[analyst]

[quote=Huckleberry]http://www.fanniemae.com/newsreleases/2009/4844.jhtml?p=Media&s=News+Releases

This program lowers rents to 31% of income, so instantly rents will fall to match incomes, and in doing so drag other rentals down with them.[/quote]

The news release does not say that rents will be lowered to 31% of income. It says that, to qualify, the borrower-become-renter may not pay more than 31% of income to cover the newly established market rental rate.

The unanswered question is how market rental rate will be established for each property.

[analyst]

[quote=Huckleberry]http://www.fanniemae.com/newsreleases/2009/4844.jhtml?p=Media&s=News+Releases

This program lowers rents to 31% of income, so instantly rents will fall to match incomes, and in doing so drag other rentals down with them.[/quote]

The news release does not say that rents will be lowered to 31% of income. It says that, to qualify, the borrower-become-renter may not pay more than 31% of income to cover the newly established market rental rate.

The unanswered question is how market rental rate will be established for each property.

[analyst]

[quote=Huckleberry]http://www.fanniemae.com/newsreleases/2009/4844.jhtml?p=Media&s=News+Releases

This program lowers rents to 31% of income, so instantly rents will fall to match incomes, and in doing so drag other rentals down with them.[/quote]

The news release does not say that rents will be lowered to 31% of income. It says that, to qualify, the borrower-become-renter may not pay more than 31% of income to cover the newly established market rental rate.

The unanswered question is how market rental rate will be established for each property.

[analyst]

[quote=Huckleberry]http://www.fanniemae.com/newsreleases/2009/4844.jhtml?p=Media&s=News+Releases

This program lowers rents to 31% of income, so instantly rents will fall to match incomes, and in doing so drag other rentals down with them.[/quote]

The news release does not say that rents will be lowered to 31% of income. It says that, to qualify, the borrower-become-renter may not pay more than 31% of income to cover the newly established market rental rate.

The unanswered question is how market rental rate will be established for each property.

[analyst]

[quote=Huckleberry]http://www.fanniemae.com/newsreleases/2009/4844.jhtml?p=Media&s=News+Releases

This program lowers rents to 31% of income, so instantly rents will fall to match incomes, and in doing so drag other rentals down with them.[/quote]

The news release does not say that rents will be lowered to 31% of income. It says that, to qualify, the borrower-become-renter may not pay more than 31% of income to cover the newly established market rental rate.

The unanswered question is how market rental rate will be established for each property.

[analyst]

[quote=davelj]

Where you and I part ways is that you apparently believe all bankers are either competent or incompetent. In my world, there are plenty of competent bankers, plenty of incompetent ones, and a HUGE number in the middle (that complicated gray area we hear so much about). My suggestion is to let those banks run by some of the less-than-middling-but-not-totally-incompetent managers survive, for the good of John Q. Public. It’s only their shareholders that will suffer. But we can agree to disagree here.

I’ve been analyzing banks for almost 15 years. And I’ve rarely found much that’s “black/white” in the world of finance – I see an awful lot of gray. You’ll have to give me directions to the Fantasyland you live in – I’d love to visit sometime. But I agree that the FDIC has failed to do its job properly. Far from it. That, however, is a blinding glimpse of the obvious.[/quote]

We are not discussing the “world of finance”. We are discussing the FDIC as regulator of public depository banking.

There is no other category between competent and incompetent. The definition of incompetent is “not competent”.

I have no doubt that there is a lot of gray to be seen. That is exactly what needs to go away. Anybody who is not fully competent should not be allowed to be the custodian of public depositors’ money.

The facts are that commercial real estate was overbuilt in recent years, and sold/bought at bubble prices. If you are looking for Fantasyland, commercial real estate loans made during recent years is where you will find it.

It is not true that only their stockholders will suffer. The general economy suffers when bankers place (and leave) public depositors’ money with speculators (bubble borrowers against commercial real estate) rather than with the productive economy.

The way to avoid saying in the future that the FDIC failed to do its duty is to insist that it do its duty today.

[analyst]

[quote=davelj]

Where you and I part ways is that you apparently believe all bankers are either competent or incompetent. In my world, there are plenty of competent bankers, plenty of incompetent ones, and a HUGE number in the middle (that complicated gray area we hear so much about). My suggestion is to let those banks run by some of the less-than-middling-but-not-totally-incompetent managers survive, for the good of John Q. Public. It’s only their shareholders that will suffer. But we can agree to disagree here.

