Orange Duce

[old salt]

Wow. I never thought I'd see something this unhinged published in the Wash Post. I'll post the entire remarkable piece, in the next post, for the benefit of non-subscribers. It's really long, so if you want to comment, plz quote this post & not the article post, or edit out what you're not specifically commenting on, or this thread will become so long it's unreadable.

Robert Kagan, the author, is the scion of one of the founding NeoCon families, He is married to Victoria Nuland, the currently serving Deputy Secy of State, who helped foment the Maidan Revolution of 2014 & still/again manages the Ukraine portfolio.

Trump's opponents are terrified that if elected, he will turn the powers of govt that have been used against him, upon them.
It's a call to arms to do whatever it takes to stop him, no matter what it takes.
It became laughable when he said that Barr, Kelly & Milley will be in danger & Mike Flynn would be confirmed as CJCS.

https://www.washingtonpost.com/opinions ... ert-kagan/

That it's "laughable" to you -- a complicit toady and apologist of Trump and the MAGA movement -- seems to confirm that it is more than possible.

https://www.axios.com/2023/12/01/trump- ... tions-2025

Be afraid. Be very afraid.

[Kismet]

Wow. I never thought I'd see something this unhinged published in the Wash Post. I'll post the entire remarkable piece, in the next post, for the benefit of non-subscribers. It's really long, so if you want to comment, plz quote this post & not the article post, or edit out what you're not specifically commenting on, or this thread will become so long it's unreadable.

Robert Kagan, the author, is the scion of one of the founding NeoCon families, He is married to Victoria Nuland, the currently serving Deputy Secy of State, who helped foment the Maidan Revolution of 2014 & still/again manages the Ukraine portfolio.

Trump's opponents are terrified that if elected, he will turn the powers of govt that have been used against him, upon them.
It's a call to arms to do whatever it takes to stop him, no matter what it takes.
It became laughable when he said that Barr, Kelly & Milley will be in danger & Mike Flynn would be confirmed as CJCS.

https://www.washingtonpost.com/opinions ... ert-kagan/

That it's "laughable" to you -- a complicit toady and apologist of Trump and the MAGA movement -- seems to confirm that it is more than possible.

https://www.axios.com/2023/12/01/trump- ... tions-2025

Be afraid. Be very afraid.

More concerned here about trolls like you, willfully looking the other way on this sh*t.

[Olderbarndog]

If nominated and defeated (again), would he trigger events comparable to or worse than 1/6?

[Farfromgeneva]

If nominated and defeated (again), would he trigger events comparable to or worse than 1/6?

If so get the drones out because they won’t have the high ground physical at that point. We’ve got enough convictions no that it’s a slam dunk to call it treason and give every one of them the Rosenberg treatment.

[MDlaxfan76]

If nominated and defeated (again), would he trigger events comparable to or worse than 1/6?

He would try.

[Farfromgeneva]

It’s his “policies” - translation, I stand against a group of people not for anything.

https://www.wsj.com/politics/elections/ ... 3d?mod=mhp

Judd Gregg of New Hampshire, a former Republican senator and governor, said Trump’s ideas were “antithetical to conservative thought and conservative history.” The federal government funds only a small portion of elementary and secondary education and yet Trump would use that money to “mandate 100% of the control.”

“That’s not conservative—but that’s the point: Trump is not a conservative,” said Gregg, who has endorsed former South Carolina Gov. Nikki Haley’s presidential bid. “He’s an iconoclastic populist, and his views have no relation to any philosophical views. They’re all related to his personal views, which are built on all sorts of different platforms depending on what he sees in the mirror in the morning.”

Gregg said he found it ironic that Trump was proposing a muscular use of federal authority over schools, given that conservatives had once attacked Gregg for overreaching with a landmark, bipartisan bill he co-authored, known as No Child Left Behind. That bill, signed by then-President George W. Bush in 2002, required reading and math assessment tests for students in certain grades. Schools faced sanctions for failing to move more students toward proficiency, but the states, and not the federal government, set the standards.

Even some of Trump’s allies have privately expressed doubts about several of his proposals. Several former Trump administration officials said they were skeptical of the feasibility of the former president’s plan, announced in a video message on his social-media platform last month, to establish an “American Academy” funded by “taxing, fining and suing” what he calls “excessively large” private university endowments. Trump pitched the government-backed free online school as an alternative to the current higher education system. “There will be no wokeness or jihadism allowed,” Trump said.

