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Old 03-14-2009, 05:31 PM
 
Location: Fort Worth and Las Vegas
255 posts, read 485,280 times
Reputation: 73

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Quote:
Originally Posted by tony soprano View Post
Financial institutions are required to value their loan portfolios every single quarter. To assert that these institutions are unable to do so, or that it would take 8 hours per house to value the underlying homes, is absurd. If they were allowed to throw up their hands and say, 'we don't know what these homes are worth", then there would be no mark to market accounting controversy. Mark to market accounting would not exist if it wasn't possible to determine market value every single quarter.
It's easy enough to figure out an appraisal. We have cookie cutter homes built on cookie cutter lot sizes (1742, 2178, 2614, etc. - I have them memorized) and few inside changes.
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Old 03-14-2009, 07:38 PM
 
Location: NW Las Vegas - Lone Mountain
15,756 posts, read 32,491,985 times
Reputation: 2661
Quote:
Originally Posted by tony soprano View Post
Financial institutions are required to value their loan portfolios every single quarter. To assert that these institutions are unable to do so, or that it would take 8 hours per house to value the underlying homes, is absurd. If they were allowed to throw up their hands and say, 'we don't know what these homes are worth", then there would be no mark to market accounting controversy. Mark to market accounting would not exist if it wasn't possible to determine market value every single quarter.

You are living in an alternative universe?

The one here has the problem...

An example - just one of hundreds...

Pricing system for toxic assets deemed key to U.S. Treasury bank rescue plan - BloggingStocks

It is quite clear up unto the ultimate regions of accounting that the inability to value things is driving the system nuts. Hell got 5 minutes on the subject on NPR not an hour ago driving home.

You guys really need to pay more attention...
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Old 03-14-2009, 07:38 PM
 
482 posts, read 1,197,175 times
Reputation: 87
When I sold my house in Thailand, last Summer, The bank appraisers were employees of the bank making the loan. I knew this to be different than America, but after thinking about it; I realized that it made more sense.

Last edited by nwlv; 03-14-2009 at 08:16 PM..
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Old 03-14-2009, 07:43 PM
 
Location: NW Las Vegas - Lone Mountain
15,756 posts, read 32,491,985 times
Reputation: 2661
Quote:
Originally Posted by nwlv View Post
When I sold my house in Thailand, last Summer, tThe bank appraisers were employees of the bank making the loan. I knew this to be different than America, but after thinking about it; I realized that it made more sense.
Not if you are the seller.

I would think an honest and neutral third person is the ideal. Though that too can be compromised...particularly when there is money to be made.
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Old 03-14-2009, 08:10 PM
 
482 posts, read 1,197,175 times
Reputation: 87
The buyer had 50% down and good credit. The appraisers came to the door, took some photos, had a cigarette and left. Next thing I knew, I was walking down Hang Dong Rd., with a million in Thai currency in 1000 baht notes. I had really low balled the sellers, when I bought, so I was able to sell for a reasonable price without any fraud. The home is located in a standard subdivision, which made the comps a lot easier to do. Here's the website if anyone is interested www.banwangtan.com
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Old 03-14-2009, 08:14 PM
 
1,347 posts, read 2,111,941 times
Reputation: 483
Quote:
Originally Posted by olecapt View Post
You are living in an alternative universe?

The one here has the problem...

An example - just one of hundreds...

Pricing system for toxic assets deemed key to U.S. Treasury bank rescue plan - BloggingStocks

It is quite clear up unto the ultimate regions of accounting that the inability to value things is driving the system nuts. Hell got 5 minutes on the subject on NPR not an hour ago driving home.

