Wednesday, September 17, 2008

Analyze a Commercial Mortgage Loan Plus The Financial Markets

See Me On

If you missed the presentation on the process and tools that you need to analyze a commercial mortgage loan on income producing property, please visit , and you will be able to read my 4 part series on how to get it done.

In a day or two, you will also be able to read my article, Underwriting Through The Eyes Of An Underwriter, which will teach you the way that you need to deal with underwriters, once the current mess plays out and banks are once again looking to lend.

Da Comrade

When I woke up last week I was pretty sure that I was operating under a capitalist system which says that those that can survive will, and those that can't won't. Darwin's survival of the fittest I think they call it. Not that this is a good thing for any of the players involved on the non-survival side, but the way that it has always worked for me in my life is that I make decisions, take risks if I determine that they will give me the appropriate reward, and pay the price if I am wrong. My neighbor doesn't come in and reimburse me.

The Federal Reserve and Treasury have basically decided which firms will continue on and which ones will not. Bear Stearns was deemed to big to fail, Lehman Brothers wasn't and AIG and Merrill Lynch were. Lehman Brothers most probably could have survived, but was not allowed the time to do so. Merrill may not have but was provided a deal.

At the end of the day it is the employees and common and preferred shareholders that paid the price for the risk and greed of those at the top. Let's hope that the people who have been at the wheel while we got into this mess, will suddenly have the wisdom to get us out of it.

SEC Short Selling Folly

Back months ago the SEC reinstated the rule on a temporary basis that in order to short a stock you needed to be able to borrow and deliver it in an effort to help stem the fall of the financial stocks. It worked as financial stocks staged a strong rally. In the infinite wisdom of the SEC the rule was allowed to expire and financial stocks went back on their downward spiral.

There are certainly a lot of problems with these financial firms that have caused their stock prices to drop, a situation which these firms are completely responsible for. But the "bear raids" that are perpetrated by hedge funds and other institutional investors that drive the stocks down in part because of the rules of not having to borrow the stock, as well as the absence of an uptick rule could have been stemmed by an SEC chairman that noticed the results achieved the first time.

Oh yeah, the rule of having to borrow stock to be able to short it is going back into effect tomorrow. I think that is too little to late. Kind of like trying to put out a warehouse fire by spitting on it.

No comments :

Post a Comment