What is going to happen?
David Tic the Founder of theÂ Prudent Bear Fund was quoted in Bloomberg today saying, “Â losses from the U.S. mortgage crisis may reach $945 billion”.Â That would be much more costly than the Saving and Loan Crisis in the eighties.Â
Is this possible?Â
Answer:Â Everyday we hear the Credit crisis is over and then we are hit with news of more write downs.Â Write downs are hitting all financial sectors.
Where is the economyÂ going?
Answer:Â Who knows!Â Earlier this week Boone Pickens predicted #150.00 a barrel oil by years’ end.Â Today oil was north of $130.00 per barrel.Â We seemed to be going through a re-occurring cycle of hearing bad news then the pundits come out and say things are going to be okay.Â Then a week later more bad news and the pundits return.Â
How does this effect commercial real estate?
Answer:Â Real estate follows employment.Â If the economy take a sharp downward turn real values will fall.Â In Texas I am told that there is a disconnect between buyers and sellers.Â Sellers aren’t willing to take a hit on there asking price thus the number of transactions are down.Â Additionally, credit continues to be a problem in funding deals.