September 20, 2008

Bail Out: Our Well Being is at Stake

An enormous, taxpayer-financed program to buy up bad mortgages and other distressed debt is necessary to protect the savings and aspirations of millions of Americans

Resolving the financial problems is not just for major corporations, Our retirement, savings, homes and college for our kids and their chance to find and keep good jobs depend on it.

In 1989, the Resolution Trust Corporation disposed of bad assets held by hundreds of crippled savings institutions. The agency closed or reorganized 747 institutions holding $400 billion. It took six years for this one to resolve itself. By 1995, the S.& L. crisis had abated

Why Do This

Commercial and residential real estate deals are, for the most part, on hold these days as buyers and sellers wait for the credit crunch to ease. If we dont provide liquidity we wont have an economy that can function. Even the sovereign funds of China and some Arab nations would not step in and buy Lehman assets. Its our mess and we must fix the problem....our well being is at stake.

No Winners

Job growth, or more recently, the lack of job growth has reestablished itself as the operative factor determining the real estate sector's growth since sales and rent rates are most effected by the ability to pay

So far this year, the U.S. has lost 463,000 jobs, as unemployment hit 5.7 percent in July, its highest rate in four years. The outlook for jobs and the real estate sector will likely worsen. This collapse is expected to cost us another 400,000 jobs. The major financial hubs are on landlords' watch list. The high tech centers of Seattle, San Francisco and Austin look like a good bet from here.

Thanks for Reading
Howard Bell
A web site of over 450 articles related to real estate focused primarily on property management.

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