It looks like Bush has been busy putting lipstick on the bailout pig in order to get more House Republican votes:
"The first version of the $700-billion financial-system bailout bill in the House included a passage giving the Securities and Exchange Commission authority to suspend mark-to-market accounting in specific instances in which the agency "determines that it is necessary or appropriate in the public interest and is consisent with the protection of investors."
Some House Republicans are pushing harder to change the rules. The Republican Study Committee, a group of House conservatives, has proposed suspending mark-to-market accounting until the SEC "can issue new guidelines that will allow firms to mark these assets to their true economic value." These conservatives' votes could be crucial in the next go-round of the bailout bill." http://latimesblogs.latimes.com/money_co/2008/09/the-angry-debat.html
"OCTOBER 1, 2008 Regulators Ease Securities-Valuation Rules By KARA SCANNELL
WASHINGTON -- The Securities and Exchange Commission and the U.S. accounting-standard setter issued guidance that will allow companies to use more flexibility when valuing securities in a market that has dried up, a move the banking industry hopes will relieve pressure on company balance sheets.
Tuesday, the SEC and Financial Accounting Standards Board issued "clarification" to accounting rules that require companies to value securities at the price for which they can be sold in the market, known as mark-to-market, or fair value, accounting. FASB said it is preparing additional guidance for later this week.
The clarifications allow executives to use their own financial models and judgment if no market exists or if assets are being sold only at fire-sale prices. They were welcomed by banking and financial-services groups that have lobbied the SEC and FASB to change the rules. Those efforts were ramped up in recent days as Congress was drafting a rescue bill.
Because of the credit crunch, the industry has said both the accounting treatment and how it is interpreted by auditors was too conservative and resulted in losses at financial institutions that were bigger than they should have been. They said the rules forced companies to write down assets tied to companies that had no chance of defaulting largely because there were few buyers or sellers.
The move Tuesday addressed many of their concerns. The SEC and FASB stopped short of bowing to pressure from some lawmakers and lobbyists who were seeking a complete suspension of fair-value accounting.
Congressional leaders are considering codifying the SEC's move in a new version of the legislation the Senate could vote on Wednesday.
The SEC and FASB, along with Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson, have objected to suspending fair-value accounting since it would make a company's position harder for investors to judge and would also likely postpone banks from taking their losses." http://online.wsj.com/article/SB122282710053493045.html?mod=googlenew...
On Tue, 30 Sep 2008 23:59:39 -0600, "mg" <mgkel...@yahoo.com> wrote: >It looks like Bush has been busy putting lipstick on the >bailout pig in order to get more House Republican votes:
>"The first version of the $700-billion financial-system >bailout bill in the House included a passage giving the >Securities and Exchange Commission authority to suspend >mark-to-market accounting in specific instances in which the >agency "determines that it is necessary or appropriate in >the public interest and is consisent with the protection of >investors."
>Some House Republicans are pushing harder to change the >rules. The Republican Study Committee, a group of House >conservatives, has proposed suspending mark-to-market >accounting until the SEC "can issue new guidelines that will >allow firms to mark these assets to their true economic >value." These conservatives' votes could be crucial in the >next go-round of the bailout bill." >http://latimesblogs.latimes.com/money_co/2008/09/the-angry-debat.html
>"OCTOBER 1, 2008 >Regulators Ease Securities-Valuation Rules >By KARA SCANNELL
>WASHINGTON -- The Securities and Exchange Commission and the >U.S. accounting-standard setter issued guidance that will >allow companies to use more flexibility when valuing >securities in a market that has dried up, a move the banking >industry hopes will relieve pressure on company balance >sheets.
>Tuesday, the SEC and Financial Accounting Standards Board >issued "clarification" to accounting rules that require >companies to value securities at the price for which they >can be sold in the market, known as mark-to-market, or fair >value, accounting. FASB said it is preparing additional >guidance for later this week.
>The clarifications allow executives to use their own >financial models and judgment if no market exists or if >assets are being sold only at fire-sale prices. They were >welcomed by banking and financial-services groups that have >lobbied the SEC and FASB to change the rules. Those efforts >were ramped up in recent days as Congress was drafting a >rescue bill.
I bet that was welcomed by the bankers. I wish I'd been there. I usually think of bankers as a rather staid bunch, so it would be fun to see them gasping in disbelief and joy, then breaking out the champagne and dancing around the room, then fighting over who can get to the telephones to be first in line ordering new yachts and jets.
Another version of the impact of the change in accounting rules follows: The issue - how to put a value on assets that nobody wanted to buy - is central to the credit crisis. Banks and securities firms have written down $500 billion worth of mortgage-backed securities as home prices fell and foreclosures rose.
According to the new guidance issued Tuesday, when the market for such securities dries up, companies can value them based on their estimated future cash flow. Some experts blame the previous rules, known as mark-to-market, for the credit crisis.
"The SEC has destroyed about $500 billion of capital by their continued insistence that mortgage-backed securities be valued at market value when there is no market," said William Isaac, a former chairman of the FDIC. "It's way below their economic value. And because banks essentially lend $10 for every dollar of capital they have, they've essentially destroyed $5 trillion in lending capacity."
> It looks like Bush has been busy putting lipstick on the bailout pig in > order to get more House Republican votes:
> "The first version of the $700-billion financial-system bailout bill in > the House included a passage giving the Securities and Exchange Commission > authority to suspend mark-to-market accounting in specific instances in > which the agency "determines that it is necessary or appropriate in the > public interest and is consisent with the protection of investors."
> Some House Republicans are pushing harder to change the rules. The > Republican Study Committee, a group of House conservatives, has proposed > suspending mark-to-market accounting until the SEC "can issue new > guidelines that will allow firms to mark these assets to their true > economic value." These conservatives' votes could be crucial in the next > go-round of the bailout bill." > http://latimesblogs.latimes.com/money_co/2008/09/the-angry-debat.html
> "OCTOBER 1, 2008 > Regulators Ease Securities-Valuation Rules > By KARA SCANNELL
> WASHINGTON -- The Securities and Exchange Commission and the U.S. > accounting-standard setter issued guidance that will allow companies to > use more flexibility when valuing securities in a market that has dried > up, a move the banking industry hopes will relieve pressure on company > balance sheets.
