Economic Meltdown

Estate Bay Real Estate Is Still Awaiting The Banks To Show Up!

This past week Congress interviewed some of the top executives in the Banking industry to find out what was delaying their institutions from providing liquidity back into the mortgage markets.

The heads of the major Banks had tough questions presented to them this past week in Washington.  They did not have any credible answers.  They are still holding on to cash that has been provided to them from the $850 Billion bailout Congress passed last month.  It appears that they are adding to the delay in having consumers start to recover from credit meltdown.  Congress told them that the bailout was meant for them to provide instant cash into the mortgage markets.  It is not happening.

Further, Congress let them know that if the liquidity issues is not addressed immediately, the next steps in the economy may cause it to sink further into the abyss of a deep recession.  The facts are that until the real estate markets are back in business the U.S. economy will be hard pressed to make a comeback. 

In addition, the added CRISIS is the U.S. auto industry’s pending collapse.  Now they have their hands out for an additional $25 Billion “loan” from us, the consumers.  The president of GM, Mr. Wagner, was asked in an interview on Thursday how he could justify a 30% increase in his compensation this year to a $17 million salary when GM is tanking.  His repsonse was that GM was considering an executive pay freeze.  What a novel proposal!?!?!?  Six years ago Toyota started a complete re-tool of their line-up of car choices to the consumer with an focus on fuel efficient cars – including the Prius Hybred.  It is a stretch to imagine that because GM, Ford, and Chrysler continued to focus on quarter profits instead of long term planning Toyota was planning for the future.  Now, it appears we are expected to bail out GM/Ford/Chrysler because of their shortsighted vision for their companies.  Does this make sense to anyone else.  I welcome your thoughts about the steps that need to be taken in the next few months to begin our long awaited economic comeback.  Until next time. 

Economic Meltdown

Economic Meltdown Causes Fear In East Bay Real Estate Community!

No matter how positive and resilient one is, we are in stormy economic times!  However, opportunities abound in the midst of economic hurricane!

I was chatting with my friend, Bob Waun - president of Vacation Finance which headquartered in Michigan,  as we talked about the financial meltdown going on in the credit markets and the stock markets.  He asked if I was afraid for what is next for our real estate businesses in the Bay Area and the Caribbean.  I told him, “Nah…we are still having the time of our life!”  The mantra of a sailor is…, “Do not be fearful!”   And, the definition of FEAR is False Evidence Appearing Real!  If you didn’t know, my favorite condition in sailing is with the gunnels ( side rails on each side of the boat )  in the water and salt water spraying all over me.  You can’t imagine the big grin on my face while I am sailing in those conditions.  However, it is not the time for the faint of heart if you are sailor in stormy seas.  It is the time when experience shows up. 

Both our Bay Area  and Caribbean  real estate businesses are thriving…however it is taking all hands on deck to pull it off.  We are blessed with a great team who only look at the glass half full,  and are committed to creating a GREAT experience for our customers.  Many of our competitors are running down to Starbucks talking about how the sky is falling.  The vacuum they are leaving within our real estate community is amazing, and whoever fills that void today will have a larger market share when the market shifts again – which it will.  In order to make it through these financial times we all need to work together, side by side, realizing storms don’t last forever.  At the end of Bob’s and my conversation he left me with these thoughts.

Faith, beliefs and conviction can be fickle friends when they are tested by panicked masses. “The end is near!”,  seems to be the chant of the crowd across the world today.  But what of substance has changed within our global economy.  Did a world of Fathers change their commitment to feed and clothe their children?  Did Mothers decide that the generic brand cereal would be fine in mass?  Did we stop wanting nice things and suddenly over the weekend decide to settle for less?   What is the shift that causes such a panicked response?  What fundamental changes are causing us to doubt the future?   Purely fear of what “MIGHT” change.  Does that sound rational to you?  

Historians and economists can attest that humans don’t always act rationally in mass,  but as individuals we can still choose to be rational – to act out of faith and conviction not panic.  ”Looking back on it, I was a trader in the pits of the S&P in 1987.  It was the most exciting and profitable stock market opportunity of my lifetime.”,  a friend told me today… Did he notice it at the time?  No.  He said he was scared to death, but he kept at his work of trading stocks in the best way he could.   Life is clearer in the rear view mirror.  Regret is more painful than overcoming fear….

In a storm, it is not time for people to jump ship and swim to safety.  A storm is the time for experienced sailors to do their work and sail through it.  It doesn’t mean we are not afraid.  However, it does require us to not panic – which could cause our ship to go down.  I promise we will all will make it through this economic mess.  We may get wet and a bit wind blown, but working together, we will get to a safe harbor, and live to see another day when we will look back and tell the stories of how we made it through the storms of 2008 and 2009.  Contact me today if you would like some help through your storm.  Until next time…fair winds!!!

Economic Meltdown

U.S. Financial Meltdown Bailout – Is It Time For HOPE?

This is a day that will be remembered for the rest of our lives – 777 points down in the DOW Jones!

OK, is today the time for HOPE regarding the Bailout?  Well, the world markets say NO!  We need to bring the message of HOPE to all of our friends and family TODAY.  One of the many reasons for the strength of our country’s economy is our ability to make mistakes, and learn from our mistakes and move forward.  OUR money is now being spent to re-tool Wall Street and Banks who still are creating the credit for consumers and companies – finally, the HOPE of the bailout is that a common sense of lending as the base of the way money will be lent will be used.

My view is that I still do not believe that we should look to Washington to fix what we can change.  However, this crisis is too big!  The current financial crisis is ONE part restructuring of Wall Street credit methods, and TWO parts a crisis of FEAR and a lack of faith in Capitalism.   A massive change in our financial structures is happening this week.  The media headlines are running rampant.  Remember, blood and guts sell!  Change is not good or bad, it is simply a different way of doing things.  We, as Americans, need to recognize that all of us participated in this mess by not saying STOP! 

I am a raving fan of free markets as opposed to Government “band aids” that may actually take longer for our economy to heal.  Our financial systems are in a real mess, along with millions of home owners.  And, stress is only relieved by CHANGE.  Well, change is what we are getting this week, whether we like it or not.

Another hopeful fact this week is there are billions of dollars in money market funds and investment accounts that are waiting for the bottom of this market.  When the consumers start to feel the “calm”,  that bundle of cash will rush back into the Market.  When that happens, a brand new business cycle will begin.  So, where is the bottom?  Well, it may have finally come.

My view is that we have had a drunken economic party for the last six or so years and this week the waiter brought the bill.  Instead of allowing those who hosted the party paying the bill, some bright person in the Government decided that the bill should be paid by our kids and grandkids.  Our kids now “own” a bunch of paper assets that may help pay the bill some time in the future, but I promise it will not pay the entire tab.

The message for us to consider today is that real estate has still been the best place I have EVER placed money.  There are non-stop bargains on the market and mortgage rates are AWESOME!  So, let’s make sure we bring the message of hope to all of our clients!  There has never been a better time to buy real estate than NOW!  Let’s start spreading the message TODAY!  Let me know your thoughts!