Zell on CRE: Too Soon for Grave Dancing
Submitted by
CalculatedRisk on Sat, 11/14/2009 - 2:04pm (73 comments)
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But not too soon for frivolous dancing.
16 flip a coin. 8 turn heads.
8 flip a coin. 4 turn heads.
4 flip a coin. 2 turn heads.
2 flip coin. 1 turns heads.
That 1 is a genius. That one is Sam Zell. That same one has flipped tails twice the last two times.
Listen to Zell?
Rob, I quoted him from the conference last year - he clearly said he thought CRE prices wouldn't fall - I saw very surprised (and I obviously disagreed with him). I still think his comments are interesting ... but he is probably just trying to talk down prices.
best wishes
He's going buy hotels with all that money he made in the newspaper business, right?
There is a terrifying graphic over at JSMineset, showing unemployment sweeping the land.
Welcome To Jim Sinclair’s MineSet
You can see the D.C. Island immune from the consequences.
OT for the weekend crew: Is there any interest in local meetings over a beverage?
I'm in the Portland metro area have sent inquiries to those who have let everyone know they are in the PDX area and have listed contact info. I'm partial to some place like The Lucky Lab brewpub because I can bring my kid. Anyone interested can send me an email and I'll try a to organize it. Other locations will need local volunteers. The holidays are coming up...
noob goldberg wrote:
But for those of retirement age maintaining a sharp mind, a wealth of accumulated knowledge, and that rare ability to immediately see to the root of a problem, it's humanity's loss if we can't find a way to tap that resource
Exactly. Much of this crisis in fact could have been both foreseen and prevented, not by experts or academics, but through common knowledge by the general public and political demand -- IF attention was paid to the elders in our society that lived through GD1 and felt many of the same sentiments toward what was going on. Divide and conquer, and the facilitation of generational animosity and artificial barriers to communication is a key strategy of control to TPTB.
Did hoocouldanode barf? Where is everyone? That's 10 minutes without a comment.
I'm thinking of building a new mall and calling it Dream World USA. Of course it will have an attached Condo/hotel tower.
English Beat. It's a dead man's party.
Rob Dawg, left you a reply long after the
in the event you haven't seen it yet.
He's overcompensating for always being called last in class with a name like "Zell".
It is mildly amusing that there are so many working off the "what worked last time" model.
Zell was IMHO a lucky coin flipper. In a deflationary spiral Zell loses. in a rising interest rate environment Zell loses. That mens Zell loses twice over going forward.
Personally I don't think most of these people think things will recover. But what is their other option when they are offered "extend and pretend"? If it has a 1 in 100 chance of working, why not take it. The other option means admitting you are a failure and made the same mistakes people did a mere 20 years ago. And that would be unpleasant at the holiday parties.
Cinco-X: I figured it was the NSA taking an interest in us again...
Plantagenet wrote:
Cool illustration
12th Percentile wrote:
The economy will recover. Residential real estate in bubble areas? You won't get to 2007 prices until, 2020 or later, and that is if there is 3% inflation.
Rob Dawg wrote:
Thirty years of Pavlovian positive reinforcement.
And plenty of negative conditioning on people who didn't buy into the stock and RE bubble.
Zell said the economy's great on CNBC weeks before we went into recession...
...the same guy that wanted to rename Wrigley Field.
So the California Constitution says no taxes but free tuition?
Forgot to put in that college professors must work for whatever Arnold the Kindergarten Cop says. Then it would work.
i meant "people who own CRE that is underwater with rapidly declining rents, record vacancies, etc" don't think it will recover before the banks finally capitulate and take it back.
The economy will recover. Eventually. I hope it doesn't recover to where borrowing more than you can pay back is considered good and normal. Especially when you are borrowing to buy useless crap.
But if you own CRE and you've been paying your loan back with borrowed money that has run out, your are underwater and have crappy income on your property, I don't think you really believe you are getting out alive. But if the bank will give you a chance, why not take it?
I don't even know why I bother trying to straighten you out.
Your biases obviously interfere with your reading comprehension.
Good day, all.
1 currency now -yogi wrote:
No the California Constitution is explicit that there is no in State tuition. The shame is in our sick pretending otherwise.
Sportsfan, watch out for the hit and run. I'm still waiting for a specific complaint about the integrity of Brad Sherman, (D, CA).
So don't pay and send your kid. When he's refused he has a case.
