Wednesday, 17th July 2019.

Posted on Monday, 6th December 2010 by Robert Domini

God Bless America

As we close in on the end of 2010, we are thankful for all of the good news this past year. The Dow Jones Industrial Average and the S & P 500 Index are up about 10% for the year due largely to corporate profits which have been strong. Interest rates have stayed low throughout the year, but housing and commercial real estate have yet to recover. Worldwide economic news is throwing off mixed signals. The Dow lost ground in November, although it is off to the races thus far in December. Unemployment is still hanging at just under 10% with the “real” unemployment rate somewhere towards 17-18%. Global markets are reeling with the Euro dropping like a rock and European stock markets down at least 5% for the month of November. Ireland, Italy, Spain, Belgium and Portugal could be going the way of Greece. Germany is trying to hold up the entire continent single handedly. The dollar has risen 7% against the Euro since the beginning of November which may seem like a good thing, but it will have a dampening effect on exports. The Euro crisis does affect the U.S. directly because 19% of our exports are to the 27 countries in the European Union.

The U.S. economy is beginning to feel better about itself, having turned in a nice performance at the shopping malls during the holiday weekend. A full house of conservatives is anxious to have a crack at reducing the deficit this coming year. Taxes are another matter. If anything is to be done to extend the Bush tax cuts, it needs to happen during the lame-duck session prior to January 1, 2011. The problem is that the President is hoping to allow some of those tax cuts to expire. The delay in making this important decision has caused a great deal of uncertainty, and that’s why most of us are not hiring, nor are we willing to invest in new plant and equipment. The small-business community is already feeling the effects of all the turmoil in the medical insurance business. Some of us have already received premium notices with increases in excess of 40%.

Having said that, this Country was spilling red ink for at least twelve years up to the beginning of World War II, and then, as the war effort ramped up in 1941 and 1942, something miraculous happened. Despite the overwhelming debt from government spending for well over ten years, our economy took off and dug its way out of the Depression. I believe strongly that our U.S. Constitution is still the law of the land, although it’s being challenged on a daily basis. We must defend our Constitution at all cost, and we will weather this storm. America will rise again, and when it does, it will be with a strength and fury no one can possibly imagine!

What Caused The Great Financial Meltdown of 2008?

The date was September 17, 2008, and the website of a company named, “Residential Home Funding Corporation” was offering a most interesting product. The website read, “A Government-regulated agency, Fannie Mae, has developed innovative mortgage products for borrowers who have difficulty raising adequate funds for their down payment. These mortgage programs will pay up to 97% of the purchase price and the other 3% can come from a wide variety of sources including loans from a 401-K or a credit union. No Doc Loans are available. One type is a NINA loan where no income or asset information is provided or verified. There is also a Stated Income Verified Assets loan where income is stated, but not proven. No proof is required. This flexible program allows foreign nationals with no income and no credit history in the United States to buy property.”

Fannie Mae and Freddy Mac were GSEs, government-sponsored enterprises. They were not only government sponsored, they were government controlled. They were a policy extension of the U.S. government. The U.S. Congress determined long before George W. Bush was President that it was their goal to make home ownership affordable to most American families.

The loans were originally packaged by Fannie Mae and sold off as securities. They were known as Mortgage Backed Securities. Later, the larger banks joined the fray. They purchased subprime loans from brokers and smaller banks, packaged them and sold them as MBS (mortgage-backed securities). Rotten loans were packaged into securities, bonds if you will, and sold with AAA Moody’s Ratings throughout the world. In fact, the bonds were even insured by such companies as AIG. It was a no-lose proposition.

The other villain was the top management of the financial corporations. The really big players were the investment bankers such as Bear Stearns, Lehman Brothers, Merrill Lynch and Morgan Stanley. The CEOs of these firms made huge bonuses by taking obscene risks with their shareholder’s money. When they collapsed, guess who was left holding the bag?

Have no fear, the taxpayer will always step up and come to the rescue. In September 2008, the U.S. Government, Joe Taxpayer, took over complete ownership of the Fannie and Freddy.

A War-Time Eminent-Domain Taking

Just four months following the bombing of Pearl Harbor by the Japanese, the U.S. Navy was busy building tank landing craft for the invasion of the European Continent. At the time, construction was underway on the Ohio River by Marietta Manufacturing Company, a company owned and controlled by the Navy. The Navy desired to acquire the neighboring 153 acres for assembly of prefabricated ship hulls and as a Naval Distribution Center. In a 3-page order, a District Judge from West Virginia declared that the United States was taking the property by eminent domain and that the price was to be $47,320. According to the order the price was determined by the Secretary of the Navy to be just compensation. This was a heavy-duty transaction because the order came directly from the Secretary of the Navy under the authority of the U.S. Attorney General and the U.S. Congress. That’s $309 per acre, and the deal was signed into law by Harry E. Watkins, District Judge, on April 28, 1942.

One month later an addendum was filed by the seller which was later attached to the deed. In it there was a very strange (offensive) deed restriction. The property was not to be sold or transferred to any person of African birth or descent for a period of 50 years.

Despite the U.S. Constitution and a Supreme Court Decision, the acquiring agency, the U.S. Navy, in time of war, acquired personal property by fiat with a local judge signing the order. The value, “just compensation” was determined by the Secretary of the Navy, the acquiring agency. The Fifth Amendment to the U.S. Constitution states that, “no person shall be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.” In 1897, a U.S. Supreme Court decision affirmed the duty of the state to see to it that just compensation is paid for property taken by eminent domain.

For a Property Tax Appeal, Should You Hire a Property Tax Consultant or an Appraisal Consultant?

A Real Property Consultant is not a real estate appraiser. A consultant is sometimes hired for property tax appeals of large commercial or industrial properties. The consultant will give advice to the property owner on all aspects of the appeal process. He/she can attend hearings with the owner and make arguments to help the client’s cause. However, the consultant cannot render an opinion of value as though he is an unbiased professional.

A Real Estate Appraisal Consultant can render an unbiased opinion of value. He/she can advise the owner as to the appeal process. The appraiser can attend hearings and speak on behalf of his appraisal, but he must be careful not to be an advocate for the client’s issues and causes. The appraiser must never accept a fee that is contingent on value or a particular result. The fee must be paid for services rendered, only.

What Can The Real Estate Appraiser Do For You?

The real estate appraiser can check the records against the actual property to determine whether there are any factual errors in the Auditor’s appraisal. What kind of factual errors can be made? Your building could have a major roof leak and serious interior damage. The property could have been vandalized. The foundation may not be secure. Additionally, the square footage could be wrong. The site size could be incorrect as well.

The appraiser can take pictures of the damaged areas and secure estimates to repair damages which are usually a deduction from the value.

While the appraisal is being prepared, the appraiser often has enough data available to make a reasonable determination of value even before the written appraisal is completed. So long as the appraiser has file material available to support his opinions, he can verbally inform the property owner that his value is equal to or greater than the Auditor’s value and an appeal will likely be unsuccessful.

When the appraisal is complete and presuming that the appraiser’s value is less than the Auditor’s appraised value, then it can be used as evidence in the Board of Revision hearing. The appraiser will appear before the Board and present his appraisal. The property owner and/or his attorney must be present during the hearing.

The Most Effective Appraisal for the Board of Revision Hearing

Most Boards hearing property tax appeals appreciate an appraisal and an appraiser which are both clear and concise. The Board will most appreciate a straight-forward sales comparison approach for smaller commercial properties. In cases of leased properties or properties where income is an important factor, an income approach is usually developed.

A brief and simplified explanation of the appraisal is always appreciated. If the Board requires greater detail, they will ask questions.

Some appraisals for tax appeal are for large and complex properties. Even appraisals of complex properties should be simplified as much as possible.

Continental Valuations can provide either a Real Estate Appraisal Consultant or a Real Estate Appraiser for your project.

Who is John Galt?

By now many of you know the segments of the story that I have been telling from the book Atlas Shrugged. John Galt and his fellow business owners, investors, inventors and creative thinkers had largely given up the fight and abandoned their businesses. Each of them had come to a place they called Atlantis which was actually a valley in the mountains of Colorado which was not visible from the air and which had no roads leading to or from it. The group in this small village was relatively small, but its inhabitants were the inventors and the creators of their industries.

The outside world was crumbling. The captains of industry had just simply vanished into thin air, and each of them had not sold their businesses, they just abandoned them. As soon as they left, the looters fed on the carcasses until there was almost nothing left. A few of the business people made a valiant effort to hang on, but it was a losing battle. One of them, Dagny Taggart, who ran the Taggart Transcontinental Railroad, was trying to hang on. She followed John Galt into the valley and crashed her plane there. The business owners were all there to greet her when she recovered from the crash. They nursed her back to good health, but as soon as she recovered from her injuries, she was ready to return to the outside world to try to stop the madness before it destroyed everything. As she was about to leave the valley in John Galt’s plane, she said to him, “I started my life with a single absolute: that the world was mine to shape in the image of my highest values and never to be given up to a lesser standard, no matter how long or hard the struggle”.

Back in the outside world, the leaders were proudly developing what they called Project X which turned out to be a weapon based upon sound waves that could destroy almost anything within a range of 100 to 300 miles. The sponsors were Dr. Floyd Farris, Dr. Stadler, Wesley Mouch, Orren Boyle and Mr. Thompson. Together, they felt that this new weapon would give them unrestricted control and the ability to take over any and all businesses of their choosing.

