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Carl Moore Articles

Written by: Carl Moore

Wall Street Got $1.2 Trillion From Fed - Click To Read Article
Fed Chairman Ben S. Bernanke’s unprecedented effort to keep the economy from plunging into depression included lending banks and other companies as much as $1.2 trillion of public money, about the same amount U.S. homeowners currently owe on 6.5 million delinquent and foreclosed mortgages. The largest borrower, Morgan Stanley (MS), got as much as $107.3 billion, while Citigroup took $99.5 billion and Bank of America $91.4 billion, according to a Bloomberg News compilation of data obtained through Freedom of Information Act requests, months of litigation and an act of Congress. These are all whopping numbers,” said Robert Litan, a former Justice Department official who in the 1990s served on a commission probing the causes of the savings and loan crisis.

What Recovery - Click To Read Article
THE Bureau of Economic Analysis released its estimate of GDP growth, and the pace of expansion was revised down again. Currently we are below the rate of population growth, which is to say that in per capita terms output continues to shrink. So how are things looking forward?

Ten States Losing White and Blue-Collar Jobs - Click To Read Article
The unemployment rate for workers with a college degree is 4.4 percent, as compared to 10 percent for those with only a high-school education. Nonetheless, an analysis found that some seven states have decreased the percentage of their workforce in white-collar jobs over the past decade.

Out-of-Work Architects Turn to Stalled Projects - Click To Read Article
There is a mismatch between stalled projects that make some economic sense and the billions of real estate investment dollars on the sidelines. There just seemed to be a lot of stories about how projects that seemed like they made a lot of economic sense just couldn’t get financing.

As Era of "Extend & Pretend" Ends, More CRE Shopping Begins - Click To Read Article
Bank "extend and pretend" strategies through 2008-2010 moved a glut of loan maturities to this year. As of year-end 2010, its forecasted more than $850 billion in commercial real estate loan maturities this year. And 2011 has produced a strong stream of newly delinquent loans on top of already significant increases in loan modification and liquidation activity.

The U.S. Immigration Department has Proposed Significant Updates to EB-5 Visa Processing - Click To Read Article
The U.S. Citizenship and Immigration Services made public a proposal to modify the existing protocol on how EB-5 Regional Center applications are processed and reviewed. USCIS is proposing three fundamental changes to the way it processes EB-5 Regional Center filings.

In 2010, 157 banks were closed, a pace of about 3.0 banks per week - Click To Read Article
The Federal Deposit Insurance Corporation oversaw the closing of six banks on Friday, April 15. This brings the total for 2011 up to 34 banks, a pace of about 2.3 banks per week. The problem bank list published by the FDIC every quarter rested at just under 900 banks (out of 6,529 banks in the banking system) on December 31, 2010. The other number that is important is the number of banks that were acquired or merged into other banks. Last year there were 153 banks dropping out of the industry due to such consolidations. Thus, the number of banks in the commercial banking system declined by 310 units last year or at a rate of approximately 6.0 banks leaving the system per week.

How big is the 2011 oil price shock? - Click To Read Article
Each of the last five major downturns in global economic activity has been immediately preceded by a major spike in oil prices. Sometimes (e.g. in the 1970s and in 1990), the surge in oil prices has been due to supply restrictions, triggered by Opec or by war in the Middle East. Other times (e.g. in 2008), it has been due to rapid growth in the demand for oil.

What are the Most Profitable Franchises? - Click To Read Article
The Mysterious Franchise Profit Report Once someone decides that buying a franchise makes sense, it’s only logical to try and find the most profitable franchise to purchase. After all, given a choice between Franchise A that returns 10 percent per year and Franchise B that returns 15 percent per year, the results should be obvious, right? Well, maybe not. First of all, very few corporations elect to divulge earnings by their franchisees – actually, only about 25 percent of franchisors publish “earnings claims” in the franchise disclosure documents (FDD) they are required by law to provide to prospective franchise owners.

Bridge Loan Market Heats Up - Click To Read Article
The bridge loan market is starting to heat up as lenders grow more comfortable with financing transitional assets. Several Institutional Lenders have re-opened their bridge loan programs in the second quarter of 2010, tying them to their agency permanent loan platforms.

Joint Venture Equity - Click To Read Article
Since institutional equity providers prefer larger deals, developers looking for $3 million in equity, for example, have a hard time getting their attention. But if an organization has the capacity to do seven deals a year, for instance, then the amount of equity inches up in the aggregate of $20 million to $30 million over 12 months, and it hits the threshold where it makes sense.

Loan Guarantees Main Source Of GSE Losses - Click To Read Article
The government-sponsored enterprises' (GSEs) guarantees of single-family homes accounted for 73% of Fannie Mae and Freddie Mac's capital losses from the end of 2007 through the second quarter of this year, their regulator reported this week. The guarantees resulted in losses of about $166 billion during that period.

