### Good bank, bad bank or theft?

February 01, 2009
– Comments (8) |
RELATED TICKERS: BAC
, C
, RBS

** Fact: the losses that we are seeing day after day, are NON-CASH, Mark-to-Market Losses. The losses ONLY become REAL when a sale, exchange, or transfer takes place. Exactly what WILL happen if "bad bank" takes over. Fact: Thirty percent of all homes in America have no mortgage. I am 100% confident that of the 70% that are mortgaged, 80 - 85% will honor their commitments through loan maturity.

Follow the math:

30% = 0.30

if only 80% of the 70% pay off their mortgage:

(1) 0.70 x 0.80= 0.56

(2) 0.30 + 0.56 = 0.86

(3) 0.86 x 100 = 86% of all AMERICAN residential real estate is OKAY.

So ask MF to check my math. Ask yourself why the financial write downs to 9c - 10c per dollar.

Again, follow the math:

30% = 0.30

if 85% of the 70% pay off their mortgage:

(1) 0.70 x 0.85= 0.595

(2) 0.30 + 0.595 = 0.895

(3) 0.895 x 100 = 89.5% of all AMERICAN residential real estate is OKAY.

Again, ask MF to check my math. Ask yourself why the financial write downs to 9c - 10c per dollar.

Mark to Market is SERIOUSLY FLAWED. To solve the financial crisis all you have to do is fix "Mark to Market"!!! History will prove me right and show WRITE DOWNS are an blatent transfer of property and wealth without due process. We, the many, are being ROBBED by "Mark to Market", and in the end the FEW will profit to the TUNE of hundreds of BILLIONS when they suddenly discover, oops 9c - 10c is actually 86c to 90c per dollar, but sorry, it's their money now. .

Follow the math. Follow the money.

Sooo, what if I am wrong and only 70% pay off their mortgage:

That's a whopping 30% decline in the 70% ...

Again 30% with NO mortgage = 0.30

70% x 70% = 0.70 x 0.70 =0.49

0.30 + 0.49 = 0.79% of all homes in America are okay. This is still a good number.

The 30% of homes in America with NO MORTGAGE are paying real estate taxes, water, sewerage, gas, electric, oil, insurance, etc ... these homes are a statistical fact that is being ignored, yet has direct relevance to the VALUE of the 70% that are mortgaged, just as the insane efforts to de-value the 70% have a VALUE DESTRUCTION relevance on the 30% ...

The CDOs, the SIVs, etc ... is there a valid need for them? If the answer is yes, then create market rules, then create a market, or exchange. for them to trade on, And fix the Mark to Market Flaws. How do you do that? The mortgage free 30% is your basis! Value the 30% of real estate properties with no mortgage, by property type(s). Now you have a base value for the mortgaged properties, by type, and it's not 9c - 10c per dollar. The next is to account for the properties that might default or be foreclosed upon ... and it's NOT 100% You may need minor adjustments from time to time but it's a much better idea that the blatent wholesale theft I'm seeing proposed.