Meanwhile, Dagny was once again walking on the streets of New York, and managed to find her way back to her office in the Taggart Transcontinental Railroad Building. When she arrived at her office she found that a Mr. Cuffy Meigs had assumed command. He was the Director of Unification, the Washington representative in charge of the Railroad Unification Plan. And, the story goes on from there. The parasites and the leaches were closing in for the kill and she, Dagny, was just now getting a good taste of the reality she had been denying now for a very long time. The story will continue in the next issue, but, again, if you would like to learn the “rest of the story”, you should read Atlas Shrugged, by Ayn Rand.

This E-Newsletter Was Brought To You By . . . .Bob Domini, MAI. Continental Valuations is a full-service real estate appraisal company located in a historic building on Second Street in downtown Perrysburg, Ohio. We make our living doing real estate appraisals for businesses, banks and private individuals for a wide variety of uses ranging from tax appeals, estates, corporate acquisitions, bankruptcies, divorces and financing. Next time you need a real estate appraisal, give us a call.


Robert D. Domini, MBA, MAI

Certified Appraiser in OH, MI and FL


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Posted on Monday, 8th November 2010 by Robert Domini


First, class, can anyone give me the definition of QE2? If you answered that it’s a really big cruise ship named after Queen Elizabeth, you’re right. If you answered that it’s the second phase of a Federal Reserve program of quantitative easing, it means you’ve been watching too much CNBC. Let me throw out a few buzz words and factoids and then we’ll talk about this whole sordid mess. Ok, here goes, printing money, monetizing the debt, and hyperinflation. In short, the Fed is either doing or approaching all of the above. Do they have a right to do this? Absolutely. On December 23, 1913, President Woodrow Wilson signed into law the Federal Reserve Act establishing the Federal Reserve System. In the original charter, one of the Fed’s tools for attempting to control the economy was monetary policy. What is monetary policy? This is coming directly from the book, The Federal Reserve System, 1963, page 35, wherein it states, “The system is continuously buying and selling securities in the open market as it accommodates seasonal demands for money and credit, attempt to offset cyclical economic swings, and supplies the bank reserves needed for long-term growth”. So, you can see that we learned about this in school way back when the Beatles were about to appear on the Ed Sullivan show. It is a mechanism for the Fed to tweak the flow of money.

What is the Fed Doing? And Will it Work?

In simple terms, the Fed is embarking on a program of buying back our treasury bonds on the open market to the tune of $100 Billion per month for six months. This is standard monetary policy that’s been around since 1913, so why is it such a big deal? This morning’s WSJ, November 5, 2010, this big event warranted a page 6 story, above the fold no less. The Fed is responsible for price stability (inflation) and unemployment. Right now our unemployment rate is stuck at 9.6%, and is showing no signs of improving. President Obama’s party just a few days ago got “shellacked”, and you ask why? Unemployment is way too high and it isn’t budging. We all know that not all unemployed people are being counted. Some are no longer looking and some are working part time or under the table. The real number is more like 17% to 18% which is at Depression levels. That’s why we here in the backward Midwest where we “cling to our bibles and our guns”, things don’t feel so good. The voting public was screaming to the government to get their house in order. We all know that you can’t make it up in volume when you spend $1.5 trillion a year more than you bring in. It used to be simple. You run up a $1.5 trillion deficit , issue bonds (treasury bills) and sell them at auction to the Chinese, and all that’s left is the interest payments. Life goes on, and we resume the spending. The public is not happy with that. The public is not happy with their taxes being unsettled for the New Year when it’s already into November. They are extremely apprehensive about the health care plan, not knowing what the cost or the benefits will be.

Let’s go back to the QE2 $600 billion move. The Federal Government is buying our own debt with what? With nothing. The stock market is yipping away happy as can be with liquidity pouring into the market. Will our corporations do better? They’re already hoarding billions in cash, so this won’t help them. In fact, corporate profits are doing just fine. According to the WSJ, the Fed is lending enough money to the government to fund its operation for the next several months. Per the WSJ, that’s “monetizing the debt.”

As usual, everything I read stops dead without telling me where we’re going. I’ll take a position. I think this is a bad move. I don’t think it’s necessary. The American people spoke on November 2, and the message was that they want fiscal responsibility. They did not send the message to go on spending and borrowing binge three days after the election. Monetizing the debt and printing money or whatever you want to call it certainly is not a prudent thing to do. We are no longer in “emergency” territory as you will see in the next section. I don’t see the need for drastic measures at this time. Now is the time to bring our fiscal house into order by cutting spending across the board and reducing the deficit.

What Does Stuart Hoffman Have to Say?

Stuart Hoffman, chief economist at PNC, spoke to a full house of business people in Toledo, Ohio about a week ago. He was a whole lot less bullish than he was a year ago. At the time Stuart believed, like most economists, that a little Keynsian stimulus was a good thing. Stuart characterized this recovery as a “half-speed” recovery. 22% of small business companies expect to add staff during the next twelve months. When it gets to 35% we’ll be in full recovery, he stated. In fact, the balance of the thoughts and ideas in this article are those of Stuart Hoffman. In Ohio 18% say they will hire and invest during the next twelve months. 40% expect sales to go up over the next twelve months in Ohio. The top challenge is government policy and the uncertainty that it causes. 34% said they expect weak sales while 21% say they are concerned about government policy. 71% said the stimulus bill did no good. While he felt that the stimulus was a good idea at the time, he also believed that there would be a handoff from the government to private industry. Jobs from private industry have been growing now for eight straight months, but the growth cannot keep pace with those newly unemployed. Stuart feels that the economy is headed in the right direction and that unemployment will come down to 9% in the next twelve months. But, that’s not enough. Consumer spending is up 2.5% this past month which is the best performance since 2006. Business investment in plant and equipment have also been strong, increasing by double digits, and remember that business investment represents 12-14% of the economy.

Other bright spots include improving exports and a growing global economy. The UK, Germany and Canada are growing. Although Canada is a close relative to the U.S., their budget deficit has not grown anywhere near what ours has. The foreclosure moratorium was not a good idea and did no good. Despite this, home prices appear to be stabilizing except in Florida and Arizona. As to the capital markets, money is available. GM and Chrysler both plan to issue an IPO in the coming months to pay back the TARP money. Credit availability is coming back. It sometimes comes down to mindset. Negativity breeds negativity which certainly is a true statement.

What can go wrong? We could get a deflationary double dip. Government policy needs to be changed and the tax situation needs to be clarified. He expected the Democrats and Republicans to compromise on that issue. Financial reform could cause problems, and commercial real estate is still weak. There is a problem worldwide with sovereign debt, and finally, job growth needs to materialize. As to the QE2, quantitative easing, he felt it would neither benefit nor hurt the economy. He did say that as a result, stocks would go up the next year or two.

In closing he said this past recession was caused by a collapse in the financial markets, and that there will be no quick fix for it. We need to fix taxes, reduce the deficit and get the government out of the way. Well done, Stuart.

What Does History Say About Printing Money?

This whole business of printing money has been tried before. It happened in Germany in the 1920s. In fact, the king of government spending, John Maynard Keynes, said in his book The Economic Consequences of Peace that “The inflationism of the currency systems of Europe has proceeded to extraordinary lengths. The various belligerent Governments, unable, or too timid or too short-sighted to secure from loans or taxes the resources they required, have printed notes for the balance.”

CoStar Group Says Commercial Real Estate Prices May Have Bottomed Out

According to CoStar, investment-grade commercial real estate has increased in price both in August and September this year. In fact, in September they were up 5.48%. Also, they report, that for the first time since the second quarter of 2007, all four commercial real estate types have increased in price, that is apartments, offices, retail and industrial. And finally, in an e-newsletter publication dated November 3, 2010, it is reported that “all four categories of CRE have had their indexes increase this past quarter. The multi-family index moved up the most with a positive 8.98%, office increasing 6.08%, retail up 5.56% and industrial up just 0.49%.”

What is in the Financial Reform Bill?

This bill was passed sometime in mid-July and it directly impacts my business and I know absolutely nothing about it. I attribute this more to burnout than to a general case of apathy. We in small business have had so many obstacles thrown in our path these past two years I think some of us are just plain numb. We can’t take it anymore, so when two clowns like Frank and Dodd decide to pass a bill to regulate my business, just the thought of it makes me feel ill. Now that I’ve set the tone for this article and you know that I’m doing this out of a sense of obligation and not because I enjoy it, here goes. This article I’m writing comes directly out of the Washington Post, July 16, 2010, by Brady Dennis, so we’ll all have to read between the lines considering which side of the aisle those people usually reside in. Ole Brady starts off by saying what a wonderful legislative victory this is for President Obama since he pledged to rein in the reckless Wall Street culprits and tighten up those regulatory rules that allowed the financial collapse to happen in the first place. So, step one is that the collapse of our entire financial system occurred as a result of corporate greed and lax regulation. That’s nice. I’m still in the second paragraph and I’m starting to get all worked up which isn’t good for my blood pressure. I mean no offense by this, but Chris and Barney, aren’t you the same two guys who helped pass the Community Reinvestment Act during the Carter and Clinton Administrations. That Act had as its goal to make housing more affordable to everyone, and it created lax regulation which allowed people to get home loans without proving their income or their assets.

Our buddy Brady called this a massive bill which establishes an independent consumer bureau within the Federal Reserve to protect borrowers, et al. Of course there will be a massive agency to regulate those derivatives and other complex financial instruments. In another section Brady states that immediately upon passage, the Federal Insurance Office will have the authority to seize big, failing companies. Kind of brings a tingle up your leg, doesn’t it. I’m not sure how this impacts me as an appraiser, but I’m sure of one thing, it will employ a whole lot of federal union workers. Actually when you think about it, this is a job creation bill.

