Mad Men and Key West Real Estate

I discovered Mad Men a couple of weeks ago. It is an AMC Cable TV series that is executive produced by Scott Hornbacher (The Sopranos). The first season of Mad Men takes place in the year 1960, and you can watch every episode if you have On Demand on your cable. Spend an afternoon or two and invest in some good TV if you have not watched it.

The sets, the furniture, the lamps and artwork, the cars, the clothes, the hair styles and hair cuts, the incessant chain smoking, the expense account lunches, and the martini drinking transport us back to a kinder, gentler time. Forty-eight years later those of us who lived through that time can look back, not in anger, but with nostalgia, and remember how much easier life was then.

In one of the first episodes Betty was shopping in the grocery store. Vintage products whose brands have disappeared or whose logos have changed remind us of things we have long forgot. In the vegetable aisle we see prices that look like food was almost free by comparison to today's prices.

The interior shots of the characters' homes look so dated. Betty Draper, the wife of Don (Juan) Draper (the male lead) looks like Betty Furness in her 1960's kitchen complete with knotty pine walls. Some of the rooms look like some houses I occasionally show in the New Town area of Key West, except people still live in those houses--houses that were built and furnished in the 1960s and not updated except for maybe a plasma TV or computer. And the Key West version is nowhere nearly as swank.

Later we see the corporate office with the IBM Executive Typewriters and other almost antique office furniture and fixtures. But it is when ad exec Pete Campbell states his salary is $75 per week salary that we are shocked into 21st Century reality. Seventy-five dollars! Per Week! In one of the last episodes Peggy Olsen gets elevated from secretary to junior copywriter and a salary of $35 per week. That is a time when most women were relegated to being either homemakers or the servants to men in the workplace. That is pre-glass ceiling. And pre-civil rights as well. Not a black to be seen in the office except a janitor who gets to spy a sexual romp through the opaque glass of an adman's office.

Later we see Pete Campbell and his wife Trudy go shopping for a Manhattan apartment that was offered at $30,000. Now I realize this is TV and that the apartment is a set, but CLICK HERE this is how much you could buy in 1960's New York for thirty grand. Most cars cost that much these days.

I was 13 in 1960. I remember it quite well in some respects. I remember that you could buy a regular Coke for a nickel and a King Sized Coke for a dime. McDonalds was new to Denver, and you could buy a hamburger for 15 cents, fries and a Coke for a dime each. I could eat a nice lunch for about fifty cents--the original Value Meal. There used to be roadside truck stands where my mom would by fresh farm produce in the summer. I remember Rocky Ford Cantaloupes and ripe watermelons for about a nickel a pound. And gas cost about 20 cents per gallon for as long as I could remember. I have some old black and white movies my uncle took of a Skelly Gas station he owned on Speer Boulevard in Denver in the 1940s. Gas cost 15 cents back then. Twenty years later it cost 20 cents per gallon. Almost 50 years later it costs about $4.35 per gallon.

Everything was cheaper back in the 1960s. As I recall most of the people I knew had one car and one TV. I don't remember any of my friends wearing a designer anything. Haircuts cost a buck and we all looked well fed and well bred.

I seem to recall the first minimum wage job I had paid $1.00 per hour in the mid 1960s. Then the minimum went up to $1.10. Man, I was rich with the stroke of a pen.

I remember my parents looked at buying a new house in the Applewood area 10 miles west of Denver in the early 1960s. I recall it cost about $15,000. I just looked at some similar houses online and they are now being offered in the $400,000s to $500,000s.

The cost of everything has gone up since the "Mad" 1960s. I don't have any idea what a Madison Avenue ad executive makes today, but I'll wager it is a lot more than the $75 per week Pete Campbell ad exec made. I know that today an apartment in Manhattan costs way more than $30,000. I would guesstimate that most shop clerk type jobs pay about $10 - $16 per hour in Key West. Most hard labor jobs pay between $17 to $25. Carpenters get paid $45 to $65 per hour in Key West. A studio apartment in Key West costs about $1100 per month. A one bedroom apartment in Key West would cost $1200 per month or more. And a buyer can probably pick up a nice two story town house at the Key West Golf Club for under $300,000.

The simple life of the 1960s is gone. Today many families have a car for every person of driving age, a TV in every room, and a cell phone for each family member capable of using one. Many families own at least one vacation home in addition to the family residence. We have so many things that have made our lives less simple.

