Commercial Mortgage Loans

The Homebuyer Credit as Economic Success Story

Homebuyers Credit a Success? Nonsense

There are many problems with this tax credit but I’ll just quickly address one in particular.

None of the calculations being used to show the programs success take into account the source of the money. <i>The Government is borrowing money it doesn’t have to fund this give away.</i>

There is an economic and a fiscal cost to massive deficit spending. I don’t see that cost addressed in this analysis.

As far as I know no economist has come up with a satisfactory justification for robbing Peter to pay Paul. Peter may feel the plan was a success but Paul suffered an equal and opposite negative effect. At best the exercise is a wash. At worse we made things worse by taking Paul’s money when he might have had a more productive use of the cash in-mind. In any event Paul will be attending the next “Tea Party” protest in his town.

Real Cause of This Financial Crisis? Global Hunger for Savings Instruments

Of course investors want AAA securities at high yields; who doesn’t?

The problem was not, and is not the huge demand for safe investments with good returns; that demand is universal and constant.

The problem was that bonds rated AAA were not actually AAA, they turned out to be BB- or worse.

The problem is not the fact that every one wants gold; the problem is that all that glitters is not gold.

Niall Ferguson: Dollar Is Doomed, U.S. Empire Over

We are not doomed. We are suffering a crisis of leadership. The United States is still a leader in…well…everything. Our position can not be taken from us if we resolve to defend it. Currently we are showing no interest in maintaining that leadership position and the world, which depends on us for…well…everything, is justifiably getting nervous.

We are seen as unserious right now; unserious about defending western (free market, free people) values, and unserious about our fiscal situation.

We are obviously being played by Iran and Obama is not paying due attention to Afghanistan. We were rolled by Russia on missile defense and the President does not seem to trust his own Sectary of State to do anything more than high profile photo-opps.

Our deficits are unfathomable, yet we push a trillion dollar health care reform and an equally expensive cap & trade bill while we talk of another massive “stimulus” and mail $250. checks to every senior citizen in the country.

We are not doomed unless we resign ourselves to being doomed.

Commercial Real Estate: Record Declines May Be Good News

Demographic trends suggest an eventual rebound in multi-family. Our population is still growing and everyone needs to live somewhere. Apartment vacancies are high now but the inventory will be worked off if the unemployment rate ever improves.


On Aug 04 05:33 PM Leftfield wrote:

> ...I don't see the need for most of the CRE in a permanently changed
> consumer environment. With little credit left, eroding pay standards
> of a shrinking job market, aging baby boomers, fuhgetabloutit.

Dollar Weakness Continues

Concern for the health of the dollar is real and justified. The current US administration appears oblivious and indifferent to the national debt, current deficits, the nations competitive advantage and national defense.

Pushing a dubious cap & trade bill, a trillion dollar health care revamp, talking about a second stimulus when the last one failed and all-the-while delaying a critical decision on the Afghanistan war for weeks and weeks on-end. The printing presses at the US Mint are running non-stop and it’s all going to be paid for by taxing the mythical “rich”.

What encouragement can we take away from all that has gone on? Not much I’m afraid.

Celebrating the 'Recovery': I'm Disgusted

Creating GSEs was the genesis of the problem because a GSE is bound to fail.

When a drunk driver is able to drive for 30 miles without killing somebody we don’t point to the first 30 miles and say “see it wasn’t the first drink that caused the accident…the problem was that he started drinking vodka instead of beer...in-fact he drove quite well...after all he drove 30 miles before he crashed into that school bus and killed all those kids.”

GSEs are bad ideas because an agency CAN NOT be both a Government entity and a private entity. It must be one or the other.



On Aug 25 10:28 AM diogeron wrote:

> I find it interesting that the "GSEs" are often cited as the core
> of the problem. Since Fannie was created in the 1930s (Freddie in
> 1970), it appears that the CONCEPT of a GSE to create a secondary
> mortgage market wasn't necessarily flawed. In fact, they worked quite
> well until their underwriting standards were lowered with the full
> support of the mortgage bankers, realtors, President Bush and the
> majority of members of Congress (yes, BEFORE Barney Frank took control
> of his committee in February of 2007). There is plenty of blame to
> go around, but people should stop implying that the creation of the
> GSEs somehow caused this meltdown.

Is There an IPO Boom Waiting in the Wings?

Lets not forget that staying / going private has benefits.

Is There an IPO Boom Waiting in the Wings?

