Property Grunt

Friday, November 20, 2009

A second wind

I had a bit of an epiphany today regarding the economy which began from what I read about certain investment banks who are actually hiring aggressively rather than cutting back. And it got me thinking, why would they do that in this economy?

As I mentioned before, I heard from a friend of mine who works in the hedge fund industry told me that that many finance players are taking advantage of the fact that many of their competitors have been wiped out. However I wasn't convinced that was the only reason.

Then I read this article.

"A Truly Extraordinary Slump": Reports of Robust Recovery Premature, James Galbraith Says

As everyone knows, the economy is still in the crapper. Regardless of what anyone says we have a long way to go. Credit markets are frozen and people are scrambling for money.

Which leads me to this article.

Galbraith: Government Spending Is the Solution, Not the Problem

The government is the only one with cash on hand and their first handout was obviously not enough.

Since the likelihood of another stimulus plan is on the horizon, my theory is that the finance industry is gearing up to take advantage of the situation. That is why a lot of these places are ramping up and building their profit centers at fighting strength in order maximize whatever opportunities come their way.

What does this mean for the real estate market in Manhattan? Well, honestly, I do not know. I think there will be definitely some buyers out there flush with cash, but I would not be surprised to see some buyers saving for a rainy day if they do not need to buy an apartment.

In the end, this is all about the economic recovery. We'll see how this plays out. But defintely expect more tension.