Is the Vetro Auction Really a “Deal”? Look at 1255 S. State
The auction of 40 units at The Vetro, at 611 S. Wells, in the South Loop in early March is “big” news in the real estate world.
The auction is being advertised all over the Chicago Tribune as well as such upscale newspapers like the Wall Street Journal.
Even The Vetro itself is getting into the act. The developer has made the website more restrictive since I last chattered about the auction.
Suddenly, you have to actually register on the website to obtain more information about the auction (whereas before, it freely listed prices and floorplans for anyone to peruse.)
Here’s what the website states:
“Filling out this form allows you to access more information about Vetro and the exciting opportunity to purchase a new condominium at auction prices. Completion of this form does not obligate you to participate in the auction – separate registration is required.”
With buzz building around the auction, it led me to wonder: is it really going to be a “deal”?
Take, for instance, the smaller 1-bedroom units. The website says they’re 684 square feet and starting at $150,000 (includes the parking.) That’s the “minimum” bid.
But there are other similar new construction buildings in the South Loop offering similar sized units for around the same price.
Take 1255 S. State, otherwise known as Vision on State. It is 2007-2008 construction, much like The Vetro.
Some owners have been under stress in the building. Unit #1411, a 677 square foot 1-bedroom recently came on the market as a short sale.
Unit #1411: 1 bedroom, 1 bath, 677 square feet
- Sold in April 2008 for $419,500
- “Short Sale”
- Originally listed on Nov 3, 2008 for $248,900
- Reduced to $229,900
- Reduced again on Nov 26, 2008 to $199,900 (included the parking)
- Currently under contract
- Assessments of $350 a month
- Taxes are “new”
- Century 21 Universal has the listing. See the pictures here.
Will the buyer of Unit #1411 actually end up with a better “deal” than those attending The Vetro auction for similarly sized units?
Stay tuned.
I don’t think this is comparable.
1255 looks ugly to me and have fun walking those six extra blocks to work in this weather. 1255 is south of Roosevelt Vetro is north of Polk–big difference, IMO.
Oh wow you’re near the Roosevelt loop stop big deal. Still a whiles walk to the loop and the walk to work amenity is why Vetro will command higher pricing than much of the S loop development that occured further south.
err correction Roosevelt el stop not loop stop.
It is 6 blocks south + 4 blocks east. If I work in the loop, I want to have a 5-10 minutes walk, not a 30 minute walk. And yes, Vetro will command higher pricing, based on the layout, location, etc.
All depends on where you work in the loop.
I work on the far north side so I’m not walking it (certainly in this much cold) either way so I’ll take hyper close to the El (including both the red and the loop trains) and the much better stores and restaurants (and just area in general) around Roosevelt over Wells and Polk.
Both the buyer and lender of Unit #1411 deserve to lose their ass for paying so much so late in the downturn.
Can someone explain why a new building should/can have a $350/month assessment? I could understand for an old/vintage, unless this assessment for 1255 includes everything (heat, AC, cable, water, etc.)
IMHO, well-publicized auctions are a horrible way to acquire property if you’re a buyer and looking for a ‘deal.’
if you want a deal, wait ’til the end of the 2009 selling season in Sept/Oct. for short sales on the properties that won’t sell this spring/summer.
“It is 6 blocks south + 4 blocks east”
It all depends on where in the loop you work. If it’s N/S Wacker, Vetro is much, much closer. If it’s central/east loop, it’s still closer, but the advantage diminishes greatly. If it’s west of the river or E/W Wacker, they both kinda suck, tho Vetro is, of course, closer.
I doubt the auction units will sell at a “deal”. But, the 67 units remaining after the auction might. Not to mention any of the current owners/specuvestors who decide to bail/foreclose now that they realize that their purchases in the Vetro are worth less than their mortgage.
Many of the Vetro post-auction remaining units are larger units, higher floors, and higher assessments than the slope (due to changes in pricing between the initial property report and the current asking prices and minimum bids).
That is why the 08 units sold out. They are small (smaller purchase price), have views in two directions and have assessments lower than the current slope of assessment to purchase price.
