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To: A.J. Mullen who wrote (37804)2/11/2012 12:31:31 PM
From: IRWIN JAMES FRANKELRead Replies (3) of 40323
 
Hi Ashley,

There is no end of arguments about this stuff. The fact pattern is sufficiently complex to allow both sides ample ammunition. Add a moral sense and the interpretations can easily reach conclusions that from a moral perspective are correct yet very damaging from an economic perspective.

I find myself siding with Bernanke. His views fit with my understanding and observations - and I am not a yes-man.

RE needs owners taking care of it or it declines in value at a damaging pace. Credit markets are impairing the uptake of the properties. That must be fixed to help the recovery and put people back to work. The losses burden the country and delay economic recovery.

>>Is a moribund real-estate market the price we pay for keeping banks from bankruptcy?


I don't think so and the Bernanke white paper paints a different picture.

My practice represents banks and creditors of all types. By an large they are frightened into inaction. Every process is now in question. Every step is subject to the tyranny of lawyers. If the spinning of the earth depended on getting lawyers to approve it - it would stop. Rule of law has become rule of lawyers. Long live the lawyers. ;-)

One of my large banks recently sent us an extensive RFP. The response took 15,000-20,000 pages. And every page will raise new questions by the lawyers if they stop to think about it. The RFP and the response will become part of the new agreement. When I started practice an agreement with that client would have taken the form of a letter of one or perhaps two pages. Ultimately, someone pays the costs of all this.


Changing subjects:


PSEC does significant lending in the energy sector - I think that is a plus for them over the other BDC's.


ij
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