Roscat

BofA, Wells Fargo: No Equity After Accounting for Bad Loans

To ChrisB
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"But continuing the analogy, if the fire sale price that I could sell my house for in 1 day is $20k, but I could put it on the market and sell it within 6 mos for $150k, and perhaps 1 year for $180k, what's the house actually worth? To me, it's $150-180k, because I have no intention of giving it away at a fire sale."
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The problem with your analogy is that it will take 10-30 years for the assets to raise to the same level as in 2007, not 6 month. Thiese aren't futures you are selling but, hard, tangible products.

There is a reason why houses shouldn't have been securitized. Because selling the underlying security assumes that one holds that house for 30 years. But, investment firms took the haircut immediately, vs over 30 years. Simple short-term vision.

So, if it's worth $20k now and you need to sell it, that's what you get and even if you wait a few more months you're still not gaining much. In this market, you're lucky if you get even that price.

It is all about asset protection, not about making money out of housing.

BofA, Wells Fargo: No Equity After Accounting for Bad Loans

To Big Jack
The homes do not have a $0 value because someone will pay a fire-sale price for them even in this market. It has been proven already in CA, NV, AZ and FL.

Waiting 10-30 years to get those assets back to 2007 values is unacceptable.

The Daily Double: Martin Mayer on CDS; Nouriel Roubini on the Banks

Nouriel is right. Let the free markets play this out. Mark-to-market is the only way to go outside of Socialism.

disclaimer: no BAC or C stock - sold them years ago.