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
“Feds Right to Let Lehman Fail, But It’s a ‘Dangerous, Risky’ Path, Roubini Says” – http://tinyurl.com/67kx97
Haven’t checked to see if this has been posted yet but the headline is a little misleading. Roubini is not saying the path of letting these firms fail is risky but rather that the policies leading up to these events is a risky PATH that has ALREADY been NAVIGATED by the FED/SEC. So it’s like a poisonous snake bite. Not a long read but I thought it was interesting.
Meredith Whitney STILL states that the housing price will fall another 33-40% from here. She estimates/predicts that credit card companies will retract $2Tril worth of consumer credits from the market in ’09. I believe 2-3 years from now many of us will look back on this board and realize how F*&ing naive & bunch of clowns we are. I am sorry to say but I believe this IS the proverbial “once in a generation” financial Tsunami hitting America today.
Prodigal Son, if I were on the sidelines, I would wait until you hear a stream of good news coming out of the housing sector (probably a few years from now). The best way to find a bottom is to see it behind you. As bad as things are, they are likely to get worse. From a purely financial perspective, you would be crazy to buy with this much uncertainty in the market.
I’ll probably ask Mr. B to put up a photo of the location with our “Coming soon…” banner up and ask people what they want us to carry.
Getting off topic here!!!
I thought so, that’s great! I’ll try to dig up your e-mail address and send you my wish list.
It is me MacD
Even though there are questions about how the stock market and lay-off’s are going to impact RE in the near future, there does seem to be continued commercial growth in previously underserved areas of Brooklyn. Anyone know anything about Butternut Market, for example? Not to get off topic (financial crisis and RE), but this seems like that would be right up your alley, DIBS. Know anything about it?
Brooklyn real estate is going to go down but there is still alot of money on the sidelines. There are alot of people myself included that saved and went to alot of cash when we started seeing what was happening last year. I will be ready to buy assets at distressed prices but certain parts of broolyn will be fine. The lower level and mid level markets are going to go down the most…
Prodigal-Son
The issue is whether or not you need a mortgage. If we enter a period of significant asset price deflation, which seems increasingly likely, you could potentially end up under water.
If you own your property free and clear however, you have nothing to worry about. Even if the value of your house declines, you’ll still have a roof over your head.