This Update is Brought to You By

Yet another Continental Valuations Newsletter is in the can. I hope you’re all doing well. That was quite an earth-shattering election we had there a few days ago, wasn’t it. Time will tell what effect it will have on the economy, but those of us in small business are hoping and praying that things get better sooner rather than later. For your real estate appraisal needs, please call me at Continental Valuations in Perrysburg, Ohio. We can provide appraisals for a wide variety of purposes ranging from financing to litigation in any state in the U.S. We do right-of-way appraisals for highway takings – both for governmental agencies and for private owners. If you have a difficult appraisal problem or one involving possible litigation, give us a call.

Respectfully submitted,


Robert D. Domini, MBA, MAI


Certified Appraiser in OH, MI and FL

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Posted on Friday, 8th October 2010 by Robert Domini

Paul Krugman and Tim Geithner are Wrong About 1937


According to a CBS News report, nearly all of the $862 billion in stimulus funds signed into law in February 2009, will have been awarded as of the end of September, 2010.  Yet, also according to CBS, the funds awarded have not yet found their way into the economy because most of it has been awarded to cities which have not been able to work through the processes such as bidding. Now, the Government is proposing a new $50 billion shovel-ready infrastructure plan, call it Stimulus II. 


In 1932, the U.S. was in the same boat as the rest of the world in terms of economic distress.  Our unemployment rate climbed to 24.9% as FDR was being elected but most of the world shared a similar predicament. Denmark led the way with 30.8% and Japan had the low of 6.8%.  Fast forward to 1937; the U.S. was registering a much-improved 13.2% unemployment rate, but that was after more than four full years of New Deal spending.  The rest of the world, in 1937, was generally at about the same place we were. Norway led the pack at 26.9% and Japan was still low with 3.7% unemployment. Our trading partners, such as Canada, were then at 12%, the UK was at 10.5%, Australia 9.3% and the World Index posted an unemployment rate of 10.1%.  Then in 1938, our unemployment numbers surged to 19.8% while the rest of the world was either standing pat or up only slightly.  No one was up by 50% like we were.  In fact, the average for 16 nations in the League of Nations was only 11.4% that year. 


Krugman and Geithner would have you believe that FDR slacked off on the fiscal stimulus in 1937 which caused the economy to crash in 1938.  Well, let’s see.  After five years Roosevelt ratcheted up taxes to 79% for the top income earners, he raised corporate and excise taxes, he doubled the national debt, and federal spending tripled.  U. S. unemployment reached 19.8% in 1938 and hit 20.7% in April 1939. 


Geithner is no big fan of extending the Bush tax  cuts even though he never has been very fond of taxes in his personal life.    He was pushing the $50 billion shovel-ready program.   Krugman claims that FDR pulled back fiscal stimulus too soon in 1937, and this caused the nosedive in 1938.  Is this true?      


It’s true that the elections of 1938 did not go well for the Democrats.  They lost a lot of seats in both Houses and many Democrats who were opposed to the New Deal were reelected.  In the U.S. we hold our Congressional elections in November, and those elected do not take office till the following January which would be 1939.  The new Congress shut down the WPA, CCC, and other relief programs after they took office in 1939.  In 1937, Roosevelt refused to cut spending after extensive debates with then Treasury Secretary Morgenthau.  In fact between 1933 and 1939, federal expenditures tripled.  There is no evidence that Roosevelt cut back spending in 1937. 


If you’re wondering why the economy took a dive in 1938, consider this.  FDR ordered an FBI investigation to look into a criminal conspiracy by business to hold back capital spending.  Roosevelt’s anti-business tirade went so far as to levy a tax on retained earnings. (i.e.  a tax on money already taxed).  Imagine that.  FDR went on a tear against monopoly power.  He attacked Henry Ford and steelmaker Tom Girder and the sixty families that controlled most of the large businesses in those days.  It’s true that FDR talked about balancing the budget in 1937, but spending was never actually reduced.  When Roosevelt saw the economy fall into a tailspin early in 1938, he immediately went on a $5 billion spending spree.  In point of fact, the New Deal had engaged in deficit spending, right out of the chute in 1933.  In May 1939, his Treasury Secretary, Morgenthau, wrote in his diary, “We have tried spending money.  We are spending more than we have ever spent before and it does not work.  And I have just one interest, and now, if I am wrong somebody else can have my job.  I want to see this Country prosper.  I want to see people get a job.  I want to see people get enough to eat.  We have never made good on our promises.  I say after eight years of this administration, we have just as much unemployment as when we started, and an enormous debt to boot.” 


So, Paul and Tim, please don’t worry.  Your Government is not likely to slack off on its spending in the near future.  Even if the Republicans take both Houses of Congress next month, they will never be able to override a Presidential veto to cut back on spending.  Deficits are scheduled to exceed $1.5 trillion as far as the eye can see, and the national debt has now reached $13.5 trillion. 


The Depression ended on December 7, 1941, with the attack on Pearl Harbor.  Unemployment went from 14% in 1940 to less than 2% in 1943.  Spending for the war was incredible.  The total for 1946 was $62 billion or 30% of GNP.  It is truly amazing that this Country was able to spend so much money for so long, and eventually come out of it.  Why did war pull us out of the Depression when all of the “make work” spending of the New Deal was never quite able to do the job?  The reason is that people had something to work for that they could believe in.  Everyone was working, man, woman and child because the cause was to do or die.  Instead of business and the Government being constantly at odds with each other, they were arm in arm for the common cause.  It is amazing what the USA can do when we all finally decide to join the same team.  This will happen again someday and we will once again be united in a common cause.  Hopefully it won’t be another World War that unites us.

Unemployment Rate Redefined


Did you know that the official Bureau of Labor Statistics definition of unemployment was changed in 1994?  I must give credit to a well-known financial guru for this revelation.  Most people have heard somewhere that not all unemployed persons are included in our current unemployment rate published by the media.  What most of us didn’t know is that the definition was changed in 1994, probably to make the politicians look better.  It is commonly known that the unemployment rate does not include persons no longer looking for work, but who are technically willing to work and have looked for work in the past.  In other words, the disenchanted unemployed are not being counted.  We’ve all heard comments that if all unemployed people were counted, our unemployment rate would be 17% right now.  If we used the same criteria used in the 1930s, then our unemployment rate may very well be the same as it was during the Depression. 

Up Close and Personal

The Depression gets personal for me since my mother was thirteen in 1936, and both parents died suddenly that year leaving eight children orphaned.  The three older boys were off working for WPA or the Army, which left five younger sisters home alone.  The oldest was only eighteen.  The youngest was 10.The girls all quit school to help make ends meet.  Each of them did odd jobs to bring in a dollar or two.  Since they had no money, the only way to heat the house was to search for coal along the railroad tracks.  Their mother left them a garden which provided year-around food.  They made money babysitting or whatever they could find, and when they were around fifteen they were off to find real jobs.  A job in those days paid about $2 per week.   So now, get this picture.  Five teen-aged girls were left home alone, orphaned and although Government programs proliferated and percolated throughout the country including WPA, AAA, CCC, NIRA, there was not one iota of help for those five little girls.  Oddly my mother lived to be nearly 86, and never lost her love or admiration for FDR.  Go figure.  Must have been those fireside chats. 

Who is John Galt?


Envision this scenario…


They had all of the power and yet they had nothing.  (A parasite cannot live on its own.  It needs a host upon which to feed.)  They passed laws, they filed indictments in court, they taxed and they regulated until there was no chance at all for businesses to survive.  Worst of all they raped and looted the carcasses of the fallen businesses.  One by one the producers, the inventors, the investors who built their businesses brick by brick began to fade away and vanish from the face of the earth.  Not one even bothered to sell or give away their businesses.  They simply abandoned them. There was Ken Danagger’s coal mines, Ellis Wyatt’s oil wells, Fransisco D’Anconia’s copper mines, Hank Rearden’s steel mills and Richard Halley, the composer’s music.  All of them, all of the enterprises, the factories, the steel mills, the offices, the rail lines, the mines, were all abandoned allowing nothing but weeds to grow in their place. 


Where had they gone?  It was a place, which among themselves, they called, Atlantis.  It was located somewhere deep in a valley nestled in the mountains of Colorado where no one could ever see it or find it.  It was a hidden place not even visible from the air, with no roads leading to or from it.  It was where they had all gone to wait for the engine to choke and sputter to its deadly end.   This was a place where they had all withdrawn so that they could no longer be used.  It was a place where they could prepare themselves for their eventual return.  Who was John Galt?  He had been a young inventor of the Twentieth Century Motor Company.  He designed a motor which would transform energy.  The invention was never allowed to see the light of day. That’s when Galt disappeared.  He was the first to “drop out”.  Then came Lawrence Hammond of Hammond Cars, Dwight Sanders of Sanders Aircraft, Judge Narragansett of the Superior Court of the State of Illinois and Midas Mulligan.  Atlantis was a place where each of the so-called former titans of industry had certain duties to keep their little village running.  Of course, the source of power was John Galt’s motor.  Some tended to the gardens while others worked the construction crews.   This little place even had automobiles, and numerous inventions available to provide an almost limitless quantity of creature comforts in a little valley with very few inhabitants. 


As each of them left, the outside world, in fact, did collapse.  There was no longer a host upon which the parasites could feed.  At first the angry mobs delighted in looting the abandoned businesses, but then with no trains running, no factories operating, no coal, no oil, no steel, no copper, no cars being built, there was simply no fuel to keep the economic engine running.  Slowly, but surely, the cities began resembling England after the bombings of World War II.  The rest of the story is to be continued in a later issue….or….you can read about it yourself in the book “Atlas Shrugged” by Ayn Rand.

