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Crisis of Credit Visualized

http://vimeo.com/3261363

Even as simplified as this great 10 minute video is, it still gets complicated. And as you can imagine, when you’ve got so many transactions handling a piece of mortgage paper, even the bankers have a hard time keeping track, which just complicates this process further — sending it to a grinding halt in some cases.

I.e. you’re foreclosing and the bank wants you out of the house. You demand to see the loan and the bank can’t find it. Until they can show it to you, they can’t kick you out. Yeah, really. So often people are staying in their houses mortgage-free for months before the bank can track down the loan and actually foreclose/kick them out.


The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

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But look at the view! John Hancock Tower Facing Foreclosure

One of Boston’s landmark buildings, the John Hancock Tower, is facing foreclosure. The current owner bought the tallest building in Boston (and all of New England) back in 2006, near the peak of the housing/commercial real estate dual bubbles, for $1.3 billion; however, current estimates put the I. M. Pei building’s value between $700 and $900 million. That’s nearly a 50% haircut on the low-end. Ouch!

I lived in Boston back from 2003 to 2004 while working in audit (AABS) for Ernst & Young. E&Y’s offices were then located in the Hancock (not sure if they are still there) at around the 40th floor. One Saturday while having to stop by the office to drop off some files, I brought along my Canon digital camera and took photos to construct a panorama. As you can see below, you get quite a view of downtown Boston forty stories up!

From Hancock Tower — Maximize your window to get the full view!

The Tower’s profile is a long and slender parallelogram. Combined with the reflective glass exterior, this made the building an enormous mirror. The 60-story Hancock Tower was the third John Hancock building, being built immediately across the street from the first two Hancock buildings. Thus, from a certain vantage point, the third building reflected the first two. You can see the top of the second Hancock building at the bottom right of the panorama above or in the picture to the left below.

Additionally, the building-as-mirror was meant to make it blend in with the sky. You get a slight feel for this in the shot to the right below.

No doubt I. M. Pei et. al were high-fiving on their sky-high mirror, which did make for a nice addition to the Boston skyline. This was even as some of the mirror-finished windows were occasionally falling out. During the brief time I had the (dis)pleasure of working in the Boston E&Y offices, I grew to dislike the functionality of this skinny building. The skinny layout looked pretty on the outside, but with conference rooms at either end of the parallelogram, one wrong turn out the elevator banks and you found yourself a long walk away from where you intended to go. The Hancock Tower is a great example of choosing form over function.

Finally, as it heads into auction on March 31, the Tower is just one more victim of the real estate bubble and crash — but look at that view!