And for everyone else as well.
On this site, http://economiccrisiswritings. blogspot.com/, we don't write about a golfer's sex scandal, nor attack liberals or conservatives, nor market any products or services.
Instead, we publish articles such as "How To Protect Yourself From The Coming Financial Crisis" [2007], "How The Big Banks Are Able To Pay Back The Bailouts And What It Means To You" [recent] and "The Coming U.S. Commercial Real Estate Crash," [our latest piece].
The articles are short and to the point as they illuminate complex issues that could have a significant impact on you. The intent is to provide you with information you need to know to protect your financial well-being. And in turn, we encourage you to care for the well-being of others.
Dick
Friday, December 18, 2009
Thursday, December 17, 2009
The Coming U.S. Commercial Real Estate Crash
Commercial property values are ready to crash - offices, shopping centers, hotels and warehouses. The crash is already beginning, but rather than have more insolvent banks, the U.S. government for now is allowing them to "extend and pretend."
This means the banks let the current investors keep the properties for now, even though they're making little or no payments on their loans. The banks pretend those loans are still good and don't foreclose.
But to make matters worse, many owners are also defaulting on their property taxes forcing the lenders to pay them rather than have local governments foreclose. Some of those owners aren't paying for building maintenance or insurance either, once again a cost the lenders must bear as they sink ever deeper into these properties.
When commercial properties do crash, even if you're not rich, please see "How You Can Make Big Returns On Your Money Investing In Commercial Real Estate Even If You're Not Rich," at http://sane-ramblings.blogspot.com/ to learn how you can invest in them and potentially make a very high return on your money.
I've been a real estate investor since 1976 and this advice is a public service. I don't have products or services to sell you or profit in any way except the satisfaction of knowing you and your family fared well in your real estate investments if you choose to make them.
Dick
This means the banks let the current investors keep the properties for now, even though they're making little or no payments on their loans. The banks pretend those loans are still good and don't foreclose.
But to make matters worse, many owners are also defaulting on their property taxes forcing the lenders to pay them rather than have local governments foreclose. Some of those owners aren't paying for building maintenance or insurance either, once again a cost the lenders must bear as they sink ever deeper into these properties.
When commercial properties do crash, even if you're not rich, please see "How You Can Make Big Returns On Your Money Investing In Commercial Real Estate Even If You're Not Rich," at http://sane-ramblings.blogspot.com/ to learn how you can invest in them and potentially make a very high return on your money.
I've been a real estate investor since 1976 and this advice is a public service. I don't have products or services to sell you or profit in any way except the satisfaction of knowing you and your family fared well in your real estate investments if you choose to make them.
Dick
Wednesday, December 16, 2009
The European Debt Crisis Rattles American Business
The so called five "PIIGS," Portugal, Ireland, Italy, Greece and Spain have run up enormous deficits they can't afford and are in serious financial trouble. But why should you care if you're not a citizen of one of those nations?
Because your economy depends on it. U.S. businesses for example, are counting on selling sizable amounts of products and services in Europe and the U.S. government is desperate for European cash to help fund its out of control deficits.
The Euro Zone must confront this crisis quickly before it gets worse. The most likely approach will be for the stronger countries to offer a bailout by channeling resources to the International Monetary Fund (IMF). But every European nation has problems and they may not commit those resources to bailout others.
But assuming there are enough resources for a bailout, to get the IMF money, these troubled nations will have to get their finances in order by dramatically slashing their spending and aggressively raising taxes. This could trigger widespread protests from their citizens and potentially even riots.
Elsewhere in Europe the situation is growing worse. Austria just nationalized one of their troubled banks and may have to nationalize another. The Baltic states, and Ukraine and Hungary also face financial peril.
And as America tries to spend its way out of a deepening Recession by using money it doesn't have, its deficits are also soaring. What we're confronted with is a domino effect in which one after the next could topple.
As a result, please be very conservative in how you spend your money. And if you can afford it, buy a few small gold coins, which are highly likely to hold value in the event your paper money loses much of its worth.
It turns out, it is a small world after all and what happens to your brethren overseas affects to you.
Dick
Because your economy depends on it. U.S. businesses for example, are counting on selling sizable amounts of products and services in Europe and the U.S. government is desperate for European cash to help fund its out of control deficits.