Snapshot of Current Financial Headlines

Corporate profits are surging.  Companies in the S & P 500 have posted quarterly profits 38% higher than in the same quarter a year ago.  The WSJ said that big companies are turning in the outsized profits through personnel cutbacks, closure of less-productive plants, shifting of work to cheaper locales and streamlining their operations.  Shouldn’t they have been doing that anyway?  Companies intend to stay lean and mean until further notice and do not intend to add employees, invest in new product lines or add plant and equipment.  In other words, they will continue to hang on to their cash like they have been doing.  Did you know that the stock market gains in September were the highest since 1939?  (Notice how often you now see references to the 1930s in the media.)  The S & P 500 were up 8.8% for the month of September.  All of this has occurred in the midst of an unemployment rate expected to rise to 9.7% for September and the number of net new jobs is projected to be zero.  What’s going on?  Stocks are surging and corporate profits are setting records, and their sales are not just from exports.  Yet, unemployment is holding stubbornly high while the housing market and the commercial real estate markets appear to be experiencing continued weakness.  Perhaps we’re learning that our large businesses can get along without as many employees.  We’re also finding that they will move their plants to where the costs are lower and the regulations are less onerous.  Some say the actual number of unemployed in the U.S. is upwards to 17%.  With unemployment this high many businesses will be hurt and so will local governments.  It appears to me that those of us in middle America will continue to struggle until further notice. 


Meanwhile, many mid-sized and smaller businesses are unconvinced that the recession ended as of June, 2009.  Many businesses feel they cannot afford to expand plants and equipment or hire more people right now due largely to the uncertainty of health care expenses and taxes.  Many businesses feel that they cannot expand as long as unemployment remains high and consumer sentiment low.  In real estate, this translates into a lower level of leasing activity for offices, retail and industrial properties. 


Commercial Real Estate (Good?) News


Real Capital Analytics is reporting that the total value of distressed commercial real estate is currently at $187 billion, up 12% from a year ago.  They are also reporting that the decline in commercial values seems to be over in most markets.  In fact, they say, values are actually increasing in some markets.  Delinquencies on construction loans experienced their first quarterly drop since mid-2006.  The end of the slump may be near, they say, but let’s see what happens next year when $600 billion in loans come due. 


In another report, Reuters is reporting that commercial real estate prices increased 2.2% in the second quarter, the first gain in two years. is reporting that hotel room rates have increased 2% over the previous quarter, the first time there has been an increase since 2007.  The top five markets are New York, Orlando, Chicago, San Francisco and Las Vegas.  In other news, Abu Dhabi’s room rates have fallen 46% in the past year.   They had what Allen Greenspan used to call, “irrational exuberance”. 


The vacancy rate for U.S. shopping centers rose to 10.9% from 10.0% a year ago.  Office vacancies rose to 17.4% for the same period.  All things considered, there is a little positive news here and there with a fair amount of negative news thrown in for good measure.  The net result is that there is still no solid evidence that we are on an upward trajectory. 

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Posted on Thursday, 16th September 2010 by Robert Domini

Recently there has been much said and written about the New Deal during the Great Depression.  Politicians and political pundits are trying to draw a parallel with 1937, and today.  They’re trying to tell us that the economy took a dive in 1938 because FDR cut back fiscal spending.  That simply is not true.  FDR talked about balancing the budget, but never cut a cent from the budget.  Federal spending tripled during those years, and the national debt doubled.  A total of 72 Republicans were elected to Congress in 1938, and in 1939, they cut programs such as WPA and CCC, but by the time they made those cuts the economy was pushing towards 19% unemployment.  That was after six years of New Deal spending.  So, nice try boys.  FDR did not cut spending during the depression.  The economy went into a tailspin in 1938 because there was a literal war going on between FDR and business.  Taxes were raised to the point, 79% of income, where the very rich business owners simply took their money out of play.    “If you’re going to steal all of my money so you can have more play money and money to stuff the ballot boxes so you can stay in power, I’m out of here”.  That’s about the size of it. 

It’s getting to the point that most of the people who lived through the Depression are gone.  I had the wonderful opportunity a day or two ago to speak to my aunt about life for their family during that period.  My mother was part of a large family with eight children, but during a one-year period 1935 and into 1936, both parentd died suddenly.  I have somewhere the details, but as I recall pneumonia took one of them.  The three boys were older and they were off to WPA and the army leaving five teenaged and adolescent girl home alone to fend for themselves.  The eldest was 18.  My mother was 13 and the youngest was 10.  “Home Alone” is what it was.  I spoke to my Aunt Betty, the youngest, a day or two ago and asked her how they survived.  Her reply was, “I have no idea”.  I remember hearing stories about their picking up coal along the railroad tracks to heat their home.  My aunt told me their food was primarily from a garden their mother had left behind.  They ate the produce during the summer and canned it, I suppose, for the rest of the year.  The eldest kind of acted as the defacto parent to this literal hoard of little girls.  Oh yes, I heard many stories from old Aunt Aggie.  My aunt said that my mother made some money babysitting and when she was 15 she went to work for the May Coal Company just down the street.  When she was 17 she got a job as a receptionist at Toledo Riverside Hospital.  In those days the breadwinner was able to bring home only about $2.00 per week.  In the meantime the FDR Administration was spending billions on WPA, CCC, AAA, NIRA and what have you, a literal alphabet soup of programs to “make work” for people.  Billions of dollars found their way into political campaigns so that the powerful could stay in office.  Federal spending was tripled from 1933 to 1939 while the national debt doubled.  And back in this Hungarian neighborhood in the Industrial Midwest this family of five orphaned little girls were home alone, and they received not one cent from any governmental agency.

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Posted on Wednesday, 25th August 2010 by Robert Domini

Today’s WSJ headlines and even the Toledo Blade are screaming the news of a 27% drop in home sales for the month of July as compared to June.   Why the sudden drop?  For one the $8,000 tax credit has finally expired after being renewed several times.  In fact, the economy is having multiple train wrecks all at the same time as we approach the Congressional mid-term elections.  The Dow Jones has reached the technically significant level of 10,000, and there are all kinds of signs indicating weakness.   Commodities prices are dropping which we would ordinarily cheer, especially oil prices while the price of money (interest rates) are also reaching new lows.  Yet, the lower the Fed pushes rates, the greater the resistence by business and consumers to borrowing.  Large companies are hoarding cash as we all know.  All of these are signs of growing weakness.  It appears the economy is decending into double-dip territory despite the bets placed by nearly all economists the first of the year that this would not happen.  Remember then when they said the economy would have to be able to walk on its own without the life-support of Keynsian Government Spending.  Notice how I capitalized some of those words, that’s a habit I picked up in Econ 101  class.  Well, Stuart, it looks like your well-publicized prognostications are falling through. 

What had Stuart and others neglected to put into their formulas?  Was it the exact nature of the stimulus spending?  Where did that money actually go?  I’m not certain of this fact, but the last I heard the stimulus money was stilll not half spent.  What we do know is that the stimulus money went to the pet projects of influential Congressmen and Senators.  What else has transpired?  Businesses are already writing down profits in anticipation of the Health Care Plan.  Taxes are going up dramatically after the first of the year, and investors and business are gearing up to avoid paying as much of it as possible.  I have not read any of the Financial Regulation bill, but you can rest assured that some of its provisions are onerous to business.  I’ve seen bits and pieces of commentary from the Appraisal Institute which is feeling pretty positive about it. 

All things considered, the economy is in for a battering in the coming months from all of these sources.  So, Humpty Dumpty Sat on the Wall.  Humpty Dumpty Had a Great Fall.  All the Kings Horses and All the Kings Men Couldn’t Put Humpty Together Again.  We had the Bush Hope Now program, the Barney Frank Hope for Homeowners and the Obama HAMP Program.  And still, housing is in a free fall.  After well over  One Trillion Dollars in stimulus spending all we have to show for it is a declining economy, high unemployment and a mounting debt that will rival Greece in the not-too-distant future. 

So where am I going with this you ask?  Good question.  The WSJ Editorial Page today suggested that the forces of supply and demand are finally being left alone for a little while to “do their thing”.  Perhaps there is a wipeout period underway where a real bottom is being made up.  Hopefully, soon we’ll all be able to do a big exhale from that wonderful sense of relief that this Congress can do no more harm than they have already done.  With the elections looming, perhaps they will go to an early recess and stay out of Washington till the first of next year.  There’s always hope. 

If you’ve been reading my earlier blogs you’ll notice that this is my first posting of a simple message.  All of the previous blog postings have been my E-Newsletter which goes out to about 1,000 people who I hope might some day order an appraisal from me.  My internet consulting firm, Kinetica Media, suggested one day that they post my newsletter to a blog and see what the reaction might be.  Today I finally took the time to look at the comments and there were amazingly a lot of them.  A lot of people have been reading my newsletter.  This is not a newsletter, but I will be writing one in the next week or two, so stand by.  Keep your cards and letters coming and the very best to each of you. 


Bob Domini, MAI

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Posted on Friday, 20th August 2010 by Robert Domini

Attention Commercial Real Estate Owners:
Is Your Market Value Lower Than Your Tax Value?