Another big bank bailout: - Click To Read Article
New legislation to help small business, recently passed almost unnoticed, from the House would allow all but the 100 largest banks to pretend they haven't made bad loans. The provision would permit more than 7,800 banks, with nearly $3 trillion in assets among them, to spread losses on bad real estate loans over six to 10 years instead of recognizing reality immediately.

Banks Continue To Hold Back on Lending - Click To Read Article
The upshot of the recently posted new numbers is that it looks like banks will continue to restrict their commercial real estate lending for the near term.

Borrowers struggle to resuscitate their overburdened properties - Click To Read Article
More than $400M in mezzanine and other alternative debt have been issued in the U.S. so far this year, a dramatic increase over the approximately $210M that was issued in 2009.

Equity Investors Turn to Development Opportunities - Click To Read Article
But some of that pent-up equity waiting on the sidelines may re-adjust its expectations in the second half by shifting away from acquisitions and to new development in high-barrier markets. Many institutional partners are having trouble sourcing higher return acquisition opportunities, especially in high-barrier markets, and as a result, they’re turning back toward development.

Economic growth has slowed since earlier in the year - Click To Read Article
Brian A. Bethune, IHS’ chief U.S. economist called the Fed's assessment “surprisingly frank description of current economic conditions.” “While this characterization of the economy is not a surprise, given the recent downward inflection of indicators on consumer and business spending…and the employment markets, the very frank description of the situation and the avoidance of the use of the typical Fed euphemisms suggests a great deal of concern about the direction of the economy”.

Collateral Damage in Lending - Click To Read Article
According to one of the nation's largest small-business lenders, basic underwriting standards haven't changed: Cash flow must be sufficient to support the loan, and there must be a secondary source of repayment. That collateral was typically a combination of accounts receivables, inventory, real estate, equipment, and other business or personal assets. But since real-estate and equipment values have plummeted, business owners who may have landed loans in the past are now falling short of having sufficient assets. Cash can make up the difference.

HUD adds another $1B to Stabilize Hard-Hit Neighborhoods bringing the total to $7B - Click To Read Article
State and local governments can use their neighborhood stabilization grants to acquire land and property; to demolish or rehabilitate abandoned homes; and to offer down payment and closing cost assistance to low- to moderate-income homebuyers. In addition, the grantees can create “land banks” to assemble, temporarily manage, and dispose of vacant properties.

How Obama's tax credit helps/hurts IT spending - Click To Read Article
Do you hold off on IT spending until Congress acts on the credit? Among the proposals President Barack Obama made this week to boost the U.S. economy is one that will allow businesses to write off all of the investment they do in 2011. But there's a lot of uncertainty ahead for IT managers interested in this tax break.

Loan Guarantees Main Source of Fannie Mae and Freddie Mac Losses - Click To Read Article
Single-family homes accounted for 73% of Fannie Mae and Freddie Mac's capital losses from the end of 2007 through the second quarter of this year, their regulator reported this week. The guarantees resulted in losses of about $166 billion during that period.

HUD adds another $1B to Stabilize Hard-Hit Neighborhoods...Total $7B - Click To Read Article
In addition to a third round of NSP funding, the Dodd-Frank Reform Act creates a $1 billion Emergency Homeowners Loan Program to be administered by HUD. This program will provide up to 24 months in mortgage assistance to homeowners who are at risk of foreclosure and have experienced a substantial reduction in income due to involuntary unemployment, underemployment, or a medical condition.

Economic growth has slowed considerably since earlier in the year - Click To Read Article
Brian A. Bethune, IHS’ chief U.S. economist called the Fed's assessment “surprisingly frank description of current economic conditions.”

Senior and Independent Living Fundamentals Decline in Q2 - Click To Read Article
The National Investment Center for the Seniors Housing & Care Industry is reporting a decline in occupancy rates for independent living and a marked decrease in the pace of rent growth during Q2.

Developers Changing The Old Business Models - Click To Read Article
The recession has forced many merchant developers to rethink their strategy, as firms found out the hard way that a more diversified business model stands a better chance of survival.

Commercial Properties Being Written Down by 50% - Click To Read Article
The CCIM Institute and the Real Estate Research Corporation recently reported that the commercial real estate recovery has become dependent on, and stands precariously linked to, the re-pricing and deleveraging of property positions, and less contingent on access to capital, given that liquidity has returned to the commercial real estate markets, and in some cases, is scarily reminiscent of the pre-credit crisis capital market environment.

Developers Make Moves to Round Out Their Business Models - Click To Read Article
The recession has forced many merchant developers to rethink their strategy, as firms found out the hard way that a more diversified business model stands a better chance of survival.