> Tuesday, the SEC and Financial Accounting Standards Board issued > "clarification" to accounting rules that require companies to value > securities at the price for which they can be sold in the market, known as > mark-to-market, or fair value, accounting. FASB said it is preparing > additional guidance for later this week.
> The clarifications allow executives to use their own financial models and > judgment if no market exists or if assets are being sold only at fire-sale > prices. They were welcomed by banking and financial-services groups that > have lobbied the SEC and FASB to change the rules. Those efforts were > ramped up in recent days as Congress was drafting a rescue bill.
> Because of the credit crunch, the industry has said both the accounting > treatment and how it is interpreted by auditors was too conservative and > resulted in losses at financial institutions that were bigger than they > should have been. They said the rules forced companies to write down > assets tied to companies that had no chance of defaulting largely because > there were few buyers or sellers.
> The move Tuesday addressed many of their concerns. The SEC and FASB > stopped short of bowing to pressure from some lawmakers and lobbyists who > were seeking a complete suspension of fair-value accounting.
> Congressional leaders are considering codifying the SEC's move in a new > version of the legislation the Senate could vote on Wednesday.
> The SEC and FASB, along with Federal Reserve Chairman Ben Bernanke and > Treasury Secretary Henry Paulson, have objected to suspending fair-value > accounting since it would make a company's position harder for investors > to judge and would also likely postpone banks from taking their losses." > http://online.wsj.com/article/SB122282710053493045.html?mod=googlenew...
On Wed, 1 Oct 2008 07:37:31 -0400, "Vanden" <vanbuss...@go.com> wrote: >Another version of the impact of the change in accounting rules follows: >The issue - how to put a value on assets that nobody wanted to buy - is >central to the credit crisis. Banks and securities firms have written down >$500 billion worth of mortgage-backed securities as home prices fell and >foreclosures rose.
>According to the new guidance issued Tuesday, when the market for such >securities dries up, companies can value them based on their estimated >future cash flow. Some experts blame the previous rules, known as >mark-to-market, for the credit crisis.
>"The SEC has destroyed about $500 billion of capital by their continued >insistence that mortgage-backed securities be valued at market value when >there is no market," said William Isaac, a former chairman of the FDIC. >"It's way below their economic value. And because banks essentially lend $10 >for every dollar of capital they have, they've essentially destroyed $5 >trillion in lending capacity."
I would have thought that if there is no market for things, that means they have no market value. I know that leaves aren't valued at $500 each, for example, not even leaves from carefully nurtured trees. In fact, I thought in my foolishness that valuation based on supply-and-demand was the basis of capitalism.
Others argue that the accounting change will come at a cost. They say without those strict rules, investors would be more reluctant to invest in banks - and make it even tougher for the banks to attract new capital.
"Rumpelstiltskin" <PleaseDoNotReplyByEm...@nowhere.net> wrote in message
> On Wed, 1 Oct 2008 07:37:31 -0400, "Vanden" <vanbuss...@go.com> wrote:
>>Another version of the impact of the change in accounting rules follows: >>The issue - how to put a value on assets that nobody wanted to buy - is >>central to the credit crisis. Banks and securities firms have written down >>$500 billion worth of mortgage-backed securities as home prices fell and >>foreclosures rose.
>>According to the new guidance issued Tuesday, when the market for such >>securities dries up, companies can value them based on their estimated >>future cash flow. Some experts blame the previous rules, known as >>mark-to-market, for the credit crisis.
>>"The SEC has destroyed about $500 billion of capital by their continued >>insistence that mortgage-backed securities be valued at market value when >>there is no market," said William Isaac, a former chairman of the FDIC. >>"It's way below their economic value. And because banks essentially lend >>$10 >>for every dollar of capital they have, they've essentially destroyed $5 >>trillion in lending capacity."
> I would have thought that if there is no market for things, that > means they have no market value. I know that leaves aren't > valued at $500 each, for example, not even leaves from > carefully nurtured trees. In fact, I thought in my foolishness that > valuation based on supply-and-demand was the basis of > capitalism.
On Wed, 1 Oct 2008 09:07:30 -0400, "Vanden" <vanbuss...@go.com> wrote: > Others argue that the accounting change will come at a cost. They say >without those strict rules, investors would be more reluctant to invest in >banks - and make it even tougher for the banks to attract new capital.
Banks aren't the source of wealth, they're mere instruments for the handling of wealth. Labour/production is the source of wealth. Pretending that accounting rules and other jimcrackery creates wealth is a recipe for disaster, such as the disaster we're having now, IMV.
<PleaseDoNotReplyByEm...@nowhere.net> wrote: > On Wed, 1 Oct 2008 07:37:31 -0400, "Vanden" <vanbuss...@go.com> wrote: > >Another version of the impact of the change in accounting rules follows: > >The issue - how to put a value on assets that nobody wanted to buy - is > >central to the credit crisis. Banks and securities firms have written down > >$500 billion worth of mortgage-backed securities as home prices fell and > >foreclosures rose.
> >According to the new guidance issued Tuesday, when the market for such > >securities dries up, companies can value them based on their estimated > >future cash flow. Some experts blame the previous rules, known as > >mark-to-market, for the credit crisis.
> >"The SEC has destroyed about $500 billion of capital by their continued > >insistence that mortgage-backed securities be valued at market value when > >there is no market," said William Isaac, a former chairman of the FDIC. > >"It's way below their economic value. And because banks essentially lend $10 > >for every dollar of capital they have, they've essentially destroyed $5 > >trillion in lending capacity."