Now is the time to have a checkup to see whether your property value is lagging behind the assessor’s tax value.  Why?  It is because commercial real estate has suffered from the same maladies as the rest of the economy, persistent unemployment and a lackluster level of economic
activity.  In Ohio we have just entered a new triennium, a three-year period with all-new tax values.  If you are able to successfully lower your
tax value this year, you will be able to enjoy that reduction for at least a
couple of more years.   The timing couldn’t be better than now to have
your commercial property value checked. Assessment officials tell me they will do an informal appeal almost anytime.  That would be for the 2010 taxes.  In Lucas County they like to have those wrapped up by October.   A formal tax appeal needs to be filed any time from the first of the year till the end of March.  For 2010 taxes, the formal appeal process begins January 1, 2011.  Your appraised
value needs to be as of January 1, 2010. If you’re going to file a formal appeal, there’s no time like the present to (a) determine that you have a good case and (b) have an appraisal ready to go with a date of value of January 1, 2010.

For the 2009 tax year, some of those Board of Revision hearings are taking place right now.  If
you have filed a notice of appeal and your hearing date is coming up, an appraisal would be a good idea.  After the appraisal is complete, we will attend the Board hearing with you to present
the appraisal, and answer any questions they may have.

Lebron, Why did you leave us?

Lebron James along with his team of MBAs, CPAs and Doctors of Jurisprudence have collectively decided the best place to do business is on the pristine shores of Miami Beach in the shadows of the Fountainbleu, not Ohio.  I believe he was being represented by the legendary firm, Wade & Bosh, LLP.  Why did he leave us?  His 14,000-square-foot mansion happens to be located in Bath, Ohio,with an income tax rate of about 7%, while in Miami it is zero.  According to a WSJ story on Saturday, Ohio has lost almost half of its Fortune 500 companies since 1990, due presumably to higher taxes. We all know that it’s all John Elway’s fault.

Read My Lips, No New Taxes

Beginning on January 1, 2011, your taxes are going up across
the board.  That includes not only income taxes on just about everyone, but it also includes capital gains and the death tax which were set to disappear.

The top tax rate will go to 39.6% from 35%.  The estate tax rate will top out at 55%.  Long-term capital gains go from 15% to 20%.  As everyone knows, raising taxes is a great way to raise tax revenue. Stock dividends will no longer be taxed at the 15% capital gains rate, but as ordinary income.  Charitable contributions will no longer be deductible to certain individuals.    Medicare taxes will rise 62% for some.  There will be a 3.8% surtax for investment income.  Medical Savings Accounts will be limited to $2,500.  For those who are paying more than $10,200 for health insurance, a 40% tax will be levied.  This should be a great benefit to those who have a loved one who badly needs specialized care.

Generally speaking, business people have an aversion to higher taxes, especially when they perceive them to be unfair or onerous.  They sometimes go to extremes to avoid them.  Imagine that.

Did the $787 Billion Stimulus Work?

The $787,000,000,000 stimulus bill was passed into law during February 2009.  The legislation passed through Congress in record time with the idea being that it would be deployed immediately on shovel-ready infrastructure projects for maximum effect.  In January 2009, our economy had already shed 2% of its jobs since the beginning of the recession January 2008.  Most countries in the world were either holding their own or losing jobs at that point.  Chile and Brazil had lost 2-3% of their jobs
as they entered the starting gate.   At this time, after eighteen months, how are the various countries doing with regard to employment?    Chile
is up 7%.  Brazil +5%, Australia +3%, S. Korea +2%,  Taiwan +2%, and Canada +1%.  Germany and Hungary were down big, but are now back to even.  Japan and UK are -2%,  and the U.S.  at  -3% is lagging the rest of the industrialized world.

Stock Market Up Big

The week ended July 9, a holiday week with just four days when most people were still cleaning up the fireworks wrappers from their yards, the market decided to rise 5.3% on the Dow.  Why? Big multinational corporations are taking advantage of global growth.  The foregoing article should illustrate  why.  In many parts of the world a genuine recovery is underway, and in some countries, a vigorous one.    Big-corporation earnings are leading the way with Alcoa and Caterpillar up over 9% for the week.  What does the smart money know that we don’t know?  That’s an interesting question.  Our office is beginning to see a slight increase in transaction volume. In some locales building permits are beginning to lead the way.

It’s always darkest before the dawn.  When you’re down and feeling low, cheer up, things are usually not as bad as they seem. Within a few months, the whole world could change from where it is now.  Taxes and spending could be brought under control.  The smart money will see
this coming from miles away.

Scuttlebutt Off the Web

Surfing the web I came across an interesting article by Dan Weil.  In it he said Sam Zell, who became a billionaire betting on down-and-out real estate, sees a similar scenario developing right now.  He believes that
commercial real estate was never in a gross oversupply situation like some sectors of residential real estate were. The bottom dropped out of the demand side for commercial, and he believes that as we see somewhat of a recovery there will be a shortage of commercial real estate.  Nothing has been
built since July 2007.  What about Florida condos I say?  My prediction is that with Lebron moving to Miami, there will be a big surge in demand for South Beach condos.  There was a ten-year supply of those before the bubble burst. Perhaps the law firm Wade & Bosh, LLP, can earn some commissions on all those condo deals.

Class A Properties On the Move

Oh yes, for investment-grade properties the market is booming.  Class A properties in Boston, New York, Washington, DC, San Fransisco and Southern California are alive and doing well.  The buyers?  It’s REITs, pension funds, insurance companies, and private equity funds.  Below the Class A level, it’s not nearly as busy.

This Update Brought to You by Robert Domini, MBA, MAI

This review is brought to you by Bob Domini.  Please call our office for your appraisal
needs.   We are especially interested in working with you to help determine the value of your assessed real property to make sure it’s not above market.  We also have been working with a wide variety of lending institutions and governmental agencies to provide numerous real estate appraisal, research and analytical services.   Yours truly and our company also enjoy working with private individuals and business entities to provide appraisals for a variety of purposes ranging from litigation, divorces, corporate mergers and dissolutions and eminent domain takings.  Our licensed and certified appraisers are at your disposal.  Give us a call.



Robert D. Domini, MBA, MAI
Certified in OH, MI, FL and PA (pending)

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Posted on Monday, 17th May 2010 by Robert Domini

Hot Greece Boiling

For months now Greece has been in financial turmoil.  Why? It’s because they have so much debt they can no longer make their
payments.  In 2009, they elected a
Socialist government which embarked on a big-time spending program.  I love European governments.  They call their parties liberal,
conservative, socialist, communist, whatever they are.  In the U.S. we are Democrats and Republicans.  Over the weekend the International Monetary Fund and the European Union
agreed to a bail-out package totaling $955 billion.

As a condition to the loan, Greece has agreed to cut
the budget by $40 billion and massively increase taxes.  I think we all know that if
you raise taxes the government will bring in less revenue.  Secondly, for months the markets have taken
none too kindly to Greek debt.  There has
been almost no demand for Greek bonds which has resulted in soaring interest
rates.   When the bond issues fail to sell, the
money to pay interest and principal is not available.  Greece is just plain running out of money.  Fearing loss of jobs, the public-employees
unions have gone on strike.

What effect has this had here in the U.S.?  The Dow lost 225 points on Tuesday, May 4.  The Greek strike went national on Wednesday
causing killing and riots.   We also know that Spain and Portugal are at
the tipping point.   The Euro is dropping
like a rock.  Yet today, Monday, May 10th, the markets were off to the races on the news of the massive bailout.

The Greek public debt is currently 113% of GDP, and expected to climb to
149% of GDP by 2013 when the bailout loans are due and payable.  Government spending amounts to more than 50%
of GDP, and their workers are very unproductive.  This just may be one of those cases where a
country is unable to tax and spend their way out of trouble.  Yet for now, the markets are euphoric that the crisis has been abated, (at least temporarily).

How Does the U.S.

From information publicly available on the web I obtained
our deficit, GDP and National Debt for the U.S. as compared to that of Greece as of about one
month ago.  The results are as follows:

U.S. Greece
Percentage National Debt/GDP 92% 113%
Percentage Deficit/GDP 10.6% 12.5%

As you can see, although we are not in quite as dire straits as Greece, we are approaching
it.  Having said that, our financial
obligations are going to be rising rapidly in the coming years with the health
care plan kicking in 2013-2014 and with the baby boomers just now beginning to
collect Social Security.

Who is John Galt?

There once was a mighty railroad known as the Taggart
Transcontinental.  There was also a steel
company known as Rearden Metal, an oil company called Wyatt Oil,  and the d’Anconia Copper Mines.  All of these were under relentless attack by
the inefficient producers who were politically connected.  Those who created the highest quality
economic goods became the victims of those who were incompetent.  The government slowly took control of the
economy and finally most of the businesses. They even put the great Richard Halley, the composer, out of
business.  One day all the producers, the
inventors, creators and builders of the best products were criticized, taxed
and regulated out of business.  One day
they all just vanished.  Without them
there was no one to pump the oil, no one to make the steel, no one to run the
trains, and no one to mine the copper. Without them being a convenient scapegoat to criticize, regulate, tax
and otherwise, loot, the engine of the economy slowly came to a halt.  The trains stopped running, the steel mills
quit producing, the oil wells stopped pumping. Where had they all gone?  To be
with John Galt, their leader, of course. He was the inventor of a revolutionary new motor which was never
accepted by the government regulators.  He was the first to disappear.  The rest of the story is yet to be told . . .