I’ve been analyzing banks for almost 15 years. And I’ve rarely found much that’s “black/white” in the world of finance – I see an awful lot of gray. You’ll have to give me directions to the Fantasyland you live in – I’d love to visit sometime. But I agree that the FDIC has failed to do its job properly. Far from it. That, however, is a blinding glimpse of the obvious.[/quote]

We are not discussing the “world of finance”. We are discussing the FDIC as regulator of public depository banking.

There is no other category between competent and incompetent. The definition of incompetent is “not competent”.

I have no doubt that there is a lot of gray to be seen. That is exactly what needs to go away. Anybody who is not fully competent should not be allowed to be the custodian of public depositors’ money.

The facts are that commercial real estate was overbuilt in recent years, and sold/bought at bubble prices. If you are looking for Fantasyland, commercial real estate loans made during recent years is where you will find it.

It is not true that only their stockholders will suffer. The general economy suffers when bankers place (and leave) public depositors’ money with speculators (bubble borrowers against commercial real estate) rather than with the productive economy.

The way to avoid saying in the future that the FDIC failed to do its duty is to insist that it do its duty today.

[analyst]

[quote=davelj]

Where you and I part ways is that you apparently believe all bankers are either competent or incompetent. In my world, there are plenty of competent bankers, plenty of incompetent ones, and a HUGE number in the middle (that complicated gray area we hear so much about). My suggestion is to let those banks run by some of the less-than-middling-but-not-totally-incompetent managers survive, for the good of John Q. Public. It’s only their shareholders that will suffer. But we can agree to disagree here.

I’ve been analyzing banks for almost 15 years. And I’ve rarely found much that’s “black/white” in the world of finance – I see an awful lot of gray. You’ll have to give me directions to the Fantasyland you live in – I’d love to visit sometime. But I agree that the FDIC has failed to do its job properly. Far from it. That, however, is a blinding glimpse of the obvious.[/quote]

We are not discussing the “world of finance”. We are discussing the FDIC as regulator of public depository banking.

There is no other category between competent and incompetent. The definition of incompetent is “not competent”.

I have no doubt that there is a lot of gray to be seen. That is exactly what needs to go away. Anybody who is not fully competent should not be allowed to be the custodian of public depositors’ money.

The facts are that commercial real estate was overbuilt in recent years, and sold/bought at bubble prices. If you are looking for Fantasyland, commercial real estate loans made during recent years is where you will find it.

It is not true that only their stockholders will suffer. The general economy suffers when bankers place (and leave) public depositors’ money with speculators (bubble borrowers against commercial real estate) rather than with the productive economy.

The way to avoid saying in the future that the FDIC failed to do its duty is to insist that it do its duty today.

[analyst]

[quote=davelj]

Where you and I part ways is that you apparently believe all bankers are either competent or incompetent. In my world, there are plenty of competent bankers, plenty of incompetent ones, and a HUGE number in the middle (that complicated gray area we hear so much about). My suggestion is to let those banks run by some of the less-than-middling-but-not-totally-incompetent managers survive, for the good of John Q. Public. It’s only their shareholders that will suffer. But we can agree to disagree here.

I’ve been analyzing banks for almost 15 years. And I’ve rarely found much that’s “black/white” in the world of finance – I see an awful lot of gray. You’ll have to give me directions to the Fantasyland you live in – I’d love to visit sometime. But I agree that the FDIC has failed to do its job properly. Far from it. That, however, is a blinding glimpse of the obvious.[/quote]

We are not discussing the “world of finance”. We are discussing the FDIC as regulator of public depository banking.

There is no other category between competent and incompetent. The definition of incompetent is “not competent”.

I have no doubt that there is a lot of gray to be seen. That is exactly what needs to go away. Anybody who is not fully competent should not be allowed to be the custodian of public depositors’ money.

The facts are that commercial real estate was overbuilt in recent years, and sold/bought at bubble prices. If you are looking for Fantasyland, commercial real estate loans made during recent years is where you will find it.

It is not true that only their stockholders will suffer. The general economy suffers when bankers place (and leave) public depositors’ money with speculators (bubble borrowers against commercial real estate) rather than with the productive economy.

The way to avoid saying in the future that the FDIC failed to do its duty is to insist that it do its duty today.

[analyst]

[quote=davelj]

Where you and I part ways is that you apparently believe all bankers are either competent or incompetent. In my world, there are plenty of competent bankers, plenty of incompetent ones, and a HUGE number in the middle (that complicated gray area we hear so much about). My suggestion is to let those banks run by some of the less-than-middling-but-not-totally-incompetent managers survive, for the good of John Q. Public. It’s only their shareholders that will suffer. But we can agree to disagree here.