Inflation has made the cost of many things seem terribly high, but the cost of some things we use daily have become so cheap that they are now considered disposable instead of repairable: TVs, cellphones, computers, major appliances, gas blowers, etc. You get the idea. I know that there are some people who read my little blog that think the cost of houses in Key West is still too high. I think that prices have moderated quite a bit. There are still some mis-guided missiles in the Key West real estate market who continue to over-price their listings. But there are probably as many bottom-feeder buyers trying to suck the smell off of every zero in a real estate contract.

Invest some of your time and watch Mad Men on AMC. See how much better (or worse) our lives are nearly a half century later. If you think the next half century will bring us equally good fortune, you might be interested in buying a house in Key West at some of the best prices in a long time. CLICK HERE to checkout the Key West Association of Realtors mls database of residential and commercial listings. If you see something you like please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com.

Sink or Swim -- Key West Real Estate

Two sales went through the mls yesterday that give us some insight into how the Key West real estate market is fairing these days.

Sale No. 1 was a bank foreclosure of a single family home at 1116 Eaton Street in Old Town. I showed the house about 5 weeks ago and it was pretty much the same as it was several years ago when it sold for a much higher price. The house has 2 bedrooms, one bath, a newer kitchen and a small pool. It is located on Eaton Street near the corner of White--one of the busiest intersections in town. It sits across the street from the entrance to Manley de Boer Lumber, Ace Hardware, and The Restaurant Store. CLICK HERE for more details on the house. It was listed originally for $379,900 and sold for $330,000 or $491 per sq ft.

Sale No. 2 is a Key West Landmark located at 1101 Casa Marina Court. It is the former estate of noted author Philip Caputo. It is one of the few Key West homes with a true ocean view. The home underwent some costly renovation and the gardens were extensively updated. It was originally listed for $5,750,000 and sold this week for $4,650,000 or $1,055 per sq ft. CLICK HERE for more info on this home.

For those that think the market price is Key West has totally tanked (or hope that it will), maybe your perception of the current market is a little skewed. I'm not trying to pick a fight with anyone. I think there are individual properties that are way over-priced based on condition, location, or the fuzzy logic of owners or their Realtors.

I am a pragmatist and I think the only sellers in Key West today are sellers who need to sell for some reason. Not all sales are distress sales. Some properties are "estate sales" where property is offered to help settle the estate of a recently departed. There are some divorce sales to be sure. This economic environment has cause a lot of marital stress. There are some developers or investors who have several properties that they purchased during the good times that they need to sell to reduce their mortgage payments. Those sellers may not be facing foreclosure, but they need to reduce the monthly outflow. The majority of listed properties are short sales and the offerings priced like short sales. And finally, there are the bank owned properties. They are typically, but not always, the houses that could not be sold because of legal issues, locational issues, or structural issues that made a regular sale nearly impossible.

Small houses usually sell at a higher price per square foot than a large home. Poorly located properties typically sell at a discounted price per square foot over those with a good location.
Houses on the market for a long period of time usually reflect some problem with the properties and that usually means a lower price per square foot. I don't pretend to understand how the appraisal process works, but these general rules seem to work quite consistently.

I see the sale of 1116 Eaton as being a reaffirmation of the value of Old Town as the place to buy. I remember showing similar properties to a New Yorker a few years ago. He said he didn't mind the street noise. He was used to it. He was looking for value and an Old Town location.

For those who think no house in Key West is worth a $1,000 per square foot, maybe you are mistaken. Maybe the Casa Marina sale will cause you to rethink the value of that location. I was showing a home last week to a couple who already own several homes in different locations including an apartment they purchased in the Belgravia section of London several years ago during a downturn there. They told me that the price per square foot is approaching $80,000 and that there is a line of buyers (Middle East, Russia, India and China)waiting to buy. Wish they were here!

If you are interested in buying a home or investment property in Key West CLICK HERE to checkout the Key West mls database. It is maintained in real time and you don't need any passwords to see what is available. If you would like to see a property please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com. There are some deals to be had out there. Many properties are priced far below the Eaton Street house.

Shipyard Units -- Key West

The Shipyard Condominiums in Truman Annex have become favorite entry level properties for second home purchasers in Key West.
Although the units were almost identical when constructed in the early 1990s, many have been remodeled or updated to accommodate usage as vacation rentals.

I created a list of the units available CLICK HERE. The list shows the size, amenities, price, and price per sq ft so that prospective buyers can make a quick comparison between the different properties.

