This Laurie Goodman, an analyst at Amherst Securities, has been calling things nicely for awhile. Nicely of course being pretty much the same way we've been calling it for a long time on this financial crisis. Today she was on Bloomberg radio and she said basically the only way the U.S. housing market is going to recover is if the big banks (and some small ones too) take SUBSTANTIAL writedowns to their home-equity loan portfolios.
She says this since the government's existing plan isn't going to work because it doesnt reduce the principal amount that borrowers owe. Hmmm where have we heard that before? Oh yeah. Right here. Lots of people have been yelling about how the banks "manipsonate" (as a little aside, this is a technical term used first by Tawana Brawley, a woman from upstate NY, back in the 80s, when she lied about being raped with the Reverend Al Sharpton by her side in a press conference. Tawana being black, and the accused rapist police officer being white, you can imagine this caused created quite the stir. Tawana uttered the words "No one is going to MANIPSONATE me or my family," during the press conference. Well it turns out she made the whole rape thing up. I just could never forget that press conference. Aside is now over) their positions as servicers and protect their home equity loan portfolios in the process. Its good to see Ms. Goodman is calling them out on this.
She and we also talked about in April 2009 how banks and other institutions wouldnt sell distressed assets in the governments PPIP program either. Why? Because the FASB (the Financial Accounting Standards Board), changed their rules on April 2 to allow banks to basically mark assets where they felt like. Guess what? We're in December 2009 and they haven't sold much. If any. Whats the incentive? Everybody sweep the losses under the rug and no one will notice.
But as we all know there's no free lunch. Or manipsonation. These things always come back to bite you in the tookus. How we feeling taxpayers? Gonna bring it with another bailout next time? Um I'm gonna guess no. Good day.
Thought it was 'manipthonate'.... my bad :)
Oh, and Richie, it's TuCHis,(hard CH) c'mon man, you're from New York, for Chri... er, I mean Heaven's Sake.
Great observations, as usual.
Posted by: sifter | December 14, 2009 at 09:13 PM
manipsonate lol
Richie Bennett, the godfather of slang
Posted by: WL | December 14, 2009 at 07:03 PM
Where did you guys meet up with ol Laurie in April? You two go down to her bridge?
Posted by: Strangebrew | December 14, 2009 at 03:15 PM