Selling us down the river
August 20, 2011
When we see headlines about increasing property sales, they are designed to make someone feel good. Well, you bet the realtor, title company, movers and other service organizations “feel good.” But what about the owner who has just sold his $16 million property for $7 million or $8 million?
There is a lot of “bottom feeding” going on to try to make me, a developer and builder, believe the property market is coming back to values like in 2007. I need much more information. How much did it cost the seller to build, or buy – and when? What was the original sale price or construction cost? How much of a “haircut” did the seller take? Such as, asking $16 million and desperately taking half. Some sales are no down payment, with slow amortization and low (2 or 3 percent) interest. What they are doing is selling on a “wing and a prayer” while the lucky, or not so lucky, buyer struggles to pay the monthly mortgage cost and yearly taxes.
I’ll bet most of these sales, if all the above details are revealed, are more like renting with “benefits.”
My prediction is that the 2007 values will come back slowly until 2020. Why? Because of the damage done by Greenspan raising interest rates 525 percent from 2001-2005, and Bush, with his economic geniuses, who stood by and did nothing. It took 235 years for us to become $5 trillion in debt. Bush II doubled that to $10 trillion. Hasn’t anyone learned you cannot have “guns and butter” at the same time?
Now we are learning how Wall Street screwed Main Street by flat-out lying about mortgage “packages.” How about one of our new residents, Paulson? He helped create the phony mortgage packages at Goldman. Then left Goldman for a hedge fund betting against the packages. Guess what, Paulson made more than $15 billion, killing Main Street and profiting from massive foreclosures.
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Don’t blame Paulson. Lying and stealing for insiders was there for the taking.
Thank God for legitimate people in the investment world, such as Wally Obermeyer and his very talented staff who are right here in Aspen (and Denver). My investments, thanks to Obermeyer Asset Management Co., are back to their values when the DOW was 14,000.
Here’s the reality: Obama is no miracle man. His administration is trying their best to plug holes in the financial dikes, but more are busting out every day. It took eight years to destroy our economy by a handful of greedy people in consort with people in and out of government.
The Great Depression of the 1930s is a Sunday school picnic compared to what was done to us in eight years by Republicans from 2000-2008. But, the greatest cost was more than 5,000 of America’s finest military. How can we pay them back?
Richard C. Goodwin