> I would have thought that if there is no market for things, that > means they have no market value. I know that leaves aren't > valued at $500 each, for example, not even leaves from > carefully nurtured trees. In fact, I thought in my foolishness that > valuation based on supply-and-demand was the basis of > capitalism.
> <snip>
The thing that you are missing here is that leaves might someday be valued at $500 dollars each. Can you prove they will never be valued at $500 each? I wonder what would happen if one were to take a 1000 leaves to a bank and try to get a $500,000 loan? :-)
Understanding Republican logic isn't all that difficult. Unfortunately, predicting the consequences also isn't difficult.
> >>Another version of the impact of the change in accounting rules follows: > >>The issue - how to put a value on assets that nobody wanted to buy - is > >>central to the credit crisis. Banks and securities firms have written down > >>$500 billion worth of mortgage-backed securities as home prices fell and > >>foreclosures rose.
> >>According to the new guidance issued Tuesday, when the market for such > >>securities dries up, companies can value them based on their estimated > >>future cash flow. Some experts blame the previous rules, known as > >>mark-to-market, for the credit crisis.
> >>"The SEC has destroyed about $500 billion of capital by their continued > >>insistence that mortgage-backed securities be valued at market value when > >>there is no market," said William Isaac, a former chairman of the FDIC. > >>"It's way below their economic value. And because banks essentially lend $10 > >>for every dollar of capital they have, they've essentially destroyed $5 > >>trillion in lending capacity."
> > I would have thought that if there is no market for things, that > >means they have no market value. I know that leaves aren't > >valued at $500 each, for example, not even leaves from > >carefully nurtured trees. In fact, I thought in my foolishness that > >valuation based on supply-and-demand was the basis of > >capitalism.
> The Republicans are very good at deviating from free market > doctrine when it suits their purposes.
Republicans don't believe in free-market economics. They believe in monopolies and crony capitalism with the public taking the risk and them taking the profits.
On Wed, 1 Oct 2008 08:37:20 -0700 (PDT), mg <mgkel...@yahoo.com> wrote:
>On Oct 1, 6:20 am, Rumpelstiltskin
<snip>
>> I would have thought that if there is no market for things, that >> means they have no market value. I know that leaves aren't >> valued at $500 each, for example, not even leaves from >> carefully nurtured trees. In fact, I thought in my foolishness that >> valuation based on supply-and-demand was the basis of >> capitalism.
>> <snip>
>The thing that you are missing here is that leaves might someday be >valued at $500 dollars each. Can you prove they will never be valued >at $500 each? I wonder what would happen if one were to take a 1000 >leaves to a bank and try to get a $500,000 loan? :-)
That all depends on whether your name is mg or Paulson, and whether the banker is GWBush or some sane person.
Most of the problem mortgage-backed securities are underperforming i.e. they are earning some interest but not the contractual amount. The new SEC guidance clarifies that the holders of these securities can estimate their value using existing cash flows (discounted cash flow method) which many of the institutions are doing anyways.
"Rumpelstiltskin" <PleaseDoNotReplyByEm...@nowhere.net> wrote in message
> On Wed, 1 Oct 2008 08:37:20 -0700 (PDT), mg <mgkel...@yahoo.com> > wrote:
>>On Oct 1, 6:20 am, Rumpelstiltskin
> <snip>
>>> I would have thought that if there is no market for things, that >>> means they have no market value. I know that leaves aren't >>> valued at $500 each, for example, not even leaves from >>> carefully nurtured trees. In fact, I thought in my foolishness that >>> valuation based on supply-and-demand was the basis of >>> capitalism.
>>> <snip>
>>The thing that you are missing here is that leaves might someday be >>valued at $500 dollars each. Can you prove they will never be valued >>at $500 each? I wonder what would happen if one were to take a 1000 >>leaves to a bank and try to get a $500,000 loan? :-)
> That all depends on whether your name is mg or Paulson, > and whether the banker is GWBush or some sane person.
>>Understanding Republican logic isn't all that difficult. >>Unfortunately, predicting the consequences also isn't difficult.
Most of the problem mortgage-backed securities are underperforming i.e. they are earning some interest but not the contractual amount. The new SEC guidance clarifies that the holders of these securities can estimate their value using existing cash flows (discounted cash flow method) which many of the institutions are doing anyways.
"Vanden" <vanbuss...@go.com> wrote in message news:gc0amo$bn7$1@aioe.org... > Most of the problem mortgage-backed securities are underperforming i.e. > they are earning some interest but not the contractual amount. The new SEC > guidance clarifies that the holders of these securities can estimate > their value using existing cash flows (discounted cash flow method) which > many of the institutions are doing anyways.
>>>> I would have thought that if there is no market for things, that >>>> means they have no market value. I know that leaves aren't >>>> valued at $500 each, for example, not even leaves from >>>> carefully nurtured trees. In fact, I thought in my foolishness that >>>> valuation based on supply-and-demand was the basis of >>>> capitalism.
>>>> <snip>
>>>The thing that you are missing here is that leaves might someday be >>>valued at $500 dollars each. Can you prove they will never be valued >>>at $500 each? I wonder what would happen if one were to take a 1000 >>>leaves to a bank and try to get a $500,000 loan? :-)
>> That all depends on whether your name is mg or Paulson, >> and whether the banker is GWBush or some sane person.
>>>Understanding Republican logic isn't all that difficult. >>>Unfortunately, predicting the consequences also isn't difficult.
On Wed, 1 Oct 2008 12:55:45 -0400, "Vanden" <vanbuss...@go.com> wrote: >Most of the problem mortgage-backed securities are underperforming i.e. they >are earning some interest but not the contractual amount. The new SEC >guidance clarifies that the holders of these securities can estimate their >value using existing cash flows (discounted cash flow method) which many of >the institutions are doing anyways.
If a bank satisfies itself that a security is worth X dollars but can't find anybody to buy it at that price, I don't want to buy it at that price either.
