“As great an opportunity as we’ll see in our lifetime”
Is the take on the market says Rudy Touzet, principal of Miami’s Banyan Street Partners LLC. According to him, there is 12 TRILLION Dollars on the sidelines waiting on the bottom to come.
He was among the members of a forum at Florida State University not long ago. Another quote from the forum I strongly agree with was from James Seneff, head of CNL Financial Group: “It’s next to impossible to determine the value of real estate in today’s market and investors are afraid “the knife will fall on them” if they buy amid so much uncertainty”.
This is why the haphazard bailouts of both the end of the Bush Administration and beginning of the Obama Administration are so frustrating. The goal should be to find the bottom, and this lurching from plan to plan without a clear, publicly defined goal of finding the bottom value of these assets is maddening. So far I’ve yet to see that Geithner was worth all the fuss. I think Mark Cuban was right when he identified Obama’s first mistake months ago. And legendary investor, and author of semi-readable books, Jim Rogers, sums it up nicely in this interview:
What do you think of the government’s response to the economic crisis?
Terrible. . . [Treasury Secretary Tim] Geithner was head of the New York Fed, which was supposedly in charge of Wall Street and the banks more than anybody else. And as you remember, [Obama’s chief economic adviser, Larry] Summers helped bail out Long-Term Capital Management years ago. These are people who think the only solution is to save their friends on Wall Street rather than to save 300 million Americans.
So what should they be doing?
What would I like to see happen? I’d like to see them let these people go bankrupt, let the bankrupt go bankrupt, stop bailing them out. There are plenty of banks in America that saw this coming, that kept their powder dry and have been waiting for the opportunity to go in and take over the assets of the incompetent. Likewise, many, many homeowners didn’t go out and buy five homes with no income. Many homeowners have been waiting for this, and now all of a sudden the government is saying: “Well, too bad for you. We don’t care if you did it right or not, we’re going to bail out the 100,000 or 200,000 who did it wrong.” I mean, this is outrageous economics, and it’s terrible morality.
The whole interview is worth a read. There are or at least will be bargains out there, and some people are going to make good money with smart investments in the near future, we just need some clarity.