Who is John Maynard

In truth Keynes was a unique man.  He wrote a book on mathematical probability,
and he also made a fortune in international currencies and commodities.  He was a Cambridge economist, the chairman of
a life insurance company, a collector of modern art and a noted collector of
Newton’s writings.  He ran a theater, and
he became a Director of the Bank of England. He knew Roosevelt, Churchill, George Bernard Shaw and Picasso.  He was born in 1883, and his first real job
was as a government servant in India.  He
stayed on the job for two years and went back to Cambridge where he wrote a
book on Indian currency and finance. Soon he was appointed to the Royal Commission on Indian Currency.    Shortly thereafter he became editor of the Economic Journal, where he stayed for 33
years.  After WWI he held an assistant
Secretary of the Treasury position in France. In 1923 he wrote a Tract on
Monetary Reform  and in 1930 he wrote
a Treatise on Money which dealt with
boom and bust in the economy.  He
believed that prosperity was not a measure of physical assets or past glories,
but of present accomplishments.  He
talked endlessly about saving  and
investment as the cycle of money that produces prosperity.  He noted that in 1929 Americans saved $3.7
billion, but in 1932-33 they saved nothing. He believed that saving was a luxury for the good times.  He also believed that the economy hung on the
amount of investment business made.  The
economy was sometimes helpless to fix itself, so the government had to step in,
he thought.

Then as Roosevelt embarked on his “First Hundred Days of the
New Deal” Keynes began to admire and relate to what was happening.  He saw a flood of social programs to “help”
people.   But more importantly he saw the
government making investments to get
consumption going again.  He never
stopped thinking about the pendulum swinging from saving to investment.  He died in 1946, at the age of 63, and will forever be remembered as the father of government spending.

Herbert Hoover as
compared to George W. Bush

Herbert Hoover and George W. Bush presided over the two
most severe economic collapses in the history of our nation.  One was in the 1920s and the other was in the
2000s, 80 years later.  The 1920s were
years of great prosperity.  In 1921,
there were 21 millionaires and in 1927 there were 15,000.  The stock market was surging.  Real GNP grew at a rate of 4.2% for the
decade, but by the summer of 1929 the party was over.  Unemployment started the decade at
5.2% then increased to 8.7%.  It finished the decade in
1929 at 4.6%.

What caused the demise of Hoover and the U.S. economy?  First, the United States was carrying a
massive debt following World War I when debt increased from $1.3 billion to $24
billion in three years.  In 1929, the
Smoot-Hawley Tariff act was passed which was a major tariff on imported
goods.  Much of our national debt was
taken on so that loans could be made to foreign governments for the war.  With the passage of Smoot-Hawley not only did
we lose most of our trade, but we also lost any hope of collecting on the
loans.  Smoot-Hawley was passed by
Congress, but signed by Hoover.  He could
have vetoed it, but he chose not to.  The
act killed the auto industry and caused the stock crash.  A bank panic ensued and the rest is

During the decade of the 2000s, real GDP grew at a steady
rate after a slow start in 2001 because of 9/11.  Other than a spike in the third quarter of
2003, growth was steady in the 3% to 4% range. Unemployment was also relatively low and inflation was under control
during seven of George Bush’s eight years. What caused the demise of George W. Bush and the U.S. economy?  It was the subprime loans and the packaging
of those loans into MBS, (mortgage backed securities).  Mortgage loans were being made to people without
verification of their income or assets. The loans were an accident waiting to happen, so when oil prices went up
and inflation spiked forcing rates up, the bubble burst.  Was this G.W. Bush’s fault?  He was at the helm.  It happened under his watch.  Fannie and Freddie were the leaders in making
those bad loans and packaging those rotten securities.  Soon, Merrill Lynch, Lehman Brothers, Bear
Stearns and others followed suit.  George
Bush is a Harvard MBA, and he should have seen this coming and put a stop to it
before it ruined his Presidency and the world economy.  He should have used the bully pulpit to stop it.

Roosevelt’s Beliefs

Roosevelt felt strongly that the era of the 1920s was
beneficial to the rich and not the average citizen.  This was contrary to the facts.  He felt that capitalism was failing and that
government needed to step in to appoint experts to manage the economy, to
promote spending and to redistribute
wealth.   He felt that the government
had to step in to fix the damage that business had done.  During the 1932 campaign, he promised to cut
government size by 25% and to balance the budget.  As it turns out Roosevelt was not a budget
balancer, he was a government reorganizer according to a book by Folsom.  For example, with his NIRA program four or
five companies from each industry were chosen to set prices and wages for their
entire industry.  In Ohio a small tire
producer almost went out of business because they relied on their business
acumen to produce a better product for a lower price.  Henry Ford was a notable exception.  He refused to cooperate and in the end he and
Ford were survivors, just like they are today.

In Support of Tom

I count myself as a long-time friend of Tom Cousino, just as
half of Toledo likely does.  We first met as
freshmen at Central Catholic High School. I cannot imagine how a person who has been a pillar of the Toledo
community all his life could possibly be treated like a criminal.  When The Docks were just an idea for Don
Monroe and Carty Finkbeiner, who was first to step up and invest his
hard-earned capital?  Tom Cousino.  I can
remember visiting his father’s restaurant at the foot of the Fassett Street
Bridge on Miami Street.  I can remember
when Tom was a young man he and Paul Krasula worked day and night to make the
Steakhouse what it was to become, an East Toledo icon.  And now after all that, he’s unceremoniously
indicted and portrayed as a criminal because he is in arrears with his taxes!  Do you have any idea how many people are having difficulty paying their taxes?  Why aren’t they all on the news?

I propose that we make the first weekend in June Tom Cousino Weekend.  I want everyone who counts
himself as a FOT to visit one of Tom’s restaurants and pay cash.  This will be a vote against dumping on a
friend who is being unfairly maligned.

About the Author

This update is brought to you by Robert Domini, MAI, real
estate appraiser and market analyst. Remember that we are a full-service real estate appraisal and market
analysis company.  We serve local banks, law firms, accounting firms and the general public in various capacities.  We also serve governmental
agencies.  For the last ten years
Continental Valuations has worked throughout the State of Ohio on right-of-way
projects, as well as throughout the northeastern United States and Florida.  Remember, “IT’S NOT TOO EARLY TO START
LOOKING INTO A TAX APPEAL APPRAISAL”.  I will provide a free consultation to
discuss your options.  Give me a call.


Robert D. Domini, MBA, MAI
Continental Valuations, Inc.

Certified in Ohio, Michigan and Florida

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Posted on Wednesday, 31st March 2010 by Robert Domini

What Are The Economists Telling Us?

This is where emotions come face to face with reality.  The economists actually count the tea leaves.  The rest of us know what we feel from 10% unemployment, from a sagging residential real estate market and a collapse in many sectors of commercial real estate.  Stuart Hoffman, PNC Chief Economist told us towards the end of last year that we would see a U-shaped recovery.  According to Stuart, things are going just fine, thank you.  He cites six straight months of personal income growth.  Personal consumption has increased for five straight months.  According to the Case-Shiller Index, house prices have been rising now for seven straight months.  Even more exciting is our rising household wealth during the past year.  Add to that an expanding manufacturing index, and he suggests that hiring can’t be too far behind.  Lastly, don’t forget that GDP grew by 2.2% for Q3, 2009, and by 5.9% for Q4, 2009.  Since Stuart’s report went to press we have new data showing a down-tick in February for home prices and the number sold.  According to the Wall Street Journal, 3/24/10, inventories of existing homes increased 9.5% at the end of February to 3.59 million available for sale or an 8.6-month supply.

Stuart cites Florida as being a market that is particularly hard hit.  Just recently I was down in The Villages doing some appraisal work in the hospitality industry.  There I found median home prices falling from $185,000 in 2006 to $135,000 today which isn’t as much decline as we’ve seen in other markets.  The volume of sales which was averaging around 300 houses per quarter in 2005-2006, is now down to around 125 houses per quarter.  The man-made retirement community had 35,000 homes in it as of December 2008, with 70,000 residents.  As home sales rapidly decline in number, the retirement-age population is no longer replenishing itself.  According to the STR Report, average annual hotel/motel occupancies in this market are at 44% with RevPAR (revenue per available room) a dismal $36.44.  And yet, PKF Hospitality Research just announced that U.S. hotels “should” enjoy double-digit growth by 2012.  The trouble is, what do we do in the meantime?

Guess where the economy is booming right now?  You’re right, it’s Washington, DC.  Unemployment there is 6% with rapid job growth during the second half of 2009, with the Obama Adminstration ramping up.

Jack Van Berkel, President, Real Estate Services, Grubb & Ellis, reported to no one’s surprise that occupier demand plunged in all categories of commercial real estate last year.  He  compared the current downturn with the deep cycle of the early 1990s. With unemployment holding stubbornly high, the commercial real estate market is suffering.  Banks are not selling their REO properties as would be expected.  They’re hanging on for better times.  Those in the market for debt instruments are finding bargains in the CMBS (commercial mortgage backed securities) market.

Why Doesn’t This Feel Like a Recovery?

It’s the unemployment, the overhanging debt and the racking up of deficits by the government.  The national debt is at $12.6 trillion.  I know, it’s just a number.  Debt now represents 7% of total tax receipts, and it’s expected to go to 11% in the next few years.  There is talk about Moody’s lowering the US Bond Rating from Aaa.  Get this, Moody’s is pleased that we only budgeted to spend $3.8 trillion this coming year.  Most of the economists and the stock market for that matter do not seem to be bothered by the rising debt levels.