[Farfromgeneva]

On the merits of this case here I am dropping this to make a point:

The residential square footage is a seriously lie though so easy for a lender to check I don’t know he can get jammed for that.

Residential valution is like a long term game of hit potato, value is mostly “the last comparable” but most homes are idiosyncratic and other measurements like sub area DTI so residential valuation ranges can have a truck driven through them.

Commercial properties are valued more accurately based on cash flow and various techniques (capitalization rate, DCF, if someone is involved with CRE and pitches replacement cost-RUN! Late cycle “get your balls cut off” way to invest in it-implies cost is logical compared with rental rates and operating expenses as well as market occupancies which you can’t draw a straight line to ever). It’s entirely possible that many NYC office bldgs are worth less than their 2011-2012 values these days between the market dynamics, in his case downtown transitioned from a financial district to residential over the 22 years since 9/11 where the higher paying financial and law firms don’t want to be there. And there this local law 97 kicking in which is going to fubar all class B and many older vintage class A office bldgs with massive renovation bills to meet emissions standards. Everybody trashing NYC CRE that doesn’t understand this legal dynamic (plus escalating ground rents for on 59yrs ago) is just taking blown shots at NYC.

(Credit Suisse last month Midtown outlier by Madison Square Park but it wasn’t so bad missing other bankers because you had the modeling agencies nearby and the original Shake Shake stand was in the park and not wildly overpriced like the storefronts now, Brasserie Les Halles nearby and easy to fit into a per diem…and there was dope deli in the floor of the flatiron bldg for years that was the best-trust me when you’re working past midnight all the time and 6-10 on weekends and they cover your food you care a lot about what’s nearby)

All that is presented to drop this - the special servicers would’ve loved having more assets/mortgages to handle five years ago because they make additional money floating advances in loans but today they don’t have the bodies to take them in unless a trustee really insists:

https://www.bisnow.com/new-york/news/of ... dium=email


Loan On Trump’s 40 Wall Sent To Special Servicing

Placeholder
The Trump Organization's 40 Wall Street in Manhattan's Financial District.

The mortgage on 40 Wall Street, one of the buildings at the center of former President Donald Trump’s civil fraud trial, is now in special servicing as it faces tumbling office occupancy.

The CMBS loan, which has an outstanding balance of $122.6M, down from an original balance of $160M, was transferred to special servicer Rialto Capital this month, Bloomberg reports. The debt on the 1.2M SF building doesn't mature until July 2025.

A representative for The Trump Organization told Bloomberg the loan is in “full conformance.” It is listed in the Morningstar Credit database as performing despite being placed on the lender's watchlist in February.

“We have never missed a payment, we have never paid late and we have never breached a loan covenant,” The Trump Organization's spokesperson said. “We are incredibly proud of 40 Wall St. and we will continue to operate this world-class building.”

The former president is listed as the sponsor on the loan, and the special servicer said a pre-negotiation letter was sent to the borrower.

Ladder Capital issued the loan in 2015, with the 72-story building underwritten at an appraised value of $540M. But occupancy fell from over 95% to 77% at the end of June, according to Morningstar Credit data.

The third-largest tenant in the property, pharmacy chain Duane Reade, took an early termination option on its 79K SF office in March, according to Morningstar. Its 25K SF retail space underneath the large gold-lettered “The Trump Building” sign, closed there last month.

Fitch Ratings downgraded its rating on the CMBS debt in August because of increasing vacancies, Crain's New York Business reported.

The building is also one of the properties at the heart of New York Attorney General Letitia James' civil fraud investigation of The Trump Organization, in which a New York state judge has already ruled that the Trumps committed fraud by inflating their real estate holdings' values to secure favorable loan terms while positioning properties as less valuable to reduce property taxes.

In her investigation, James found that appraisers valued 40 Wall Street at $200M in August 2010 and $220M in 2012. But on Trump’s 2011 financial statement, he pegged the value of 40 Wall at $524M, then going up to $530M in the next two years, more than double the professional calculation, according to court filings.

In court testimony last week, Trump said he believed the value of the property was “very underestimated” after admitting that the valuation provided for his Trump Tower penthouse was high, CNN reported.

The Trump Building wasn't the only prominent Manhattan office building to see its CMBS debt hit special servicing last week. The loan secured by RXR Realty’s iconic Helmsley Building at 230 Park Ave. was also transferred to special servicing because of “an imminent maturity default,” Commercial Observer reported.

