Bear Stearns’ Bailout numbers are huge….really huge.
May 13th, 2008If you are like most of us the recent bail out of Bear Stearns’ was just a passing blip in the never ending river of talking head blather and hype… most of it BS… about real estate, finance and investing. However, a closer look at the magnitude of exposure Bear Stearns’ has in derivatives gives us a prospective about why the bailout was necessary. My mentor and associate Pat Kitano has a great article about this mega event and what it really means.
So with all the hype going on about real estate slumping, tanking and all that in the Oceanside Carlsbad, Vista, San Marcos and Encinitas areas some people actually believe that sellers will be paying buyers to take their property, perhaps giving them a monthly stipend, or arranging a marriage with their daughters and mowing the yard for them until 2020. REALITY CHECK…there are some great buys to be found but don’t miss the boat. According to HomeDex median prices in the North San Diego County Coastal area actually increased about 5% in April. There are homes on the market in the North San Diego County and many other economically stable areas that couldn’t be built for their current asking price. According to some, so called, authorities we are 75% through the sub-prime fiasco. So what! Prices are down, interest rates are low, inflation is rising and what better asset to own than Real Estate? Real Estate is personal shelter, tax shelter, it doesn’t evaporate like a stock can, you can live in it , rent it, insure it so if it burns to the ground it can be rebuilt and underneath is the land value. Real Estate is a tangible asset, not a piece of paper like a Bear Stearns’ derivative.
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