Some of the units have a transient rental license that permits the rental of the unit on a daily basis as permitted by a newly adopted City Ordinance. But other units do not have that license. So if you are looking to purchase a unit that can be legally rented on a daily basis, pay careful attention to the details on each unit.

Several of the units are offered as possible short sales. A short sale occurs when a lender (bank or mortgage company) allows the property to be sold for less than the remaining balance on the mortgage loan. The asking price may be subject to negotiation and there is no assurance the lender will agree to accept any sum less than the total owed on the mortgage. But since there are so many properties in foreclosure across the nation, prospective buyers may want to consider purchasing such a property on the chance that they may buy the property at a somewhat discounted value. (Not all properties are shown to the public as short sales. So it may be necessary to consult with a Realtor to determine whether any particular unit is offered as a short sale.)

One particular condo you might want to consider is unit no. 194 which is located in the southeast corner of the development near the corner of Thomas and Petronia Streets. This unit was just reduced in price from $539,000 to $499,000 and it is offered fully furnished. The furnishings are especially nice. According to the listing agent, this ground floor unit has a good rental history. It does have the valuable transient rental license. CLICK HERE for additional info on unit no. 194.

I would caution any buyer of a condominium or town home in Key West or anywhere else to review the condo docs and the home owner association budget to make sure the association is well capitalized and able to carry out business functions in the future without the imposition of any special assessments. I am not suggesting that Shipyard or any other association is in financial danger. But I am saying buyers need to investigate the fiscal stability of any project in which they may become an owner.

If you want to see any of the units listed here, please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com.

623 Grinnell St. Old Town Key West, Fl

Just Listed: 623 Grinnell Street, Old Town, Key West, Florida. Absolutely charming historic home on a quiet street in the heart of old town. Original details throughout. High ceilings, 3 generous bedrooms including downstairs master. Off Street parking for 2 vehicles in tandem, wonderful porches and covered outside living area. An adorable home on one of the finest streets in Old Town Key West. CLICK HERE for more detailed information.

This 1646 sq ft home sits on a 3140 sq ft lot and is priced at $895,000 or $544 per sq ft. The home is now offered as a short sale. Just three months ago it was originally priced at $1,179,000 or $716 per sq ft. That is the reality of our current market. This property has always been a favorite of mine. It just oozes charm.

The house is located in one of the great Old Town neighborhoods. Five Brothers Grocery is just a hop-skip-and-a-jump away at the corner of Southard. You can go there every morning for your con leche and catch up with all the latest Key West gossip. Everybody famous goes there. You foodies know that Michael's is a two minute walk and Mangia Mangia takes the same time to reach if you got a craving for pasta. The Historic Key West Seaport is about a five minute walk to the north. Duval Street is a five or six minute stroll. It takes longer if you stop to smell the flowering trees.

If you are looking for a classic home, this one may be what you have been waiting for . It is a short sale, so there may other potential buyers who have their offers in the mix along with yours. That is just a fact of trying to buy a short sale property. But the wait and price break may be worth the trouble.

Want to see this house? Please call me, Gary Thomas, 305-766-2642 or e-mail me a kw1101v@aol.com. It is not my listing, but don't let that stop you from calling me. I work with buyers all the time.

Dream Fulfillment in Key West

Some people vacation in Key West year after year. They dream of buying a second home that they can rent as a transition to living in Key West as a full time resident.

The recent downturn in the real estate market has made achieving that dream more affordable and attainable. And many dreamers are actively looking to fulfill their dreams.

CLICK HERE to see four similar yet very different properties all near the Old Town area. The four units are similarly priced. You can see the price per sq ft on the right hand side of each listing. In the same area you will note the total square footage of each property. The two story town home at 606 Truman in Windward Park is more than twice as large as the condo at 120 Angela Street. But the Angela Street condo is absolutely adorable and can be purchased fully furnished. There are only four units at the Angela property, but there are 19 town homes at Windward Park. The recently renovated home turned condo at 912 James Street is one block walk to the Historic Key West Seaport. Two units constitute that condominium. The two story town home at 554 Porter Lane is located in Truman Annex and has a carport. There are 55 units in that development.

Please checkout the listings and if you see something that interests you, please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com. You may find a property that will make your dreams come true.