[MDlaxfan76]

Basically, Trump's fraud was about exaggerating value, and attempting to justify the exaggeration of value, for various reasons, from ego to beneficial terms and opportunities. The overall pattern of such is easy to see because some of the exaggerations were so wildly overstatements of value relative to various more credible measures, whether professional assessments or tax filings with lower statements of value and some flat out lies on material components of value eg square footage. Thus, the easily reached conclusion that fraud was committed.

The only question at hand is not whether various statements were fraud, but rather how much damage, if any, was done to any party, whether public or private. Did Trump and his org gain beneficial access and/or terms to deals relative to what likely would have occurred if truth had been reported? Did banks, insurers, others get paid less than they would have? Did the public have a cost for allowing such fraudulent activity happen, whether tax or simply a contribution to a lawless climate?

Trump continues to argue that his own assessments of value were more credible than those of professionals, including those he hired. Including the assessment of tax authorities who agreed to lower valuations based on Trump's own arguments that such were justified by cash flows.

I found particularly interesting his counsel's notion that some multi-billionaire might buy Mar-A-Lago for a billion and a half, instead of the somewhere below $100 million that similarly sized and situated homes in Palm Beach trade (if not encumbered by restrictions to be used commercially)...why? because 'who knows' what some multi-billionaire might pay to own Trump's former estate/club. Specious argument, but that's what they're going with despite it already being decided that it was fraud...

[Farfromgeneva]

Basically, Trump's fraud was about exaggerating value, and attempting to justify the exaggeration of value, for various reasons, from ego to beneficial terms and opportunities. The overall pattern of such is easy to see because some of the exaggerations were so wildly overstatements of value relative to various more credible measures, whether professional assessments or tax filings with lower statements of value and some flat out lies on material components of value eg square footage. Thus, the easily reached conclusion that fraud was committed.

The only question at hand is not whether various statements were fraud, but rather how much damage, if any, was done to any party, whether public or private. Did Trump and his org gain beneficial access and/or terms to deals relative to what likely would have occurred if truth had been reported? Did banks, insurers, others get paid less than they would have? Did the public have a cost for allowing such fraudulent activity happen, whether tax or simply a contribution to a lawless climate?

Trump continues to argue that his own assessments of value were more credible than those of professionals, including those he hired. Including the assessment of tax authorities who agreed to lower valuations based on Trump's own arguments that such were justified by cash flows.

I found particularly interesting his counsel's notion that some multi-billionaire might buy Mar-A-Lago for a billion and a half, instead of the somewhere below $100 million that similarly sized and situated homes in Palm Beach trade (if not encumbered by restrictions to be used commercially)...why? because 'who knows' what some multi-billionaire might pay to own Trump's former estate/club. Specious argument, but that's what they're going with despite it already being decided that it was fraud...

Well there’s the “did he cross the threshold” in both civil and criminal and then what is the punishment or corrective measures society should apply under the law of everyone today not Trump’s law.

I think it’s going to be hard to prove the residential valution fraud becasue it’s such a guessing game though the difference between 10,000sq ft the number he used (30k I think) is astounding. Took me a while but eventually I can size buildings and floor plates by eye reasonably well after walking through enough CRE properties over time but that’s not easy for a non domain person who’s been in a few spaces in their life including a judge often.

Couple other points. Yes professional valuations are MAI which we professionally refer to as “made as instructed” and often the people in the market know better and tax assessors are always off high or low, but off. That’s all very true in reality. But that doesn’t mean anything goes either obviously. On CRE though cash flow is still king just like operating businesses with a rare exception for very exclusive trophy properties with true global demand like the hotel now converted to condos on the park or the GM bldg but even that goes away, nobody has much respect in the finance world for the Willis (formerly Sears) tower as business patterns changed such that if you’re not inside the loop near the water it’s worth a lot less.

