Barry Sternlicht,Chairman and CEO of Starwood Capital,says he thinks everyone's pretty optimistic about Commercial Mortgage-Backed Securities,or CMBS,in the TALF program.I think we're closer to the bottom of the residential side,Mr.Sternlicht observed,so now we can focus on the commercial side.The commercial real estate market is gonna lag the economy.Companies are gonna have to be confident before they get back in.This recovery is gonna be longer,deeper and broader than the Resolution Trust Corporation cycle of the 1980s.There still isn't any debt,Mr.Sternlicht noted,though TALF will encourage some lending.
When we buy land,we're doing it unleveraged,Mr.Sternlicht revealed.We're buying debt in property.There's one in Las Vegas we're looking at,and something in Brazil right now.You've got to be patient.The bid-ask spreads are huge,Mr.Sternlicht feels.
Tuesday, June 9, 2009
A Question of Balance
Federal Reserve Chairman Ben Bernanke,whose four-year term expires in January,appeared before the House Budget Committee last week,assessing the shape of the economy.The Targeted Asset-backed securities Loan Facility,or TALF,has helped open up lending,Mr.Bernanke said,and he is confident that TALF carries minimal risk.As well,the recovery rate for Troubled Asset Relief Program,or TARP,funds should be excellent.We need to restore ourselves to a more balanced fiscal path,however.
Currency and commodity prices are factors in inflation,Mr.Bernanke pointed out,and will be watched carefully.Most indicators point toward stable inflation.There is no sign of a wage/price spiral.Picking a time to remove accommodation,or Federal Reserve actions,is tricky,but monetary accommodations can be unwound,and the decision can be made with political independence.The increase in federal borrowing has been offset by a decrease in private borrowing.
The fear of deflation has receded somewhat,Mr.Bernanke told the House Budget Committee.Retaining the confidence of the financial markets requires that we as Americans take action now to try and restore the fiscal balance.Financial institutions and markets do remain under some stress,but those banks required to raise new capital have made substantial progress.
We need to be on a path of spending and tax measures to cut debt,Mr.Bernanke feels.The stimulus program will have an effect on jobs for two to three years.When the time comes,we will need to raise interest rates,as the Fed is strongly committed to price stability.Q2 economic growth could be negative as inventories are worked off,but the Fed will not monetize debt.Businesses remain cautious and continue to reduce the work force,as the unemployment report on Friday indicated.Overall,Mr.Bernanke,wearing a gray suit,white shirt and red tie with a gold pattern,was sounding a note of cautious optimism,cognizant of the threat of deficit spending to the economy in the long term.
Currency and commodity prices are factors in inflation,Mr.Bernanke pointed out,and will be watched carefully.Most indicators point toward stable inflation.There is no sign of a wage/price spiral.Picking a time to remove accommodation,or Federal Reserve actions,is tricky,but monetary accommodations can be unwound,and the decision can be made with political independence.The increase in federal borrowing has been offset by a decrease in private borrowing.
The fear of deflation has receded somewhat,Mr.Bernanke told the House Budget Committee.Retaining the confidence of the financial markets requires that we as Americans take action now to try and restore the fiscal balance.Financial institutions and markets do remain under some stress,but those banks required to raise new capital have made substantial progress.
We need to be on a path of spending and tax measures to cut debt,Mr.Bernanke feels.The stimulus program will have an effect on jobs for two to three years.When the time comes,we will need to raise interest rates,as the Fed is strongly committed to price stability.Q2 economic growth could be negative as inventories are worked off,but the Fed will not monetize debt.Businesses remain cautious and continue to reduce the work force,as the unemployment report on Friday indicated.Overall,Mr.Bernanke,wearing a gray suit,white shirt and red tie with a gold pattern,was sounding a note of cautious optimism,cognizant of the threat of deficit spending to the economy in the long term.