I’ve been analyzing banks for almost 15 years. And I’ve rarely found much that’s “black/white” in the world of finance – I see an awful lot of gray. You’ll have to give me directions to the Fantasyland you live in – I’d love to visit sometime. But I agree that the FDIC has failed to do its job properly. Far from it. That, however, is a blinding glimpse of the obvious.[/quote]

We are not discussing the “world of finance”. We are discussing the FDIC as regulator of public depository banking.

There is no other category between competent and incompetent. The definition of incompetent is “not competent”.

I have no doubt that there is a lot of gray to be seen. That is exactly what needs to go away. Anybody who is not fully competent should not be allowed to be the custodian of public depositors’ money.

The facts are that commercial real estate was overbuilt in recent years, and sold/bought at bubble prices. If you are looking for Fantasyland, commercial real estate loans made during recent years is where you will find it.

It is not true that only their stockholders will suffer. The general economy suffers when bankers place (and leave) public depositors’ money with speculators (bubble borrowers against commercial real estate) rather than with the productive economy.

The way to avoid saying in the future that the FDIC failed to do its duty is to insist that it do its duty today.

[analyst]

[quote=evolusd]
However, if these new lax FDIC standards are implemented, banks should be required to disclose the aggregate LTV composition of their CRE portfolio for each property type. At least then investors and depositors can make a sound decision. [/quote]

The whole point of the FDIC is to eliminate the need for depositors to do such analysis. The FDIC is to do the analysis on a proper basis, and to flush out those not in conformance.

Do not underestimate the effect of bank stockholders forcing unsound behavior on their bank managers by comparing them to unsound bank managers making high returns by engaging in inappropriate banking behavior.

With respect to the FDIC, distinct from other entities, this is a black/white issue. The FDIC is failing to do its duty.

[analyst]

[quote=evolusd]
However, if these new lax FDIC standards are implemented, banks should be required to disclose the aggregate LTV composition of their CRE portfolio for each property type. At least then investors and depositors can make a sound decision. [/quote]

The whole point of the FDIC is to eliminate the need for depositors to do such analysis. The FDIC is to do the analysis on a proper basis, and to flush out those not in conformance.

Do not underestimate the effect of bank stockholders forcing unsound behavior on their bank managers by comparing them to unsound bank managers making high returns by engaging in inappropriate banking behavior.

With respect to the FDIC, distinct from other entities, this is a black/white issue. The FDIC is failing to do its duty.

[analyst]

[quote=evolusd]
However, if these new lax FDIC standards are implemented, banks should be required to disclose the aggregate LTV composition of their CRE portfolio for each property type. At least then investors and depositors can make a sound decision. [/quote]

The whole point of the FDIC is to eliminate the need for depositors to do such analysis. The FDIC is to do the analysis on a proper basis, and to flush out those not in conformance.

Do not underestimate the effect of bank stockholders forcing unsound behavior on their bank managers by comparing them to unsound bank managers making high returns by engaging in inappropriate banking behavior.

With respect to the FDIC, distinct from other entities, this is a black/white issue. The FDIC is failing to do its duty.

[analyst]

[quote=evolusd]
However, if these new lax FDIC standards are implemented, banks should be required to disclose the aggregate LTV composition of their CRE portfolio for each property type. At least then investors and depositors can make a sound decision. [/quote]

The whole point of the FDIC is to eliminate the need for depositors to do such analysis. The FDIC is to do the analysis on a proper basis, and to flush out those not in conformance.

Do not underestimate the effect of bank stockholders forcing unsound behavior on their bank managers by comparing them to unsound bank managers making high returns by engaging in inappropriate banking behavior.

With respect to the FDIC, distinct from other entities, this is a black/white issue. The FDIC is failing to do its duty.

[analyst]

[quote=evolusd]
However, if these new lax FDIC standards are implemented, banks should be required to disclose the aggregate LTV composition of their CRE portfolio for each property type. At least then investors and depositors can make a sound decision. [/quote]

The whole point of the FDIC is to eliminate the need for depositors to do such analysis. The FDIC is to do the analysis on a proper basis, and to flush out those not in conformance.

Do not underestimate the effect of bank stockholders forcing unsound behavior on their bank managers by comparing them to unsound bank managers making high returns by engaging in inappropriate banking behavior.

With respect to the FDIC, distinct from other entities, this is a black/white issue. The FDIC is failing to do its duty.

[Author]

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