Residential is pretty hard to prove but this knucklehead excels at going too far so maybe. Like I see it and know it easily but about half to maybe now third of my career was in CRE finance play some aspects of mortgage finance (secondary markets and structured finance around bonds and their synthetic derivatives -funny side note is the ABX HE Mritgage bond index Lehman rolled out in 2006 was seriously breaking down by first quarter of 2007 so for non fiancé folks next time you read/watch the big short recall this note when Burry talks about when pay option arms were supposed to spike n rate from subsidized teaser rates to 8-15%.). I don’t trust a lay person to see it so obviously unless the prosecutors do their job and get the right experts however (like when I was hired for some work evaluating bonds issued by countrywide in suits between BofA and the mono line insurers that was subbed out HY a Philly are a finance professor who used to be on CNBC all the time )

Hard part on damages is first half of 2010s coming out of the crisis many lenders were liking to added loan receivable assets and hyper competitive by 2013 or so because of massive liquidity and low loan/deposit ratios (can’t make a solid ROA as a spread lender if you have to keep too much liquidity which earns lower yields so incentivized you make loans that maybe are less economical than they should be because cash and liquid bonds yield at lot less, hundreds of basis points less of spread)

[MDlaxfan76]

Basically, Trump's fraud was about exaggerating value, and attempting to justify the exaggeration of value, for various reasons, from ego to beneficial terms and opportunities. The overall pattern of such is easy to see because some of the exaggerations were so wildly overstatements of value relative to various more credible measures, whether professional assessments or tax filings with lower statements of value and some flat out lies on material components of value eg square footage. Thus, the easily reached conclusion that fraud was committed.

The only question at hand is not whether various statements were fraud, but rather how much damage, if any, was done to any party, whether public or private. Did Trump and his org gain beneficial access and/or terms to deals relative to what likely would have occurred if truth had been reported? Did banks, insurers, others get paid less than they would have? Did the public have a cost for allowing such fraudulent activity happen, whether tax or simply a contribution to a lawless climate?

Trump continues to argue that his own assessments of value were more credible than those of professionals, including those he hired. Including the assessment of tax authorities who agreed to lower valuations based on Trump's own arguments that such were justified by cash flows.

I found particularly interesting his counsel's notion that some multi-billionaire might buy Mar-A-Lago for a billion and a half, instead of the somewhere below $100 million that similarly sized and situated homes in Palm Beach trade (if not encumbered by restrictions to be used commercially)...why? because 'who knows' what some multi-billionaire might pay to own Trump's former estate/club. Specious argument, but that's what they're going with despite it already being decided that it was fraud...

Well there’s the “did he cross the threshold” in both civil and criminal and then what is the punishment or corrective measures society should apply under the law of everyone today not Trump’s law.

I think it’s going to be hard to prove the residential valution fraud becasue it’s such a guessing game though the difference between 10,000sq ft the number he used (30k I think) is astounding. Took me a while but eventually I can size buildings and floor plates by eye reasonably well after walking through enough CRE properties over time but that’s not easy for a non domain person who’s been in a few spaces in their life including a judge often.

Couple other points. Yes professional valuations are MAI which we professionally refer to as “made as instructed” and often the people in the market know better and tax assessors are always off high or low, but off. That’s all very true in reality. But that doesn’t mean anything goes either obviously. On CRE though cash flow is still king just like operating businesses with a rare exception for very exclusive trophy properties with true global demand like the hotel now converted to condos on the park or the GM bldg but even that goes away, nobody has much respect in the finance world for the Willis (formerly Sears) tower as business patterns changed such that if you’re not inside the loop near the water it’s worth a lot less.

Residential is pretty hard to prove but this knucklehead excels at going too far so maybe. Like I see it and know it easily but about half to maybe now third of my career was in CRE finance play some aspects of mortgage finance (secondary markets and structured finance around bonds and their synthetic derivatives -funny side note is the ABX HE Mritgage bond index Lehman rolled out in 2006 was seriously breaking down by first quarter of 2007 so for non fiancé folks next time you read/watch the big short recall this note when Burry talks about when pay option arms were supposed to spike n rate from subsidized teaser rates to 8-15%.). I don’t trust a lay person to see it so obviously unless the prosecutors do their job and get the right experts however (like when I was hired for some work evaluating bonds issued by countrywide in suits between BofA and the mono line insurers that was subbed out HY a Philly are a finance professor who used to be on CNBC all the time )

Hard part on damages is first half of 2010s coming out of the crisis many lenders were liking to added loan receivable assets and hyper competitive by 2013 or so because of massive liquidity and low loan/deposit ratios (can’t make a solid ROA as a spread lender if you have to keep too much liquidity which earns lower yields so incentivized you make loans that maybe are less economical than they should be because cash and liquid bonds yield at lot less, hundreds of basis points less of spread)

right now its only the damages, whether actual or punitive that are in question. The fraudulent act re Trump Tower residence is primarily the square footage, but also the unreasonableness of the $ per square foot...the net result was hyper overstated. That single fraud ain't the issue though, it's the aggregate of lots of overstatements, many of which involved ignoring various deed restrictions that encumber value, then inflating double or more what the experts say, sometimes 10X, that get to the point of influencing deal terms and access. And if there are substantial such (the expert has indicated well over $100 million in benefit, then the punitive is likely to be substantial as well. Up to the judge. But arguing that there wasn't fraud is p'ing in the wind.