The Euro Zone must confront this crisis quickly before it gets worse. The most likely approach will be for the stronger countries to offer a bailout by channeling resources to the International Monetary Fund (IMF). But every European nation has problems and they may not commit those resources to bailout others.
But assuming there are enough resources for a bailout, to get the IMF money, these troubled nations will have to get their finances in order by dramatically slashing their spending and aggressively raising taxes. This could trigger widespread protests from their citizens and potentially even riots.
Elsewhere in Europe the situation is growing worse. Austria just nationalized one of their troubled banks and may have to nationalize another. The Baltic states, and Ukraine and Hungary also face financial peril.
And as America tries to spend its way out of a deepening Recession by using money it doesn't have, its deficits are also soaring. What we're confronted with is a domino effect in which one after the next could topple.
As a result, please be very conservative in how you spend your money. And if you can afford it, buy a few small gold coins, which are highly likely to hold value in the event your paper money loses much of its worth.
It turns out, it is a small world after all and what happens to your brethren overseas affects to you.
Dick
Tuesday, December 15, 2009
How You Can Make Big Returns On Your Money Investing In Commercial Real Estate Even If You're Not Rich
Commercial property values are ready to crash - offices, shopping centers, hotels and warehouses. The crash is already beginning, but rather than have more insolvent banks, the U.S. government for now is allowing them to "extend and pretend."
This means the banks let the current investors keep the properties for now, even though they're making little or no payments on their loans. The banks pretend those loans are still good and don't foreclose.
But to make matters worse, many owners are also defaulting on their property taxes forcing the lenders to pay them rather than have local governments foreclose. Some of those owners aren't paying for building maintenance or insurance either, once again a cost the lenders must bear as they sink ever deeper into these properties.
When commercial properties do crash, even if you're not rich, here is how you can invest in them and potentially make a very high return on your money.
As the crash happens, hedge funds and other investor groups will swoop in and buy these properties from the lenders, at deep discounts, sometimes even for pennies on the dollar. But to avoid heavy debt payments and keep rental prices low to fill the properties with good tenants, investors will need to pay cash.
That's where you come in, if you have as little as a few thousand dollars to invest. Some of these investor groups will be raising money from many small investors and this means you can be very selective as to which one is right for you. In making your decision, please do the following:
- Check the track record of the company raising the money and the people involved. Have they defaulted on their obligations or made poor investments in the past? Know who you are doing business with and their track record. Ponzi schemes are run based upon people being too busy to do their homework.
- How will they manage the properties once they buy them? Investors can make a tremendous buy and then lose their shirts mismanaging the property. Find out who will manage the properties, their track record and what their vested interest is in having them run well.
- Check the fee structure. You can make a great buy on property, bring in a top notch manager and then get eaten alive by fees. The managing partners and other organizers make big money, while you get a very small return on your investment. As the risks are shared, so should be the rewards.
- Transparency. A well respected accounting firm should regularly issue financials and they should be easily available to you. If you're not financially sophisticated, you can hire a CPA for a few hours who is, any time you choose.
- Liquidity. How can you sell your investment if you need to? What market exists for it? If you must hold for a certain number of years, you should know that up front.
- Dividends. What is the dividend policy? Will you receive periodic payouts?
Commercial real estate opportunities will be plentiful. But take the time to choose wisely and you'll enjoy peace of mind doing business with the right people to meet your objectives.
Dick
This means the banks let the current investors keep the properties for now, even though they're making little or no payments on their loans. The banks pretend those loans are still good and don't foreclose.
But to make matters worse, many owners are also defaulting on their property taxes forcing the lenders to pay them rather than have local governments foreclose. Some of those owners aren't paying for building maintenance or insurance either, once again a cost the lenders must bear as they sink ever deeper into these properties.
When commercial properties do crash, even if you're not rich, here is how you can invest in them and potentially make a very high return on your money.
As the crash happens, hedge funds and other investor groups will swoop in and buy these properties from the lenders, at deep discounts, sometimes even for pennies on the dollar. But to avoid heavy debt payments and keep rental prices low to fill the properties with good tenants, investors will need to pay cash.
