Sam Zell Could Have Saved Us All

By Karl Klockars in News on Sep 24, 2008 7:00PM

At least, if you take what he says as gospel truth. With all the financial stories swirling around our heads these days, it's hard to know what's for real and what's just blithering...but in this case, it is Sam Zell, master real estate investor billionaire and not Sam Zell, Tribune Company executive. Crain's has the details:

The billionaire financier said he called [Treasury Secretary Henry] Paulson nine months ago, telling him the [accounting rules requiring financial firms to write down the value of their real-estate mortgage assets] needed to be suspended, so lenders would have more discretion to assign a value to the assets. “Without fair-value accounting, this whole situation would have never reached this level,” Mr. Zell said, adding later, “You took a big problem and turned it into a gargantuan problem.”

So if you choose to believe that, you'll be heartened by this news: Zell also believes that the economy will drop into a recession sometime early next year, but it won't be as bad as others fear. In addition, the housing market will bottom out "by next spring" and commercial real estate will be fine. (Maybe because of all the vacant space in Trib Tower.) However, the Zell definition of apocalypse? "I think any legislation of any kind that modifies existing contracts is such a slippery slope that, in effect, I think it destroys the country" Cue Trumpets of Doom!

Photo by Charles Rex Arbogast, Associated Press.