From The Wall Street Journal:Sheila Bair, the chairman of the Federal Deposit Insurance Corp., takes her 14-room home in Amherst, Mass., off the market after cutting its sale price by $100,000. She had originally listed it for $795,000 in April. Ms. Bair and her husband, Scott P. Cooper, bought the 1860s house in 2002 for $355,000. The home has five bedrooms, new roofing and a counter-current basement pool.
Since both Sheila Bair and
Tim Geithner have recently tried and failed to sell their homes at unreasonably high prices, do they have a conflict of interest regarding the housing bust and financial crisis? Do they have an incentive to use the powers of their offices to prop up prices?
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Doesn't matter, cause nobody is buying their home anyway.
ReplyDeleteIf they weren't selling their properties, it wouldn't be as much of a conflict of interest.
ReplyDeleteWell at some level, it's only a conflict of interest if you intend to sell or to put the property up a collateral for a loan. Those of us who bought pre-bubble and don't intend to sell have an easier time stepping back and observing the RE craziness of the last few years.
ReplyDelete--Jim A
"Those of us who bought pre-bubble and don't intend to sell have an easier time stepping back and observing the RE craziness of the last few years."
ReplyDeleteJim, there was a time here on this blog where anyone who owned RE was said to be losing their shirt because there was "blood in the streets". The notion that someone could own RE *and* be comfortable financially was inconceivable to bubbleheads.
Nice to see that sort of erroneous logic fading away.
I miss JerkStore, and NOZ, and the Gay Oil Guru.
ReplyDeletewhen you're in a type of powerful, far reaching financial position Baird holds it could be argued that any large financial transaction if a conflict of interest. She could probably move the S&P 5% in a day with the right commentary. At a certain point that kind of speculation becomes true conspiracy theory when there's no evidence to support it.
ReplyDeleteI agree with shamrock and kahner but wait a minute, she's asking double what she paid for it in 2002? I don't know, I think I'd prefer to have someone smoking a little less crack overseeing the financial system.
ReplyDeleteIt just connotes one thing that during the times real estate industry is booming many people made money out of it. We could only hope for the better.
ReplyDeleteBut my house is probably STILL worth more than I paid for it, my mortgage is less than equivalent rent, and 9 years from now I'll own it free and clear. How can I be said to be losing my shirt? I can reasonably with that I had sold at peak, but I don't want prices to stay at unsupportable levels.
ReplyDeleteAnd for the most part I agree with Anon412. But it's not so much that she ASKED for twice what she paid, after all, two years ago she would have gotten it. It's that she thinks that holding on to the property will get her more later. Keep in mind that for the most part, the top end has yet to see the PRICE declines that the bottom has. The actual rich can hold out before being forced to sell. But the fake it to make it crowd will be captulating soon, and they're likely to bring prices down.
--Jim A
"The actual rich can hold out before being forced to sell. But the fake it to make it crowd will be captulating soon"
ReplyDeleteThere are actually FEW rich. The real rich live in small houses and drive 10 year old american built cars. Go read the "millionaire nextdoor."
The rich neighborhoods are filled full of doctors and lawyers living day to day, sweating bullets to pay their credit cards, car payments and mortgages.
The well-off (because, 7:29 is right, we're not really talking about the rich here) DO have a greater cushion than most in my neighborhood. Whether that cushion is cash or credit probably makes little difference in the timing of the declines in upper quartile house prices. It probably makes a big difference to banks and bond-(read bag)holders though. --Jim A.
ReplyDelete