[Rhodes22-list] Accounting

[Robert Skinner]

I must admit that I will not be satisfied with any
solution that does not severely penalize those who
sat on top of this pile of paper with their golden
parachutes.  The very existence of the parachutes
is evidence that they had no confidence that the
market would survive their mismanagement.

And I know that I have a lot of company in that
sentiment.

Those of us who believe in good pay for good work
are bent beyond tolerance by the obvious disregard
for merit in determining executive pay at the top.
A double standard if I ever saw one, the antithesis
of the classless society we flaunt to the rest of
the world.

I smell revolution - bloodless, I hope, but
nevertheless with sharp teeth and a great hunger
for revenge.

As the French once said, heads will roll.  And
the first will be those of the legislators who do
not enact appropriate penalties and limitations
during the process of rebuilding our financial
structure.

There should be no free ride for either the
lenders who made ill-advised loans, or the fools
who took the money and mis-spent it.

/Robert

Brad Haslett wrote:
> Bill,
> 
> You just touched on the "sensitive nerve" of this issue, the moral
> obligation.  If we bail out the lender, why not the borrower?  What
> about those of us who behaved responsibly?  To paraphrase one of our
> founding fathers, do we "hang together or hang individually?" Like
> you, I'm getting offers that are too good to be true.  I would start
> asking them if they might want to consider if I'm paying back the
> money I already owe them but I don't think Fatima in India really
> cares.
> 
> Brad
> 
> On Wed, Oct 1, 2008 at 4:10 PM, Bill Effros <bill at effros.com> wrote:
>> Wally,
>>
>> I think the problem is that some significant portion of these homes will
>> not be worth anything to anyone by the time buyers can be found.
>>
>> And many more mortgages are held by people who know their homes are not
>> worth the remaining amount on their mortgage.  These people ask why, if
>> the banks can get out of their stupid obligations, can't the mortgage
>> holders get out of theirs?
>>
>> And the people who weren't stupid in the first place ask why they
>> shouldn't have their obligations reduced too, instead of being asked to
>> pay for the stupidity of others.
>>
>> Credit is still easy to obtain if you can demonstrate you will pay it
>> back.  I was just offered a $729,500 fixed loan with 3% down by one of
>> the largest banks in the country...here we go again...
>>
>> Bill Effros
>>
>>
>>
>> TN Rhodey wrote:
>>> "A sharp CPA could design a believable computer
>>> model that could make the value come out wherever his boss wanted it
>>> to be. He could also convince outside auditors and regulators of the
>>> soundness of his model. "
>>>
>>> Brad, I am with you but wondering how they determine new (long term) value
>>> for this big pile of crap?  One thing the article mentions that often gets
>>> lost. Most people are paying their mortgages. The properties that are
>>> bundled in these securities are not worthless. At some point they all will
>>> be worth something to somebody.... but when?
>>>
>>> Are there computer models that accountants trust? Not poking a stick I have
>>> no idea. I can see how it would ease credit. I also see how it led to past
>>> problems.
>>>
>>>  I thought we were rushing into the bail out. I am all for any plain that
>>> reduces government intervention.
>>>
>>> Wally
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