They made their own bed, and now they don't want to lie in it. It's hurting me too, my investments are going down as the stock market goes down, but I still bridle at handing those companies a gift that other people could never get. They don't deserve it. I deserve it more than they do. The people their profession fooled into mortgages they couldn't afford deserve it more than they do.
I'll just have to live with whatever comes out of this, but I'm not going to pretend to like it. or pretend that I think justice, or honour, is being served.
On Oct 1, 10:55 am, "Vanden" <vanbuss...@go.com> wrote:
> Most of the problem mortgage-backed securities are underperforming i.e. they > are earning some interest but not the contractual amount. The new SEC > guidance clarifies that the holders of these securities can estimate their > value using existing cash flows (discounted cash flow method) which many of > the institutions are doing anyways.
Houses are a real pain in the neck to own. Selling one is a pain in the neck and you have to pay the agent 6%. Renting them is a pain in the neck. Maintenance is a pain in the neck. The lawn dies, vandals damage them. Drug dealers make drug factories out of them and in the meantime you still have to pay taxes and insurance. Banker's might have one idea of what their mortgage-backed securities are worth, but I'll bet buyers in an open, public market would have another.
> > On Wed, 1 Oct 2008 08:37:20 -0700 (PDT), mg <mgkel...@yahoo.com> > > wrote:
> >>On Oct 1, 6:20 am, Rumpelstiltskin
> > <snip>
> >>> I would have thought that if there is no market for things, that > >>> means they have no market value. I know that leaves aren't > >>> valued at $500 each, for example, not even leaves from > >>> carefully nurtured trees. In fact, I thought in my foolishness that > >>> valuation based on supply-and-demand was the basis of > >>> capitalism.
> >>> <snip>
> >>The thing that you are missing here is that leaves might someday be > >>valued at $500 dollars each. Can you prove they will never be valued > >>at $500 each? I wonder what would happen if one were to take a 1000 > >>leaves to a bank and try to get a $500,000 loan? :-)
> > That all depends on whether your name is mg or Paulson, > > and whether the banker is GWBush or some sane person.
> >>Understanding Republican logic isn't all that difficult. > >>Unfortunately, predicting the consequences also isn't difficult.
On Wed, 1 Oct 2008 17:54:07 -0700 (PDT), mg <mgkel...@yahoo.com> wrote:
>On Oct 1, 10:55 am, "Vanden" <vanbuss...@go.com> wrote: >> Most of the problem mortgage-backed securities are underperforming i.e. they >> are earning some interest but not the contractual amount. The new SEC >> guidance clarifies that the holders of these securities can estimate their >> value using existing cash flows (discounted cash flow method) which many of >> the institutions are doing anyways.
>Houses are a real pain in the neck to own. Selling one is a pain in >the neck and you have to pay the agent 6%. Renting them is a pain in >the neck. Maintenance is a pain in the neck. The lawn dies, vandals >damage them. Drug dealers make drug factories out of them and in the >meantime you still have to pay taxes and insurance. Banker's might >have one idea of what their mortgage-backed securities are worth, but >I'll bet buyers in an open, public market would have another.
Thanks for reminding me why I don't want to own a house! I rent, and if something goes really wrong so that I can't fix it myself, I call the landlord or landlady. They're very good, they take care of things right away.
<PleaseDoNotReplyByEm...@nowhere.net> wrote: > On Wed, 1 Oct 2008 17:54:07 -0700 (PDT), mg <mgkel...@yahoo.com> > wrote:
> >On Oct 1, 10:55 am, "Vanden" <vanbuss...@go.com> wrote: > >> Most of the problem mortgage-backed securities are underperforming i.e. they > >> are earning some interest but not the contractual amount. The new SEC > >> guidance clarifies that the holders of these securities can estimate their > >> value using existing cash flows (discounted cash flow method) which many of > >> the institutions are doing anyways.
> >Houses are a real pain in the neck to own. Selling one is a pain in > >the neck and you have to pay the agent 6%. Renting them is a pain in > >the neck. Maintenance is a pain in the neck. The lawn dies, vandals > >damage them. Drug dealers make drug factories out of them and in the > >meantime you still have to pay taxes and insurance. Banker's might > >have one idea of what their mortgage-backed securities are worth, but > >I'll bet buyers in an open, public market would have another.
> Thanks for reminding me why I don't want to own a house! > I rent, and if something goes really wrong so that I can't fix it > myself, I call the landlord or landlady. They're very good, > they take care of things right away.
> <snip>
I have a theory. It not very revolutionary and I'm not sure it makes a lot of sense. My theory says that houses are made out of natural materials that are being forced to do things not intended by mother nature. Therefore, you can always expect problems. In addition, builders and repairman are also doing things not intended by mother nature. Homeowners can hope they do a good job, but mother nature says they won't since people in their natural state are lazy and careless. In addition, the house is occupied by renters who have no natural interest in talking care of it and rarely have either the desire or ability to do so.
In short, everything connected with owning residential property for the purpose of profit works against the owner, including renting it. The only way a landlord can make it work is by being a very talented hard worker willing to devote a long time to it and then leaving it to his children so they can sell it and get rich when he dies.
This obviously isn't the sort of thing you want the federal government involved in. They'll merely pay the bank a lot more than the property is worth and then sell it at a bargain basement price.
>On Oct 1, 11:53 pm, Rumpelstiltskin ><PleaseDoNotReplyByEm...@nowhere.net> wrote: >> On Wed, 1 Oct 2008 17:54:07 -0700 (PDT), mg <mgkel...@yahoo.com> >> wrote:
>> >On Oct 1, 10:55 am, "Vanden" <vanbuss...@go.com> wrote: >> >> Most of the problem mortgage-backed securities are underperforming i.e. they >> >> are earning some interest but not the contractual amount. The new SEC >> >> guidance clarifies that the holders of these securities can estimate their >> >> value using existing cash flows (discounted cash flow method) which many of >> >> the institutions are doing anyways.