I always figured that the doormen drove the price of assessments up. It is a nice bit of extra security in a highrise.
Vetro’s auction just proves that some real estate agents are really uninformed and/or deceptive. About a year ago we looked at this building and were told by the agents that the building was about 65% sold (this was in late 07 or early 08). “Hurry, get your unit now or you’ll miss out.” The funny thing is, at the prices then, we could only afford a two bedroom. Now we can afford the penthouse. Too bad for them that we have found out what these units are really worth. Now we have no desire to live there.
Not to change the subject, but has anyone seen anything more ridiculous than this?:
http://chicago.craigslist.org/chc/apa/1039800832.html
Thoughts?
I would love to sit down with the buyer and lender of the 1255 S State St unit. Do lenders do any research on what they approve…ever?? $400k for 677 sq ft next to one of the busiest el stops in the city.
who the heck paid 400k for 677 sq. feet in the south loop??! and at the vision at that, that building looks like an asylum or prison!
Deals? In early 2009? LMAO.
$419.5k…….. that’s unreal — were there any comps within $75k at the time?
“Both the buyer and lender of Unit #1411 deserve to lose their ass for paying so much so late in the downturn.”
Pete, what a nasty thing to say. What is wrong with all of the negative people hiding behind this blog? Sad really. I can only imagine what a wreck of life you must have to write something like that.
If you want to know why I wish bad things on people who mindlessly overpaid for real estate, it’s because they are the cause of this global depression. Did they ever stop to think whether these properties were really worth it? No, the only thing they were thinking about is appreciation. Because real estate only went up in price, until it didn’t. Even relentless real estate bulls like paulj have got to be realizing now that maybe this all wasn’t such a great idea after all. As to why I personally am pissed at specuvestors any buyers who overpaid, I moved to Chicago in 2005. I would like to have bought a condo, but I knew even at the time that prices were unsustainably high. The sooner Obama stops talking about bailing everyone out and lets prices fall to affordable levels, the sooner the recovery can begin.
“Pete, what a nasty thing to say.”
I think some frequent posters are a little overly aggressive with how much ill-will they have for bad real estate transactions, but $600/sq ft in south loop does seem completely ridiculous.
“The sooner Obama stops talking about bailing everyone out and lets prices fall to affordable levels, the sooner the recovery can begin.
”
Are you suggested no bank bailout and no stimulus plan?
fullhouse: “Are you suggested no bank bailout and no stimulus plan?”
I am. IMO, insolvent banks that fail the stress test” should be nationalized, and by that I mean they should be put into receivership, new management put in place to help with writing down toxic assets so they can be auctioned off. Shareholders should be wiped out and depositors protected. The banks remaining assets and deposits would then get sold to new shareholders. In this way the taxpayers are protected over the investors.
Its what Nouriel Roubini, among others, are suggesting:
http://online.wsj.com/article/SB123517380343437079.html
I didn’t ask if anyone agrees with the bank bailout or stimulus plan as they are implemented – it’s pretty easy to poke holes in plans that large – I was asking about any plans. Banks being nationalized is definitely a bailout.
Not the way I see it. A bailout would be where the government attempts to restore the banks to health using the federal balance sheet. Nationalization, in effect bankruptcy, would only bail out depositors up to the FDIC limits.
fullhouse: “Banks being nationalized is definitely a bailout.”
Yeah, I suppose what you described is basically bankruptcy… How do you propose “auctioning off toxic assets”?
The FDIC could either sell them at traditional style auctions or continue with its recent revenue sharing arrangements with investors who specialize in distressed debt. The latter could result in something better than fire-sale prices.
Yeah, I suppose what you described is basically bankruptcy… How do you propose “auctioning off toxic assets”?
So I looked at Accelerated Marketing Partners past projects.
One is the Solaire in Orlando. AMP reported 30 units auctioned for just under $10,000,000.
