Q: Is the bottom in when the CRE folks get their bailout? Certainly, that will help the banks CR mentioned.

Also (on topic), this was linked on Drudge today:

Search - Global Edition - The New York Times

Glad to see the CRE situation get a promotion to "crash."

From the article: "...the Sears Tower in Chicago, which were acquired in 2006 and 2007 with mortgage-backed financing based on future rents rather than existing income."

This is why I disposed of all my nonpersonal use RE by April 2006.  I saw no pricing authority whatsoever. 

Interesting to see this spread to Texas. To date, Texas seems to have been spared much of the real estate problems affecting the rest of the country. Time will tell.

Does "commercial" real estate lending include residential development lending?
Groundhogday | 01.05.09 - 12:40 am | #
Welcome the the wonderful world of Mixed-use and PUDs. 

Nobody fails anymore, everyone gets a ribbon.

Texas was the fools last paradise. Now it is paradise lost.

Texas largely avoided the RRE bubble. Oil prices on the other hand...
Alex DeLarge | 01.05.09 - 12:51 am | #

I've been saying for a couple years here that the CRE bust would be terrible in flyover - far worse than on the coasts.  We didn't have the concentrated build up in flyover like they had on the coasts [think Manhattan] but man there are a lot of newer theme 'strip malls' & such. And unlike the coasts - few people to support all that retail & 'mixed use'. I mean we are talking pretty small cities or even 'towns' with significant developments.  Where is the demand going to come from?

"Now Elvis I wouldn't go that far.
FFDIC"

On with account. Paradise or paradise lost. I might agree with you on the "paradise" name for Texas but not the "lost."

"I mean we are talking pretty small cities or even 'towns' with significant developments."

But I alway thought condo developments in Iowa made so much sense...

"Son, some day, I'm going to sell this farm and retire to a condo in Des Moines. That is living."

"Pa, do you think there will be babes from California lounging at the pool."

"Son, why do you think I want to retire there?"

Rob-

Your dish of revenge on over stimulated planners and zoning officials will finally be served. Will it be cold?

Please leave a hot plate in the stove for me:)

There is a major disconnect between the understanding of basic math and the steps being taken to stimulate the economy.
Citizen Jacked | 01.05.09 - 1:05 am | #
This is a timely topic Denninger has been loudly complaining about with some merit of late.
The Market Ticker 

Willem Buiter Calls for Less US Stimulus, Expects Collapse in Price of Dollar Assets « naked capitalism

FT.com | Willem Buiter's Maverecon | Can the US economy afford a Keynesian stimulus?

Summary of Willem Buiter's FT article:

the US is pretty close to the end of its rope, in terms of relying on the rest of the world for financing. He sees it as a no-brainer that a massive fiscal deficits, whether they are narrowly successful or not, will relatively soon (he estimates 2 to 5 years) lead to a collapse in prices of dollar denominated assets.

Rob-
Your dish of revenge on over stimulated planners and zoning officials will finally be served. Will it be cold?
hong konger | 01.05.09 - 1:13 am | #
Not so much cold as well aged.  You guys think waiting 3 years for vindication wrt asset bubbles was long?  I've been nailing treatises to the urban planning doors for a dozen years.  They'll be given a special place in my reeducation schools. 

You'd hate "stinkin' Licoln", CA also!

ScoProLaw: Bankruptcy law is no fun thing, and no way to get rich either. What you want to get into to get rich is debt collection and default pursuit.

And unlike the coasts - few people to support all that retail & 'mixed use'. I mean we are talking pretty small cities or even 'towns' with significant developments.  Where is the demand going to come from?
dryfly | 01.05.09 - 1:06 am | #

The coasts have lost their appetite as well.  MUD, NURB, SMUG, PUD were only viable in an environment of artifical demand especially from people with no intention of living there.  Returning to traditional values includes revealed preferences for SFRs with a picket fence and lawn. 

FFDIC: Look into getting on nattokinase. Warfarin is bullshit and will kill you.

You got heart trouble? I got a million things to tell you that'll make your life a lot better...