>> >Houses are a real pain in the neck to own. Selling one is a pain in >> >the neck and you have to pay the agent 6%. Renting them is a pain in >> >the neck. Maintenance is a pain in the neck. The lawn dies, vandals >> >damage them. Drug dealers make drug factories out of them and in the >> >meantime you still have to pay taxes and insurance. Banker's might >> >have one idea of what their mortgage-backed securities are worth, but >> >I'll bet buyers in an open, public market would have another.
>> Thanks for reminding me why I don't want to own a house! >> I rent, and if something goes really wrong so that I can't fix it >> myself, I call the landlord or landlady. They're very good, >> they take care of things right away.
>> <snip>
>I have a theory. It not very revolutionary and I'm not sure it makes a >lot of sense. My theory says that houses are made out of natural >materials that are being forced to do things not intended by mother >nature. Therefore, you can always expect problems. In addition, >builders and repairman are also doing things not intended by mother >nature. Homeowners can hope they do a good job, but mother nature says >they won't since people in their natural state are lazy and careless. >In addition, the house is occupied by renters who have no natural >interest in talking care of it and rarely have either the desire or >ability to do so.
>In short, everything connected with owning residential property for >the purpose of profit works against the owner, including renting it. >The only way a landlord can make it work is by being a very talented >hard worker willing to devote a long time to it and then leaving it to >his children so they can sell it and get rich when he dies.
>This obviously isn't the sort of thing you want the federal government >involved in. They'll merely pay the bank a lot more than the property >is worth and then sell it at a bargain basement price.
My landlords are lawyers, so the rental property isn't their primary source of income. They inherited it from the wife's parents, a coulourful couple from whom I originally rented my flat, both now deceased, unfortunately, though they made it into their 90's. My current landlords don't do anything themselves except manage the money very expeditiously. They hire people to do the maintenance.
> [Default] On Thu, 2 Oct 2008 04:11:17 -0700 (PDT), mg
> <mgkel...@yahoo.com> wrote: > >On Oct 1, 11:53 pm, Rumpelstiltskin > ><PleaseDoNotReplyByEm...@nowhere.net> wrote: > >> On Wed, 1 Oct 2008 17:54:07 -0700 (PDT), mg <mgkel...@yahoo.com> > >> wrote:
> >> >On Oct 1, 10:55 am, "Vanden" <vanbuss...@go.com> wrote: > >> >> Most of the problem mortgage-backed securities are underperforming i.e. they > >> >> are earning some interest but not the contractual amount. The new SEC > >> >> guidance clarifies that the holders of these securities can estimate their > >> >> value using existing cash flows (discounted cash flow method) which many of > >> >> the institutions are doing anyways.
> >> >Houses are a real pain in the neck to own. Selling one is a pain in > >> >the neck and you have to pay the agent 6%. Renting them is a pain in > >> >the neck. Maintenance is a pain in the neck. The lawn dies, vandals > >> >damage them. Drug dealers make drug factories out of them and in the > >> >meantime you still have to pay taxes and insurance. Banker's might > >> >have one idea of what their mortgage-backed securities are worth, but > >> >I'll bet buyers in an open, public market would have another.
> >> Thanks for reminding me why I don't want to own a house! > >> I rent, and if something goes really wrong so that I can't fix it > >> myself, I call the landlord or landlady. They're very good, > >> they take care of things right away.
> >> <snip>
> >I have a theory. It not very revolutionary and I'm not sure it makes a > >lot of sense. My theory says that houses are made out of natural > >materials that are being forced to do things not intended by mother > >nature. Therefore, you can always expect problems.
> Hmmmmmmmm. At the root of your thinking is that there is some natural > order of things and that order somehow has both a conscious and the > ability to respond to violations of that order?
I do believe there is a natural order of things, but I don't believe there's any consciousness or sentience involved. In nature materials tend to wear or change; take the grand canyon, for instance. When man uses these materials, they also change, i.e., wear out. Airplanes crash due to lack of maintenance. If you are a 40-year homeowner, like me, you've probably fixed dozens of water leaks and put a countless number of new valves and flappers in your toilets. You've probably replaced the roof at least once. In my previous house (built in the 40's), the electrical insulation had deteriorated to the point, that it would fall off if you merely touched the wire.
I did learn something new recently, by the way, after about 40 years of do-it-yourself work. I had a P-Trap develop a little pin hole after 20 years and when I went to Home Depot to buy a replacement, I noticed they had a cheap one with a thin wall and a more expensive one with a larger wall thickness. I bought the more expensive one.
> Hmmmmmmmmmmmmmm Go ask Rump about the basic premise and then get > back to us the next step involving abusing woody structures.
> Hell, ask him about that too. ;)
> <I did not write that set up but it just begs for a straight man. - > guffaw, there I did it again<
> In addition,
> >builders and repairman are also doing things not intended by mother > >nature. Homeowners can hope they do a good job, but mother nature says > >they won't since people in their natural state are lazy and careless. > >In addition, the house is occupied by renters who have no natural > >interest in talking care of it and rarely have either the desire or > >ability to do so.
> >In short, everything connected with owning residential property for > >the purpose of profit works against the owner, including renting it. > >The only way a landlord can make it work is by being a very talented > >hard worker willing to devote a long time to it and then leaving it to > >his children so they can sell it and get rich when he dies.
> >This obviously isn't the sort of thing you want the federal government > >involved in. They'll merely pay the bank a lot more than the property > >is worth and then sell it at a bargain basement price.
<PleaseDoNotReplyByEm...@nowhere.net> wrote: > On Thu, 2 Oct 2008 04:11:17 -0700 (PDT), mg <mgkel...@yahoo.com> > wrote:
> >On Oct 1, 11:53 pm, Rumpelstiltskin > ><PleaseDoNotReplyByEm...@nowhere.net> wrote: > >> On Wed, 1 Oct 2008 17:54:07 -0700 (PDT), mg <mgkel...@yahoo.com> > >> wrote:
> >> >On Oct 1, 10:55 am, "Vanden" <vanbuss...@go.com> wrote: > >> >> Most of the problem mortgage-backed securities are underperforming i.e. they > >> >> are earning some interest but not the contractual amount. The new SEC > >> >> guidance clarifies that the holders of these securities can estimate their > >> >> value using existing cash flows (discounted cash flow method) which many of > >> >> the institutions are doing anyways.