Finnegan's Wake -- 320 Grinnell St Key West, Fl

Want to have a party every night? Want to own a Key West Landmark? You can do both. Just Listed: Finnegan's Wake at 320 Grinnell Street, Old Town, Key West.

This bar and restaurant is a locals hangout and a tourist draw. It is located a stone's throw from the Historic Key West Seaport. It is across the street from the Key West municipal parking garage. Grinnell Street is the primary feeder street for traffic going to the seaport.

The building sits at the corner of James and Grinnell Streets and occupies a pretty good sized amount of land. The main building houses the pub downstairs. There are two licensed residential units upstairs that can be used for employee housing. And next door to the south is Pady O's outside bar and dining area.

This is a business and real estate package sold turn-key with 174 seats and an SRX liquor license. The Pub has indoor and outdoor patio seating. The building has two residential apartments upstairs for staff housing. The numbers are strong, making this a profitable business investment. Financials are available upon execution of a confidentiality agreement.

The asking price on Finnegan's Wake is $2,800,000. This is not my listing, but don't let that stop you from taking a look into your future. Call me, Gary Thomas, 305-766-2642 or e-mail at kw1101v@aol.com.

The New York Times even did a piece on Finnegan's Wake. CLICK HERE for the review and pics.

Fear Factor -- Key West Reality

It seems like Déjà vu all over again. Back in the 1970's we were in a war that would not end, President Nixon had been deposed, the American automobile industry was reeling, gas prices were making us change our driving habits and lifestyles, the stock market was in turmoil, President Ford was defiant over his pardon of Nixon and refusal to bail out NYC, foreclosures were up, and hope was down.

After we exited Viet Nam, I think everyone breathed a collective sigh of relief. Our terrible nightmare was over. We vowed "Never Again" and meant it. In 1976 the Democrats won both the Senate and House, many statehouses and governorships, and the big prize: The Presidency. Jimmy Carter took over and had his honeymoon with Congress and the public.

Fast forward 32 years. We are no longer fear the Commies. Now we fear terrorists. And rightly so.

The 1980's and 1990's were good for a lot of Americans. Reagan made most of the public feel good, even if they didn't agree with his policies. The Berlin Wall fell, Communism failed, the Baby Boomers made money in the stock market, the middle class went on a spending spree, and life was great once again. But September 11th changed all of that.

Our economy is in worse shape now than it was 30 years ago. The cost of fuel keeps going up, the price of groceries goes up or the size of packages shrink, American icons such as Anheuser-Busch and The Chrysler Building get sold to foreign entities, the threat of possible bank closings looms, and the housing crisis just gets worse. As the Baby Boomers approach retirement it looks like Social Security may not be as secure or as helpful as we once thought. It is not the Economy Stupid. It is the Stupid Economy.

There are a lot of busy Realtors in Key West this summer. We are all working with people who want deals. We send e-mails of new listings to prospective buyers who tell us what they want and what they are willing to pay. We drive them around town showing properties. Some people end up buying. Most express fear that prices will drop more and go back home hoping they do.

A real estate investor who owns a variety of income producing properties recently lowered the asking price on several. Several months after Hurricane Wilma, my client made an offer to purchase a commercial property the investor owned. The property was not used since Wilma. The owner bought the property in 2004. But his asking price was a $900,000 more than he paid for it. In early 2007 my buyer offered about $400,000 over the price the investor paid for the property. The investor said no deal. Earlier this year my buyer offered about $300,000 over the amount the investor paid. No go. Earlier this week, my buyer offered about $75,000 under what the investor paid. My buyer said "He should have accepted my price when I made it two years ago." My buyer is very pessimistic about the economy in general. He has cash in the bank and can buy without borrowing money. But he is reluctant to buy in the current market. He is fearful it will get worse. I understand.

We recovered after Nixon-Ford-Carter went away. We are going to have a new President in January. Bush will be history. I think the whole world will breath a very loud sigh of relief. And things will get better. I'm pretty sure all markets will re-bound right after the Inauguration. They may even pick up before the election. And when the rebound starts, it might just shoot up like crazy. Not everybody is poor and desperate. There are a lot of people waiting in the wings ready to buy. They just have to get over the Fear Factor.

If you think I'm full of beans, consider what Warren Buffet has to say about Market Timing: "Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful."

CLICK HERE to checkout the Key West Association of Realtors mls database of all current listings. If you see something you like please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com.

