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alstry (35.36)

An accounting lesson

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September 18, 2008 – Comments (2)

You will soon find out what a company whose debt exceeds is assets and has little prospects of making an economic profit is really worth.  Some people will call this deleveraging.....others will call it bankruptcy.......now the question is how many thousands of companies will deleverage and declare bankruptcy.

You will be really upset is when you learn that the assets managements were representing were worth X were really worth much less and they huge bonuses and dumped their shares and you were left holding the bag in your retirement accounts.

Good luck to all and in the end they will attribute it to greed and America will be left in need.

As an American.......this sucks and little was done by our politicans to protect us as they got huge contributions from these pricks.  Hopefully, when we emerge.....the outlook will be much better for our kids......right now I am pretty optimistic about that.

2 Comments – Post Your Own

#1) On September 18, 2008 at 11:41 AM, alstry (35.36) wrote:

Alert:  No place was the above behavior more eggregious and openly obvious as the publicly traded homebuilders.  These guys have been dumping homes for a loss for over eight quarters destroying values of exisitng homes around them and exacerbating our current housing crisis.

Managements lied through their teeth about book value as they extracted shareholder dollars and drove their businesses into the ground. 

FloridaBuilder and I have had an ongoing debate as to how many public builders will go bankrupt......I am upping my estimate now to 75% before we see the bottom of this.

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#2) On September 18, 2008 at 12:58 PM, FleaBagger (29.77) wrote:

Nationally it's really bad. In most of the South and Midwest, not so much. Homebuilders that operate in the communities that never went through the bubble/bust are a lot better off than national housing statistics would seem to allow.

Do you have community-specific statistics for places like Raleigh, Houston, Boise, etc.?

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