> >> >Houses are a real pain in the neck to own. Selling one is a pain in > >> >the neck and you have to pay the agent 6%. Renting them is a pain in > >> >the neck. Maintenance is a pain in the neck. The lawn dies, vandals > >> >damage them. Drug dealers make drug factories out of them and in the > >> >meantime you still have to pay taxes and insurance. Banker's might > >> >have one idea of what their mortgage-backed securities are worth, but > >> >I'll bet buyers in an open, public market would have another.
> >> Thanks for reminding me why I don't want to own a house! > >> I rent, and if something goes really wrong so that I can't fix it > >> myself, I call the landlord or landlady. They're very good, > >> they take care of things right away.
> >> <snip>
> >I have a theory. It not very revolutionary and I'm not sure it makes a > >lot of sense. My theory says that houses are made out of natural > >materials that are being forced to do things not intended by mother > >nature. Therefore, you can always expect problems. In addition, > >builders and repairman are also doing things not intended by mother > >nature. Homeowners can hope they do a good job, but mother nature says > >they won't since people in their natural state are lazy and careless. > >In addition, the house is occupied by renters who have no natural > >interest in talking care of it and rarely have either the desire or > >ability to do so.
> >In short, everything connected with owning residential property for > >the purpose of profit works against the owner, including renting it. > >The only way a landlord can make it work is by being a very talented > >hard worker willing to devote a long time to it and then leaving it to > >his children so they can sell it and get rich when he dies.
> >This obviously isn't the sort of thing you want the federal government > >involved in. They'll merely pay the bank a lot more than the property > >is worth and then sell it at a bargain basement price.
> My landlords are lawyers, so the rental property isn't their > primary source of income. They inherited it from the wife's > parents, a coulourful couple from whom I originally rented > my flat, both now deceased, unfortunately, though they > made it into their 90's. My current landlords don't do > anything themselves except manage the money very > expeditiously. They hire people to do the maintenance.
It sound like it must be an apartment house where hiring work done is probably the norm. With single-family houses, though, everyone I know does there own maintenance, but I'm sure there are probably exceptions.
I can tell you two stories about relatives who bought houses and rented them that I think are interesting.
Relative #1 worked his guts out for years on his rentals and when he retired he had accumulated quite a bit of wealth. A few weeks after he retired, he took his motor home to California for his first retirement vacation. He parked the motor home, opened the door, put his foot on the first step and collapsed. His wife said he died instantly.
Relative #2 got lucky and happened to buy a bunch of houses in Silicon Valley before the housing boom and rented them out. I think that was back in the late 70s. He was a multi-millionaire by the time he was 50 and that's when he retired. He was one of those guys who couldn't sit still. He was working all the time. When he retired, he bought a small ranchette. He worked on it day and night and after about 1 year, he had it whipped into shape. Then he went to bed one night and never woke up. His wife cleaned up his tool box and put a nice paint job on it and put his ashes in it. She's a very wealthy women now.
Rita wrote: > On Thu, 02 Oct 2008 05:53:04 GMT, Rumpelstiltskin > <PleaseDoNotReplyByEm...@nowhere.net> wrote:
>> On Wed, 1 Oct 2008 17:54:07 -0700 (PDT), mg <mgkel...@yahoo.com> >> wrote:
>>> On Oct 1, 10:55 am, "Vanden" <vanbuss...@go.com> wrote: >>>> Most of the problem mortgage-backed securities are underperforming i.e. they >>>> are earning some interest but not the contractual amount. The new SEC >>>> guidance clarifies that the holders of these securities can estimate their >>>> value using existing cash flows (discounted cash flow method) which many of >>>> the institutions are doing anyways. >>> Houses are a real pain in the neck to own. Selling one is a pain in >>> the neck and you have to pay the agent 6%. Renting them is a pain in >>> the neck. Maintenance is a pain in the neck. The lawn dies, vandals >>> damage them. Drug dealers make drug factories out of them and in the >>> meantime you still have to pay taxes and insurance. Banker's might >>> have one idea of what their mortgage-backed securities are worth, but >>> I'll bet buyers in an open, public market would have another.
>> Thanks for reminding me why I don't want to own a house! >> I rent, and if something goes really wrong so that I can't fix it >> myself, I call the landlord or landlady. They're very good, >> they take care of things right away.
>> <snip>
> My landlord does as well. A couple of weeks ago he had new windows > installed in all of the apartments. The guys who did the work were > amazing -- fast, took only a couple of hours and no mess, they > cleaned up well. Any little thing is taken care of pronto.
To each his own. Personally, I like the satisfaction of not only owning my home, but owning it also in the sense that I understand everything in it. I built it, actually doing nearly everything myself. Not everyone has the luxury of doing that. It is an amazing experience and when the winter storms blow, I know that I am safe and secure in a way that others can never really appreciate.
Truly owning your home in the sense of being independent of anyone else is something that is important to me on a very personal level.
As I look to the future, I realize that I will not always be able to do maintenance and upkeep despite my best efforts to make it maintenance free, but for now I am as self-sufficient as I want to be.
