The Sun'll Come Out Tomorrow

The sun'll come out
Tomorrow
Bet your bottom dollar
That tomorrow
There'll be sun!
Just thinkin' about
Tomorrow
Clears away the cobwebs,
And the sorrow
'Til there's none!
When I'm stuck a day
That's gray,
And lonely,
I just stick out my chin
And Grin,
And Say,
Oh
The sun'll come out
Tomorrow
So ya gotta hang on
'Til tomorrow
Come what may
Tomorrow!
Tomorrow!
I love ya
Tomorrow!
You're always
A day
A way!

I'm so lazy these days that I no longer read the newspaper, but rather get the news online or from TV. The financial news yesterday was especially displeasing because the stock market took another tumble on fears of more doom and gloom over the housing and mortgage markets. Then today I read a nifty little item in FORTUNE about how us tax payers (those that actually pay taxes as opposed to the illegal aliens and lots of others who work "off book" don't!) are going to pay for Bank of America's acquisition of Country Wide Mortgage. GO HERE and read it. It'll make your blood boil. The gist is that BofA will use the accrued tax losses of Country Wide to offset the gains BofA has so BofA gets a valuable asset without paying for it.

Then I remember back in the early 1990s when there was talk that CITICORP was going to fail. I bought CITICORP stock at $8 a share because I knew that the US government could not afford to have the largest bank in America fail. It would start a major depression. I was correct. The stock bounced back and I sold it years later with a good profit. At the same time BofA was buying a lot of the assets of failed savings and loans--the bank buildings, FF&Es, the deposits (which are technically a liability, and other cherry-picked assets. BofA turned a negative into a positive. The RTC (for which I worked) managed and disposed of the rest.

I worked in the Subsidiary Assets Division of the RTC. The subsidiaries were companies, partnerships and joint ventures that failed thrifts used as vehicles to develop or own real estate investments. We had all kinds of assets including a nursing home in Louisiana, a Burger King in New Mexico, undeveloped ground in Tennessee, Florida, Arizona, California, etc. The largest asset was a $300 million investment in a new town that Lincoln Savings had been constructing several miles west of Phoenix--Estrella.

One of the things I saw very quickly was that we had a lot of inexperienced people handling assets they did not understand or appreciate. Most were former bankers who were familiar with making loans and working in an "up" market. Then they were put in charge of liquidating billions of dollars worth of assets in a very depressed market. It was The Peter Principle in stark raving reality. There numerous instances of asset managers not understanding the basic fact that even though the real estate market was tight, the assets themselves were generally very valuable, and that either walking away from them (I'm serious!) or setting a very low sales price was the only way to dispose of the asset. There was pressure to resolve assets because the RTC was supposed to "sunset" (go away) by 1995. The assets weren't theirs so they really didn't care what happened as long as they got the deal done. Because their performance was judged on getting deals done and not on dollars recovered. (But when you had you had lunch or dinner with them, they'd watch every penny.)

It is frustrating in this market to get buyers to commit because they think the market is going to continue to fall. It may. And the cheery news like yesterday's announcement about the DOW falling again because of housing woes reinforces the fears so many would-be buyers have.

I'm starting to look now. I have a house which I don't intend to sell. But I think now is a good time to buy an investment. Key West has not been affordable for over 20 years. But the prices now are certainly better than they were 3 years ago. A real buyer with real cash as a down payment can get a 30 year fixed rate loan under 6%. Right now the return on a certificate of deposit is around 5%. You do the math.

I think the sun'll come out tomorrow and you can bet your bottom dollar that things will be better. We are going to get a new president and we are going to have a collective feeling of joy. Bet on it.

CLICK HERE to search the Key West mls database. If you see something you like, think of contacting me, Gary Thomas, 305-766-2642 or e-mail at kw1101v@aol.com to get more information on the property or to schedule a showing. Thanks.