Monday, April 20, 2009

There is a Season...

TO EVERYTHING (EARN, EARN, EARN)...THERE IS A SEASON (EARN, EARN, EARN)... That's how Pete Seeger and The Byrd's famous 1962 hit, "Turn, Turn, Turn" could be rewritten for the financial markets of late - earnings season kicked off last week, with several reports delivering music to the economy's ears.

Last week, the week began with the sweet sounds of investment banking giant Goldman Sachs reporting earnings that were much better than expected. More good news from the financial zone followed, with better than expected earnings from JP Morgan Chase and Citigroup. As you can see in the chart below, the financial sector has clearly been helped by the recent mark-to-market discussions and easing of the FASB ruling. In other sectors, big players Google and General Electric also reported earnings that were higher than anticipated.

And more good news last week, as Fed Chairman Ben Bernanke sang out that there are signs that the sharp decline in the economy is slowing, indicating a potential "first step" towards a recovery from the worst recession in a generation. Specifically, he said, "I am fundamentally optimistic about our economy. Today's economic conditions are difficult, but the foundations of our economy are strong, and we face no problems that cannot be overcome with insight, patience, and persistence." While last week's Retail Sales Report came in lower than expected, indicating that consumers are still keeping a good grip on their wallets - Bernanke's words certainly inspire some economic confidence.

Confidence for the Banking Industry may now help loosen up the lending side a little. Now that new mechanisms’ are in place for lenders to qualify buyers under the best FICO scores are sought after. They will receive the best new financing.

There are some buyers out there. There are some realistic sellers who recognize the market has changed. Now then, are the lending sources ready?

Get your lending set up soon. The time to find a good property is soon at hand.

IMHO Keith

Thursday, April 16, 2009

? TEA ?

T E A, as in Taxed Enough Already!

Funny stuff. And last night we had a Dinner at a "Form 1040" party. The price of the meal? You guessed it... $10.40

I posted a few shots of the TEA party mob out on the streets in Santa Monica yesterday on Facebook. The people can make a difference. Like Prop 13 !


Monday, April 06, 2009

A financial turning point?

The March 12th Congressional hearing on mark-to-market (Financial Accounting Standards Board's (FASB) favorable vote to relax accounting rules), which will help to warm up the frosty credit markets, Stocks have risen 23% just on the speculation a change could be coming. And just one short day after the FASB mark-to-market ruling, there were stories of banks already saying they may not need to sell assets to raise capital, as they will no longer have to take massive paper losses by pricing their assets to the "fire-sale" comps that were created in some of the illiquid markets. Capital ratios are now more in line for many institutions, which will also help their ability to lend - in turn helping consumers and businesses alike. Yesterday's ruling is a dramatic step towards unwinding the negative spiral created by mark to market, and in fact, the ruling on mark-to-market accounting could well go down in history as a turning point in the US financial crisis.

While Stocks were buoyed by the Mark-to-Market announcement and optimism that the G20 meeting in London will lead to an agreement on ways to pull global economies out of the current recession, Bonds were unable to hold onto recent gains. As a result, Bonds and rates ended the week .125-.25 percent worse than where they began. Therefore interest rates for loans may start to creep upward.

Are we nearing the bottom? Do we all see that light ahead? It is the end of the tunnel?

Are you optimistic about Real Estate values in the future now?