Rita wrote: > On Thu, 02 Oct 2008 09:18:31 -0700, Islander <nos...@privacy.net> > wrote:
>> Rita wrote: >>> On Thu, 02 Oct 2008 05:53:04 GMT, Rumpelstiltskin >>> <PleaseDoNotReplyByEm...@nowhere.net> wrote:
>>>> On Wed, 1 Oct 2008 17:54:07 -0700 (PDT), mg <mgkel...@yahoo.com> >>>> wrote:
>>>>> On Oct 1, 10:55 am, "Vanden" <vanbuss...@go.com> wrote: >>>>>> Most of the problem mortgage-backed securities are underperforming i.e. they >>>>>> are earning some interest but not the contractual amount. The new SEC >>>>>> guidance clarifies that the holders of these securities can estimate their >>>>>> value using existing cash flows (discounted cash flow method) which many of >>>>>> the institutions are doing anyways. >>>>> Houses are a real pain in the neck to own. Selling one is a pain in >>>>> the neck and you have to pay the agent 6%. Renting them is a pain in >>>>> the neck. Maintenance is a pain in the neck. The lawn dies, vandals >>>>> damage them. Drug dealers make drug factories out of them and in the >>>>> meantime you still have to pay taxes and insurance. Banker's might >>>>> have one idea of what their mortgage-backed securities are worth, but >>>>> I'll bet buyers in an open, public market would have another. >>>> Thanks for reminding me why I don't want to own a house! >>>> I rent, and if something goes really wrong so that I can't fix it >>>> myself, I call the landlord or landlady. They're very good, >>>> they take care of things right away.
>>>> <snip> >>> My landlord does as well. A couple of weeks ago he had new windows >>> installed in all of the apartments. The guys who did the work were >>> amazing -- fast, took only a couple of hours and no mess, they >>> cleaned up well. Any little thing is taken care of pronto. >> To each his own. Personally, I like the satisfaction of not only owning >> my home, but owning it also in the sense that I understand everything in >> it. I built it, actually doing nearly everything myself. Not everyone >> has the luxury of doing that. It is an amazing experience and when the >> winter storms blow, I know that I am safe and secure in a way that >> others can never really appreciate.
>> Truly owning your home in the sense of being independent of anyone else >> is something that is important to me on a very personal level.
>> As I look to the future, I realize that I will not always be able to do >> maintenance and upkeep despite my best efforts to make it maintenance >> free, but for now I am as self-sufficient as I want to be.
> Obviously you enjoy the work you do on your home and have the > necessary skills or have acquired them.
> For me it would be a nightmare. I prefer to spend my time > differently. I think I am considerably older than you.
> Renting can be a nightmare with a bad landlord of course. > I lucked into finding a very good one in San Diego. The > property -- quite a few apartments on one block -- has been > in the owner's family for 60 years. And it has been well > kept up, modernized over the years and an on site staff to > keep things ship shape.
> I also lucked out in New York City over the years having > decent landlords. But there were perhaps far more who were > landords from hell.
I'm afraid that I am a bit of a control freak and intensely dislike being dependent on someone else. Some years ago I felt that I was at a disadvantage in not knowing anything about cars. So, I bought one out of a junk yard and rebuilt it from the ground up - a total restoration! I no longer feel that I have to do maintenance on my cars, but I also no longer feel at a disadvantage when dealing with mechanics.
This is admittedly a personality defect, but I can live with it.
Yes, you are older than me, but not by that much. I've been very fortunate to have good health and financial security. So, I have the luxury of indulging myself in this need to control these aspects of my life.
When I retired from what was primarily a cerebral job, I simply went to work, first repairing the house that we lived in and then building our retirement dream home. It made no economic sense at all because we had a lot of money tied up in something that was not useful to us until we moved in. It also takes me a lot longer to do something than for a competent tradesman. Some jobs I have had to do three times before I got it right! I'm very fortunate to have a wife who trusted that I could do this, even though I had not done it before. It has taken about eight years so far and I'm nearly finished. The last major job is her bathroom and I'm tiling it now. It is really something, even if I do say so myself. The shower is spacious (4'x6') and she also has a deep soaking tub. There is a small gas stove that will totally keep her toasty warm, even on the coldest winter day. Plenty of storage for the copious number of things that she seems to need. A labor of love!
Please understand that this is my thing and I don't disapprove of the choices that others might make. But, as I sit at my computer, I'm sitting next to a 24' peeled Douglas fir pole, one of eight that support the massive beams that are the bones of this house, each anchored securely to the concrete pads under the basement floor. Last winter, we had winds that gusted to over 100mph and the house didn't even creak! I look out of the expanse of south facing windows at Rosario Strait and across the Peapod rocks at Eagle Cliff on Cypress Island. Beautiful!
> >> >> >On Oct 1, 10:55 am, "Vanden" <vanbuss...@go.com> wrote: > >> >> >> Most of the problem mortgage-backed securities are underperforming i.e. they > >> >> >> are earning some interest but not the contractual amount. The new SEC > >> >> >> guidance clarifies that the holders of these securities can estimate their > >> >> >> value using existing cash flows (discounted cash flow method) which many of > >> >> >> the institutions are doing anyways.
> >> >> >Houses are a real pain in the neck to own. Selling one is a pain in > >> >> >the neck and you have to pay the agent 6%. Renting them is a pain in > >> >> >the neck. Maintenance is a pain in the neck. The lawn dies, vandals > >> >> >damage them. Drug dealers make drug factories out of them and in the > >> >> >meantime you still have to pay taxes and insurance. Banker's might > >> >> >have one idea of what their mortgage-backed securities are worth, but > >> >> >I'll bet buyers in an open, public market would have another.
> >> >> Thanks for reminding me why I don't want to own a house! > >> >> I rent, and if something goes really wrong so that I can't fix it > >> >> myself, I call the landlord or landlady. They're very good, > >> >> they take care of things right away.
> >> >> <snip>
> >> >I have a theory. It not very revolutionary and I'm not sure it makes a > >> >lot of sense. My theory says that houses are made out of natural > >> >materials that are being forced to do things not intended by mother > >> >nature. Therefore, you can always expect problems.
> >> Hmmmmmmmm. At the root of your thinking is that there is some natural > >> order of things and that order somehow has both a conscious and the > >> ability to respond to violations of that order?
