Speaking at the U.S. Chamber of Commerce building near the White House this morning, President Bush tried to reassure investors and the public that although the ongoing financial\/credit crisis won\u2019t be over soon, the federal government\u2019s programs now under way are \u201cbig enough and bold enough to work.\u201d Bush noted that under ordinary circumstances, he would have opposed moves such as the recent commitment to inject $250 billion directly into nine major banks in return for equity stakes, \u201cbut these are not ordinary circumstances.\u201d It\u2019s sort of a private bailout, but it\u2019s also a call for the nation to bail itself out. In an op-ed piece in today\u2019s New York Times, giga-investor Warren Buffett reported that he\u2019s been buying stocks of U.S. companies with his personal account, which heretofore, he wrote, has been entirely in U.S. government bonds. \u201cA simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful,\u201d Buffett wrote. \u201c\u2026 To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation\u2019s many sound companies make no sense\u2026. most major companies will be setting new profit records five, 10 and 20 years from now\u2026. [I]f you wait for the robins, spring will be over.\u201d Tracing a quick history of the 20th-century U.S. economy, Buffett wrote, \u201cIn short, bad news is an investor\u2019s best friend. It lets you buy a slice of America\u2019s future at a marked-down price.\u201d In Germany today, a rare same-day vote by both houses of parliament ushered through a 500 billion euro ($672 billion) bank rescue plan, according to Bloomberg. The lower house, the Bundestag, passed the measure 476-99, and the upper house, the Bundesrat, pass it unanimously. The upper house, which consists of representatives of the 16 federal states, was a key win. Arm-twisting by Chancellor Angela Merkel was needed to get the German states to agree to a take a 35 percent share of the risk entailed by the plan. In the end, the German government agreed to cap the states\u2019 losses at 7.7 billion euros and to spread the risk should any of the state-owned banks, called Landesbanken, be forced to take writedowns. The rescue package, originally announced Oct. 13, consists of a pledge of 400 billion euros in loan guarantees, up to 80 billion euros to recapitalize struggling banks and 20 billion euros to cover potential losses from loans. Meanwhile, following similar moves by Hong Kong and Singapore, according to the Associated Press, Malaysia\u2019s government said late yesterday that it will guarantee all bank deposits for the next two years. And in Australia, Prime Minister Kevin Rudd said he\u2019ll be announcing a proposal for responding to the financial crisis, one that will include a review of executive compensation at financial institutions. In an exclusive interview with CPN, Harvey E. Green, president & CEO of Marcus & Millichap Real Estate Investment Services, emphasized a balanced view of the current situation. Noting that the foreclosure rate in commercial real estate is still below 0.5 percent, he added that the sector is being pulled down mostly through secondary effects, such as the retail slowdown and overall job losses, though these are nowhere near \u201cRTC level,\u201d referring to the Resolution Trust Corp. that cleaned up the savings-and-loan mess of the 1980s. Looking especially at the volatility in the stock markets, Green (pictured) said that stabilizing the markets is going to be crucial. He also estimates that the bailout is likely to cost $2 trillion to $3 trillion in the long run. \u201cCMBS as we know it is probably gone,\u201d Green said, though other forms of debt will emerge, which could be important, because he sees a glut of commercial real estate refinancing coming in about 2012\u20132014. \u201cIf you\u2019re deleveraged,\u201d he said, \u201cI don\u2019t think it\u2019s an issue,\u201d but added that the commercial real estate foreclosure rate could well climb, depending on what happens with properties that remain highly leveraged. Moving forward, he expects that the CRE market will likely return to historical levels of 65\u201370 percent debt. And even though interest rates are currently stabilizing and even dropping, Green commented, \u201cThere are a lot of issues remaining.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Speaking at the U.S. Chamber of Commerce building near the White House this morning, President Bush tried to reassure investors and the public that although the ongoing financial\/credit crisis won\u2019t be over soon, the federal government\u2019s programs now under way are \u201cbig enough and bold enough to work.\u201d Bush noted that under ordinary circumstances, he…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1003875292","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n