31 Seaside South Ct - Key West -- Ocean View

31 Seaside South Ct is a beautifully decorated home with stunning views of the Atlantic Ocean. Ideally located in a secluded quiet location at Seaside Key West Residences this luxurious 3 level home includes many amenities. A few of the features of this home include designer decor, multiple outdoor spaces, private elevator, 2 car garage and breathtaking rooftop deck. This is a perfect stress free island home with poured concrete construction and impact resistant windows and doors. Seaside Key West Residences is recently built (2005)gated community with several pools and clubhouse.

This 1914 sq ft home has two bedrooms and 3 baths is offered as a potential short sale at the price of $695,000 or only $363 per sq ft. And if that price isn't good enough, the property comes furnished. There are more photos and additional information about the unit CLICK HERE. Imagine, moving into a place like this for such a potentially affordable price. The developer of the entire development owns the unit next door. That means the ocean view is just about as good as it gets in my opinion.

This is not my listing, but I would gladly show it to you. Please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com. Imagine waking up to the sunrise view at your Seaside home in Key West. It can happen.

What Happens When a Bank Fails -- My Experience

I have two sets of personal experience dealing with bank failures. I thought my experiences might prove somewhat helpful in understanding the closure of Indymac Bank and the theoretical possibility of more closures in the near term.

In the late 1980's I managed the Special Assets Department of a national bank in Denver. Our bank was on the FDIC's Watch List of troubled banks. Our liquidity was low and we had very limited loan making ability. Everybody knew our bank would either be sold by its owner or that the FDIC would close it. For well over a year various potential purchasers did their due diligence to identify and distinguish performing assets from problem or non-performing assets. The FDIC was in the bank during the same time as well as it prepared for its presumed takeover.

Takeovers normally occur around 4:00 PM on Friday afternoons. Around 11:00 AM on the day when our bank was to get shut down by the FDIC the president of the bank held a meeting of all bank employees and thanked them for their services and explained how the presumed shutdown would occur and what would happen to the employees. At 4:00 PM the suits (FDIC officials and attorneys) showed up with briefcases in hand and walked in to shut the place down. A meeting ensued in the president's office. The suits walked out the front door to the TV news cameras waiting to hear the announcement that the bank had been closed. Didn't happen.

The bank was owned by a man who had made Billions in oil. His name and reputation were associated with the bank. He made a last minute cash infusion that re-established enough liquidity to keep the bank afloat until it could be sold. And that is what happened about a year later.

Fast forward to the summer of 1990 when I joined the Resolution Trust Corporation (RTC), the federal government agency formed as an offshoot of the FDIC to manage the shutdown of failed savings and loan associations.

As I recall the way things occurred the Comptroller of the Currency identified the S&Ls that were in trouble and it made the decision to "resolve" or close those institutions. The RTC knew which S&Ls would be closed but not the specific date. There were so many institutions that it was impossible to do every "bank" in one fell swoop.

RTC employees called "managing agents" were assigned to the bank to learn bank operations and identify assets. The process is laborious and I am not writing a book. A managing agent might have been a former senior level FDIC official or a senior officer in a large bank or thrift. A managing agent would be the defacto CEO of the thrift once the bank was closed. The managing agents often "lived" in the banks for months before the day we actually showed up to shut the old bank down. Other outside contractors, such as Coopers & Lybrand or Arthur Andersen, would perform due diligence and scrutinize the assets and liabilities so that when the resolution date occurred, a potential purchaser or purchasers would have a credible list of assets available to purchase.

Once closure date was known worker bees such as myself would "visit" the bank prior to closure to identify assets for which we would be responsible. The mission of the RTC was to shut down the failed thrifts, not to manage them for years to come. The banking operations were to continue in without interuption to maintain the value of the assets.

On the fateful Fridays we would show up in suits at the appointed time and get the glares from the disheartened employees as they saw their old lives abruptly change. The RTC retained most of the employees on for the short term basis while the assets were sold. The RTC would typically re-open the failed S&L on Monday with an almost identical name with the appendage "Federal Savings Bank or FSB" to distinguish the new entity from its former self.

The RTC usually had a "suitor" or an "acquiring bank" in hand to purchase the cash deposits and "banking" operations of the old bank. In reality the cash constituted liabilities so the RTC paid the acquirer to take on the responsibility. Again that process is way too involved to discuss here. The Western Regional Office of the RTC where I worked sold many of the failed thrifts to Bank of America. And I consider the purchase of all of those failed thrifts as a significant factor in the explosive growth of Bank of America during the 1990's.