> >I do believe there is a natural order of things, but I don't believe > >there's any consciousness or sentience involved. In nature materials > >tend to wear or change; take the grand canyon, for instance. When man > >uses these materials, they also change, i.e., wear out. Airplanes > >crash due to lack of maintenance. If you are a 40-year homeowner, like > >me, you've probably fixed dozens of water leaks and put a countless > >number of new valves and flappers in your toilets. You've probably > >replaced the roof at least once. In my previous house (built in the > >40's), the electrical insulation had deteriorated to the point, that > >it would fall off if you merely touched the wire.
> >I did learn something new recently, by the way, after about 40 years > >of do-it-yourself work. I had a P-Trap develop a little pin hole after > >20 years and when I went to Home Depot to buy a replacement, I noticed > >they had a cheap one with a thin wall and a more expensive one with a > >larger wall thickness. I bought the more expensive one.
> Home Depot are bums. They have a long line of crap products with > off-brand names like Glacier Bay faucets. I learned the hard way. > Have three bathrooms that had aging faucets but nothing was really in > horrible shape. HD had those GB faucets on a great sale so I bought > and replaced all three sets. Those things had the finish flaking off > and turning green within six months. HD would not stand behind them > insisting I had to have the original receipts. Who to hell keeps all > that crap? They know precisely what you buy, when you buy it, and > where it was bought. It is in their computer records as I learned > when I bought some cabinets and a friendly cabinet consultant said > they could pull up the purchase with my credit card and other > information.
> They know most homeowners will get screwed not having receipts or the > ambition to take the faucets out and return for refund.
> I hate HD and try hard to buy stuff elsewhere when possible.
I had the same experience once with a faucet from Pay 'N Pac. I'm not sure how you make sure you get good-quality faucets. The last one I bought was a Moen and it seems to be OK so far.
I also got burned by Home Depot a couple of years ago when I bought an expensive set of doors and paid in advance for installation. That's the last I'll ever do that. I'll deal directly with the installer from now on and he won't get paid until it's done right.
> >> Hmmmmmmmmmmmmmm Go ask Rump about the basic premise and then get > >> back to us the next step involving abusing woody structures.
> >> Hell, ask him about that too. ;)
> >> <I did not write that set up but it just begs for a straight man. - > >> guffaw, there I did it again<
> >> In addition,
> >> >builders and repairman are also doing things not intended by mother > >> >nature. Homeowners can hope they do a good job, but mother nature says > >> >they won't since people in their natural state are lazy and careless. > >> >In addition, the house is occupied by renters who have no natural > >> >interest in talking care of it and rarely have either the desire or > >> >ability to do so.
> >> >In short, everything connected with owning residential property for > >> >the purpose of profit works against the owner, including renting it. > >> >The only way a landlord can make it work is by being a very talented > >> >hard worker willing to devote a long time to it and then leaving it to > >> >his children so they can sell it and get rich when he dies.
> >> >This obviously isn't the sort of thing you want the federal government > >> >involved in. They'll merely pay the bank a lot more than the property > >> >is worth and then sell it at a bargain basement price.
>I can tell you two stories about relatives who bought houses and >rented them that I think are interesting.
>Relative #1 worked his guts out for years on his rentals and when he >retired he had accumulated quite a bit of wealth. A few weeks after he >retired, he took his motor home to California for his first retirement >vacation. He parked the motor home, opened the door, put his foot on >the first step and collapsed. His wife said he died instantly.
>Relative #2 got lucky and happened to buy a bunch of houses in Silicon >Valley before the housing boom and rented them out. I think that was >back in the late 70s. He was a multi-millionaire by the time he was 50 >and that's when he retired. He was one of those guys who couldn't sit >still. He was working all the time. When he retired, he bought a small >ranchette. He worked on it day and night and after about 1 year, he >had it whipped into shape. Then he went to bed one night and never >woke up. His wife cleaned up his tool box and put a nice paint job on >it and put his ashes in it. She's a very wealthy women now.
I like the tool-box touch, very appropriate for somebody who was working all the time.
I wish I'd been one of those guys who couldn't sit still, in a way. I've never had any problem sitting still - I have a problem getting up. But I guess I shouldn't complain about my basic nature.
AN IMMORALITY
Sing we for love and idleness, Naught else is worth the having. Though I have been in many lands, There is naught else in living.
And I would sooner have my sweet Though rose-leaves die of grieving, Than do high deeds in Hungary To pass all men's believing.
> On Thu, 2 Oct 2008 09:13:56 -0700 (PDT), mg <mgkel...@yahoo.com> > wrote:
> <snip>
>>I can tell you two stories about relatives who bought houses and >>rented them that I think are interesting.
>>Relative #1 worked his guts out for years on his rentals and when he >>retired he had accumulated quite a bit of wealth. A few weeks after he >>retired, he took his motor home to California for his first retirement >>vacation. He parked the motor home, opened the door, put his foot on >>the first step and collapsed. His wife said he died instantly.
>>Relative #2 got lucky and happened to buy a bunch of houses in Silicon >>Valley before the housing boom and rented them out. I think that was >>back in the late 70s. He was a multi-millionaire by the time he was 50 >>and that's when he retired. He was one of those guys who couldn't sit >>still. He was working all the time. When he retired, he bought a small >>ranchette. He worked on it day and night and after about 1 year, he >>had it whipped into shape. Then he went to bed one night and never >>woke up. His wife cleaned up his tool box and put a nice paint job on >>it and put his ashes in it. She's a very wealthy women now.
> I like the tool-box touch, very appropriate for somebody who > was working all the time.
> I wish I'd been one of those guys who couldn't sit still, in a > way. I've never had any problem sitting still - I have a problem > getting up. But I guess I shouldn't complain about my basic > nature.
> AN IMMORALITY
> Sing we for love and idleness, > Naught else is worth the having. > Though I have been in many lands, > There is naught else in living.
> And I would sooner have my sweet > Though rose-leaves die of grieving, > Than do high deeds in Hungary > To pass all men's believing.
> -- Ezra Pound
LaFontaine has a fable about Lazy John who divided his time into two parts: one for sleeping and the other for doing nothing.
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