I realize it was a year ago, and things change. But, posters at a site called topix.com kept saying that no one would be willing to spend the minimum bid prices.
http://www.topix.com/forum/source/orlando-sentinel/T4SNJ6Q67JT1HR3O9/p7
All of the units sold for considerably more than the minimum bids. As an example one unit with a minimum bid of apparently $160K sold for $229K, $69K above the minimum bid….43% above the minimum bid price. AMP seems to market to the developers that every auction is this successful. So anyone thinking they will get a unit for $115K, you’re dreaming. (I’d be willing to bid higher than that.)
My expectation is that the $115K units in Vetro will go for $165K. I will therefore not be a successful bidder if all of the units go for 43% above minimum bid.
juliana,
So, because you read in the WSJ that the FDIC is already doing this to a couple tiny banks, you think this is a good idea to do with possibly the majority of the banking system? I think Roubini recommended trying to bring the banks back as operational – I didn’t see anything about liquidating assets.
IMO, if its not possible to get “revenue sharing arrangements” to get rid of the toxic assets without risking taxpayer dollars, they should be sold for market value, whatever that is, by the FDIC. The other alternative would be to set up something similar to the Resolution Trust Corporation, and the assets could be sold over a few years.
The bigger problem could be the Credit Default Swaps. Bankruptcies would trigger big payouts out from the firms that wrote CDS on the banks that go under which could trigger more bankruptcies. Here is one person’s ideas on how to clean up the CDS mess, but it doesn’t address the more immediate problem.
http://www.nytimes.com/2009/01/25/business/25gret.html?_r=1&ref=todayspaper
fullhouse:”So, because you read in the WSJ that the FDIC is already doing this to a couple tiny banks, you think this is a good idea to do with possibly the majority of the banking system? I think Roubini recommended trying to bring the banks back as operational – I didn’t see anything about liquidating assets.
The toxic assets aren’t worth anything at all and in fact are liabilites. That’s why there is no price for them. Many issues don’t produce any profits at all and have caused investors significant losses. Some of Bear Stern’s rmbs issues had default rates higher than 40%. How can a bank make any money when 40% of an issue stops paying? The underlying collaterals are worth far less than the issue and are best sold as reos. The issues are literally worth nothing. Who wants to buy something, even for pennies on the dollar if it loses money? The banks are insolvent and the good will of their names have been squandered I.e. The countrywide name is being phased out. The banks literally bet the bank and lost miserably. The gov funds are being used to fund operations and payroll. They aren’t making enough money to offset their losses.
juliana,
I agree many of these “assets” are, potentially, a huge systematic problem – I’m just not sure why you’re championing liquidation of any sort… Most of the economists who support bankruptcy are trying to hold the right people accountable, but understand avoiding a systematic meltdown is the most important thing.
Just the amount of marketing dollars that have been spent on Vetro tells me that it will NOT be a bargain. Similar to the Circuit City / Linen N Things bankruptcy sales the owners are trying to get the most they can out of this. They are going to promote it and say “min bids start at 115” but at the end no unit is going to sell for this.
Save your money and look for short sales or deals from individual owners. I would stay away from Vetro.
I don’t understand what you’re saying in the comment below. You said above that Roubini recommends “trying to bring banks back as operational”. I don’t see him saying that. He prefers “outright government takeover (call it nationalization or “receivership” if you don’t like the dirty N-word) of insolvent banks to be cleaned after takeover and then resold to the private sector.” Not exactly bringing them back as operational in my way of thinking.
Maybe I have selectively been reading the economists who I agree with, most of whom support nationalization/receivership/liquidation. Whatever you choose to call it, it means breaking up the too big to fail insolvent banks in a way similar to the the way Sweden did in the early 1990s. Here is an interview Bill Moyers did with Simon Johnson, former chief economist at the IMF, that describes this method (towards the end of the interview):
http://www.pbs.org/moyers/journal/02132009/transcript1.html
fullhouse: “I agree many of these “assets” are, potentially, a huge systematic problem – I’m just not sure why you’re championing liquidation of any sort… Most of the economists who support bankruptcy are trying to hold the right people accountable, but understand avoiding a systematic meltdown is the most important thing.”
