Tuesday, January 13, 2009

Bailout Nation Continues in Commercial Real Estate Land - "Lemme In on that TARP Money"

It's all just starting to get very sickening. The commercial real estate developers - many of the very wealthy folks in America after lobbying for a $200 billion bailout (which Barney Frank seems very receptive to) [Dec 22: Wall Street Journal - Property Developers Ask for Government Bailouts] is now asking directly for $20 Billion of TARP funds
  • Stakeholders in the commercial real estate market are pushing lawmakers to devote at least $20 billion of financial rescue funds to a new Federal Reserve facility to unfreeze lending to the sector. Lobbyists for developers of shopping malls, office parks and high rises are warning lawmakers they may not be able to rollover tens of billions of dollars of debt set to mature this year if the government doesn't act.
  • "In 2009, tens of billions of commercial real estate mortgage loans will come due, but under current conditions, there will be insufficient capacity to refinance the performing commercial real estate loans that are maturing, which could result in loan defaults," the coalition wrote to House Financial Services Chairman Barney Frank, D-Mass., and Rep. Spencer Bachus, R-Ala., the panel's ranking member.
  • "Many steps are needed to address this issue, but the first and most significant action would be for policy makers to request that the Treasury Department provide, at a minimum, $20 billion in TARP funds to revive the broader private commercial mortgage markets," the coalition wrote to Frank and Bachus.
Just wanted to let you know of the LONG line jockeying for your tax dollars.

So are schools -
  • If banks, insurance companies and automakers are getting a piece of Washington's bailout largesse, why not cash-strapped schools? That's the thinking of officials at a few hard-pressed school systems, who have set wheels in motion to get a share of the $700 billion Troubled Asset Relief Program, or TARP, intended for ailing financial institutions, and the economic stimulus package now before Congress.
  • Mike Petrilli of the Thomas B. Fordham Institute, a Washington think tank, says many districts' financial woes can be traced to long-term teacher contracts that have locked them into automatic raises and growing pension expenditures without the flexibility to cut costs "in a smart way." "School districts have gotten themselves into this mess by making promises they can't fulfill," he says. "And now the chickens are coming home to roost." (it seems to be a national epidemic)
You just have to love a country where lobbyists direct public policy.

Money for nothing; chicks for free - welcome to America.

[Jan 6: New York Times - As Vacant Office Space Grows, So Does Lenders' Crisis]
[Mar 4, 2008: WSJ - Building Slowdown Goes Commercial]

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