A week ago, the Health Care Bill passed.  I figured there would be an emotional upheaval in the country, and I’ve been worried about the mounting debt now for some time.  Well, I don’t think this is Armageddon as yet, but it isn’t looking pretty.  On Wednesday, March 24, 2010, the news of two weak bond sales had not caused widespread public alarm.  Bond investors had avoided two major Treasury Department auctions, and there was one more to go on Thursday, March 25, 2010.  The total bond issues for the week were $118 Billion.  Investors failed to absorb 5-year Treasury Notes, pushing rates on the 5-year note to 2.59% from 2.42%.  The rate on the 10-year Treasury Note also rose from 3.69% to 3.90%.  The Thursday auction was for $32 billion in 7-year notes, which also received a lukewarm response.  In order for the U.S. to borrow $1.5 trillion a year, the amount required is around $29 billion per week.  At the very least we’re seeing the 10-year rate go up which is also pushing mortgage rates up.

Health Care Bill

With the passage of the Health Care Bill, we will be immediately faced with tax increases.  The actual health care benefits will not begin till some time in 2013 or 2014.  Speaking of the Health Care Bill, and I don’t claim to know much about what’s in it, but I have a pretty good idea that the “fixes” thrown in by both Houses of Congress added to the price tag.  Let’s get this straight, you’re paying through the “yingyang”  for your insurance because you have a serious health problem and really need the coverage, so the government will now charge a 40% penalty for your “Cadillac” plan.  Now that’s pain you can believe in.

Korpacz Real Estate Investor Survey Sees A Bottom in the Market

Overall Rates or Cap Rates as most people call them reached a low point in mid-2007 with an overall average of 6.87%.  After two years of recession and turbulence the rates appear to have topped out at 8.49%.  This quarter, Korpacz reports, the average rate has actually declined slightly to 8.42%.  Please be reminded that these are aggregate rates for all property types, and those involved in the Korpacz survey are institutional investors.  Some properties in NW Ohio are in this class, but many are not, and so Cap Rates will be higher for most properties here.  Although there has been stress and duress, it has not reached epic proportions as did the sub-prime crisis.  Delinquent CMBSs (commercial mortgage-backed securities) have risen from $20 billion in October 2008 to $65 billion in November 2009.  Those are the securities which were used to buy commercial real estate mortgages.  Default rates for commercial real estate nationwide have risen from 1.6% in 2008 to 3.8% in 2009.  Still, Korpacz feels that the fallout has not been nearly as bad as predicted.  A recovery appears to be underway.

LoopNet Sees Commercial Real Estate Prices Increase

LoopNet is reportiong that Moody’s/Real Commercial property Price Index has risen for the third straight month.  In fact prices according to that index rose 4.1% in December.  They remind us to fasten our seatbelts because the ride will be bumpy.  Overall, prices are down 38.7% from January 2008 and 40.2% from October 2007.

Manhattan Luxury Condo Sells for $33.2 Million

Think the recession is over?  For some people it is.  Someone paid $6,000 a square foot for a 5,500-square-foot condo with 20′ ceilings, overlooking Central Park.  The property was in receivership, but was owned by an Italian film producer who paid $10.4 million for it in 1997.  Donald Trump paid $5 million for it in 1997 and sold it to the Italian guy.

First Solar Hitting a Speed Bump?

A Wall Street Journal story in March 22, 2010 issue started with the sentence that the company’s reign as the sun king could be coming to an end. Harold McMaster started the company right here in Perrysburg, but then sold it to a Tempe, Arizona firm.  Their only U.S. plant is right here in Perrysburg, Cedar Business Park.  According to the story, First Solar has relied upon the German government subsidized market for at least 65% of their sales.  With Germany on an austerity program, First Solar sales have declined.  The stock is now down more than 40% in the last two years.  Shifting sales from Germany to the U.S. could mean lower prices.  Solar electricity sells for around $.15 per KWH here in the U.S. while in Germany it sells for $.35 per KWH.

Since some of our good friends are in the solar energy business, I thought it would be a good idea to dig a little deeper.  A white paper was written by he Enterprise Florida and GTM Research by Shayle Kann entitled, “Emerging Trends in the U.S. Solar Market”.  I’m just going to quote directly from the introduction.  “The U.S. is rapidly emerging as one of the world’s leading markets for solar power.  Installed costs for PV systems have fallen on average 3.6%/year for the past decade, making solar more affordable by the day.  Simultaneously, electricity prices have been rising and acknowledgment of the external costs of fossil fuel-based generation have been growing.  As a result, the U.S. PV market has grown at an average rate of 71% per annum since 2000, significantly outpacing global PV demand growth of 51% per annum.”

Feed-in tariffs (FIT) are fixed-rate contracts by countries and communities for solar electricity.  Germany and Spain have the highest which has encouraged their PV (photovoltaic system) market to grow from 44 MW in 2000 to 1260 MW in 2007.  In the U.S. the first to offer a FIT was Gainsville, FL, which offers a 20-year fixed rate contract as high as $.32/KWH.  Their capacity is 4 MW per year, and this is completely sold out till 2014.  The FIT starts at $.32 in 2009, and decreases to $.23 in 2016.  Seven states have FITs.  California is the largest, supporting 750 MW.  Their rate is also the lowest ranging from $.08-$.19/KWH.  Meanwhile, Texas, Vermont and Wisconsin have rates in the $.25-$.30 range.

Without getting too heavily into the details, the solar power market is said to be heavily handicapped by the global recession.  Project financing is a real problem.  So, although the long-term trends are extremely positive, the short-term does have some bumps in it.

To Get Away From it all, Try Chile

Did you wonder why the death and destruction toll in Chile was so minor as compared to Haiti when Chile’s earthquake was about ten times as strong.  The airport and many stores were open for business on Monday after the weekend quake.  Unlike Greece, Portugal and the good old USA.  Chile’s GDP has grown by 8% throughout the 90s and averaged 5-7% during the 2000s.  Up through 2006, Chile was reaping big profits from copper.  Rather than squandering the windfall on big-time spending initiatives, President Michelle Bachelet salted away the money for a rainy day.  When recession hit in 2008, money was available for a big stimulus plan.  They paid cash for their stimulus, what a novel idea.

Chile is a really free market with spending discipline which has resulted in outsized economic success.  Sounds like a winner to me.

Ohio Jobs Ready Site

Just so you don’t forget, there is a site on the south side of U.S. 20, and on the west side of Pemberville Road in Troy Township, Wood County, at a brand new interchange linking this site to I-280 and the Ohio Turnpike which has rail, First Energy/Troy Energy electricity, Columbia Gas/Dominion Gas natural gas, water and sewer proposed for installation in 2010 at the JRS site by Northwest Water & Sewer District.  People talk about what a great location we have here in Northwest Ohio being on the Great Lakes, being a major rail center, having an excellent freight airport and being at the confluence of I-75 and I-80/90.  This is THE site.  Joe Rutherford and Bob Mack of Signature Associates have a listing of a smaller parcel just adjacent to the JRS, so if you know someone who is interested in up to 2,000 acres, I’m sure they could help you.  So could Brian McMahon of Danberry National who also works that territory.

This Update is Brought to You By Robert Domini, MAI

Thanks for taking the time to read my newsletter.  We appreciate your business, and we are grateful that our business has held up pretty well in this difficult market.   Continental Valuations routinely performs appraisals for the lending industry, corporations, governmental agencies and private individuals.  This past year we have had the honor to have worked on some very major industrial appraisals.  There has been a fair amount of activity in the hospitality industry, and one of those was a trophy property in one of Ohio’s larger cities.

Again, Continental continues to work with various governmental agencies on highway projects.  My associate, Pamela Casper, specializes in review appraisals throughout the state.  I am certified in Ohio, Michigan and Florida, but have done appraisals in several other states on a temporary license.  This year we have worked in New York, Pennsylvania, Indiana, Illinois, West Virginia and Florida.  Please give us a call next time you have a need for appraisal services.  Continental is in the real estate research and reporting business.

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Posted on Friday, 20th November 2009 by Robert Domini

Toledo Blade Sees Tough Sledding Ahead


Front Page, The Blade, November 7, 2009, reported that the
national unemployment rate of 10.2% has not been as high since 1983.  (The truth is that in 1983, unemployment
started the year at 10.4% and ended it at 8.3%. 
The Fed Chief was Paul Volcker who had the job of tamping down
out-of-control inflation.  He raised
rates almost non stop from the day Reagan was inaugurated in January
1981.)  Meanwhile, The Blade story
reported 190,000 being “thrown” out of work this October, with a total of 15.7
million workers out of work and 5 million putting in fewer hours.  The President reportedly extended
unemployment and the home-owner tax credits. 
It says that few economists thought either measure would do much
good.  They point out that the job losses
are from employers who are cutting expenses. 
The Blade seems to agree with economists who believe that unemployment
will go to at least 11% and stay there all next year.  That can’t be good for the elections in
2010.  Robert Reich, Clinton’s Labor
Secretary, chimed in that double-digit unemployment will force the President to
“do more to stimulate” jobs.  The Blade
said that without “government action” we’ll probably continue to lose jobs as
evidenced by the drop in consumer confidence in October.  They said that “shoppers’ sentiments were the
lowest they’ve been in three decades”. 
The final thought was that the “recovery balloon” is off the ground, but
might not be able to keep rising. 


Stuart Hoffman, PNC Chief Economist Sees Recovery Soon


Of course, by now we all know that the economy turned in a
3.5% growth rate for the third quarter of 2009, which
has been reduced to 2.6%. The PNC economist is predicting a “U”-shaped recovery, but a “W” is
possible.  The “W” is a double dip where
the economy turns in growth for a quarter then relapses before recovering again
later.  Hoffman said that we are
recovering because of the economic stimulus from both the Fed and the
Congress.  What must be done is to
successfully “hand off” the government-induced recovery to the private
sector.  We will see a business recovery
early next year, but unemployment will continue, however, we will see job
growth towards the end of the first quarter, 2010.


