Assessing Commercial Real Estate

Jeffrey DeBoer,Chairman of the Real Estate Round Table,says that the outlook is cautiously optimistic for commercial real estate.It's an uncomfortable and challenging market,but it has improved slightly the past several months.The Term Asset-backed securities Loan Facility,or TALF,is a good outline.With the TALF and the Public-Private Investment Partnership,or PPIP,we're concerned that it's taken quite some time,but if they're put in place they will provide a road out,Mr.DeBoer believes,referring to Treasury Department programs to improve credit markets and take toxic assets off balance sheets.

Ford's Recovery Vision

We believe with all the government actions,the economy will begin to come back in Q3 and Q4 of this year,Ford CEO Alan Mulally stated.We took decisive action last year to reduce our inventory,and we are clearly on tremendously good progress.The plan is the right plan.We're very confident for the long term.Our new product line is sparking some new demand.All the things in our control,we're taking very aggressive action on,Mr.Mulally pointed out.

Ford Losses Shrinking

Ford CEO Alan Mulally notes that their cash burn rate is less than 5% of what they had in Q3 and Q4 of 2008,and they believe they can lower it for the rest of this year.They also validated their guidance of returning to profitability by 2011,Mr.Mulally said.The supply base is the most fragile base of support.We started this restructuring two-and-a-half years ago,the executive remarked.We have a good agreement with the United Auto Workers.Ford has the money to continue this transformation.We keep a continuing dialogue with the government,Mr.Mulally revealed.

Focus on Ford:Garnering Praise

Goldman Sachs has placed Ford Motor Company on its conviction buy list.It says Ford is doing well enough to get through at least 2010;the chances of their needing aid are very low.Goldman has put a six-month price target of 6.00 on Ford shares.Ford reported Q1 earnings of -0.75 a share,versus an estimate of -1.23.Its Q1 revenue was 24.8 billion dollars,versus an estimate of 22.01.It had 21.3 billion in cash at the end of Q1.Many consumers are giving Ford credit for shoring up its finances before the financial crisis took hold,so that it could survive on its own now.

Health Uncle:Johnson and Johnson Adopts Wellness

As well as making pharmaceuticals,medical devices and diagnostics,health care titan Johnson and Johnson reaches consumers directly through its consumer health division.This branch of the company produces retail health care products such as its iconic baby shampoo and Band-Aid bandages,Listerine antiseptic mouth wash and the Neutrogena skin care line.Recently,the company has been augmenting this division with healthy lifestyle firms such as HealthMedia,Inc. and Human Performance Institute.These subsidiaries promote employee wellness,saving time that would have been lost to illness,and keeping insurance costs lower.Both lifestyle firms were acquired last year.J and J hopes to make billions of dollars from wellness businesses,expanding its holdings through partnerships and licensing as well as acquisitions.Johnson and Johnson is one of the most widely recommended stocks,given the breadth and value of its branded assets.That a major firm has adopted wellness into its business plan shows that the concept has genuinely arrived.

Some Striking Facts

Trevor Fetter,President and CEO of Tenet Health Care,stated that two problems stand out:1.length of stay,and 2.utilization of high cost equipment and pharmaceuticals.We should focus on incentives overcoming vested interests of doctors in certain pharmaceuticals and long stays.We are finding increasingly in our hospitals that people are taking on insurance risks that they don't understand.Twenty-five percent of their costs go unpaid.It's trending up more rapidly than the uninsured crisis,Mr.Fetter told the White House Forum on the U.S. Health Care System.All of the business leaders seemed determined to resolve the issues facing U.S. health care today.

The CalPERS Wish List

Ann Stausboll,CEO of the California Personnel Retirement System,or CalPERS,said they purchase health insurance for about 1.5 million members.The status quo is clearly not a sustainable model.We support the greater use of generic drugs-including biologics;the development of health information technology;disease prevention and management;insurance coverage for all Americans;and evidence-based care.We stand ready to assist the President.The financial crisis has made the situation much worse,Ms.Stausboll indicated to the White House forum.

Home Care Called For

Mal Mixon,Chairman and CEO of Invacare,remarked that the greatest words a patient wants to hear are "I'm going home." Clearly now we can create a hospital room in the home.The caregiver is usually a family member.It's the trifecta of health care.It's clearly lower cost.There's a lot of evidence the infection rates are lower.We need to get these emergency rooms unclogged.They need to see a primary care physician;get an outpatient procedure;and go home.A lot of the incentives today don't cause to happen what should happen,Mr.Mixon informed the White House forum.