You guys really need to pay more attention...
There's part of your problem, you rely on blogs for your information. That, and you don't seem to have a sound understanding of the pricing issue. The difficulty in pricing CDOs is not determining the current value of the underlying collateral (homes), it's forecasting what the housing market does going forward, and by extension whether or not the loans will continue to perform. Irrelevant blog citations aside, the fact is that loan portfolios are valued every single quarter.
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Old 03-14-2009, 08:24 PM
 
Location: NW Las Vegas - Lone Mountain
15,756 posts, read 32,491,985 times
Reputation: 2661
Quote:
Originally Posted by tony soprano View Post
There's part of your problem, you rely on blogs for your information. That, and you don't seem to have a sound understanding of the pricing issue. The difficulty in pricing CDOs is not determining the current value of the underlying collateral (homes), it's forecasting what the housing market does going forward, and by extension whether or not the loans will continue to perform. Irrelevant blog citations aside, the fact is that loan portfolios are valued every single quarter.
NPR is a blog? How interesting.

And of course present value is basic. You need that to determine from what base you are changing.

Think about it...it will come eventually.
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Old 03-14-2009, 08:42 PM
 
1,347 posts, read 2,111,941 times
Reputation: 483
Quote:
Originally Posted by olecapt View Post
NPR is a blog? How interesting.
You cited bloggingstocks.com. Presumably, that is a blog.
Quote:
And of course present value is basic. You need that to determine from what base you are changing.
Ah, I see. Present value is basic. As in, not impossibly difficult to divine without an 8 hour appraisal. It seems like I've heard that somewhere else.
Quote:
Think about it...it will come eventually.
What I'm coming up with is that you don't really get the pricing issue.
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Old 03-14-2009, 08:58 PM
 
Location: NW Las Vegas - Lone Mountain
15,756 posts, read 32,491,985 times
Reputation: 2661
Quote:
Originally Posted by tony soprano View Post
You cited bloggingstocks.com. Presumably, that is a blog.Ah, I see. Present value is basic. As in, not impossibly difficult to divine without an 8 hour appraisal. It seems like I've heard that somewhere else.What I'm coming up with is that you don't really get the pricing issue.
That was simply the first of several hundred. Do your own sort. And blogs generally cite good sources. You can dig back a level or two if you try hard.

You obviously do not buy much property. I have not heard of a financial institution that will lend money on less.

My opinion is that is overkill. A good agent can give an accurate opinion of value with a visit and two hours. Not as thorough as an appraisal though...and certainly not as well documented.

Again these are among the set of people that did the valuations that got us into this mess are they not?

When people know answers and publish them widely when they are really not yet knowable they are very likely charlatans of one sort or the other.

Mostly these guys are pure BS...but maybe corelogic cloaks their BS in a model.

Accurate financials on the Las Vegas market requires grunt work that these guys have not done. So their projections are properly valued as not very useful.

This mad desire to get cosmic intelligence from non knowledgable folk is entertaining...but dull.
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Old 03-14-2009, 09:44 PM
 
1,347 posts, read 2,111,941 times
Reputation: 483
Quote:
Originally Posted by olecapt View Post
That was simply the first of several hundred. Do your own sort. And blogs generally cite good sources. You can dig back a level or two if you try hard.

You obviously do not buy much property. I have not heard of a financial institution that will lend money on less.

My opinion is that is overkill. A good agent can give an accurate opinion of value with a visit and two hours. Not as thorough as an appraisal though...and certainly not as well documented.

Again these are among the set of people that did the valuations that got us into this mess are they not?

When people know answers and publish them widely when they are really not yet knowable they are very likely charlatans of one sort or the other.

Mostly these guys are pure BS...but maybe corelogic cloaks their BS in a model.

Accurate financials on the Las Vegas market requires grunt work that these guys have not done. So their projections are properly valued as not very useful.

This mad desire to get cosmic intelligence from non knowledgable folk is entertaining...but dull.
I have no desire to sort through blog results when I'm looking for hard data. I'll leave the blog results for you. Further, citing that particular blog article as support for your position that valuing homes is not easily doable, displays a less than firm grasp on the issue of difficulty in CDO valuation. Determining the current value of the underlying assets is precisely the easy part. The difficulty in accurately valuing CDOs is forecasting what home prices will do going forward, as well as future default rates. That's the difficult part. The notion that banks and other financial institutions aren't able to value the homes they have loans against is ridiculous. They do it for every quarterly report.
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