10% earnings per share - 13% RoE. Get some NOW!
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Originally Posted by herosrest
The lender valuing that asset is a conflict of interest.
The lender as trustee, manipulating that asset to destroy its value is a breach of trust.
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This isn't logic at all, it's hopeless idealism. If you think for one second that a lender doesn't know the approximate value of a collateral item and price his money accordingly, you're dreaming.
Get with the concept - the important thing here isn't the money being loaned, but that the loan itself is a commodity that is being sold. The borrower is buying the opportunity to obtain the money for a certain amount of time. The seller of the opportunity sets his own price, regardless of whether someone else values it higher or lower. The buyer/borrower can accept or decline the terms. There's no such thing as a third party to a loan, except in an ancillary role as witness.
Quote:
Originally Posted by Herosrest
The lender valuing that asset is a conflict of interest.
A property purchase is a transaction between the owner of a property and a buyer.
Finance of the sale is usually offered by a third party, who will hold title to the property in TRUST until the loan they finance, is repaid.
The lender, DOES NOT own the property being financed.
This small but vital aspect of home purchase finance has been overlooked recently.
It remains the underlying basis and fact of property purchase financing.
The Lender DOES NOT OWN THE PROPERTY.
Finance people think a certain way. They do not operate in the common interest. That is fact of business. They are subject to law, legal process and financial accountability. Trustees hold a responsibity to defend the value of the home buyers asset. The agreement between the lender and buyer allows them to treat the property as an asset, the assumption being one of common interest between the property buyer and the lender. A twisted mind decided it would be terrific to unlock the value of housing markets by getting lenders to trade these 'assets held in trust' as commodities. They are not commodities. They are peoples homes. Even so, with responsible behaviour and proper control, this is a very good idea. In practise it has been turned into a game of Casino and Governments and taxpayers are picking up the tab for a game of roulette which was rigged from the very start by criminal minds who realised the potential for profits unlimited from chaotic market trading of unregulated Financial Trading Derivative contracts.
How in the name of God does anyone think that Hedge Funds are able to maintain "earnings per share target of 10 percent and return on equity of 13 percent.''
Finance is a service, it does not make the world go around.
It attracts the most unreasonable and obnoxious and unscrupulous people on earth. The derivatives that are causing the huge headache with Banks are going to continue for the next 7 to 10 years. That is the contract term of them. The Banks are not writing these things off........... they are writing them down.
When it suits them - they will be written back up again. It is a huge multi- Trillion dollar CON.
writedown
A reduction in the value of an asset carried on a firm's financial statements.
For example, the firm's accountants, believing the inventory is overvalued,
may decide to take a writedown by reducing inventory valuation.
Unlike a writeoff, a writedown does not result in elimination of the asset.
Property values, as opposed to sale price, cannot be allowed to fluctuate.
That they can is a lie. Current property value is constant and defined by Insurance Rebuild cost.
The whole thing going on now is a conceptual CON that destroys economies and leads to wars.
It is a flawed and illegal process.
Property Value has nothing to do with the price it sells for.
I shidt you not!