Friday, June 5, 2009
Health Uncle:Triathletes Face More Risk
Triathletes are at about twice the risk of sudden cardiac death as marathon runners,according to a Minneapolis Heart Institute study.Several hundred thousand Americans take part in the grueling triathlon event-consisting of swimming,biking and running-each year.Around 15 of every million participants will die suddenly during competition,as opposed to four to eight deaths per million marathon runners.Most of the triathlete heart attacks occur during the swimming portion of the event.Swimming in a natural body of water is more strenuous than in a pool,says Dr.Kevin Harris,a cardiologist at the Institute.The triathletes often just sign up for the events without having had a heart check-up.Many of them are not properly conditioned for these difficult competitions,Dr.Harris points out.Triathlons are becoming increasingly popular as charity fundraisers,and professional events are frequently televised on weekend afternoons,including the Ironman series,stoking the imaginations of amateur triathletes.
Tuesday, June 2, 2009
Economists Gauge the Prospects
A survey of economists conducted by the National Association for Business Economics shows that around 74% of them think the recession will end in Q3,while 19% think Q4 is more likely.A further 7% look for a Q1 2010 conclusion.The economists see the unemployment rate for 2009 averaging 9.1%,though some feel it could go as high as 10.7% in Q2 of 2010.This high unemployment will occur even if economic recovery begins,as companies will refrain from hiring until it is a certainty.The May unemployment report will be released on Friday,putting a question mark on the durability of the week's market activity.
UCLA and Medicine
UCLA's new medical center is already counted among the world's best,Mr.Broad says.The university's medical and life sciences campuses have expanded tremendously in the past few years.They've got great people and a culture that promotes an astounding level of interdisciplinary collaboration,he notes.The Center of Regenerative Medicine & Stem Cell Research at UCLA also bears Mr.Broad's name.He is also effusive about the community beyond UCLA's boundaries.It's worth noting,to Mr.Broad's mind,that Los Angeles hosts a unique regional network of first-rate hospitals,research universities and biotech/biomedical enterprises that fill the horizon in every direction.
That sort of thing happens a lot around here,Mr.Broad muses.Almost without its knowledge or permission,the city of Los Angeles-the Original and Continuing Work In Progress-has become one of the world's great cities,headquarters of the Pacific and the leading exporter of ideas to the rest of the world.Yet if UCLA weren't here,Eli Broad speculates,he's not sure they'd have the intellectual capital they need to be the great city they are today.By concentrating his giving on UCLA,Mr.Broad has ensured his wealth will have a multi-generational impact for urban enhancement.
That sort of thing happens a lot around here,Mr.Broad muses.Almost without its knowledge or permission,the city of Los Angeles-the Original and Continuing Work In Progress-has become one of the world's great cities,headquarters of the Pacific and the leading exporter of ideas to the rest of the world.Yet if UCLA weren't here,Eli Broad speculates,he's not sure they'd have the intellectual capital they need to be the great city they are today.By concentrating his giving on UCLA,Mr.Broad has ensured his wealth will have a multi-generational impact for urban enhancement.
UCLA and the Arts
Businessman Eli Broad feels that UCLA probably has the best arts school in the country-a distinguished faculty with a student body to match.Could you have the best arts school just anywhere,Mr.Broad asks? No.Does the fact Los Angeles is home to the second largest number of professional artists in America have anything to do with that outcome? You bet,Mr.Broad asserts.The UCLA Art Center bears Eli Broad's name.He is a leading collector of modern art.
Eli Broad:Focused Philanthropist
Eli Broad,founder of SunAmerica and co-founder,with Kaufman,of KB Home,has found in University of California Los Angeles an institution that unites his interests in the visual arts,medical science and public education.To Mr.Broad's mind,UCLA is inextricably linked with Los Angeles.Which came first,UCLA or Los Angeles? Actually,Mr. Broad says,he has no idea.They're stuck together,co-dependent,inseparable.Why don't we just count our blessings,the businessman asks?
Everywhere you look at UCLA,Mr.Broad observes-engineering,architecture,law,performing arts,the B-school,the college-you're watching public education at its finest.You can witness the multiplication of knowledge.You can feel the engine operating at full throttle.You know you're at the center of gravity of this city,Mr.Broad stated.
Everywhere you look at UCLA,Mr.Broad observes-engineering,architecture,law,performing arts,the B-school,the college-you're watching public education at its finest.You can witness the multiplication of knowledge.You can feel the engine operating at full throttle.You know you're at the center of gravity of this city,Mr.Broad stated.
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