[Rhodes22-list] What's It Worth?

[Brad Haslett]

Bill,

You of all people know what a scam this whole real estate bubble was.
Yeah, it's a good buy in the long run, provided you think long run.
People thought they could buy ANYTHING house related and it would go
up in value.  I started doubting my own crystal ball after listening
to co-workers brag about how much money they had made in real estate
while I sat on the sidelines.  You hit the nail on the head, "they
couldn't afford their mortgages".  Three years ago I would have bet my
last dollar that Chinese banks would fail because of the bad loans
they continue to carry on the books from "the old days".  China didn't
pass FASB 157, we did.  Welcome to America!  We hid the true cost of
our social programs for too long.  I'll do anything I can within my
power and budget to help someone get a "leg up" on their financial
well being.  What we face here is not a lack of money but a deficiency
of spirit and ingenuity.

Brad

On Thu, Sep 25, 2008 at 5:26 PM, Bill Effros <bill at effros.com> wrote:
> The bottom line on the bailout seems to be trying to determine the
> future value of assets on a current basis.
>
> Some of those mortgages will pay off over their lifetime.  Others are
> worthless now, and never will have any value.
>
> What will be the mechanism to ensure the government doesn't wind up with
> only the junk?  It's not really that hard to sort the wheat from the
> chaff, and I would expect ongoing businesses to do so.  If that happens,
> taxpayers will never recover any significant portion of the money they
> put up.
>
> Most of the people facing foreclosure can't afford their homes no matter
> who is holding their mortgages.  And many of those homes can't find
> buyers at any price.  As they sit abandoned they are looted and have
> less value every day.
>
> Will Federal taxpayers have to pay local taxes on the worthless homes
> they own?
>
> And, if not, how will local taxing bodies obtain the money to continue
> operations?
>
> The Feds will discover there is only so much money you can squeeze out
> of the survivors to rescue the...financial system.  (Oxymoron.)
>
> Bill Effros
>
>
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