Of course, the only thing I know about either is what CR and Conjure Bag have taught me.
ScoProLaw | 01.05.09 - 1:19 am | #

My cousin, Don Smith, is a criminal defense atty there and also has a Baytown office. One of the best now that some of the other 70 plus year olds have died off. You should do well in Houston over the long haul.

You got heart trouble? I got a million things to tell you that'll make your life a lot better...
Hoopajoops, LTD | Homepage | 01.05.09 - 1:24 am | #
Atrial fib...

Atrial Fibrillation Causes, Symptoms, Diagnosis, and Treatment on eMedicineHealth.com

"Try to get into the door of some financial institution. That way you can learn while someone else pays for your mistakes."

Just demand silver dollars instead of stock options.

I swear you dudes provide more guidance than 3 yrs of my allsome academic professors.
ScoProLaw | 01.05.09 - 1:35 am | #

After you stop the post-graduation partying, start cramming for the bar exam. 

Treat it as a full time job. 

Ruin your summer, but pass the damn exam.

ScoProLaw: what's the relative ranking, geographic location of your school, and what's your class ranking look like. I know a bankruptcy firm in SoCal who needs folks.

And yet the Dow Jones US Real Estate Index is up over 50% from its bottom. I guess it was a panic bottom...

FFDIC, I don't mean to crap on your evening, but long term warfarin therapy is some nasty stuff. Does more harm than good, as far as atherosclerosis is concerned. Really screws up the pipes. I'd get really damn agressive with nutritional sups, aspirin, and other less well known anti-coagulants before I went on a long term dose of coumadin.

This may have been discussed before, so sorry if a repeat.But my contention is grad school isn't much different than speculation in housing. Some people like house flippers are like the 8 yr NYU anthropology grads (2 friends doing this). Just completely unacceptable. Then there are people like me...it might have seemed like a "logical" choice, because it seemed like a solid investment. Only time will tell--but it's not lookin' good!
ScoProLaw | 01.05.09 - 1:52 am | #

The only mistake you made was 'timing' - too bad you couldn't be starting school now [instead of graduating now]. It is a real good time to be in school assuming you can find someone to fund it... not so easy to find good work right now though.

But if you survive this tough period - you'll have all the survival skills you'll ever need for the rest of your life. You'll become your own personal 'life coach'.

My daughter is starting grad school this summer - doctor of physical therapy program. In state tuition at major top tier program so even though very good it's reasonably cheap. Her undergrad is in biomed engineering w/ a minor in marketing - so even when she is done she'll have options. Practice - engineering - business. Her fiance isn't so lucky - just graduated w/ an architecture degree.

I'm sure if you dig deep into your experiences & skills you'll find you have options too. Most all of us do... If I made it graduating in the early 80s between those ball busting recessions then anyone can make it.

ScoProLaw writes:
\tI go to South Texas--it's a 4 tier. I'm in the 50%tile. Not much name recognition outside Tx. But I really appreciate the offer. Lord knows us noobs are going to need all the help we can get!
Doubt a CA firm would take much of a look at me. But I'll send if you think it's worth a shot.
ScoProLaw | 01.05.09 - 1:47 am | #
-----
In an alternative universe, I would be in an earlier phase of where you are. 

I would be at some low 3-tier or 4-tier school trying to stay above the 50% mark in an out-of-the-place law school realizing that I was going to come out with 6 digits of debt into one of the worse job markets for baby lawyers in a generation or two.  However, I requested a year deferral to see where some personal things and economic things were going to go.  Now, I'm not too excited about retaking the LSAT (For what?  A better score for a "better" school that costs even more) or going into deep debt to earn that J.D. + Bar Exam butt-whoopin'.  From what I've read, 2nd/3rd year & recent graduates are "fearlessly" charging ahead into their new future, but many/most of 'em are wearing brown pants just to be safe.

My point?  Law School (and Higher Ed in general) is in for a world of hurt.  Many of 'em are starting to hurt already, and like (C)RE, it is only going to get helluva worse.

Kunstler (I know, I hate quoting him, too) suggests that we're going to have to rediscover that warehouses shouldn't be condos, and harbors and piers are for shipping, not RE developments and pleasure craft.   But  before we get there, there's a helluva hangover to get through.   

Kunstler is insane and like a lot of insane people he is often right.

