A Look at the Past and a Look at the Future

December 30, 2009 · Dean Rizzi · 1 Comment

This time last year we predicted that 2009 would end a lot better than it began. We were right, though it wasn’t a great accomplishment to be right considering how low the housing market, stock market, and overall economy had sunk during the latter half of 2008. As we’ve stated repeatedly over the past year, a low base and a dour outlook provide an excellent buying opportunity, so we weren’t surprised when buyers stepped forward to exploit the opportunities.

Looking ahead to 2010, we see continued improvement in home sales and home prices. In fact, we wouldn’t be surprised if the market turns to a sellers’ market from a buyers’ market by year’s end. We are almost certain that will be the case if we see a two to three percentage point drop in the unemployment rate. Low mortgage rates and income tax credits are contributing factors in stabilizing the market, to be sure, but no factor is more important than employment in not only maintaining stability but stimulating activity. Read more

We’re Getting the Job Done

June 30, 2009 · Dean Rizzi · 6 Comments

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. Read more