Wall Street Reorg: Impact on Real Estate?
After a weekend spent huddling together, Wall Street chieftains were unable (or, more precisely, unwilling) to come up with a plan to save faltering Lehman Brothers, which is now expected to file for bankruptcy. Merrill Lynch, which had seen its shares drop along with Lehman’s in recent days, agreed to be acquired by Bank of…
After a weekend spent huddling together, Wall Street chieftains were unable (or, more precisely, unwilling) to come up with a plan to save faltering Lehman Brothers, which is now expected to file for bankruptcy. Merrill Lynch, which had seen its shares drop along with Lehman’s in recent days, agreed to be acquired by Bank of America for close to $50 billion. Meanwhile, questions about giant insurer AIG’s ability to weather its own set of mortgage-related problems continued to mount. My goodness. I’ve been in the business 35 years, and these are the most extraordinary events I’ve ever seen, said Peter G. Peterson, co-founder of the private equity firm the Blackstone Group, who was head of Lehman in the 1970s and a secretary of commerce in the Nixon administration. The big question is whether these moves will increase investor unease or, by removing a few of the major question marks, hasten its recovery. The same can be said for the local real estate market. While many of Merrill’s remaining 60,000 employees will undoubtably be kept on, the same can’t be said for Lehman’s workforce of 25,000; on the other hand, market’s hate uncertainty, and maybe this just helps ensure that New York market is on target to meet Jim Cramer’s projected turnaround date of June 30, 2009.
Two Major Wall Street Banks Falter [NY Times]
Crisis on Wall Street [WSJ]
Photo by huachen
Yes DOW…bad markets do make great brokers…in the stock market too.
Polemicist…..barring this financial crisis as a reason to cut rates, its usually the opposite…inflation is what drives the rate cuts, both up and down.
dave:
you think an interest rate cut would look good for inflation? I’m assuming you mean for existing debtors, right?
DOW:
that is very good advice re: distressed sellers. Bad markets make great brokers – even today, the best I know really got into their game during the early ’90s.
We must be down from 2006. I just wonder how much of that huge upswing on the graph has now gone back down? Would love to see that info.
The CRB (Commodities Research Bureau) Index today has now gone down to a point where it is now DOWN for the year; meaning that Y-T-D commodities prices are now down.
This will factor into inflation & interest rates. We will get a Fed cut soon. Those looks very good for inflation expectaions and interest rates looking forward.
That’s a pretty picture given today’s gloom & doom
“Renting, waiting and then bottom-feeding…”
I’m contradicting myself. Don’t wait. Bottom-feed now. Lowball now. You may not score but you’ll develop relationships with brokers (assuming good credit, cash and solvency) who will eventually steer you to distressed sellers as time passes and things get “worse”.
“Have you seen an updated chart?”
No, but I’ve seen the updated Case-Shiller Index that this graph is based on. Not good. From that, you can infer that we are down from 2006.
Dave–glad to hear it. Keep on keeping on my cyber friend.
Yes, it wasn’t a postscript…Sorry PS…Didn’t mean to add an extra S!!!
Going OK here…we don’t make big bets and put on crazy trades. We’re still up for the year and buying today.