You mean to practice law you can't just study hard and take + pass the bar exam? This process all seems rather "undemocratic"... the necessity to go to college and learn a bunch of stuff that you probably won't practice.

Of course depending on your job you could still go through that and not learn anything... learned more in the past 2 years than I have learned in the previous 4 (college) + 2 (beginning engineering work).

No offense, but there's a doctorate for PT? The program was still mostly an associates degree about 10 years ago.
anonymous | 01.05.09 - 2:12 am | #

At most large programs they used to be five year BS degrees (at least going back 30 years at my alma mater). But 'yes' most programs are now turning into 'doctoral' programs just like in pharmacy. The reason is economics NOT that they need to be for the 'science'.

Used to be the Associate Degree level was for Physical Therapy Assistant... two years at a CC. That still holds.

The five year BS required two years Pre-PT at a Uni or CC then the PT curriculum was three years at a Uni on top of that... now they require a full medical or technical BS, work experience related to PT [volunteer if you can't find a pay job] and then follow a full 12 mon/yr program for three years - short internsip after that. Nowhere near as severe as an MD but similar. Pay isn't as good either but hours are better.

As a DPT she will not be able to prescribe drugs [like an MD] but will be able to prescribe therapy & prosthetics. If she only had a BS she would need to have those prescribed by a 'doctor' before she could treat - then she would follow the MDs directives verbatim.

Even her studies will dovetail the MDs. For the first year - most of her classes will be with the medical students - the PT dept is now part of the med school proper.

And 'yes' there was no reason this had to happen - it was just the way it evolved.

Yagij, you should consider going to medical school. I'm a full fledged lawyer, and I plan on saving up and going to medschool in a year or so. The prereqs are not that brutal.
\t Hoopajoops, LTD | \t \t \tHomepage | \t01.05.09 - 2:16 am | #
Hoop; Just finished up that process a couple years ago, and I was a re-entry/late starter also.
The competition for Med school is inversly proportional to a financially strong economy; the ease of money to be made on Wallstreet correlates well with the number of folks entering MBA programs.
When the economy gets tight, more inteligent hardworking folks gravitate toward medicine, as it is seen as "recession" proof.
Bottom line, do everything you can to get into a good mid-tier school with good residency programs to ensure your post grad education and hence job prospects.

So he's very connected to the housing and wall street sickness. He's using Allan Ripp, a NY legal PR guy to field inquires. But who did he piss off? They're going after him for a piddly $1.5M deal?
Uncle Billy, Mental Widget | Homepage | 01.05.09 - 4:41 am | #

I think he is involved in Jefferson County Alabama Municipal Sewer Bond debacle, some say this will or may be the largest government bankruptcy when over.

Besides, I'm impressed with Richardson's withdrawal, I didn't think he was that smart. Better to be governator of New Mexico than Commerce Secretary of US in a time like this.

Lucifer,
Awesome "screwtape letter"!

re: vetting for O Admin

Gonna be tough for anybody to get through it.
Volker the Viking | 01.05.09 - 8:03 am | #

I'm actually surprised that Hillary made it.  Of course, she's not confirmed yet.

(Note.... I have nothing against her.. I voted for her in the primaries....  just shocked that given the connections Bill has, that she could even begin to fill out that questionaire in a way that didn't leave about 10,000,000,000,000 unanwsered questions).

Uncle Billy, many thanks for the Mark Thoma link (2:42am) - a fine read.

RTO, I hope the monkeys fail to dissuade you. The international perspective has become a little faint here lately, and you're a great help for those of us looking for triangulation.

I'm familiar with some of those German hamlets, particularly Kirchheim which is just as you describe.

heh.... I need some perspective.... looking at the /ES chart right now, thinking "WOW.. IT'S CRATERING".

But it's only dropped 7 points in a half hour.  In this world, that's nothing.

and tax cut plans.
1 currency soon [yogi] | 01.05.09 - 9:06 am | #

In what way are targetted tax cuts (stealing from the rich and giving to the poor) not communism?