Oh, and Riholtz posted a list on his blog of those that favor nationalization vs. those opposed. Guess I haven’t been listening to Kudlow or Cramer lately. I KNOW I try to avoid listening to Barney Fife…er…Frank.
http://www.ritholtz.com/blog/2009/02/favoring-nationalization-are/
Speaking of Vetro marketing:
I saw a big moveable billboard (the kind that go around on the back of trucks) in the parking lot of the Dominicks on Roosevelt Road over the weekend.
They are advertising this everywhere.
We should take guesses on how many show up. 1,000? 2,000?
Should be interesting to watch.
And yes- there is no way someone is going to get a “deal” at this auction.
juliana,
You basically summarized Roubini’s plan, but completely misunderstood what he wanted to do with the bad assets:
http://optionarmageddon.ml-implode.com/2009/02/14/roubini-nationalize-the-banks/
He said “merge all the remaining bad assets into one enterprise. The assets could be held to maturity or eventually sold off with the gains and risks accruing to the taxpayers”, which is completely different than a liquidation or “auctioned off” as the FDIC is doing with failed banks. Additionally, once the bad assets are off the books and some restructuring, those banks would emerge as operational.
“We should take guesses on how many show up. 1,000? 2,000?” – winner’s curse.
You’re right about Roubini’s latest ideas about disposition of bad assets, but I don’t think his plan has the banks emerging as operational. He says in Saturday’s WSJ interview “So if you took over a big bank, and you split the assets in three or four pieces, maybe you create three or four regional or national banks, and they’re stronger!” Does that sound like the banks emerging operational?
There are so many different versions of the nationalization scheme. Almost all have the shareholders getting wiped out. Greenspan thinks senior debtholders (Pimco) should be kept protected, implying junior debtholders get nothing. Roubini said in the Washington Post interview that the long-term debtholders get paid off only after depositors and short term creditors are, but has advocated cramdowns in the past. I am wondering why the bondholders get paid off at all, before toxic assets are liquidated. They have no FDIC insurance like depositors. Some speculation is that Greenspan’s view is protecting Pimco’s interests, since he’s a consultant with them. You have to wonder how much of this protecting of friends plays into the systemic risk warnings.
Fullhouse: You basically summarized Roubini’s plan, but completely misunderstood what he wanted to do with the bad assets.He said “merge all the remaining bad assets into one enterprise. The assets could be held to maturity or eventually sold off with the gains and risks accruing to the taxpayers”, which is completely different than a liquidation or “auctioned off” as the FDIC is doing with failed banks. Additionally, once the bad assets are off the books and some restructuring, those banks would emerge as operational.
““So if you took over a big bank, and you split the assets in three or four pieces, maybe you create three or four regional or national banks, and they’re stronger!” Does that sound like the banks emerging operational? ”
Yes. Yes it does. In what way does “maybe you create three or four regional or national banks” *not* indicate banks emerging as operational?
“Here is one person’s ideas on how to clean up the CDS mess”
Gretchen Morgenson is widely seen as borederline incompetent in her understanding of what she writes about. I don’t trust that she accurately conveys *any*thing.
HD: “The issues are literally worth nothing.”
You are misusing “literally”, using a very broad definition of “nothing” or both.
The only mbs that are worth (approximately) nothing are 2d lien mbs (and even those do not have 100% defualt–yet). They’re worht something–credit card charged-off accounts are worth something (even tho they are essentially uncollectable by legal process), and the 1st lien mbs include a foreclosure right, so they’re definitely, literally, worth something–maybe only ten cents on a dollar, or even less, but they are worth something.
Charged off credit card debt sells for about 1 to 2 cents on the dollar to brokers who turn around and sell it to assignees for 3 to 4 cents on the dollar. Debt that’s more geographically parceled out is worth more like 4-5 cents on the dollar like Chicago vs. Chicago and suburbs vs. all of Illinois. Foreclosed second mortgages are worth about the same, some even less. 1st lien mortgages are probably worth about the same; no one really knows b/c there is no market.
