Real Estate Blog

We can now enter a new acronym into our lexicon: TALF. And what is TALF? The Federal Reserve and the Treasury announced on November 25^th that a Term Asset-backed securities Loan Facility will be created to provide liquidity for purchasers of ABS’s (Asset-Backed Securities, which include mortgage-backed securities). Asset-backed securities also include student loans and car loans, which under normal conditions are packaged and sold to investors willing to take a risk that has been evaluated by another institution.

The trouble is, no one can be certain how thorough those institutions (specifically banks) were in their risk assessment process. Banks need to package and sell these securities in order to remove potential liabilities from their balance sheets, but when it becomes virtually impossible to slog through the tranches of loans within those securities, investors can easily become gun shy. To witness the headaches that these loans are causing banks, take a look at the chart below.

So as our trusted officials continue their efforts to restore confidence in the markets, and as the demand-led recession deepens, this task seems increasingly Herculean. Paulson & Company have resorted to some extremely desperate measures to pull this one off. To fund the TALF, approximately $600-800 billion will have to be committed, which nearly equals the amount of the original bailout plan. $20 billion of that money is, in fact, coming from the bailout plan. The other remaining billions are being leveraged, a fairly astonishing fact whose implications remain unclear. One thing is for certain: if the Fed wishes to avoid an inflationary spiral, destruction of money will become a necessity once this crisis begins to abate.

It would appear that the Fed’s announcement caused a positive reaction in the mortgage markets, however, Mortgage prime rates dropped from 6.3% to 5.5%, a relatively massive decline, and a huge wave of refinancing ensued…in a matter of hours, essentially. Could that be a forward indicator? Credit Suisse Group mortgage strategist Mahesh Swaminathan thinks so, saying that he expects to see rates drop below 5% in the near term. While there are some strict requirements for homeowners hoping to refinance, this is obviously a positive for the consumer. And while these measures do little to halt the rising tide of foreclosures, it does help the demand side of the issue. And in a demand-led recession, such as the one we are in, has the Fed finally stumbled upon the right combination to stimulate the markets?

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Can the TALF Return Demand to the Markets?

[Note: To follow is an excerpt of an interview with Michael Anderson, Managing Member and Founder of Salt Lake City-based RealSource, a leader in multifamily research and tenant in common deals [www.realsource.net/bestoftimes]. To listen to the show archive or download an MP3, go to www.IncomePropertyInvestmentTalk.com/102908.]

These Are the ‘Best of Times’ for Multifamily TIC Providers and Investors

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CAR HIRE & TRANSFERS

<span class=”field_caption”>Full Description</span>:&nbsp;Car hire & Transfers with mini vans or estates vehicles.<br />
Private trips with driver & English speaking guide, from 50€ per day. All destinations.<br />
Rent a mini van or limousine from 15€ per day.<br />

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CAR HIRE & TRANSFERS

<span class=”field_caption”>Full Description</span>:&nbsp;Car hire & Transfers with mini vans or estates vehicles.<br />
Private trips with driver & English speaking guide, from 50€ per day. All destinations.<br />
Rent a mini van or limousine from 15€ per day.<br />

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CAR HIRE & TRANSFERS

<span class=”field_caption”>Full Description</span>:&nbsp;Car hire & Transfers with mini vans or estates vehicles.<br />
Private trips with driver & English speaking guide, from 50€ per day. All destinations.<br />
Rent a mini van or limousine from 15€ per day.<br />

See original here:
CAR HIRE & TRANSFERS

<span class=”field_caption”>Full Description</span>:&nbsp;Car hire & Transfers with mini vans or estates vehicles.<br />
Private trips with driver & English speaking guide, from 50€ per day. All destinations.<br />
Rent a mini van or limousine from 15€ per day.<br />

Continued here:
CAR HIRE & TRANSFERS

<span class=”field_caption”>Full Description</span>:&nbsp;Car hire & Transfers with mini vans or estates vehicles.<br />
Private trips with driver & English speaking guide, from 50€ per day. All destinations.<br />
Rent a mini van or limousine from 15€ per day.<br />

View original post here:
CAR HIRE & TRANSFERS

<span class=”field_caption”>Full Description</span>:&nbsp;Car hire & Transfers with mini vans or estates vehicles.<br />
Private trips with driver & English speaking guide, from 50€ per day. All destinations.<br />
Rent a mini van or limousine from 15€ per day.<br />

Credit:
CAR HIRE & TRANSFERS

<span class=”field_caption”>Full Description</span>:&nbsp;Car hire & Transfers with mini vans or estates vehicles.<br />
Private trips with driver & English speaking guide, from 50€ per day. All destinations.<br />
Rent a mini van or limousine from 15€ per day.<br />

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CAR HIRE & TRANSFERS

*FULL CLIP* Exclusive Interview with Mortimer Zuckerman, Chairman of Boston Properties and Owner of the Daily News (12 Minutes)

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Zuckerman on the Markets

10 Days In October

A guest post from Constantine von Hoffman, veteran business journalist and author of the blog CollateralDamage.biz, a humorous look at marketing, business and his dog.

The markets continues to stagger around like a drunk after last call and with every bit as much connection to reality. As I write this, a half hour before the final bell, the Dow is up 11%, nearly 900 points for the day. The NASDAQ and S&P 500 are both up around 10%. All this despite reports of consumer confidence and home prices dropping faster than President Bush’s approval ratings.

Wall Street’s Queens of Denial were apparently responding to talk that the Fed will cut the prime rate by at least half a percent. This is just one more measure of how the markets are now a faith-based initiative. It doesn’t matter how low the rate is when there is no money to borrow. The system is still facing a liquidity crisis and even if it wasn’t we’d still be tanking. For better and mostly for worse consumers still drive the economy. Those of them fortunate enough not to be losing their houses are losing equity at an astounding clip.

These trends aren’t going to change any time soon.

The Standard & Poor’s/Case-Shiller index showed August home prices tumbled by the sharpest annual rate ever. You’d have to be insane – or work on Wall St. – to think September’s numbers will be any better. Further, the Conference Board Consumer Confidence Index fell to 38 this month, down from September’s 61.4. This was the third-steepest in the history of the index and left it at a record low.

The spending hatches have been most certainly – and wisely – battened. The smart investors, if there are any, are fleeing to those goods which consumers absolutely cannot do without – which is good news for Procter & Gamble, et al. (Say how about P&G taking over GM? At least that way they’d get competent leadership.) Wall Street, which at the best of times is a lousy indicator of economic conditions, has wandered off into a land of make believe on a journey that we can only we all survive.

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Stock markets set new record for bouncing a dead cat

Politics caused the global economic crisis. Can politics fix it? Doubtful.

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Sub-prime Mess Leads to Global Summit

Today’s volatile housing market demands that home buyers take an exacting, almost surgical approach to completing a mortgage application in order to speed the paperwork through the narrowed arteries of the home loan pipeline.

Deploy A Strategic Assault On Your Mortgage Application

Small-scale rental home investors need to be aware of a new campaign by the nation’s largest apartment owners that could have the effect of scaring away potential tenants.

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Investor Report: Small-scale Investors Beware