Digital Issues

Glen Tullman,CEO of Allscripts,said we don't have reliable information in health care today.We haven't equipped medical staff with the kind of information every other industry has to make important decisions with.It's not just digitizing patient records;we have to connect it all.The seamless transfer of information is the heart of it.Imagine if physicians and nurses could exchange information.What we need is the leadership to force interoperability.The time for action is now.The technology exists,Mr.Tullman pointed out to the White House forum.

Business on Board:A White House Forum

A number of business leaders recently participated in a White House forum on health care reform.The forum was moderated by Nancy-Ann DeParle,Director of the White House Office of Health Reform and a former Clinton administration official.Richard Braken of the Hospital Corporation of America noted that his firm provides about 5.5 million emergency room visits each year.One in five of these patients cannot pay.It's escalated dramatically in the past year.Expanding coverage has to be the centerpiece of reform.It isn't just good medicine;it's good economics.Sixty or seventy percent of HCA's cost is either labor or supplies.We have to take on variation in our administrative and clinical processes,Mr.Braken said.We have to get physicians into the redesign.We believe that minimizing variation holds great promise,but it will be difficult.If there were easy answers,they'd be in place right now.The proposed reforms seem good now,but it's the test of the marketplace that will drive reform,Mr.Braken observed.

Health Uncle:Cuts and Scrapes

If you have a cut or scrape,it's more important than ever to treat it.The potentially fatal staph infection MRSA is more pervasive now.MRSA kills about 19,000 people a year,out of around 94,000 infected.A MRSA infection may look like a boil or bug bite at first.Any unusual-looking infection needs immediate medical attention.MRSA often affects athletes and students because it is spread through skin contact.The staph bacteria that cause it are resistant to most antibiotics.Wounds should be cleaned and covered,and kept a close watch on.If they get sore and red,consider seeing your doctor about them very soon.

The Best Financials

Gerard Cassidy of RBC Capital Markets feels the financial recovery is gonna take awhile.There's gonna be a lot of fits and starts.The securitization market is still frozen.That's a critical part to getting consumers spending again.If you have to invest in financials,invest in a capital markets bank such as Goldman Sachs or Morgan Stanley,Mr.Cassidy advises.Such banks are less exposed to the consumer.Goldman Sachs reported earnings that were far better than expected yesterday,and is raising capital through a stock offering ,so it can pay back the money it received from the Troubled Asset Recovery Program.

Some Good Sectors

Mortgages,municipal bonds and corporate bonds are attractive,Mohamed El-Erian thinks.The critical question is,what mistake can I afford to make? If you can't,then wait.When you have a new world emerging,you have to scale your investments.There have to be mid-course corrections.You have to adjust.We live in a very fluid world,the former manager of the Harvard Endowment noted.

A Strategy for Today

I am very underweight equities-below 30%,Mohamed El-Erian revealed.I am increasing as the rally unfolds.Fade the strong rallies;buy the strong sell-offs.It's hard to do,taking you out of your comfort zone.There are four contracting sectors now:housing;finance;the consumer;and the rest of the world.At least two of the four must recover in order to be considered a turnaround.Now people are trying to get up.It's gonna be sequential.The federal programs are getting traction,but it's early.Commercial paper,money markets and mortgages are getting better,but it's a long lag between conception and effectiveness,Mr.El-Erian believes.

The Unemployment Impact

Balance sheet effects dominate slope,Mohamed El-Erian observed.We have massive unemployment.It will take time to adjust.The real answer is,we don't know where the bottom is.Analytically,the employment report is no longer backward-looking.People will save more in the face of unemployment.It impacts forward-looking behavior such as home-buying,Mr.El-Erian pointed out.

A New Landscape

Mohamed El-Erian,co-CEO and co-Chief Investment Officer at Pimco,says that,fundamentally,we are in a volatile journey to the new normal.The world is changing.We've redefined the financial landscape.The critical things for investors are to reposition and navigate for the new normal.The American consumer will return,but it will be a saner consumer,more concerned about retirement and not over-extended,Mr.El-Erian feels.

