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
Dave, thanks for worrying! No, not blocked. I’m here, just very busy today given all that’s going on (although I did post to Montrose quite early this morning on an old thread). It’s nice to see posters pretty much banding together here and being supportive, even those who have traditionally disagreed in the past.
PS you need to get with a lender to solidify the terms of what you are able to borrow before you start looking. No guarantees that prices will drop fast for the type of property you may be interested in and the neighborhood where you’d like to be.
Prodigal Son, are you actually asking us why you should not buy when prices are falling and will continue to do so? I want to make sure you are actually asking this question before I neglect to answer it.
I’ll ask again.
I am in the market to buy. I have plenty of cash and excellent credit. I have a job, not in the financial services area.
Why ~not~ buy?
Should I wait for prices to drop? Or will money, credit and job standings not make a difference to any lender right now?
MacD – we are very close to breaking the 30-year low trend line. I’m sure the government is working feverishly to keep the DOW from dropping below the high 10,000s. If that happens, it’s going to be exceptionally rough.
wasder: it’s best to look at this in terms of inflation adjusted prices. The DOW would have to reach 15,000 tomorrow to reach the peak value form March of 2000. While you rarely hear this discussed, the performance of the DOW has actually been very similar to the Great Depression. Slight deflation during the 1930s however masks this a bit if you just look at the nominal values. In any event, it’s been almost 10 years, and things keep going down.
Very dark day. I tripped over the financial paparazzi in front of the Lehman office on my way to work this morning. There are going to be a lot more failures to come. It’s a terrible time to buy or sell anything unless you really know what you’re doing.
Dow—are you suggesting that house prices will never reach 2006 levels in our lifetimes?
Yeah MacD stick to the real estate topic and that alone!!!
Where’s Biff? Did he get blocked too??
MacD: What you are missing is that this board is about NYC real estate, which will be much more heavily influenced by the layoffs at Bear, Lehman, etc. etc. and the decline in share price of financial institutions than the performance of the broader stock market. The S&P could end 2008 with a gain and I think it would change very little when it comes to NYC real estate.