The September 2009, survey of small business was very
cautious with regard to jobs.  
Meanwhile, the Fed has lowered rates to zero.  He and most every other economist are predicting
that, “we will get inflation and massive deficits”.  Hoffman feels Ben Bernanke is an expert at
managing an economy.  He has high
confidence in him.  Interest rates are
expected to go up in the second half of 2010.  Business is the heart and soul of the economy.  Stuart is hedging a little bit in that his
predictions can come unglued if oil prices surge, there is a lack of lending or
a lack of job growth.  In some of his
final remarks he complimented John Maynard Keynes for his economic ideas.  He also commented on psychology and its
affect on the economy. 


In the question and answer phase, Mr. Hoffman addressed a
variety of issues.  Here is a compilation
of his answers and comments.

  • The dollar will come down gradually, and this is
    not a concern.

  • Housing values will be down 5% more in the
    Spring of 2010.  They will then be at
    2001 levels and will stay flat for five years before beginning to recover.  (Let’s see, the leading edge of the baby
    boomers will be 68 when real estate begins to recover.)
  • Cap and Trade won’t pass.  It would be a big mistake if it did because
    it would be negative for the entire country.
  • An increasing national debt will cause (a) the
    government to raise taxes and (b) inflation.
  • The health care plan won’t work in reducing
    health-care costs.  (He didn’t opine
    whether it would pass or not.)  As of the
    writing of this letter, it has passed the House.

Stuart Hoffman feels strongly that we are on the leading
edge of a major economic recovery. 


Ted Anglyn, MAI, CCIM Also Sees Recovery


I had the pleasure of an eight-hour seminar with a  brilliant and highly experienced financial
analyst, appraiser, speaker and educator in Cancun, Mexico on November 11,
2009.  Ted Anglyn has worked for New York
Life, and has been called upon by the Obama Administration to advise the
government in the current financial crisis. 


The seminar opened with the five most dangerous words in
real estate, “This time it is different.” 
The current crisis began in February 2007 when there was a peak of
debt chasing deals.  CMBSs (commercial
mortgage backed securities) were the primary vehicle.  CMBS are the securities which were sold to
fund major commercial real estate deals. 
They were selling like hot cakes here in the U.S. and throughout the
world.  Today there are no sales of
CMBSs.  Today there is a lack of equity
investment and debt financing.  He
believes that commercial real estate values are down 45% in the last twelve
months.  Life insurance companies are
doing ok since they apparently didn’t get into the highly leveraged deals like
most everyone else.  97% debt and 3%
equity was chasing deals.  Loans were non
recourse with interest only.  Cap rates
were based on no amortization.  6% cap
rates were the rule, and lower.  Now
there is no money for the Class B and C properties.  There have been 120 bank failures this
year.  There were 25 in 2008 and 3 in
2007.  As of June 2009, there were
150,000 hotel rooms under construction in the U.S.  Those deals were made in 2007.  It takes five years to put a full-service hotel
deal together from date of beginning to opening.  It only takes around two years to put a
limited-service hotel deal together.

There will be $1.5 trillion of commercial real estate loans
coming due in the next three years.  The
policy for now is “pray and delay”. 
There is $700 billion of CMBS money out there right now funding
commercial real estate.  Remember, the
commercial real estate purchased with the CMBS and the securitized debt has
declined in value 45% the last twelve months. 
The reason is that these properties were valued with cap rates assuming
interest-only while today only amortized debt is available.  This alone would bring a cap rate from 6% to

There were 300,000 foreclosures in the last six months while
retail sales have declined only 1% this year. 
This year, 45% of all real estate sales have been first-time home
buyers.  25% of all loans are FHA this


The U.S. is overbuilt. 
We have 23 square feet of shopping center space per person and 46 square
feet of retail space while in Mexico they have only 5 square feet of retail
space per person.  Debt is still
available for Class A properties. 


Borders will close 200 stores in January.  In January 2006, 2.1 million houses were
built, and as of May 2009, the figure was 532,000 and in September it rose
slightly to 600,000.  We need 1.1 million
to replace inventory, plus 200,000 second homes.  So, we just might see a housing recovery sooner
rather than later because the inventory is falling below that level which is
demanded as the population increases and older homes are taken out of


Take a deep breath. 
We’ve only just begun.  Ted told
me he believes that employment will turn the corner in March 2010.  He also told me that he believes that the
economy is on track to recover with its emergence from recession as of this
past quarter. 


An Eminent Domain / Right-of-Way Appraising Success Story


Earlier this year I accepted an appraisal assignment for a
property owner who had a strip of his 50-acre property taken to make way for a
new interstate interchange.  The taking
along his frontage was not just a strip of land, however, it was all of his
access.  After the take, the only access
to the property was an access easement through the adjacent neighbor’s property.  My client was elderly and accepted the
acquiring agency offer without question. 
Only very minimal damages were paid in return for taking virtually all
of his access rights.  To make matters
worse, the county property taxes were increased dramatically because in their
view he now was the proud owner of “interchange land”.  How was a person on fixed income going to pay
for such a massive tax increase?  My
appraised value took into consideration the subject’s commercial zoning, public
utilities, but with no commercial access. 
My client could possibly have sold to his neighbor to the north who has
a big commercial business operation, but it isn’t likely.  The final appraised value was based on
agricultural sales and property sales with commercial zoning without good
access or public utilities.


The good news was twofold. 
First, the county auditor immediately reduced the property taxes to the
level of my appraisal.  The second was
that the property owner submitted my appraisal to the acquiring agency which
has now agreed in writing to grant full commercial access to my client’s
property.  There will no longer be a
fence along the entire length of its frontage. 
He can now sell his land to a commercial user for commercial
prices.  How’s that for a happy ending?

Thieken Access Case


A landmark access case a couple of years ago established
that an eminent domain, right-of-way taking of access is not compensable if the
property owner still has direct access to a public roadway.  The law says that damages can only be awarded
if there is substantial or unreasonable interference with a property right of
access.  If a property has 100% access on
a major highway before the taking, but has right-in, right-out access after the
take, no compensation is available for damages. 
In this case the State installed curbing which restricted the access to
a 42′ curb cut resulting in a 30′ driveway. 
Once again, no damages if the state provides “adequate” access.  In this case there were two wide driveways
into the property from two streets, before, but only one after.  Still, the court said, “no damages”.  The same holds true if the access is changed
to a side street from a commercial highway. 
In the Thieken case the property owner was only able to win damages on
the basis that the taking caused damages to the remainder site as a result of
impaired maneuverability within the improved site.  This is called circuity of travel within a
.  On the other hand, if a taking
causes the main body of traffic from a highway to take a circuitous route to
get to the property which had formerly had direct highway access, the property
owner is not entitled to damages for a change of access.   


The Auto Bailout, Is it Working?


First, lets take a little history lesson.  GM was founded by William Crapo Durant in
1908.  Certainly, he wasn’t going to call
his company Crapo Motors, so while most other auto companies are named after
their founder, GM became GM.  In 1931,
Alfred P. Sloan took the helm and built GM into the giant it was to become with
its numerous nameplates.  The concept
worked well until at least the 1960s when GM began to unravel. 


In February of this year a man named Steven Rattner was put
in charge of the Auto Task Force.  It was
essentially a group headed by Rattner, Tim Geithner and Larry Summers.  Rattner’s first reaction on beginning his
task was just how bad things had gotten at GM and Chrysler.  Chrysler had almost no new-car pipeline.  Both companies were facing liquidation, and
so the team began to consider the possibilities given a complete liquidation of
the auto giants.  The consequences were
too great to even consider.  The Bush
Administration kept both companies alive in December with $17.4 billion in TARP
money.  To make a long story short, the
task force fired Rick Wagoner, and although the specter of the government
firing an auto executive was upsetting to most of us, Wagoner did have to go,
that’s for sure.  The team fully
understood that the problems were a result of oil prices, the financial crisis,
the dollar value and the UAW.  The
Wagoner administration burned through $21 billion in 2008 and another $13
billion the first quarter of 2009. 

Meanwhile, Chrysler appeared to be a lost cause.  The only ray of hope was the interest of Fiat
and its feisty president, Sergio Marchionne. 
Again, fast forwarding, each of the companies spent a brief month or two
in bankruptcy.  The Chrysler deal was
almost sealed to avoid bankruptcy, but a few bond holders wouldn’t agree.  In negotiations the bond holders were offered
$2.25 billion, but after bankruptcy, they received $2 billion.  The UAW was able to recover about 50% on the
overall deal with the reasoning that the company could not do without workers,
suppliers and customers.  GM’s debt and
related liabilities were reduced from $120 billion to $55 billion, and $8
billion a year of operating expenses were eliminated.  In the final analysis, the U.S. had to put up
$50 billion for GM and $12 billion for Chrysler. 


Now, GM no longer has Pontiac and a couple of thousand
dealers.  Chrysler has a new operating
company, Fiat.  Fast forward to November
10, 2009, with Ed Whitacre saying that GM would pay the U.S. back in full, that
is, $6.7 billion in cash.  The other $50
billion was taken in stock.  The U.S. is
hoping to some day sell the stock to recover the money.  The jury is still out on Chrysler, but in
Toledo we recently received news that Jeep will play a major role in the new
Chrysler.  The Jeep will be made more
reliable and more energy efficient.  The
brand still has enormous worldwide appeal, and the Toledo plant is still state
of the art in the world of auto manufacturing.

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Posted on Thursday, 15th October 2009 by admin

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