What's happening to our nation's 27 million small businesses - Click To Read Article
Meet Karen Mills, 55, Harvard-educated, with both an economics degree and an MBA from her alma mater

Lifestyle Communities Have Dramatically Changed - Click To Read Article
Years ago, communities had far fewer choices for incoming residents. Today, however, there are hundreds of communities across the country that cater to the 50-plus housing market. As the general housing market decreased due to the current economic recession, the active-adult market has also struggled.

Distressed Real Estate Continues to Grow - Click To Read Article
In preparing the federal budget proposal for the upcoming fiscal year, the White House and the Office of Management and Budget (OMB) made a number of assumptions regarding the economy's direction. In almost every respect, those assumptions have been proven to be overly optimistic.

Rental Housing - The Saving Grace - Click To Read Article
More overleveraged developers and owners, surviving on loan extensions, will be forced to turn in the keys in 2010 as fundamentals continue to fall before the market hits bottom around the end of the year. Once there, value declines will approach about 40 percent, on average, from the mid-2007 peak-the worst decline since the Great Depression and worse than seen in the early 1990s.

There's no more appropriate name - Click To Read Article
As soon as you die, the feds demand nearly half or more of everything you have. Like it or not – it's a tax for dying. On the other hand, you could call it a living tax that is paid when you die. Just think, if your house is valued at more than $1 million, you'll owe the feds 55 percent of everything else!

Trends in Seniors Housing - Click To Read Article
The Outlook Across the nation’s metropolitan areas, seniors housing rent growth has slowed as occupancy rates have edged down. But by both measures, the sector has thus far avoided core commercial real estate’s more precipitous slump in fundamentals.

Many Evangelical Church Leaders are now having to "Walk by Faith" - Click To Read Article
The growth of U.S. evangelical churches has been fueled by the increase in credit flowing to churches in the form of five-year commercial mortgages with minimal monthly payments. Now, delinquency rates have more than doubled since the end of 2007 and mortgage originations have slumped because of a decline in financing.

Using Creative Financing in Credit Starved Times - Click To Read Article
Lenders only make money when they lend…so give them a reason!

New Efforts to Thaw U.S. Credit Markets - Click To Read Article
A recent press release highlighted some of the key initiatives that are under way to help small businesses who are struggling with existing Government loans as well as get new capital flowing into the market for small businesses.

The new paradigm for V.C. Investing - Click To Read Article
Venture Capitalists and Private Equity firms alike insist that they only way to garner return on investment is to exit. If you’re investing in businesses that have real revenues and are, or soon will be, profitable and cash flow positive, why don’t you hold the company in a portfolio and take returns in the form of annual dividends? Depending on an exit for a return on your investment seems the highest risk kind of investment of all.

What will happen to small business funding? - Click To Read Article
Investors must change their mental views of “I don't feel like "spending money" because of the recession and lack of liquidity options. For startups it’s irrelevant, it’s a long road and management or lack of will be the determining factor.

We had TARP for residential, now comes commercial - Click To Read Article
The residential collapse has contributed to a record number of bank failures. Now banks are seeing commercial lending problems rise, centered around commercial real estate. Bankers, industry analysts and observers widely expect first-quarter 2009 data — scheduled to be released in the next few weeks as part of many lenders’ first-quarter reports — to signal a continued escalation in loan defaults from all forms of commercial borrowers, from the real estate at office parks, shopping centers and commercial building space to more traditional business borrowers. State banks, according to Federal Deposit Insurance Corp. data, reported a 15 percent increase in non-farm, non-residential loans — the regulators’ definition for all commercial loans — as nonaccrual loans within the last 90 days of 2008.

The Commercial Real Estate Time Bomb - Click To Read Article
The deterioration resulting in a drop in commercial real estate values could result in over $1 trillion in upcoming headaches for financial institutions, investors and the administration, with the bulk of exposure concentrated at banks and insurance companies. The refinancing problem is the altogether entire current shut down in debt capital markets for assets, which affects all refinancings equally

Who do you believe? - Click To Read Article
While big money continues to move funds in and out of the market (all-the-while being ignored by Regulators what regulators used to consider manipulating the price of stocks) Main Street continues to shed jobs and close doors.

Fed announces end to Recession - Click To Read Article
However, the number of U.S. households on the verge of losing their homes rose 7 percent from June to July, as the escalating foreclosure crisis continued to outpace government efforts to limit the damage.

Surviving Tight Credit Creative Financing - Click To Read Article
For the Investor/ Lender, determining the suitability of a projects is still a work in progress. The Borrower needs to provide a presentation of information easy to follow. Starting with a strong executive summary. The KISS formula still works miracles.

How to think out of the box regarding Equity - Click To Read Article
Equity is expensive and investors want to buy assets for 10 to 30 cents on the dollar. There are a number of different sources for equity that can be accessed.





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