It looks like I picked the wrong week to quit blogging

I haven't quit. I am just going along with the theme of this clip.



So take your pick of disasters. We have Citibank banging on every door possible in Dubai and other foreign countries desperately trying to get cash. And it appears that misery loves company because now other financial institutions are joining the growing league of losers.

Bernanke right now is at precipice of history where whatever he does will not affect his legacy and the country but the entire world. Right now he is shifting through his bag of tricks to find temporary stimulus measures.

Ben S. Bernanke, chairman of the Federal Reserve, has told lawmakers that he can support short-term tax cuts or spending measures to stimulate the economy, even if they increase the budget deficit, as long as the measures are quick and temporary.

Oh this will definitely provide stimulus, for the parties that directly benefit from these measures. In other words the haves, not the have nots.

The New York Times has written an excellent piece on Bernanke and for those of you who believe in interest rate cuts, here is something to shake you out of that dream.

Bernanke also has strong reasons to worry, however, about easing rates too much. Inflation has failed to fall as the Fed expected. (In fact, lately it has been rising.) Also, lower interest rates induce foreigners to switch out of dollar-denominated investments like Treasuries and into currencies with higher yields. Thus, any rate cut would tend to escalate the stampede out of the dollar.

Say goodbye to those foreign buyers.

And of course let us not forget the beatdown the stock market is taking.

On the New York Front, real estate is giving warm fuzzies all around.

Harry Macklowe has screamed uncle by unloading the GM building. This is probably the best option for him at this point. The question is that will he get the price that he wants? The only real contenders are buyers who are drenched in liquidity because if he was having trouble getting financing to hold onto the GM building the there is no way in hell lenders are going to put up the cash for the buyers. And with the current volatility in the market those liquid heavy buyers are going to gouge him as much as possible.


Then we have this little ditty from the New York Times, which was trying to figure out what will be the next phase for the New York City Market. It pretty much covers the bases on the Wall street bonuses being paid in stock, lenders tightening up standards and apartments hanging out on the market longer than usual. It is chock full of interesting information that I recommend everyone to read.

There is one quote that really stood out for me and not in a good way.

Diane M. Ramirez, president of Halstead Property, is less concerned about a recession because the inventory of property on the market is currently low. She said that in the recession of the late ’80s, Manhattan dropped sharply because the city had an oversupply of apartments. “We had a deeper, longer recession than most cities,” she said. “We lost 20 to 50 percent value.”

The operative word here is currently. Which means now. Now inventory levels are low. What about the upcoming year? Can Ms. Ramirez tell me how things are going to be? Does she have a crystal ball? Because I sure as hell can’t tell what is going to happen to inventory levels a year from now.

What I do know is that we are dire straits right now to the point that inflation has hit its highest in 17 years.


Citibank plans on laying off a lot of people and they won’t be alone in cutting the flesh. If the recession hits hard enough, a lot of those people may decide to cut and run especially those who own. It will be probably more expensive to live in New York city since Bloomberg is considering rolling back 7% tax cut and getting rid of the $400 dollar rebate.

And let’s not forget those ARMs and other funky mortgage products buyers used to get that piece of the Manhattan dream. Are owners going to have the money when those mortgages reset?

With these variables and other ones that have yet to make themselves known it is possible that inventory levels could actually skyrocket with people needing to liquidate.

I think Jonathan Miller sums it best.

Another Inman News Real Estate Connect conference is behind us and as a result, I feel more informed, was able to meet new industry people, be exposed to new concepts, was able to see many colleagues, get another Inman bag full of pens and post-it note thingies. In other words, it was time well spent.

Brad Inman provided a great overview of his interpretation of where the market was going to the audience at the close of the conference, which was rational, clear and in many ways, the distillation of all the information and filtered spin that was presented over the previous three days. I need to listen to Brad more often - I wish his summary was available (Hey Joel, how about his summary for Inman TV?)

Housing market direction discussion throughout the conference was essentially presented by two camps which seemed to parallel the ongoing presidential primaries:
· Sales agents, brokers and NAR current and former employees [ie Republicans] — This group is nearly always providing a silver lining because they are paid for their ability to sell a vision or idea. Thats their job. Thats being said, I was surprised at the quantity of pollyanna-isms still peppering the reasoning why housing will recover in 2008. In the last two main session panels on the last day, it was very interesting to hear a lot of discussion about second home units and how they posed no greater risk than primary home units because they weren’t flips (reality check: when someone loses their job, which mortgage payment do they stop first: their family home or the ski lodge condo?)

· Economists and academics [ie Democrats] — There is an old saying that economists are paid to worry. Prescribers of the red light theory (people are more likely to remember the negatives such as all the red traffic lights they hit, rather than the green) love this stuff. The keynote panel discussion was terrific, (Barry Ritholz and Noah Rosenblatt were great at laying it all out) but everyone needed to receive counseling for depression when it was over.

Thats why this period of housing turbulence feels a lot like the presidential primaries. Its all about how the information is presented, whether or not its in the right context and whose interests are being served.

I have a headache.