[Farfromgeneva]

Basically, Trump's fraud was about exaggerating value, and attempting to justify the exaggeration of value, for various reasons, from ego to beneficial terms and opportunities. The overall pattern of such is easy to see because some of the exaggerations were so wildly overstatements of value relative to various more credible measures, whether professional assessments or tax filings with lower statements of value and some flat out lies on material components of value eg square footage. Thus, the easily reached conclusion that fraud was committed.

The only question at hand is not whether various statements were fraud, but rather how much damage, if any, was done to any party, whether public or private. Did Trump and his org gain beneficial access and/or terms to deals relative to what likely would have occurred if truth had been reported? Did banks, insurers, others get paid less than they would have? Did the public have a cost for allowing such fraudulent activity happen, whether tax or simply a contribution to a lawless climate?

Trump continues to argue that his own assessments of value were more credible than those of professionals, including those he hired. Including the assessment of tax authorities who agreed to lower valuations based on Trump's own arguments that such were justified by cash flows.

I found particularly interesting his counsel's notion that some multi-billionaire might buy Mar-A-Lago for a billion and a half, instead of the somewhere below $100 million that similarly sized and situated homes in Palm Beach trade (if not encumbered by restrictions to be used commercially)...why? because 'who knows' what some multi-billionaire might pay to own Trump's former estate/club. Specious argument, but that's what they're going with despite it already being decided that it was fraud...

Well there’s the “did he cross the threshold” in both civil and criminal and then what is the punishment or corrective measures society should apply under the law of everyone today not Trump’s law.

I think it’s going to be hard to prove the residential valution fraud becasue it’s such a guessing game though the difference between 10,000sq ft the number he used (30k I think) is astounding. Took me a while but eventually I can size buildings and floor plates by eye reasonably well after walking through enough CRE properties over time but that’s not easy for a non domain person who’s been in a few spaces in their life including a judge often.

Couple other points. Yes professional valuations are MAI which we professionally refer to as “made as instructed” and often the people in the market know better and tax assessors are always off high or low, but off. That’s all very true in reality. But that doesn’t mean anything goes either obviously. On CRE though cash flow is still king just like operating businesses with a rare exception for very exclusive trophy properties with true global demand like the hotel now converted to condos on the park or the GM bldg but even that goes away, nobody has much respect in the finance world for the Willis (formerly Sears) tower as business patterns changed such that if you’re not inside the loop near the water it’s worth a lot less.

Residential is pretty hard to prove but this knucklehead excels at going too far so maybe. Like I see it and know it easily but about half to maybe now third of my career was in CRE finance play some aspects of mortgage finance (secondary markets and structured finance around bonds and their synthetic derivatives -funny side note is the ABX HE Mritgage bond index Lehman rolled out in 2006 was seriously breaking down by first quarter of 2007 so for non fiancé folks next time you read/watch the big short recall this note when Burry talks about when pay option arms were supposed to spike n rate from subsidized teaser rates to 8-15%.). I don’t trust a lay person to see it so obviously unless the prosecutors do their job and get the right experts however (like when I was hired for some work evaluating bonds issued by countrywide in suits between BofA and the mono line insurers that was subbed out HY a Philly are a finance professor who used to be on CNBC all the time )

Hard part on damages is first half of 2010s coming out of the crisis many lenders were liking to added loan receivable assets and hyper competitive by 2013 or so because of massive liquidity and low loan/deposit ratios (can’t make a solid ROA as a spread lender if you have to keep too much liquidity which earns lower yields so incentivized you make loans that maybe are less economical than they should be because cash and liquid bonds yield at lot less, hundreds of basis points less of spread)

right now its only the damages, whether actual or punitive that are in question. The fraudulent act re Trump Tower residence is primarily the square footage, but also the unreasonableness of the $ per square foot...the net result was hyper overstated. That single fraud ain't the issue though, it's the aggregate of lots of overstatements, many of which involved ignoring various deed restrictions that encumber value, then inflating double or more what the experts say, sometimes 10X, that get to the point of influencing deal terms and access. And if there are substantial such (the expert has indicated well over $100 million in benefit, then the punitive is likely to be substantial as well. Up to the judge. But arguing that there wasn't fraud is p'ing in the wind.

