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alstry (35.64)

When Business is No Longer Business...

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November 03, 2010 – Comments (5)

A few years ago....I blogged that in American public companies would no longer really need to make or sell anything any more because they would simply be able to buy and sell debt back and forth to each other and report huge profits.......

most of you Fools don't have the requisite accounting or legal training or background to see through this...you simply read the company's press releases and move on.......

heck...under the current scheme, it really wouldn't matter what was behind the debt.....so long as they could mark it to whatever price they wanted, they could book whatever profits they wanted.....and if there was a loss, no big deal, pass it on to a special purpose entity and conceal it forever......as they raised more and more money from our pension funds to keep the scheme going......while paying themselves huge bonuses....

until the day we realize that the collateral behind the debt was really worthless and the whole game was fraudulent financial alchemy really not much different than Madoff.....

It appears that day has come......this is too funny.

Lennar Corp., the third-largest U.S. homebuilder by revenue, is seeking to raise about $800 million from private investors to add funds to its distressed real estate unit, according to three people briefed on the matter.

A first tranche of the offering is being marketed to U.S. and Canadian investors and is expected to close by the end of November, said two of the people, who asked not to be named because the discussions are private.

Lennar has been expanding its distressed real estate arm, Rialto Investments, as demand for new houses slumps. The company bought a 40 percent stake in a $3 billion portfolio of loans auctioned by the Federal Deposit Insurance Corp. in February, and said last month it acquired an additional $740 million of distressed loans and property from financial institutions.

http://www.bloomberg.com/news/2010-11-03/lennar-said-to-seek-800-million-in-funding-for-distressed-unit.html

Why would anyone go to the effort  hiring people and building a house when they can just buy distressed debt from bailed out banks?.....especially at a time when fewer and fewer are buying homes and home prices are crashing.....and think of the salaries the executives can pay themselves with $800 million dollars.

Didn't CalPers get clipped for a quick billion on a Lennar deal a few years ago?.....and Lennar is at it again?..and just think, most people paying into pensions think that their managers actually give a damn about their investments.

I hope FloridaBuilder isn't reading this......poor guy is actually trying to make money the old fashioned way, actually building and selling homes in an environement where home prices are crashing as millions are losing their jobs and getting foreclosed.

I miss him........

5 Comments – Post Your Own

#1) On November 03, 2010 at 5:13 PM, alstry (35.64) wrote:

Airplane values CRASHING and banks being advised to commit FRAUD.......as the beat goes on.......and the Gardner Bros keep the Fools in the dark and distract them with the ticker......

“I’ve seen it with my own airplanes. My Challenger went from a $9 million airplane to a $3 million airplane in eight months.”

“If you are a bank [with] a $3 million note on an airplane that is now worth only $1 million, you have a $2 million deficiency, and now you have to insure it, store it and worry about maintaining it.”

Banks have another problem if they take back an aircraft right now and resell it at a distressed price: they are forced to write down the value of the assets of all similar aircraft in their loan portfolio–a huge hit to their bottom line at a time they need it least.

http://www.ainonline.com/news/single-news-page/article/repossessor-advises-banks-against-reclaiming-aircraft-25211/

The banks that are repossing the homes of millions of Americans are failing to properly account for their failing loans so they can give themselves billions in bonuses.......

I guess Blankenfein is right...they are God and Buffett is supporting them.....but I never knew God was so crooked.

Just like I warned...as commodity prices rise from a crashing dollar, the value of essentially everything else, including homes and private planes, will collapse to near zero as few will be able to afford to buy much more than escalting Food and Fuel and support much of anything else.

America, as in import based service economy, is not structured for the commodity inflation consequences of Benny the B's zombulation policies.....when we were an export based economy like in the 70s, our wages increased with inflation....now our wages will collapse with inflation....

AND BENNY THE B KNOWS THIS!!!!!!

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#2) On November 03, 2010 at 5:35 PM, alstry (35.64) wrote:

WARNING:  language may be offensive to some....but very funny video...

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#3) On November 03, 2010 at 5:57 PM, alstry (35.64) wrote:

Freddie Mae Sees no Housing  Recovery Soon

Oh really?  Who coulda seen that coming when when 500K people are losing jobs each week and FOOD and FUEL prices are skyrocketing.......

When planes lose 2/3 of the value in less than a year......when land in many places is now worthless.....when the FED is simply counterfeiting the money that Americans had to work hard to earn........when banks are lying about the condition of their books.........

Where the firetruck do you think housing is going?

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#4) On November 03, 2010 at 6:01 PM, alstry (35.64) wrote:

RICO Suit Filed Against HSBC And JPMorgan For Silver Market Manipulation

http://www.zerohedge.com/article/rico-suit-filed-against-hsbc-and-jpmorgan-silver-market-manipulation

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#5) On November 03, 2010 at 10:02 PM, gexuna wrote:

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