Axios Capital: When society faces the unprecedented

Our febrile world is not normal.

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One Response to Axios Capital: When society faces the unprecedented

  1. MIKE BLACK says:

    Dear Mr. Salmon;
    I just read your article, titled “WHAT’S A SUPER-SENIOR TRANCHE”, dated Dec.2, 2008. What I read was literally prophetic in your analysis. The analysis was totally profound, especially to write this article in the midst of the Recession in 2008.
    Today, I am seeing a situation where the Banks, as a whole, have a total, collectively, of over $80 Billion in Non-Accrual Assets secured by Real Estate, as per the FDIC, as of June 30, 2020. BUT, try to get with individual banks to try to work with them in taking these types of assets off of their hands is very difficult, to say the least. These assets are considered by their FDIC as being negative in their impact on Banks. For example, Bank of America has a total Non-Accrual of between $6-6.5 Billion, of which $4-4.5 Billion is secured by Real Estate. Try to get a even a partial listing of these assets, GOOD LUCK. Even if You have funds to work with, GOOD LUCK. The sad fact is that there is tremendous amounts of funds available and interested in acquiring these assets, from within the USA, and from without. For example, there are groups, collectively representing $58 Billion in assets, interested in Mobile Home Parks, all of this funding coming from sources in America. There is a Non-Profit, with $200 Million in an European Bank interested in Transferring those funds into an American Bank, all in accordance with the FDIC, for investing in Real Estate in America. The sources in the Orient, especially Chinese, and Indian, already invest at least $70 Billion, if not more, in Real Estate and Businesses in America.
    And Yet, the Banks “Hid” these assets. Try to find an accurate listing. Can you imagine the property taxes Bank of America pays for their Non-Accrual Real Estate Assets of $4-4.5 Billion in value that they own (REOs). What affect does that expense have on the Bank? Imagine the affect of this asset on Banks that are financially hurting, and the FDIC, OCC, and the Federal Reserve, are all aware of who is hurting.
    There is so much more to say. For example, Imagine, if these assets could be made to help Charities, especially those helping children and Veterans, like St. Jude, following in the example of the Catholic Church, the Charities being the owner of these assets; thereby, acquiring the properties’ equity and the monthly cash flow, if the properties are held onto. Imagine the potential!! Also, at that level, there are people and companies available able to help the Charities manage these properties to make sure the properties will generate a profit. In the meantime, this negative for the Banks can become a positive for the Charities. Ideally, Imagine what $80 Billion in these assets would mean for all of these Charities, if they became the OWNERS of these properties!! Presently, the current Owners, the Banks, either don’t know what to do, or do not realize the full extent of the problem, or, even worse, don’t care. Maybe the Banks think they will be bailed like they were in the Great Recession? It definitely is an unknown, a Question mark that maybe answered soon. Who Knows?

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