Health Uncle Early Edition:Mental Health

I will not be in on Friday,so I am publishing early.The state of mental health in America is not looking good at this point.There have been nine mass murders in the past month,many of them murder-suicides.Several of them were also committed by the unemployed.Surely the financial crisis is a factor in tipping people over the edge.No one should be complacent about their state of mind in this economic environment.You may be more troubled than you realize.Consider relaxing your own train of thought with the best spring break you can manage.Read a neglected book or go for that postponed walk.It doesn't have to be elaborate.Have a blessed holiday.

Leading Economist Looks Ahead

Nariman Behravesh,Chief Economist at Global Insight,has been evaluating where we are.We're facing a lot of headwinds,he pointed out.Employment and housing prices are still dropping.Consumer spending won't turn till Q3.The earliest Gross Domestic Product will turn is Q4.Exports and business construction won't turn till mid-2010.On the other hand,you're starting to get very mixed signals.This is an indicator of a turning point,Mr.Behravesh believes.A consensus seems to be forming that substantive recovery will occur late in 2009 or the first half of 2010.

The Nature of Progress

America and Europe must reach out to the vast majority of Muslims who seek only peace and a better life,President Obama thinks.We can't get there alone.Progress is slow;it comes in fits and starts.We've just emerged from an era of irresponsibility.It is a revolutionary world that we live in.We must renew this relationship for a new generation in a new century.I am confident we can achieve the promise of a new day,the President concluded.Wearing a gray suit,white shirt and light blue tie,the tall leader took questions from the audience at Rhenus Sports Arena bfore shaking hands with them to the accompaniment of "Stars and Stripes Forever."Not since President John F. Kennedy in the early 1960s has a president been so in touch with foreign crowds.The Europeans couldn't believe they got to greet Mr.Obama,congratulating each other on the singular occasion.

Security and Prosperity

I've come to Europe this week to renew our partnership,Mr.Obama continued.Together we must forge common solutions,he urged.America is changing,but it cannot be America alone that changes.All of us are moving forward.We are ushering in a new era of responsiblity.Trade wars have no victors.As we restore our common prosperity,we must stand up for our common security.Those terrorists of 9-11 are still plotting today.We have no interest in occupying Afghanistan.Now we need an alliance that is even stronger than when it brought down a mighty wall in Berlin.This is one of our central tasks.This is the generation that must also stop the pollution that is threatening our planet.We all know that time is running out.Let us meet that responsibiliy together.I am confident we can meet it,but we have to begin today,Mr.Obama feels.

A Drifting Alliance

The European Union buildings of Strasbourg were born of the blood of the first half of the 20th century,President Obama recalled.The Marshall Plan was an unprecedented effort that secured prosperity.Without firing a single shot,the NATO alliance would prevent the iron curtain of communism from descending across Europe.This generation cannot stand still.This is our generation;this is our time,and I am confident we can meet any challenge-as long as we are together.In recent years,we've allowed our alliance to drift.In America,there is a failure to appreciate Europe's leading role in the world.In Europe,there is an anti-Americanism that is casual,but can also be insidious.These attitudes are not wise;they do not represent the truth,the new president instructed.

Who Obama Is:Leading in Strasbourg

President Barack Obama was greeted enthusiastically by European young people at the Rhenus Sports Arena in Strasbourg,France.The president was in the middle of his first overseas trip since his inauguration in January.It's important to hear from you,the President said,not just speak to you.We stand at a crossroads.The same forces that have brought us closer together have also brought us new dangers,such as nuclear weapons.The pollution of cars from Boston or smokestacks in Beijing can reach other countries.The economic crisis is proving the fact of interdependence.There's certainly enough blame to go around,and the U.S. bears its share.The only way forward is by a persistent way to combat fear and want wherever they are found,Mr.Obama told the large assembly.

Health Uncle:Activity and Cancer

A survey of 52 different studies spanning a 20-year period by Washington University Medical School and Harvard University indicates that exercise,whether recreational or work-related,may lower your odds of getting colon cancer by up to 24%.A Japanese study echoed the finding.The Japanese researchers found that risk reduction is in proportion to the amount of exercise:the more active you are,the better.These researchers think that exercise may be beneficial because it strengthens the immune system,lowers body fat,and lowers levels of hormones responsible for tumor development.Consider taking the stairs to the office,instead of the elevator.It may protect your lower intestine,as well as fortify your heart.