Admittedly I cant keep track of all his self inflicted problems but was the verdict already handed over on this one? I know hes fraudulent and guilty flat out but concerned about which non pracitioners are trying to make sense of it with a lot of noise presumably thrown at them.

$/sq. ft. on resi is impossible to really jam someone on, total floorspace obvious (but again that's such negligence on a lender as to suggest they were conspirators in it).

Commercial is much easier to evaluate was my point all along becuase you have real, hard to argue metrics and methodologies unlike residential to get to a valuation.

Seems like the easiest one is that the interest tax deduction for higher proceeds is fundamentally tax fraud. Pretty straightforward compared with damages to lenders and other investors. Especially when NYC CRE is getting creamed and that was without SBNY who is gone now. That bank effectively took the place in tri state lending that Washington Mutual had prior to their failure in the financial crisis cranking out small balance loans without much rigor and buying into asset values detached from cash flows (we used to refer to it as "the colonial bank of CRE")

(Signature which was doing in excess of $5Bn a year in mostly Tri state CRE lending and the average loan was below $10MM meaning they were just churning out financings around the city and making things easy - they also played this game where any NYC CRE that got to 30 days late theyd punt so as to never show a delinquency which worked for years because some local investor always has cash for small balance CRE in the city, until now)

[MDlaxfan76]

Basically, Trump's fraud was about exaggerating value, and attempting to justify the exaggeration of value, for various reasons, from ego to beneficial terms and opportunities. The overall pattern of such is easy to see because some of the exaggerations were so wildly overstatements of value relative to various more credible measures, whether professional assessments or tax filings with lower statements of value and some flat out lies on material components of value eg square footage. Thus, the easily reached conclusion that fraud was committed.

The only question at hand is not whether various statements were fraud, but rather how much damage, if any, was done to any party, whether public or private. Did Trump and his org gain beneficial access and/or terms to deals relative to what likely would have occurred if truth had been reported? Did banks, insurers, others get paid less than they would have? Did the public have a cost for allowing such fraudulent activity happen, whether tax or simply a contribution to a lawless climate?

Trump continues to argue that his own assessments of value were more credible than those of professionals, including those he hired. Including the assessment of tax authorities who agreed to lower valuations based on Trump's own arguments that such were justified by cash flows.

I found particularly interesting his counsel's notion that some multi-billionaire might buy Mar-A-Lago for a billion and a half, instead of the somewhere below $100 million that similarly sized and situated homes in Palm Beach trade (if not encumbered by restrictions to be used commercially)...why? because 'who knows' what some multi-billionaire might pay to own Trump's former estate/club. Specious argument, but that's what they're going with despite it already being decided that it was fraud...

Well there’s the “did he cross the threshold” in both civil and criminal and then what is the punishment or corrective measures society should apply under the law of everyone today not Trump’s law.

I think it’s going to be hard to prove the residential valution fraud becasue it’s such a guessing game though the difference between 10,000sq ft the number he used (30k I think) is astounding. Took me a while but eventually I can size buildings and floor plates by eye reasonably well after walking through enough CRE properties over time but that’s not easy for a non domain person who’s been in a few spaces in their life including a judge often.

Couple other points. Yes professional valuations are MAI which we professionally refer to as “made as instructed” and often the people in the market know better and tax assessors are always off high or low, but off. That’s all very true in reality. But that doesn’t mean anything goes either obviously. On CRE though cash flow is still king just like operating businesses with a rare exception for very exclusive trophy properties with true global demand like the hotel now converted to condos on the park or the GM bldg but even that goes away, nobody has much respect in the finance world for the Willis (formerly Sears) tower as business patterns changed such that if you’re not inside the loop near the water it’s worth a lot less.

