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Financial statements......humor not political


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My retired banker friend stopped by the shop today asking me if I could fix a broken dresser drawer.

After coffee and the usual farm BS, markets, etc. The topic turned to the latest happenings in Washington and other places in that part of the country. The topic of the former president and his possibly inflating the value of some of his assets was brought up. We must have been thinking the same thing because he said...."those lawyers have never been around a bunch of farmers when it was time to fill out their financial statements". He said that some of the most hard scratch farmers he dealt with had some of the most valuable equipment according to their financial statements. He said that every farmer he dealt with had some equipment that would "easily bring top dollar" on a sale.

I had to point out to him that personally I never lied about the number of cattle I had. (though not all of them may have been worth as much as I thought they were.) I pointed out that I have some rusty bale rings that are worth $500. And that 16' disk parked in the trees with the broken blades and the frozen wheel bearing will bring $1500 to the right buyer. (I'll even throw in the mulberry tree. Since you would have to cut it to move the disk.)

Nope, those big time billionaires have nothing on a bunch of flyover farmers.

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If that judge really wanted to nail him, he could go ask on YT or RPF for value opinions. I can hear it now: "I wouldn't give a penny more than $3,500 for Trump Tower. $4,500 tops. 'Course some idiot from town with more money than brains will give $35m, but they're all stupid, because it needs a new elevator door, so it's not worth it. SMH. City morons."

 

 

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Argue value all you want but that case against the Trump family over real estate is a crime without a victim. The creditors were paid in full but the Uniparty seeks to confiscate assets and send the Trump family to debtor's prison, or something. It's a Stalinist political hit job and if they can do that to those people they will do it to anyone.

Like the Trumps or hate them. It's a free country but it will cease to be so if this crap is allowed to continue.

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You know... I don't get to tell my township what I think my house is worth. I have to pay taxes on what the town hired assessor says it's worth. When I go to the bank for a loan, they want to see my taxes so they see the value. And, in case of a new mortgage, once again "they" send out the assessor. I pay for it but it's their guy.

Is this not how it's done elsewhere? Maybe I should serve the assessor a few drinks and fire up the grill for some steaks next time he's coming around? I mean I can't take the guy up the elevator to the top of Trump tower, but I could let him ride the elevator up to the haymow... Or let him climb to the top of the silo?

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If every department and public official were to be audited, how many do you think would have items  that they paid 10 times the real value for? $1,200 claw hammers ring any bells? Property valuations for a loan are between the borrower and lender. And generally, the lender decides what the value of a property is. I can state that my barn is worth half a million, but the lender will decide for themselves if they want accept that valuation or appraise it themselves. As I understand it, the lenders haven't filed any suit over this issue, so why does anyone even care if the asset values were inflated?

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6 hours ago, lotsaIHCs said:

If every department and public official were to be audited, how many do you think would have items  that they paid 10 times the real value for? $1,200 claw hammers ring any bells? Property valuations for a loan are between the borrower and lender. And generally, the lender decides what the value of a property is. I can state that my barn is worth half a million, but the lender will decide for themselves if they want accept that valuation or appraise it themselves. As I understand it, the lenders haven't filed any suit over this issue, so why does anyone even care if the asset values were inflated?

It's a political witch hunt. Show me the man and I'll show you the crime.

Just as a point of reference, the Marxist media secured a propaganda coup in the 1980's when they discovered the military "hammer scandal" where taxpayers paid outrageously for simple claw hammers used at certain installations. The truth is those were beryllium hammers made specially for use on facilities where gunpowder was stored or processed into munitions because the beryllium will never create an inadvertent spark when struck against another metal.

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We just have a little hobby farm to play around with. What we grow is for ourselves, friends and family and might have a wagon of pumpkins in the fall then a few rows of corn, soybeans or sunflowers to draw in wildlife.

One night my buddy was over. My young son went up to me and asked if I could speak to his class. They needed a guest speaker that was a farmer. 

I said "sorry I'm not a real farmer, I don't make money off this stuff"

My buddy responded " you're like every other farmer then, only difference is they can convince the bank they made just enough profit to pay for a new loan"

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12 hours ago, Drysleeves said:

It's a political witch hunt. Show me the man and I'll show you the crime.

Just as a point of reference, the Marxist media secured a propaganda coup in the 1980's when they discovered the military "hammer scandal" where taxpayers paid outrageously for simple claw hammers used at certain installations. The truth is those were beryllium hammers made specially for use on facilities where gunpowder was stored or processed into munitions because the beryllium will never create an inadvertent spark when struck against another metal.

I've never looked into the whole thing. Thanks for the what where and why! There is so much misinformation and disinformation out there that, in this day and age, who knows what to believe? Property valuation is in the eye of the beholder. I believe my 56 Chevy short box big window is worth 50k because I've had it since I was 18 years old. I'm now 55. But that doesn't mean someone else will value it the same. It's up to the buyer or lender to determine if my valuation is right!

