I read the Real Deal magazine, a NYC real estate rag. Although they have never quoted me or even bothered to feature my rather dashing picture in their publication, a reporter or two does keep in touch to get my opinion on things valuation related. This is some of their latest stuff:

Manhattan residential market reports bring good news, experts cautiously optimistic
Third-quarter Manhattan market reports released by the city's residential brokerages this week paint a grim picture compared to the same period last year, but show a marked improvement from earlier this year. "For New York, the worst is over," said Dottie Herman, president and CEO of the city's largest residential brokerage, Prudential Douglas Elliman. Still, experts caution that while the pace of decline is slowing, recovery is not yet imminent. "I'm very pleased with what we saw this summer and it’s a step in the right direction, but I still think we have a ways to go," said real estate appraiser Jonathan Miller, the CEO of Miller Samuel, who prepared Elliman's report.   

Well, I wouldn't stake my future on those prices skyrocketing any time soon. To begin with, there is a market difference between prices improving verses prices getting worse at a slower pace. Words, after all, do have meanings, don't they? Below is the Case Shiller seasonally adjusted index for Condos, to put things into perspective.

I read the Real Deal magazine, a NYC real estate rag. Although they have never quoted me or even bothered to feature my rather dashing picture in their publication, a reporter or two does keep in touch to get my opinion on things valuation related. This is some of their latest stuff:

Manhattan residential market reports bring good news, experts cautiously optimistic
Third-quarter Manhattan market reports released by the city's residential brokerages this week paint a grim picture compared to the same period last year, but show a marked improvement from earlier this year. "For New York, the worst is over," said Dottie Herman, president and CEO of the city's largest residential brokerage, Prudential Douglas Elliman. Still, experts caution that while the pace of decline is slowing, recovery is not yet imminent. "I'm very pleased with what we saw this summer and it’s a step in the right direction, but I still think we have a ways to go," said real estate appraiser Jonathan Miller, the CEO of Miller Samuel, who prepared Elliman's report.   

Well, I wouldn't stake my future on those prices skyrocketing any time soon. To begin with, there is a market difference between prices improving verses prices getting worse at a slower pace. Words, after all, do have meanings, don't they? Below is the Case Shiller seasonally adjusted index for Condos, to put things into perspective.

From Reuters via CNBC: Banks' Large-Loan Losses Triple: US Regulators

 U.S. regulators say that the level of losses from syndicated loans facing banks and other financial institutions tripled to $53 billion in 2009, due to poor underwriting standards and the continuing weakness in economic conditions.

From Reuters via CNBC: Banks' Large-Loan Losses Triple: US Regulators

 U.S. regulators say that the level of losses from syndicated loans facing banks and other financial institutions tripled to $53 billion in 2009, due to poor underwriting standards and the continuing weakness in economic conditions.

There have been a lot of theories and anecdotal evidence indicating that banks are letting defaulted mortgage borrowers stay in their houses in lieu of taking possession of said properties and recording the writedown on thier books, particularly once the property is sold at auction. The auction sale will actually set a hard market price for the property that cannot be fudged, and will reveal the amount of losses on said banks books from the (most likely severely underwater) mortgage.

There have been a lot of theories and anecdotal evidence indicating that banks are letting defaulted mortgage borrowers stay in their houses in lieu of taking possession of said properties and recording the writedown on thier books, particularly once the property is sold at auction. The auction sale will actually set a hard market price for the property that cannot be fudged, and will reveal the amount of losses on said banks books from the (most likely severely underwater) mortgage.

Wednesday, 16 September 2009 20:00

I'm About to Drop a Bomb on the Banking Industry

I must admit, I am a bit frustrated at the propensity of the market, the media and so many analysts towards totally disregarding basic math, not to mention the fundamentals of finance and capitalism. Thus, I have decided to do something about it. The forensic analysis of JP Morgan will be a doozy, and I have excerpted certain (non-valuation or directly investment related) portions of it as a pdf document to be distributed freely over the web. I have already released quite a bit of information in an attempt to educate the laymen about the extent of systemic risk that still abounds. From a risk perspective, we are worse off than ever before. Those who were claimed to be too big to fail are even bigger. Those who concentrated risks to the point that they held this country and the entire global financial system hostage are even more concentrated, and the lobbying machine that is Wall Street is even more focused and effective than ever.

On that note, I would like to congratulate Barney Frank for his uncharacteristically pleasing display of standing up for the people. Let's hope its for real. From Reuters:

WASHINGTON, Sept 16 (Reuters) - A top lobbyist for Wall Street giant Goldman Sachs (GS.N) has been barred from communicating with members and staff of the U.S. House of Representatives Financial Services Committee, an aide to the panel's chairman said on Wednesday.

