On A Positive Note

We know that numerous factors that are influencing our life are not great this beginning of the year, however, there are positive sings for 2009. The first positive news of 2009 is that capital is getting circulated in the economy. While credit is going to continue to be difficult to obtain the different investments programs that have been created at the end of 2008 are moving forward. We are just now starting to see the effects of these programs and as we enter 2009 we are going to see more effects of these investments.

A New president. While, I don’t like to talk about politics it is important to note that Mr. Obama has been aggressive in working on the economy. It seems, from what we know so far, that he is ahead of the curve and has gathered a strong team of financial and economic advisors. It appears that within a few days of taking office he will take actions and launch a new economic program that will help employment and liquidity. Most likely we should start seeing the positive effects of the program in Q3 and Q4.

The bottoming out of the real estate market. In 2008 we were hoping that the markets will bottom out at some point. It appears based on initial numbers that we are starting to see that bottoming out. It may take some markets until the end of the year to see this bottoming, however, it is clear that other markets are now reaching the bottom. The media is always late in recognizing trends and thus you should no see stories on that subject for another 6 months. However, looking at numbers then we are seeing the right signs, which allow us to anticipate the future.

Recognition of the problems. It took, I believe, more than a year for both the private sectors and the different levels of government to realize that we had problems. 2009 may still be a difficult year, but once problems have been acknowledged then they are possible to solve.

From a lending and a Hard Money lending perspective this means that money is going to be tight in 2009. Demand for capital is going to be higher than availability thus increasing the costs of borrowing. However, we should hopefully see some improvements in the second part of the year.