Posts Tagged ‘bailout bill’

In a stunning slap to President Bush, the original bailout bill was rejected by Congress.  Now a new modified bill is making the rounds, with some sweetners (I’m watching the AMT earmark myself) that might just get everyone to vote yes.

Understand that no one wants this bill.  It’s like cough medicine, you know you have to take it but it still tastes awful going down.  Of course cough medicine usually helps your cough, but the country’s financial system has caught bronchitis not just a trifling cold — so it is questionable whether the bailout bill will end the financial crisis.  Still everyone seems resigned to the cold hard fact that there is really not much choice.

I’m involved with two real estate development deals.  Thankfully they are not condos.  One of the developer wisely switched to building apartments from the original condo plan.  The other is a commercial development.  So what’s the problem?  Like you had to ask, of course it is financing.

Recently overheard in a corporate hallway somewhere in Silicon Valley, “our stock price is so low, we are prime take over bait .. but no one can organize the financing”.  Even the tech section is affected, isn’t that food for thought.

With both the real estate deals that I’m involved in, the bank providing the original construction financing went under.  So the developers are scrambling to find new financing .. but to no avail.  Word is, that banks are getting downgraded just for having construction loans on their balance sheets, whether performing or not, so they have the door firmly closed for new ones.

So will the bailout bill help real estate developers?  Well if it helps the banks start lending again, it should.

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