Residential is pretty hard to prove but this knucklehead excels at going too far so maybe. Like I see it and know it easily but about half to maybe now third of my career was in CRE finance play some aspects of mortgage finance (secondary markets and structured finance around bonds and their synthetic derivatives -funny side note is the ABX HE Mritgage bond index Lehman rolled out in 2006 was seriously breaking down by first quarter of 2007 so for non fiancé folks next time you read/watch the big short recall this note when Burry talks about when pay option arms were supposed to spike n rate from subsidized teaser rates to 8-15%.). I don’t trust a lay person to see it so obviously unless the prosecutors do their job and get the right experts however (like when I was hired for some work evaluating bonds issued by countrywide in suits between BofA and the mono line insurers that was subbed out HY a Philly are a finance professor who used to be on CNBC all the time )

Hard part on damages is first half of 2010s coming out of the crisis many lenders were liking to added loan receivable assets and hyper competitive by 2013 or so because of massive liquidity and low loan/deposit ratios (can’t make a solid ROA as a spread lender if you have to keep too much liquidity which earns lower yields so incentivized you make loans that maybe are less economical than they should be because cash and liquid bonds yield at lot less, hundreds of basis points less of spread)

right now its only the damages, whether actual or punitive that are in question. The fraudulent act re Trump Tower residence is primarily the square footage, but also the unreasonableness of the $ per square foot...the net result was hyper overstated. That single fraud ain't the issue though, it's the aggregate of lots of overstatements, many of which involved ignoring various deed restrictions that encumber value, then inflating double or more what the experts say, sometimes 10X, that get to the point of influencing deal terms and access. And if there are substantial such (the expert has indicated well over $100 million in benefit, then the punitive is likely to be substantial as well. Up to the judge. But arguing that there wasn't fraud is p'ing in the wind.

Admittedly I cant keep track of all his self inflicted problems but was the verdict already handed over on this one? I know hes fraudulent and guilty flat out but concerned about which non pracitioners are trying to make sense of it with a lot of noise presumably thrown at them.

$/sq. ft. on resi is impossible to really jam someone on, total floorspace obvious (but again that's such negligence on a lender as to suggest they were conspirators in it).

Commercial is much easier to evaluate was my point all along becuase you have real, hard to argue metrics and methodologies unlike residential to get to a valuation.

Seems like the easiest one is that the interest tax deduction for higher proceeds is fundamentally tax fraud. Pretty straightforward compared with damages to lenders and other investors. Especially when NYC CRE is getting creamed and that was without SBNY who is gone now. That bank effectively took the place in tri state lending that Washington Mutual had prior to their failure in the financial crisis cranking out small balance loans without much rigor and buying into asset values detached from cash flows (we used to refer to it as "the colonial bank of CRE")

(Signature which was doing in excess of $5Bn a year in mostly Tri state CRE lending and the average loan was below $10MM meaning they were just churning out financings around the city and making things easy - they also played this game where any NYC CRE that got to 30 days late theyd punt so as to never show a delinquency which worked for years because some local investor always has cash for small balance CRE in the city, until now)

Yes, the judge already made a legal ruling that fraud was committed and he cited various instances and pattern of such. It included a wide array.

I agree that valuing cash flows is less arbitrary than comparable values of "trophy" residential real estate albeit those comps are available and when you double the highest estimate just because you feel like it that's gonna be not ok. the wrong square footage simply makes clear the intentionality of trying to justify ridiculous numbers by simply lying flat out.

Damages are an entirely more nuanced matter and they haven't been determined...that's what these hearings are about.

[njbill]

Judge has already ruled Trump committed statutory (not common law) fraud, which does not require a showing of reliance by the lenders and others, as common law fraud would.

The issue being tried now is damages. Trump is trying to argue that the lenders, etc. weren’t damaged because they knew he was lying. Don’t think this judge is going to buy that defense, but it remains to be seen how high the damages are set by this judge. With the way Trump is attacking the judge’s wife and law clerk (mind numbingly dumb), the judge is going to bend over backwards to slam Trump. As he should.

[Farfromgeneva]

Thanks on both NJB and MD. I only deal in legal stuff when I need to get into the weeds of the details financially or of the deal in question and rely on the attorneys for the rest.

Presumably they are looking at the damage from the time of the act not necessarily where the market would put the damages now which is likely to be worse. And how do you evaluate opportunity cost for investors/lenders? I could come up with a number of methodologies from a finance side but presumably that's fairly codified for this type of scenario as to how to assess damage.

[njbill]

Actually, my understanding is that this type of situation is pretty rare, such that there isn’t a lot of authority out there for how to assess damages in a case like this. Some have said the judge could calculate the damages by looking at the interest and other costs Trump saved, that is, had he told the truth, the lenders would’ve charged him higher rates. I’m not sure of this, but I suspect the judge can also award punitive damages. For those, the sky could be the limit.