Democratic Representative Barney Frank has banished Goldman's Michael Paese, a former committee staffer, from dealing with the panel while it considers a long list of financial reform proposals, some directly impacting Goldman.

"Mr. Paese left our offices in September 2008, and was not allowed to communicate with any committee members or staff for a period of one year due to normal ethics restrictions that apply to all House and Senate employees," said Frank aide Steven Adamske in a statement.

"Out of an abundance of caution due to the nature of financial regulation reform, the chairman has extended Mr. Paese's recusal for another year," Adamske said.

Frank's committee is dealing with a heavy load of proposed legislation put forward by the Obama administration to tighten regulation of banks and capital markets following the worst financial crisis in generations.

In an example of the Washington-Wall Street revolving door culture, Paese was the committee's deputy staff director before he quit to work for the Securities Industry and Financial Markets Association as a lobbyist. Goldman hired him in April.

Wednesday, 16 September 2009 20:00

I'm About to Drop a Bomb on the Banking Industry

I must admit, I am a bit frustrated at the propensity of the market, the media and so many analysts towards totally disregarding basic math, not to mention the fundamentals of finance and capitalism. Thus, I have decided to do something about it. The forensic analysis of JP Morgan will be a doozy, and I have excerpted certain (non-valuation or directly investment related) portions of it as a pdf document to be distributed freely over the web. I have already released quite a bit of information in an attempt to educate the laymen about the extent of systemic risk that still abounds. From a risk perspective, we are worse off than ever before. Those who were claimed to be too big to fail are even bigger. Those who concentrated risks to the point that they held this country and the entire global financial system hostage are even more concentrated, and the lobbying machine that is Wall Street is even more focused and effective than ever.

On that note, I would like to congratulate Barney Frank for his uncharacteristically pleasing display of standing up for the people. Let's hope its for real. From Reuters:

WASHINGTON, Sept 16 (Reuters) - A top lobbyist for Wall Street giant Goldman Sachs (GS.N) has been barred from communicating with members and staff of the U.S. House of Representatives Financial Services Committee, an aide to the panel's chairman said on Wednesday.

Democratic Representative Barney Frank has banished Goldman's Michael Paese, a former committee staffer, from dealing with the panel while it considers a long list of financial reform proposals, some directly impacting Goldman.

"Mr. Paese left our offices in September 2008, and was not allowed to communicate with any committee members or staff for a period of one year due to normal ethics restrictions that apply to all House and Senate employees," said Frank aide Steven Adamske in a statement.

"Out of an abundance of caution due to the nature of financial regulation reform, the chairman has extended Mr. Paese's recusal for another year," Adamske said.

Frank's committee is dealing with a heavy load of proposed legislation put forward by the Obama administration to tighten regulation of banks and capital markets following the worst financial crisis in generations.

In an example of the Washington-Wall Street revolving door culture, Paese was the committee's deputy staff director before he quit to work for the Securities Industry and Financial Markets Association as a lobbyist. Goldman hired him in April.

From Bloomberg: Banks May Reach Point of No Return as Toxic Loans Exceed 5% of Holdings

Aug. 14 (Bloomberg) -- More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank's equity and threaten its survival.

The number of banks exceeding the threshold more than doubled in the year through June, according to data compiled by Bloomberg, as real estate and credit-card defaults surged. Almost 300 reported 3 percent or more of their loans were nonperforming, a term for commercial and consumer debt that has stopped collecting interest or will no longer be paid in full.

The biggest banks with nonperforming loans of at least 5 percent include Wisconsin's Marshall & Ilsley Corp. and Georgia's Synovus Financial Corp., according to Bloomberg data. Among those exceeding 10 percent, the biggest in the 50 U.S. states was Michigan's Flagstar Bancorp. All said in second- quarter filings they're "well-capitalized" by regulatory standards, which means they're considered financially sound.

From Bloomberg: Banks May Reach Point of No Return as Toxic Loans Exceed 5% of Holdings

Aug. 14 (Bloomberg) -- More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank's equity and threaten its survival.

The number of banks exceeding the threshold more than doubled in the year through June, according to data compiled by Bloomberg, as real estate and credit-card defaults surged. Almost 300 reported 3 percent or more of their loans were nonperforming, a term for commercial and consumer debt that has stopped collecting interest or will no longer be paid in full.

The biggest banks with nonperforming loans of at least 5 percent include Wisconsin's Marshall & Ilsley Corp. and Georgia's Synovus Financial Corp., according to Bloomberg data. Among those exceeding 10 percent, the biggest in the 50 U.S. states was Michigan's Flagstar Bancorp. All said in second- quarter filings they're "well-capitalized" by regulatory standards, which means they're considered financially sound.

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