IMHO I think they’re probably worth the same, if not zero, and in some cases, they are probably liabilities (kind of like how the former owner of chrysler paid the new owner to take it off their hands!). There are significant transaction costs with 1st mortgages; real taxes, realtor fees, closing costs, credits, servicing, foreclosure attorneys, other attorneys, winterizers, etc. I don’t have figures but my gut tells me that on going charges to foreclose, evict, maintain and sell some of these properties may end up costing more than they ultimately recover regardless of the amount of the initial mortgage. Especially now that sales volume has decreased so significantly the holding costs have got to be eating them alive. If these assets were worth something the banks would have gotten rid of these hot potatoes long ago; the excuses is that they don’t want to sell them at fire sale prices: but the kicker is that no one wants them even at fire sale prices so that’s just a convenient cover-up. The banks are bleeding cash and taking gov loans just to fund their day to day operations; the banks aren’t making enough income off the good assets to offset the bad ones! I suppose when you break it down on a property by property basis investors could pay top dollar for the best assets and refuse to purchase the bad ones……that might be the way to do it.
Now isn’t that an intelligent way to make an argument, an ad hominem attack. So much easier than having to think it out. Where is this “widely seen” view of Gretchen Morgenson coming from? Your buddies or the voices in your head?
Did you even read the article? She basically sets out the arguments of Christopher Whalen, managing partner at Institutional Risk Analytics, and Sylvain R. Raynes, a mathematics professor at Baruch College in New York. Don’t you want to attack them too?
Here’s Gretchen’s article on how to unravel the CDS mess again, in case you want to actually read it this time and come up with something intelligent to say about it.
http://www.nytimes.com/2009/01/25/business/25gret.html
anon (tfo): “Gretchen Morgenson is widely seen as borederline incompetent in her understanding of what she writes about. I don’t trust that she accurately conveys *any*thing.”
Ummm, because whatever new banks emerge would look nothing like the old too big to fail version? If one bank is broken up and the assets split up into three or four new banks, that hardly seems like coming through as “operational”. Kind of a fuzzy term you use there. Lots of wiggle room.
anon (tfo): “Yes. Yes it does. In what way does “maybe you create three or four regional or national banks” *not* indicate banks emerging as operational?”
HD: “[lawyering me]”
You’re deflecting. You made an absolute statement, acknowledge it’s incorrect and then try to say you were right anyway. “literally worth nothing” is false; that’s the only point of your’s I mentioned, and you’re better than trying to defend absurd absolutes, so just move on from it.
juliana: “[must be Gretchen’s sister or something]”
And you ignore everything else I posted to defend Gretchen. Here are a couple examples of the opprobrium for your-gal-Gretch; it’s not my imagination:
http://www.calculatedriskblog.com/2007/09/morgenson-watch.html
http://economicsofcontempt.blogspot.com/search?q=morgenson
(good note in the first of these: “Morgenson, who lacks the intellectual capacity to understand credit default swaps”
http://delong.typepad.com/sdj/2008/03/new-york-time-6.html
http://busmovie.typepad.com/ideoblog/gretchen_morgenson/
I can find more, if you insist.
And, like I said, I–based on my own understanding and analysis–don’t trust that her reporting accurately conveys facts, so I need to follow-up myself on anything she reports. I read the article, don’t believe she didn’t leave out salient points from teh proposals and don’t have time to follow the links and read the actual proposals right now. The proposals may be great, and just what we need to do. Gretchen saying so only increases my skepticism.
HD,
“my gut tells me that on going charges to foreclose, evict, maintain and sell some of these properties may end up costing more than they ultimately recover”
I’ve seen the recovery rates on many 1st liens – it’s true the costs are brutal, but they are rarely more than half the sale price for non-subprime.
“but the kicker is that no one wants them even at fire sale prices so that’s just a convenient cover-up”
I can’t speak for all toxic assets, but this is definitely true with some – there are assets that will, by definition, yield a profitable trade if they can be held to maturity… Everything is so strapped for cash right now, that banks won’t take a guaranteed profit because they don’t want to hold the risk in the mean time.
“If one bank is broken up and the assets split up into three or four new banks, that hardly seems like coming through as “operational”. Kind of a fuzzy term you use there. Lots of wiggle room.”