Of course, Trump is going to appeal all this, including the earlier finding of fraud.

[Farfromgeneva]

Actually, my understanding is that this type of situation is pretty rare, such that there isn’t a lot of authority out there for how to assess damages in a case like this. Some have said the judge could calculate the damages by looking at the interest and other costs Trump saved, that is, had he told the truth, the lenders would’ve charged him higher rates. I’m not sure of this, but I suspect the judge can also award punitive damages. For those, the sky could be the limit.

Of course, Trump is going to appeal all this, including the earlier finding of fraud.

Honestly I know that world and some delta in interest rate is a nothing. At that stage and type of asset if it wasn't Brian Harris at Ladder or whoever was left at DB post crisis it woudl've been Cantor or Barclays etc. Worst case some sloppy superregional bank wouldn't ask the hard question of "why have I never been in the mix to finance this guy but now I'm the lead horse" and likely dropped their pants with even more permissive and easy terms - not hard to move down market for a while and keep getting good deals. Maybe you coud argue the capital charge (equity held) could have been utilized elsewhere but it would've been similar terms.

Punitive seems the way to go.

And his brand wasn't tarnished then and even so there's many odious CRE players in NYC who consistently get easy credit, Harry Macklowe is a name you might recongize who literally paid a dude in the 80s to tear down a SRO while an injunction was in place and the guy sat in jail for Harry and it hut numerous lenders as well and they gladly levered him up on the GM building and various hotel tear down redevelopments as one example.

[MDlaxfan76]

Judge has already ruled Trump committed statutory (not common law) fraud, which does not require a showing of reliance by the lenders and others, as common law fraud would.

The issue being tried now is damages. Trump is trying to argue that the lenders, etc. weren’t damaged because they knew he was lying. Don’t think this judge is going to buy that defense, but it remains to be seen how high the damages are set by this judge. With the way Trump is attacking the judge’s wife and law clerk (mind numbingly dumb), the judge is going to bend over backwards to slam Trump. As he should.

I dunno that "the judge is going to bend over backwards to slam Trump" but I think it would be fair to say that one shouldn't expect the judge to bend over backwards not to do so. I suspect Engeron is going to be very careful to have a sound basis for his decision, but it's not as if Trump's actions will make the Judge feel sorry for him!

[MDlaxfan76]

Actually, my understanding is that this type of situation is pretty rare, such that there isn’t a lot of authority out there for how to assess damages in a case like this. Some have said the judge could calculate the damages by looking at the interest and other costs Trump saved, that is, had he told the truth, the lenders would’ve charged him higher rates. I’m not sure of this, but I suspect the judge can also award punitive damages. For those, the sky could be the limit.

Of course, Trump is going to appeal all this, including the earlier finding of fraud.

Honestly I know that world and some delta in interest rate is a nothing. At that stage and type of asset if it wasn't Brian Harris at Ladder or whoever was left at DB post crisis it woudl've been Cantor or Barclays etc. Worst case some sloppy superregional bank wouldn't ask the hard question of "why have I never been in the mix to finance this guy but now I'm the lead horse" and likely dropped their pants with even more permissive and easy terms - not hard to move down market for a while and keep getting good deals. Maybe you coud argue the capital charge (equity held) could have been utilized elsewhere but it would've been similar terms.

Punitive seems the way to go.

And his brand wasn't tarnished then and even so there's many odious CRE players in NYC who consistently get easy credit, Harry Macklowe is a name you might recongize who literally paid a dude in the 80s to tear down a SRO while an injunction was in place and the guy sat in jail for Harry and it hut numerous lenders as well and they gladly levered him up on the GM building and various hotel tear down redevelopments as one example.

I don't think the punitive will be big if the finding is that there was little benefit gained through fraud. But any amount of benefit will justify the loss of business licenses.

I think it's less about "damage" than the benefit gained (lower fees etc). Those have been estimated to exceed $100 million.

[njbill]

We shall see. I think it will be a big number.

Edit: this was in response to MD‘s prior post, not his most recent one. When I say “big number,” I am referring to the total damages award. Not sure how big the punitive number alone will be, but I don’t think it will be small. Punitive damages are to punish the wrong doer. Trump needs punishing. That is indisputable.

[MDlaxfan76]

We shall see. I think it will be a big number.

Yes, but because the benefit gained will be found to have been substantial. Punitive may double or triple that...enough that it will be a warning to any other fraudulent billionaire.