buying Goldman shares for $3.00 or $4.00 apiece, if all credit on the planet were dissolved and everything is only worth what someone holding gold or silver is willing to pay for it?