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17 hours ago, Drysleeves said:

It's a political witch hunt. Show me the man and I'll show you the crime.

Just as a point of reference, the Marxist media secured a propaganda coup in the 1980's when they discovered the military "hammer scandal" where taxpayers paid outrageously for simple claw hammers used at certain installations. The truth is those were beryllium hammers made specially for use on facilities where gunpowder was stored or processed into munitions because the beryllium will never create an inadvertent spark when struck against another metal.

I liked the line in the movie Independence Day, when the president asks where all the fancy alien research facilities came from, and Judd Hirsch looks at him and says something like “You really didn’t think they were buying $500 toilet seats and $1100 hammers did you?”

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Uh guys... P-WORD! The discussion is about farmers and how they inflated/inflate the values on their equipment and livestock. Don't head that other direction or the thread will "poof." 

On that subject can someone explain to me WHY you'd want to inflate the value of your equipment? I was too young in the late 70s through the early 80s to understand what was going on and if the practice is still going on clearly I'm doing something wrong...

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18 minutes ago, Matt Kirsch said:

that subject can someone explain to me WHY you'd want to inflate the value of your equipment? 

I would assume to make yourself look solvent enough to keep your line of credit going and not have the banker shut you down. 

I would think if the bank didn't do their due diligence and get an accurate picture of your assets and over extended credit to a farmer or anyone, they would/should bear part of the responsibility. If the loan was paid back in full I don't see where anyone was hurt. Tho it does seem unwise to over state assets value. 

I dont really know the inn and outs of it either as I have never borrowed any money to run my lil operation. Tho I've never made much at it either.  😄

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6 hours ago, iowaboy1965 said:

I would assume to make yourself look solvent enough to keep your line of credit going and not have the banker shut you down. 

I would think if the bank didn't do their due diligence and get an accurate picture of your assets and over extended credit to a farmer or anyone, they would/should bear part of the responsibility. If the loan was paid back in full I don't see where anyone was hurt. Tho it does seem unwise to over state assets value. 

I dont really know the inn and outs of it either as I have never borrowed any money to run my lil operation. Tho I've never made much at it either.  😄

Any bank examiner who would lend based on inflated asset values is taking on the same risk as the borrower. In the case of The Guy from Queens, let's adopt the Marxist Uniparty argument that inflated asset numbers were used to facilitate the loan. At the end of the contract, the loan was paid in full with interest.

There's no crime.

I wouldn't want to engage in such activities but I wouldn't seek to take on the amoeba - like morally bankrupt state as The Guy from Queens has done, which is why they all hate him and invent crimes where none exist to punish him.

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5 hours ago, Matt Kirsch said:

On that subject can someone explain to me WHY you'd want to inflate the value of your equipment? I was too young in the late 70s through the early 80s to understand what was going on and if the practice is still going on clearly I'm doing something wrong...

All goes into the equation when securing a loan for whatever. Operating, equipment, land purchase loan, etc. You make your books look pretty to get the loan. Inflating values achieve this goal. 

Do we do it. No. But it happens out there. We had BTO claiming they were working more ground than what they were for loans, crop insurance. You name it. All in the pursuit of the almighty dollar. 

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37 minutes ago, Matt Kirsch said:

Hmm. Must be different now. The values of anything I own don't seem to much matter in my ability to get any sort of loan for any reason. Everyone just says "no." 

Get a different lender or you have some other reason. Most your lenders in your state experience with farms ends at Ole McDonald. So being in the Peoples Republic of New York doesn't help either. 

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7 hours ago, F-301066460puller said:

Yup.. that is actual bank fraud. Selling an asset that was used as collateral for a loan is a no-no! Glad he got caught. Now if he had simply said he had 100k bushels of wheat that was worth $6.00 a bushel when the actual value was $5.50 a bushel and the bank accepted his valuation without checking grain prices, that is on the bank for not confirming grain prices. Of course, just my opinion.

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4 minutes ago, lotsaIHCs said:

Yup.. that is actual bank fraud. Selling an asset that was used as collateral for a loan is a no-no! Glad he got caught. Now if he had simply said he had 100k bushels of wheat that was worth $6.00 a bushel when the actual value was $5.50 a bushel and the bank accepted his valuation without checking grain prices, that is on the bank for not confirming grain prices. Of course, just my opinion.

It may have been $6 when he filled out the paperwork.... A little bit different though when there is an actual market. Real estate is different. What is worth X amount in one guys eyes may only be worth y in another's but if they both agree it's z then no worries. Unless your old Mc DONald from Queens.

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3 minutes ago, F-301066460puller said:

It may have been $6 when he filled out the paperwork.... A little bit different though when there is an actual market. Real estate is different. What is worth X amount in one guys eyes may only be worth y in another's but if they both agree it's z then no worries. Unless your old Mc DONald from Queens.

Shouldn't matter who the borrower is, or what the asset is, if the bank didn't confirm valuations, that's their problem. In the queens ny case, the banks got paid with interest. They aren't bringing suit.

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