We’re Getting the Job Done

June 30, 2009 · Dean Rizzi

Conservatives will say government has done too much, while liberals will say government has done too little. No sense in debating the argument; the differences are irreconcilable. But what isn’t debatable is the recovery, which will fully bloom because of the efforts of the private section.

Former junk-bond king Michael Milken noted as much in the Wall Street Journal. One of the more pervasive myths is that money is in short supply, but it’s really not. Milken noted that corporations worldwide have raised nearly $2 trillion in public and private markets this year, a clear sign the economy is improving. The fact that non-investment-grade companies, such as Harrah’s Entertainment, Warner Music Group, MGM Mirage, and Rite Aid, are now paying down bank debt with newly raised funds shows the capacity of our financial markets to re-capitalize, thanks mostly to the efforts of private financiers.

More money flowing into capital markets isn’t headline-making news, but it is important news. It reveals just how far along our economy is in the recovery process. Dour pundits have been comparing our economic situation to Japan , circa 1990, when that country was thrown into a decades’ long funk. There is no comparison. Unlike Japan , we have been aggressively working our problems by raising capital and de-leveraging, and doing both successfully.

A full recovery will take time, but as with people, the tincture of time is often the best medicine for an ailing economy.

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Filed Under Important Thoughts, Real Estate Finance

Tags: economic stimulus, home sales, recovery

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Comments

6 Responses to “We’re Getting the Job Done”

Larry Franzella on June 30th, 2009 2:40 pm

There are many signs that the economy is turning around, if the State of California gets a budget it will help tremendously.

Larry
Brian Boisson on July 1st, 2009 8:55 am

Dean,

Thanks again for the insight.

Money flow helps buyers feel much more confident, and I am very happy to hear about MGM & Harrahs!

Brian
Michael Monozon on July 1st, 2009 5:35 pm

Yep
the skids are in place, look around, lots of little things in place or soon to be in place that signal change for the good
How about a little challenge, can we put together a list of 10 changes that will have a positive effect on the economy
ok lets make it 12 and use larry’s CALIFORNIA BUDGET AS 1

2. just read that Fanny Mae & Freddy will start refinancing loans that have a value less than 100% of current loan. (believe up to 125% over original comforming loan limit $417,000 ?)

ok next 10??????
Jonathan Shaw on July 2nd, 2009 2:30 pm

Hi Dean,
Great info regarding areas of our economy that we traditionally do not follow. Thanks for the info!
Jonathan
Dean Rizzi on July 3rd, 2009 3:00 pm

3. repeal or revise HVCC. The current results in escrows being jeopardized because of shoddy work by un qualified appraisers.

P.S. Refi plus will now allow the loan amount to be up to 125% of the value of the property… Refi plus apply to Fannie loans up to $729,750
Shokoofeh Nowbakht on July 13th, 2009 1:01 am

Ok, how about #4, relating to my blog on recently properties are selling for over asking price. I see this as a sign of a healthy economy.