An IPO tsunami could be in the offing but it depends on how regulatory reform shapes up and how/if the economy recovers.

If the SEC and other regulators make it too expensive and impose too much liability risk, companies will go public in other, more business friendly jurisdictions.

Also, You will not see consumer dependant companies go public en-mass unless and until employment starts to rebound. For now, healthcare and green energy companies will still find the markets receptive to IPOs.

An Alternative to REITs: Master Limited Partnership Units of Real Estate Firms

Yes they trade just like stocks. It is the tax implications that are different.


On Aug 08 08:34 PM Rhino Realty wrote:

> Are these units as "liquid" as stock ?

Sentiment Readings Disturbingly Bullish

Players are bullish but I do not detect unbridled optimism. And the bullishness is confined to professionals. The general public is not fully on board this “rally”

Commercial Real Estate Cataclysm Underway?

On 8/6 the Wall Street Journal had a headline that said”…Pension Funds Jump into Commercial Real Estate” The story reported more than $600m in CRE buys by pension money managers last week alone. Today the Mortgage Bankers Association reported that commercial and multi-family loan originations were up 50% in Q2 as compared with Q1 and (for what it is worth) this from one time fund manager, now TV star Jim Cramer:
In an appearance on the CNBC show “Stop Trading,” Cramer noted that the major commercial REITs are doing quite fine, thank you, despite the negative outlook for the sector.
“I have Fed(eral) Realty, the best mall play. It’s up huge,” Cramer says.
“How about Boston Properties, your friend Mort Zuckerman? The stock’s up huge. How about Brandywine (Realty)? Off a giant secondary, it’s up gigantically.”
So, “What the heck are we talking about?” Cramer asks.
“This market is on fire. I’m tired of hearing about the bears saying the next big down leg is commercial (real estate). This is the heart of commercial.”
He advises investors to just “focus on the facts.”
Cramer also disagrees with what the media is saying about IPOs. “The papers have said over and over again that’s not going to happen,” he says.
“I have a number of friends in private equity. … There are so many new deals in the pipeline that are about to be announced. The whole ‘no more deals thing’ just doesn’t jibe with the facts.”

The trick here is to avoid being Chicken Little while not being Pollyanna.

REITs, CDS Spreads and Bear Markets

For what ever it's worth Jim Cramer:
In an appearance on the CNBC show “Stop Trading,” Cramer noted that the major commercial REITs are doing quite fine, thank you, despite the negative outlook for the sector.


“I have Fed(eral) Realty, the best mall play. It’s up huge,” Cramer says.


“How about Boston Properties, your friend Mort Zuckerman? The stock’s up huge. How about Brandywine (Realty)? Off a giant secondary, it’s up gigantically.”


So, “What the heck are we talking about?” Cramer asks.


“This market is on fire. I’m tired of hearing about the bears saying the next big down leg is commercial (real estate). This is the heart of commercial.”


He advises investors to just “focus on the facts.”


Cramer also disagrees with what the media is saying about IPOs. “The papers have said over and over again that’s not going to happen,” he says.


“I have a number of friends in private equity. … There are so many new deals in the pipeline that are about to be announced. The whole ‘no more deals thing’ just doesn’t jibe with the facts.”

Market Leader for Real Estate Profits

To find competitive advantages among homebuilders look at their regional footprints.
Those with infrastructure and a presence in healthier areas will grow first and fastest.
For instance (this is not a recommendation just an observation) HOV has a decent presence and owns many lots in the Washington DC area. There is no recession in Government, Washington is adding jobs. That’s just one way to think about it.

Buffett's Betrayal

Often its the editors write the headlines not the author.

We should not act as-if Buffet is above the fray.
The artical's point is valid; Berkshire is profiting greatly from low or no interest loans and Government backing. That is just fact.
We can debate the merits of his action but not the facts.


On Aug 05 03:15 PM Vafer wrote:

> Great headline. Did you get the web hits you were looking for?<br/>
>
> The rest of the article, not so much. If most of Wall Street had
> 10% of his integrity, we'd be a lot better of.
>
> It's nice that he responded to your email. As for betrayal, who's
> betraying who?

Buffett's Betrayal

The Bar Tender and the Baker don’t supply us with beer and bread because they love us. Nor does Warren Buffet make investment decisions based on altruistic reasons.
He is a capitalist and will seek and take rents when and where he can.

I will join the criticism when and if I hear hypocrisy from him. So far he’s been consistent.