Monday, October 29, 2007

Wilbur leads the way to 2008

I read about this guy Wilbur who recently purchased American Home Mortgage . Here we sit with daily death notices being published by the media an Wilbur wants us to believe that he would buy a company crippled by sub prime mortgages years before the market corrects itself...gee Wilbur I really don't like South Florida property. I just can't make sense of what Wilbur is trying to convince us of...that is with all those adjustable rate mortgages have days of reckoning coming up. Month after month of billions coming due should scare anyone out that market...B of A just dumped their wholesale division putting it behind them. Where are you taking your loan portfolio Wilbur?
Here we sit right in the middle of a major event that has changed the fabric of the American dream and we still have folks who won't do straight talk. Sub prime isn't gone. Nobody shot and buried it. Done legit its how many investors accumulate properties and build empires it just got out of control. In many companies risk management was sent home while money was being made all through the house all were told to be quiet as mice.
The CEO of Merrill quit this week. Some say he didn't know how to manage risk others just say he lost billions. Will someone say how much he made during the fast and furious heydays? Risk or do we mean fraud since most of the problems really connect to rampant fraud. In 2005-2006 when he moved their income up a substantial amount.
Everyone knew the market was volatile and either you sat still and watched all the other players or you jumped in to the hottest part of the flame. Merrill does not employ a bunch of amateurs. Like Bo they know risk what no one knew was how bad the fraud was. We put third world countries to shame with our no holds barred behavior. Greed was the order of the day right up to the day the phones went quiet. Suddenly there was time to look at all the folders of loans that were going to come back to haunt.
Just think through this time a person who could falsify his citizenship, lie about his income, actually you could lie about anything and get a loan on a house. Not a citizen easy to beat foreclosure...grab a new identity. Strange how easy that was in a post 9/11 era. If you were unlucky and were a citizen blame the person you gave the phony info to.
It concerns me to think that we are no more sophisticated in 2007 than we were on the black days that crashed markets. Folks quit teaching school, left the factory floors and halls of telemarketing havens to either sell real estate or sell mortgages services. Now houses don't sell and mortgage companies are fighting over one real folder.
The guys at the top took the heat. Some did not survive but in my book they are the best qualified to bring a company back from this red bath.

No comments: