While I found the Goldman hearings to be a travesty, and a rerunof the Army McCarthy hearings of 1954, the underlying issue is theStreet tried to make real estate into a commodity that can betraded and hedged like a commodity. Instead of trying to understandany of what was really happening, Levin and McCaskill and the otherclearly uninformed senators simply wanted to have political theaterand denigrate Goldman.
Real estate is not a commodity. It is an asset which does nottrade or physically move. It's value does not shift hourly. Thereis not a liquid constant world market for a building or for amortgage. It is not oil, scrap, or corn. Therein lies the realunderlying problem. Each building is unique. It is different bymany measures form the one even next door. Commodities are exactlythe same. Oil is oil. Gold is gold. There may be differences bytype of oil, but Brent North Sea is essentially all the same. Justbecause a building has a mortgage on it does not make that mortgagethe same as other mortgages.
When we created the initial hotel mortgage CMBS programs in1993, we were very clear in our underwriting that a Ramada was nota Ritz Carlton. A 25 year old exterior corridor hotel is not a newCourtyard. A hotel is not just a hotel and it is clearly not aretail center, nor a package of home mortgages.
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