Posts Tagged ‘housing’

More Rhetoric From Obama

February 21, 2009

Tonight, I read on CNN.com that President Obama wants to cut the national deficit in half by the end of his first term in 2013.  This is absolute nonsense, and I have no idea why he would even say something like this.  We are in the middle of one of the most massive government spending programs ever, and he has the gall to say he’s going to be able to actually cut the deficit.  When will we stop buying all the garbage that is coming out of his mouth?

There is no chance Obama will be able to even get the deficit back to what it was when he inherited it from Bush!  How are we going to balance it when we can’t even pay for the trillions of dollars we are printing right now?  He says he’ll do it by raising taxes on those making more than $250,000 a year.  Can our President be any more idealistic and naive?  We aren’t paying for all the stimulus and bailouts right now to begin with!  It’s all borrowed money from China!  In order to cut the deficit, you’re going to need to cut spending!

All I know is right now, all of this Hope and Change sucks.  He talks about urgency and needing to act now, and then when the stimulus package is passed, he says we’ll see our extra $13 a week in April!  Like that’s a tax cut in the first place!  And then he brags about how fast the tax cut happened, when it’s still 2 months away!

Then he wants to spend $275 billion more of taxpayer money to help fight off foreclosures for irresponsible borrowers.  Sure, some people might have lost their jobs and are falling behind on their payments who might need some help.  But I just read statistics where even if rates were cut to 2%, forty percent of these people facing foreclosure still wouldn’t be able to make their payments!

If they are going to give taxpayer money away, they should give it to the people who are current on their mortgage and who can make their payments.  Let them pay off their debt or buy a car or a foreclosed home.  Give the money to people who will be able to do something with it!

I cannot believe that there is not more of an outrage at the actions of our government.  I can guarantee you that over half the population disagrees with all of these bailouts, yet our government shows no signs of stopping.  Why should we all just sit back and watch our hard earned money go to pay some stranger’s mortgage?  At what point is enough going to be enough?  I can see now the “change” Obama was talking about.  It’s going to be the revolt of the American Taxpayer kicking his hypocrite butt out of office.

Source:  CNN

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Calling a Bottom

December 3, 2008

I work in the architecture industry and we are feeling the credit crisis probably a little harder than everyone else.  My firm steered clear of condos and single family homes, mainly sticking with apartments, retail, and student housing.  We avoided the end of the housing bubble, but we are stuck in the middle of the lack of lending.  Right now, nothing is being built and nothing is on the boards.  This is because developers, from the most aggressive to the most conservative, cannot get funding for their projects.  They have the land and they have the vision, but they can’t get the funds to even start the process.

Today, my boss went to a presentation on the emerging trends for 2009, and the story was that the economy would not get better until 2011 at the earliest.  According to the presenters, 2009 would just keep getting worse, 2010 would be volatile, but more on the down side.  Then in 2011, we would start to bottom out and maybe by the end of that year we would start to see building again.

Talk about gloom and doom!  To me, this is just as crazy as the NASDAQ 20,000 calls during the dot-com boom, the ‘15% a year forever’ real estate pumpers, and the $500 oil predictions from earlier this year.  Those signs told those who were really paying attention that things had gotten out of hand.  The rise of the stocks during dot-com days and the rise of commodities (especially oil) earlier this year did not follow any fundamentals.

It was the result of everyone piling on, trying to make a buck.  And with that piling on came all the cheerleaders.  I think Peter Lynch said that when the checker at the grocery store is giving you stock tips, you know it’s time to get out.  On the other hand, when all of the experts in the industry are calling for three more years of pain, it’s probably time to get in.

There is a lot of money to be made right now out there.  Not just in construction and architecture and engineering either, but that’s where I’m focusing.  We have clients trying to build retail centers in areas that have only old, run-down malls.  Others are trying to build boutique hotels.  Some want to build senior housing or low income apartments.  These are projects that people will use, no matter what.  It is not the viability of the project that is driving decisions right now.  It is fear and a loss of confidence in the system.

All it’s going to take though, is one firm or lender to realize that if they lend out money and just sit back and take the returns on it, they are going to make a killing.  In the current state, no one is going to buy a loan that is packaged and resold.  But there has to be some lenders out there that will just sit back and collect interest for the next 10 years.

That is the big shift that is coming.  Lenders are going to have to hold the loans they make.  They won’t be able to resell it before the ink is dry, and they will have to really pay attention to their standards to make sure they are making loans to the right people.  During the last few years of easy and cheap credit, banks were just making loans and selling them to Wall Street right away.  They didn’t have to follow any standards because speculators were buying them up, no questions asked.

So, right here, right now, on December 3, 2008, I am calling the bottom in the architecture industry.  We’ve gone way past fundamentals and pro-formas and are being driven by fear right now.  I might be off by a few months, but I believe that someone is going to take that first step and start lending again.  And once someone tests the water and doesn’t get eaten by sharks, more and more will jump in.