The Constitution can't promise something without providing the means to pay for it. It's the same vicious circle as the federal order to maintain prisons without cruelty. Constitutions are still subject to the imperfections of language and political logic.
Grave Dancing:
I light my torch
and wave it for the
New moon on Monday
And a firedance through the night
I stayed the cold day with a lonely satellite
YouTube -
When I hit the lotto I'm going to name my truck Grave Dancer.
plantagenet, your interactive link ties in well with this one:
The Geography of Jobs - TIP Strategies
OT-Another item for the WTF file:
Just received and urgent email from PayPal. The body of the email had these goodies.
This email is to let you know that you have been pre-approved for Bill Me Later. Bill Me Later is the new payment option from PayPal.
Bill Me Later is now available in PayPal checkout at select PayPal merchants.
To use Bill Me Later:
Your pre-approval offer remains valid until 11/30/2009.
We hope you enjoy this new convenient and flexible payment option. ...
Bill Me Later is offered through CIT Bank, Salt Lake City, Utah, and is operated by Bill Me Later, Inc.
Does anyone know the current status of the CIT Bank?
FW
So, why are REITs still levitating? Is there some way to hide the long-term loss in short-term cash-flow?
DCRogers wrote:
There are a lot of hedge funds betting that they will be the first through the door when someone yells "fire" in the crowded theater.
Let's hope that they all are right (or not.)
I believe CIT bank, UT, was not part of the BK filing. Ponzi lives.
Rajesh wrote:
What kinds of fools (coughCalPERScough) would be funding this insanity?
When someone yells "fire", it's usually better to drop to the ground than run through a doorway.
YouTube - Cricket Chirping
FUBAR and WASS LLC wrote:
Still breathing
Terry wrote:
cue crickets
face it folk, it's all quiet, and damn well better stay that way until O gets back from China
"Some people without brains do an awful lot of talking."
Washington, D.C., Nov. 13, 2009 — The Securities and Exchange Commission today announced a new financial literacy outreach program to promote financial literacy to elementary school students.
Press Release: Securities Regulators to Talk Financial Literacy With Students; 2009-245; Nov. 13, 2009
DCRogers wrote:
It's an all-in-bet. They're so far down they probably feel the all or nothing bet is the their only rational choice. It's not of course, but if they had the sense to realize it and face the music, they wouldn't have gotten themselves in this mess to start with.
Societies, like individuals employ sometimes analysis and sometimes synthesis; and this determines whether the epoch which they pass through will be critical or organic. All history may be divided into critical periods and organic periods. The critical periods are those in which the minds of men are employed in investigating the principles of the government under which they live, in endeavouring to amend old institutions and to invent new ones; in which no creed commands the assent of all, so that society is without principles, discontented, changeful, and, in a word, in a state of anarchy. Organic periods, on the contrary, are those which possess an accepted doctrine, in which society is cemented by the synthesis of a common faith, in which the actual institutions give satisfaction to the world, and men's minds are at rest.
this is real_folks wrote:
simply known as mouth breathers
volker the viking wrote:
Huh?
"Does anyone know the current status of the CIT Bank? "
RECENT 8K FILINGS
November 5, 2009
Form 8-K is used by companies to file current reports on the following
events:
CIT GROUP INC DE 1.03,2.04,3.01,7.01,8.01,9.01 11/01/09
1.03 Bankruptcy or Receivership
2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation
or an Obligation under an Off-Balance Sheet Arrangement
3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing
7.01 Regulation FD Disclosure
8.01 Other Events
9.01 Financial Statements and Exhibits
http://www.sec.gov/news/digest/2009/dig110509-8k.txt
From Mauldin's latest newsletter:
If This is Recovery, Where Are the Taxes?
I keep reading about surveys that show that retail sales are up. But as noted above, no one pays extra sales taxes, or decides they need to pay more income taxes.
So how do we keep seeing headlines about retail sales being up, as unemployment keeps rising?
Remember that such reports are usually based on surveys, and generally cover mid-sized and up retailers, leaving out smaller businesses. Further, if you are a retail chain that has closed 10% of its stores, the remaining stores should in theory benefit from getting your loyal customers into them
barfly wrote:
The bank is not part of the bankruptcy.
All history may be divided into critical periods and organic periods.
Excellent philosophizing. However I find it difficult to see the present situation as an example of either a critical examination period or a time of organic functioning of healthy and useful social institutions.
Generally a good policy in any event.
"The bank is not part of the bankruptcy."