I'm taking notes, here. Please be specific.
hong konger | 01.05.09 - 2:06 am | #

First you need a list of acronyms:
SmUG = Smart Urban Growth
SmUGLers = Smart Urban Growth Lovers
NUTS = New Urbanist Transit Supporter
TODLers = Transit Only Development Lovers
FOAMer = Friend Of Anti-Mobility
TROGlodyte = Transit Only Groupies
Dense Pack = A failed missle defensive/urban offensive strategy

Darth P-

rumor (and its only a rumor) is that they are going to be swallowed by MI

two pieces of crap always look better when you push them together into one piece of crap

Construction data in a few minutes, auto sales later.  Should be interesting.  I'll guess down 2.4% construction with large single digit new starts. 

LOL. great Dieter reference.  i feared i was the only person that thought that mike myers skit was funny.
the man from nantucket | 01.05.09 - 9:53 am | #

Crank up the way-back machine....

In a previous life, I worked for a software development firm, and we did some business with a German distributor.  Their rep was named Dieter.  It was like having the SNL skits brought to life.....

Oh, and for all you AAPL players out there.... I weep for your puts.

MPinCO writes:

Rates may sink to lowest since 1694
Telegraph | Error 404 | Sorry, the page you have requested is not available 1694.html

Waterford Goes Into Receivership as No Buyer Emerges (Update5) - Bloomberg.com

Well, Waterford crystal in business since 1759 is BK today, survived WW1 and 2, the GD, etc...and we managed to sink them too...

Eric what were the numbers?
Comrade Kristina | 01.05.09 - 10:08 am | #

Fell 0.6%, consensus was -1.3%.

Bloomberg has a great page for this stuff.....

Bloomberg.com:
Economic Calendar

eric-

"appl puts"

They only call it manipulation when it drops...not when it causes it to go up. Loved the timing of it though.....it's akin to the "treating a virus with antibiotics" meme. from last year.

Ciao
MS

"appl puts"
They only call it manipulation when it drops...not when it causes it to go up. Loved the timing of it though.....it's akin to the "treating a virus with antibiotics" meme. from last year.
MS | 01.05.09 - 10:16 am | #

Look at the Jan expiry deep out of the money puts.  The volume around 70 is huge.  These were ghoul trades, betting on Jobs' health.  They deserve their 30-40% haircut this morning. 

Waterford got felled by cheap Chinese competition.
Even moving factories to Eastern Europe didn't help
for long.

I think Dawg has the most likely scenario for those APPL puts but appreciate the other side of the trade. Most people can't spell the word option let alone figure out how to short Puts.

In any case most of the premiums are still utterly ridiculous....I think I looked at those (the 70's) and they looked like the only reality in most of them.....the puts that is. Calls at 90 were pretty affordable last week before the health crap started.

I'm waiting for him to get a visit from Chavez while modeling the latest in "jogging suits". Can't be far off.

Ciao
MS

A couple of things: my friend, a self-employed lawyer in Milwaukee, is thinking about specializing in bankruptcies because of the present economy (or lack thereof). She has to go back to school (actually attend specific seminars and classes) in order to bone up on all the latest laws. It is expensive to practice law, what with all the required bar fees and classes and books as well as malpractice insurance. Plus you are generally prevented from advertising despite the ads you sometimes see on TV.

As for commercial real estate, I'm hoping to sell my residential property and buy a commercial building that I can live and work in as well as rent out other parts. Previously I didn't think I could afford it and now I'm enthusiastically waiting for the CRE crash. Meanwhile, I see that most landlords are stupidly refusing to reduce rental rates despite the number of businesses going under. That's another reason why many businesses are not surviving.

Re: Waterford...I'm a glassie. Many of the glassblowing firms are in trouble. Fenton is in the process of folding too. Blenko is walking the line. I expect more to go out of business.

Re Richardson: During the runup to the primaries, I attended a meeting. A high-up Demo party operative was there. Personally, I didn't like him...too slick. He worked for the Obama campaign. It was a mixed meeting with supporters of various Demo candidates. Since it was known that Richardson probably wouldn't make it, a Richardson supporter asked if he would be considered for the vice presidency. This guy answered that Richardson had a big, scary skeleton in the closet. Turns out he was right.

So my question is: If Team Obama knew about the skeleton, why did they name him to Commerce? Perhaps there's more than 1 buried in the closet.