jp the biggest problem is indeed and then what. These investors can do whatever they want. They are not under the same pressures that lenders are under. They do not have the same accounting requirements as institutions. Don’t you see? It is a free for all, the investors have hardly any skin in the game at all. I forgot the amount of money the investors have to bring to the table but it is ridiculous.
That is the big problem. With the institutions holding all these bad assets the credit market clogs up. Now once these books are relieved, the credit markets open up. Is the crap still out there? Yes of course. Does the government care what happens to it? Maybe but before that investor made the purchase they made damn sure that they would not lose money no matter how it turns out.
So yeah logically one would think, well it would be stupid for these investors not to dump all the properties on the market wouldn’t it? Well yeah and maybe no. Look say some investor is gonna purchase 100B of crap from Citi… Do they put up 100B? No way. They put up a small fraction of that. Do they need to dump all the properties? Probably not. Whose to say that there are not some backroom deals in place so that maybe an investor is incentivized to NOT DUMP them all at once.
I don’t know. Doesn’t the whole thing seem kind of… rigged to you? It does to me. I sincerely hope we see them all come flooding into the market. Just not so sure we will. There are a hell of alot of them out there though.