Oops
Companies with names matching "CIT"
Search Results
Comrade Rally Monkey wrote:
In the Army, we called them "oxygen thieves".
RiF
I just threw it out there for fun, just to see any reaction, my book reading is bouncing around and that piece is an excerpt from The Philosophy of History in France and Germany by Robert Flint 1874, describing a branch of thinking according to Saint Simon who lived through the French Revolution but the idea goes back to the guy who Voltaire got it from and Voltaire died a decade before the French Revolution began. France was very Catholic and this was all against the doctrine of the Catholic Church which stated history doesn't repeat because it is all God's plan.
Fits with the heretical market portfolio beliefs now; that timing matters and buy + hold is inadequate.
EvilHenryPaulson wrote:
Is that still considered heretical?
I'm too busy timing to keep track.
sm_landlord wrote:
Every time you speak ill of the Efficient Market Hypothesis, a U of Chicago professor has a heart attack. Last I checked they have a full faculty so it still hasn't taken off yet. On TV up here one of the banks has this stupid ad that is all rah-rah about diversified portfolio of buy and hold. Don't take my word for it, ask a random sample of people what their approach to investing is
EHP - Having just trounced through "A thousand years of nonlinear history" I really picked up on the 'organic' interpretation of social institutions - but am inclined to see critical periods of failure/collapse as stepping stones to a higher synthesis...
I like the idea of a social institution as an experiment or artifact that embodies and is designed to test the usefulness of, a philosophy or paradigm in the real world.
ResistanceIsFeudal wrote:
what a full load of used hay
take a simple universal concept, formalize the acceptance through ratification, and try not to fuck it up
volker - the longer it persists, and the more powerful it gets, the harder it becomes to not fuck it up.
Anecdote: Started Christmas shopping for the kids today (I am crowd-averse) and don't worry about the economy. The places were packed. You could barely get a parking space at Best Buy. Macy's had Christmas music playing. People everywhere. I thought it was the week before Christmas. w-o-w
I am no longer officially a doomer. I am a doubter, but not a doomer.
That's a big switch for me.
Outsider wrote:
Yes, but what were they carrying? Could be a whole lot of looking and intense bargain hunting, not so much buying.
Has anybody played with Mish's unemployment predictions spreadsheet? We had a long talk yesterday about his post. Mish feels that his projections are quite conservative.
The link to the spreadsheet is at the end of the post.
Mish Unemployment Projections Through 2020 - It Looks Grim
TJ and The Bear wrote:
I had to go out for a run today - stopped for gas at Costco, and the lot was packed. Traffic was a mess. Maybe everyone is getting wine for Christmas.
Places are always crowded. Not once during this debacle did I ever notice that places were empty. Next.
token bull wrote:
Except a bunch of small storefronts. Especially video rental stores.
Reference Mauldin's comments above about retail survivorship, as well as this...
Last Business Standing
Yesterday I was with an associate, and I hesitated in asking them how their business was doing, because I knew things had been tough at the beginning of the year. But I did ask, and they said sales were up over the last months and business was looking better. Surprised, I asked them what made the difference. "Ah," they said, "less competition. Our competitors have gone out of business."
Best Buy and other electronic retailers had to benefit from Circuit City disappearing. That is Schumpeter's creative destruction at work. Not very good for total employment, but it does help the profitability of the survivors.
It stands to reason that businesses would look busy, because you have the same number of shoppers but fewer shops.
OT: sm, sent you an email.
EDIT: Ah, you already replied! Thanks!!
token bull wrote:
New para dig um. Some people believe and they are spending money they do not have and others disbelieve and are spending their money first
Terry, you are correct -
"CIT said that only its holding company was filing for bankruptcy, and that most of its important operating subsidiaries, including its Utah bank, would continue to operate normally. "
Creditors Back CIT's Bankruptcy - NY Times
"None of CIT’s operating units, including CIT Bank, were included in the filing."
CIT Group Can Shield Equipment Finance Unit During Bankruptcy - Bloomberg.com
No worries. We'll save your seat for you... right next to C&C's seat.
Terry wrote:
Still breathing
cue crickets
+2
Comrade Rally Monkey's tile is off the hook....
hat tip the rally monkey.
Boom
Done
"less than well-capitalized"
Why use three words when one will do? Sounds as if somebody never read Strunk and White.
In the future, fewer and fewer office buildings will be required. Look for conversions to to lofts.