So, “not operational” to you is working, but in a different form? So, for example, KMart did not come through it’s bankruptcy “operational” because it had been bought by Sears? Methinks *you* have a weird definition of “operational”.
Anyway, looking back it was fullhouse’s word, not yours, so I apologze for the implication that it was. My fault for skimming the comments.
juliana,
I agree, the phrase “emerge as operational” is not completely clear – the plan that Roubini discusses is to let some banks fail, break some up, and let others come back after they are cleaned up. I was just saying that the two most common results of bankruptcy are restructuring and liquidation – and it seems that Roubini and others consider liquidation to be the less desirable outcome for most banks, and are looking more for a restructuring.
Liquidation only appears to be the less desirable outcome for most banks because the government doesn’t want to flood the markets with their assets that need to be sold to repay creditors. Regardless of whether a bank is liquidated or ‘restructured’ I think the government should adopt the stance that all senior management, at least the top 200 people at any large financial institution, need to go.
It really isn’t fair to keep these people making significant amounts of money on the payroll if its on the taxpayers dime. They are responsible for the state of their business today.
they don’t need a bad bank plan….they need a good bank plan. Fence all the good assets into a new bank. Let the bondholders and shareholders scavenge on the bad assets.
The problem is that the CDS exposures of all other institutions will take down every big bank in America if one bank fails. Sort of a poison pill if you will.
So first they need to unwind the CDS as they have been doing with AIG which is easier said than done.
Hey if the drank the Jim Jones Kool Aid then they should go under. These CDS derivatives sound like a way for them to attempt to hold the entire financial system hostage–ie: if you let any one of us fail we all fail and you’re all F’d.
I don’t like negotiating with hostage takers. I say lets call their bluff and put that to the test.
Also if you didn’t own the underlying bonds of an institution you had no business buying their CDS. If you were speculating in CDS you deserve to go under as well, CDS should have only been for hedging.
“I don’t like negotiating with hostage takers. I say lets call their bluff and put that to the test.”
Rambo economics. Is all your money “invested” in canned food and ammo?
“Also if you didn’t own the underlying bonds of an institution you had no business buying their CDS. If you were speculating in CDS you deserve to go under as well, CDS should have only been for hedging.”
Yep, true enough. Thank you Phil Gramm, Tom Ewing, Tom Bliley, Larry Combest, John LaFalce, Jim Leach, Dick Lugar, Peter Fitzgerald(!!!), Chuck Hagel, Tom Harkin, and Tim Johnson (look at that Bi-Partisan Spirit!!) for the Commodity Futures Modernization Act.
another option is to declare all CDS for any failing bank null and void and then let it fail.
“declare all CDS for any failing bank null and void and then let it fail”
Um, how does this resolve anything? It’s not so much the problem of CDS written to cover bank debt, it’s CDS written by banks to cover the AAA pieces of other debt–for example (totally made up, but based on reality), Citi wrote CDS insuring against default of “MBS Series 2006-1”; this was packaged with the bond and the benefits of the insurance parceled out to the buyers of the bonds. Citi may have been paying make good amounts to cover an current shortfalls in interest to the holders resulting from delinquencies. If Citi defaults on its obligation, then the “MBS Series 2006-1” will be in default, the AAA piece will be downgraded (or at least placed on watch, whether performing or not) and some holders will need to dump their pieces. The default may trigger special servicing provisions of the “MBS Series 2006-1” and may have other unexpected consequences. *THIS* scenario is why letting the major banks (and AIG, etc.) go bankrupt is not palatable.
If I’m not mistaken Citi going into default shouldn’t have any impact on the any MBS CDOs. Those CDOs should’ve been placed in a trust that has the necessary capital for payments and likely sold off to a servicer to do the grunt work.
No way these MBS pools would’ve been set up so there is a going concern risk on behalf of the underwriter. Thats hedged out via the trust.
BK isn’t palatable but nor are zombie banks. The answer is that there is no real answer. They gov will keep trying different things until it either something works or they start printing money instead of borrowing it.
