David Fischer

Just Say No to Commercial Real Estate Beggars

Bang on! I am glad some form of capitalism survives in this country. It's amazing how few understand the devistating consequences of the government owning more and more privately held assets. That is comunism or at least socialism. So when the government forcloses on these companies because they are well below debt value and cash flow cannot sustain the debt payments, what then? Folks will be screaming about the government intervention and bullying. This backing of assets leads to the government owning all assets which is comunism. Backing these assets in the hopes they don't go down in value is rediculous. I

The first step in backing loans is one thing, looks harmless. But the next obvious results that would come later when these companies owe billions and need to be taken back is the phase which would enlighten investors to what is really going on. The day the loans are called if things gets worse is a day of reveoution. When there is no clear line in the sand between what the government owns and can take from you and what you think is yours.

Capitalism has a downside which is recession/depression, this needs to be undertaken, but the government wants votes, so all those senators give in. But that only delays the recession for years to come, as savvy investors stay on the sidelines unwilling to buy unless values reflect reality in valuations.

Most of these reits should be gone as their models of payouts are rediculous. These company strategies only work when times are good and asset values continue to go up, but not during pullbacks in values.

And this crisis is a crisis because knowone has any money any more, so it is warranted. Such a rediculous notion that is somehow an anomoly due to some quasi event, and not real. It is real, all asset values are plummeting, so don't loan. That is the motto of banks, wait it out, stay afloat until this is over.

The government didn't save housing, and its' a good thing, look at the tsunami of refi's to come with no takers. The same is just beginning in reits. The model does not work, they need to be purged and values reset.