The World is (still) Falling Apart – Part II

What a great year 2009 has been! Although this statement seems contradictory to the title of my (most likely) final blog entry of 2009, it has been a great year. My family remains healthy. Both of my sons will be graduating schools this year and continue to make me a proud parent. I wake up every day feeling blessed to come to work at Santos, Postal & Company. My colleagues are smart and interesting people. I enjoy their company and camaraderie. The work is stimulating and I get to help people and businesses with financial issues that might otherwise provide devastating results had it not been for my guidance.

Of course, 155 years ago in 1854 a traveler took a room in a small boarding house. After a long day he removed his boot and when it dropped to the floor it made a very loud noise. Not wanting to wake up the other guests, he very gently placed his other boot on the floor after removal. Ten minutes later the guest in the room below him banged on his door and inquired when the other boot would fall.

2009 has been a year of many fallen boots. Paragraph one above spoke about how great the year was. [Look at everything in context]. However, the world continues to fall apart. My blog entries for 2009 were:

1. The World is Falling Apart – Part I
2. Bad Bank, Good Bank
3. Mortgage Modification for High Net Worth Individual
4. Austin Powers or Timothy Geithner
5. Executive Leaders Radio Program
6. Credit Cards
7. Dividend (NOT)
8. Success Exists!!
9. Chicken Little
10. Wine or Banks; or is it Whine about Banks
11. Summertime Blues
12. U.S. Small Business Administration
13. Pat On My Back (Or Am I Scared)
15. Bank Intellect (An Oxymoron)
16. Random
17. Cicero, Unemployment & Porn
18. Debt by Credit Cards
19. Retail Sales Down – Duh?
20. Will We Ever Have Free Markets Again?
21. Susan Boyle and Student Loans
22. LEEDing the Way: The Green Movement and Sustainability
23. Tzuris for Credit Unions
24. SBA’s 100% Guarantee ARC Loan Program
25. Credit Card Accountability Responsibility and Disclosure Act of 2009
26. Tax Increases
27. A Rolling Loan Gathers No Loss
28. Bank Thinking at its Best – NOT!
29. New York Lawyers – Courtesy – Wachovia
30. CIT Group files for Bankruptcy
31. Real Estate in Recovery: What Can Be Done to Prepare for a Turnaround

Too much unemployment, too little bank lending. Why should banks loan money when they can borrow money for free from the government and then loan it back to the government, essentially risk free, at a spread in excess of 3%. The Washington Post’s Binyamin Appelbaum stated “The federal government quietly agreed to forgo billions of dollars in potential tax payments from Citigroup as part of the deal announced this week to wean the company from the massive taxpayer bailout that helped it survive the financial crisis”. This seems real fair. Can Citi executives use the tax savings to pay themselves larger bonuses? All sectors of real estate, from residential to commercial to retail to hospitality remain depressed. Billions of dollars in loans will be maturing. Depressed values create calls for additional equity, which will be forthcoming; thereby forcing present equity holders to leave the party. Cash is now king, and is staying on the sidelines. What will be the “Tipping Point” to allow for new equity to come to a transaction and a new lender to loan money? When will companies begin hiring again? When will consumers spend? When will someone get rid of the kryptonite so we can all be strong once again?

Who knows? Timing is impossible to predict when we’ll return from this Bizzaro World. However, I do know that the Government must stop spending money like a drunken sailor on leave (no offense to the military here, whom I deeply respect for all you do for our country). Only We the People can save ourselves. Reliance on the Government has historically, and will continue, to create so many additional problems from excessive debt burdens to welfare societies…. Regardless of your political ideology, doesn’t it incense everyone that the Health Care bill specifically excludes members of Congress, the very people shoving a new law down the throat of their constituents?

Finally, I ran into Andy Blocher, CFO of Federal Realty, the other day when we were both trying out the new restaurant at Rockville Town Square. Andy asked me to mention him in my next blog entry – and I just complied.

I wish all readers a very happy and healthy New Year. You can also follow me on twitter at @BobGreenfest.


One Response to “The World is (still) Falling Apart – Part II”

  1. Charles Postal Says:

    Thanks for the tip of the hat to SantosPostal! We love you too.

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