Receivership is definitely palatable. It is the FDIC’s MANDATE to shut down zombie banks and re-distribute their assets to solvent institutions. Last I checked their mandate did not specify that they were to steer clear of insolvent banks beyond a certain size due to lobbying power or systemic risk.
They need to DO THEIR JOB and shut Citigroup down. Citigroup is at least overstating their assets by 5%, making them insolvent. Shut them down and fire all senior and upper middle management.
Yes I am adamant about having the overpaid bankers FIRED and in the unemployment line. Its an absolute disgrace the way our government is keeping these people making six figures on the payroll at taxpayer expense despite that they’re playing solitaire these days.
If citibank goes into receivership/bk/nationalization/etc I will try my hardest to make my student loans disappear off their books.
“No way these MBS pools would’ve been set up so there is a going concern risk on behalf of the underwriter. Thats hedged out via the trust.”
Dude, then you have no idea what CDS is actually intended to do when used properly (i.e., not for speculation). Why do you think Ambac, MBIA, et al went in the toilet last year?
Duh dee duh. They went in the toilet because they are responsible for the shortfall between foreclosure recoveries and the combined mortgage amounts. Not my fault they were insuring greater than 80% LTV loans.
Still no going concern risk on behalf of the underwriter of the MBS pools. The mortgage insurer isn’t the underwriter.
“Why do you think Ambac, MBIA, et al went in the toilet last year?”
“Still no going concern risk on behalf of the underwriter of the MBS pools. The mortgage insurer isn’t the underwriter.”
Then you didn’t bother reading my example. The banks were writing CDS. Citi, BofA, JPM all are acting as insurers. Maybe not on MBS, but on a bunch of other debt.
Of course there’s no going concern risk on the underwriter, but that wasn’t what I was talking about.
Then let them fail to teach a lesson to market participants that you better ensure that your insurer is adequately capitalized.
Insurance is only as good as the ability of your insurer to pay on claims. If someone couldn’t figure that out they deserve to go under.
“Citi, BofA, JPM all are acting as insurers.”
Bob:
Again, do you have all your money in canned goods and ammo? If we do as you want, that’s what’s going to have real value, not your savings, mr. frugal.
Not confirmed yet, but I may be working at the auction, representing the developer. My role would be to assist successful bidders with completing their contracts. It’s going to be very interesting…
anon(tfo):
Your belief as to the outcome if we let the failed banks collapse is just that, its a belief. Its as much of a guess as is the entire science of macroeconomics.
Just because Mishkin wrote in a book it would be bad if big banks collapse doesn’t make it so. There are over eight thousand banks and thrift institutions in the US, tack on another eight thousand credit unions. Do you really think all would fail?
More than likely only those that got in over their head would fail. We are using taxpayer money to save the failed banks from their desired fate at the expense of their more competent competitors who never gambled the farm.
err…science shold’ve read “science” and desired should’ve read deserved
The Vetro auction is this weekend. Any further thoughts on why the developer is auctioning off just 40 of the 100+ remaining units?
– Could these be the more difficult units to sell?
– Are there just too many of these tiers available?
– Does this auction have anything to do with selling the 40 units takes the development beyond the 75% sold and the developer can turn over to the unit owners?
Just some random thoughts. I’ve watched this building and attended the auction open house. I saw a lot of activity. But, not sure how many people are just curious or actually potential buyers.
I was at the auction. There were about 300 people in the room, half of them were registered buyers. They ended up selling 45 units, adding 5 more units.
how does one secure on of these cheap condo with no money down and is it possible to know what the neighborhood is like.
My son age 35, employed at Field Museum (6) years, and he want to buy a condo. i suggested that he attend a home buying seminar first and than follow instructions.
He is singe no children and will be a first time home buyer with above average credit (thank god) what advise can you guys offer. I am his mother and live in the state of Mississippi. I have read some of the comments and find them informative much more so than sites that list foreclosures.
PS. we have researched all kinds of websites to no avail. What resources are available to aid this process. Please, let me hear back from someone, a mama in the state of Mississippi
TB, MA anthropologist