That's where you come in, if you have as little as a few thousand dollars to invest. Some of these investor groups will be raising money from many small investors and this means you can be very selective as to which one is right for you. In making your decision, please do the following:
- Check the track record of the company raising the money and the people involved. Have they defaulted on their obligations or made poor investments in the past? Know who you are doing business with and their track record. Ponzi schemes are run based upon people being too busy to do their homework.
- How will they manage the properties once they buy them? Investors can make a tremendous buy and then lose their shirts mismanaging the property. Find out who will manage the properties, their track record and what their vested interest is in having them run well.
- Check the fee structure. You can make a great buy on property, bring in a top notch manager and then get eaten alive by fees. The managing partners and other organizers make big money, while you get a very small return on your investment. As the risks are shared, so should be the rewards.
- Transparency. A well respected accounting firm should regularly issue financials and they should be easily available to you. If you're not financially sophisticated, you can hire a CPA for a few hours who is, any time you choose.
- Liquidity. How can you sell your investment if you need to? What market exists for it? If you must hold for a certain number of years, you should know that up front.
- Dividends. What is the dividend policy? Will you receive periodic payouts?
Commercial real estate opportunities will be plentiful. But take the time to choose wisely and you'll enjoy peace of mind doing business with the right people to meet your objectives.
Dick
How The Big Banks Are Able To Pay Back The Bailouts And What It Means To You
The big banks are rushing to pay back their massive bailouts. Here is why, where they got the money, what to expect next and how to protect yourself.
Why are they paying back the bailouts? Because the government was ready to limit massive payouts to their top managements. Those banks were hemorrhaging money but now they're highly profitable.
Were did those profits suddenly come from? Most of these banks are swimming in cash for they borrow money at near zero rates from the U.S. government and loan it out at premium rates, such as on your credit cards, and pocket the difference.
They also dumped many of their toxic mortgages on to the Fed but charge fees to collect the monthly payments or to throw delinquent borrowers into foreclosure. In addition, they receive special tax benefits to help shield their profits. Citibank just saved as much as $38 billion based upon a special ruling by the IRS.
Where is the bailout payback money coming from? Stock offerings. Investors now view these institutions as "too big to fail," and therefore protectorates of the U.S. government.
What's next? Re-regulation. But not to protect consumers or to cap banker income. It is to sharply restrict competition among giant lenders so that they can charge higher fees. They also want to continue their risky investments, which is what got us into this mess in the first place. So we will see a new financial reform act and it will be sold to the public as the "Consumer Banking Protection Act" or a similar title.
How can you protect yourself? Get involved. Raise your voice. Lenders are spending $300 million to lobby Congress and helping to draft laws favorable to themselves. You don't have to tolerate this.
And there is one more thing. You can do business with smaller community banks. Those not deemed "to big to fail" and who care about you and value your business.
Dick
Why are they paying back the bailouts? Because the government was ready to limit massive payouts to their top managements. Those banks were hemorrhaging money but now they're highly profitable.
Were did those profits suddenly come from? Most of these banks are swimming in cash for they borrow money at near zero rates from the U.S. government and loan it out at premium rates, such as on your credit cards, and pocket the difference.
They also dumped many of their toxic mortgages on to the Fed but charge fees to collect the monthly payments or to throw delinquent borrowers into foreclosure. In addition, they receive special tax benefits to help shield their profits. Citibank just saved as much as $38 billion based upon a special ruling by the IRS.
Where is the bailout payback money coming from? Stock offerings. Investors now view these institutions as "too big to fail," and therefore protectorates of the U.S. government.
What's next? Re-regulation. But not to protect consumers or to cap banker income. It is to sharply restrict competition among giant lenders so that they can charge higher fees. They also want to continue their risky investments, which is what got us into this mess in the first place. So we will see a new financial reform act and it will be sold to the public as the "Consumer Banking Protection Act" or a similar title.
How can you protect yourself? Get involved. Raise your voice. Lenders are spending $300 million to lobby Congress and helping to draft laws favorable to themselves. You don't have to tolerate this.
And there is one more thing. You can do business with smaller community banks. Those not deemed "to big to fail" and who care about you and value your business.
Dick
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