The RTC Operations Department did massive conversions of bank loans from their old accounting and reporting functions to the universal RTC system. Again, this is what I recall. I was never a "loan guy" so if I err in my report, forget it. Notices were mailed to borrowers telling them to make loan payments to a new loan servicer. Eventually, the loans were securitized and sold. But the loans were not lost or forgotten. If you happened to have a mortgage with Indymac Bank do not stop making payments. Do not listen to people who do not know what they are talking about. Your credit is valuable. Don't trust people who tell you to do dumb things! You are only hurting yourself and your credit if you do.

Eventually the assets were sold or transferred and the managing agents came back to Denver only to get re-assigned to another failing institution.

The procedures the RTC used are basically what the FDIC use because the FDIC set up the RTC to be run basically the same way.

The process of what happened on Friday with the closure of Indymac Bank is different than a typical FDIC closing because it reportedly came as a surprise to everyone. Indymac Bank was not on the Watch List, meaning it was not being scrutinzied for possible bank closing. It is my understanding that the run on the bank deposits created the liquidity crisis that required the closing. Because the Indymac Bank closing occurred so abruptly the FDIC did not have a "suitor" or "acquiring bank" in place. And since Indymac Bank was so large it may be difficult to find one suitor to buy all of the assets.

The FDIC is organized and they have done lots of bank closings. The FDIC is not FEMA. The FDIC has a new website set up to explain exactly how operations will continue. CLICK HERE to view. For would-be buyers of foreclosed homes in Key West or elsewhere do not think you are going to get a "deal" because of bumbling "Feds".

Regulators Shut Down IndyMac Bank! Friday July 11th

Regulators Shut Down IndyMac Bank! Re-printed by Permission of Ruben Concepcion, Keys Financial.

Bank regulators today shut the doors of IndyMac Bank and have transferred its assets to the FDIC. IndyMac had stopped lending activities earlier this week due to lack of capital and had seen a run on its deposits over the last couple of weeks due to concerns about its ability to survive.



IndyMac is the largest thrift ever to fail and the second largest financial institution in the U.S ever to do so.

What you may not know about IndyMac, is that it was founded by Angelo Mozilo and David Loeb, the same two geniuses who founded Countrywide and likewise ran it into the ground as well.



What’s important to note here:

The last major round of lender closings (Fall ’07) was primarily due to liquidity problems. Credit markets seized up at that time due to investor fears of exposure to subprime paper. Investors stopped buying mortgage securities and lenders were unable to sell their loans. No cash to continue operations – and therefore no choice but to shut down. Those failings were not due to actual realized losses at that time.

These were primarily mortgage bankers and not banking institutions.



The IndyMac failure is different because now we are seeing a major lender/banking institution failure due to actual losses. Rising defaults at IndyMac deteriorated it’s capital position. That called it’s survivability into question and depositors began a run on the bank – resulting in today’s shutdown.



In my opinion, the best thing that’s happened to the US housing market is Bank of America’s takeover of Countrywide. The takeover will in effect serve to hide the actual level of losses at the nation’s largest mortgage lender. If the magnitude of the actual losses at Countrywide were to become public, the resulting panic in the market would make what we’re experiencing now seem mild by comparison.

Are the failures of Countrywide and IndyMac indicative of systemic problems in the banking industry, and should we expect more of the same?

I don’t think so. What sets Chase Manhattan, Wells Fargo, BB&T (our primary lenders) apart is that they are well diversified banking institutions first, and mortgage lending is simply a component of what they do.

Countrywide and IndyMac were sales companies by design – and financial institutions by default. They had an overly aggressive high pressure sales culture with notoriously poor underwriting standards. If you can believe this, their underwriting departments reported to their sales managers! The end result doesn’t seem so surprising when you think about that one.

Go to Keys Financial to get Reuben's e-mailed analysis of how money market news affects you in Key West.

Our office is doing several short sales right now with Indymac Bank. I worked for the RTC in the early 1990s and we closed dozens of small to very large S&Ls. The first couple of days are always edgy. But things start to move smoothly within a few days. Indmac Bank was doing a credible job in addressing short sales that we presented to them. I hope that the FDIC's takeover will permit the process to continue. If the old RTC model is used by the FDIC, the former Indymac Bank employees will be retained by the FDIC or its successor to perform exactly the same job functions as before the takeover. We shall see.