Bottom Line: This is Not the Bottom of the Financial Crisis

Trust in general is a very serious matter. Maybe even paramount. It tends to be very strong once established; but once broken, it is extraordinarily difficult to regain. Trust and loyalty are naturally connected concepts as well, where loyalty is driven by trust. If there is no trust, there is also no loyalty, dedication, work ethic, enthusiasm or even a distant interest aimed at the parties in question. Whether people trust financial figures, their personal instincts or historical evidence - it can be said that the world's co-operative efforts of any form run primarily on trust.

The current financial crisis requires such an effort to gradually avert it from progressing. Perhaps one of the downsides of a strongly capitalist regime, is that in this type of situation - everyone tries to distance themselves from the crisis in an attempt to ensure their own safety. Many people would also seek ways to profit from it. Truthfully, neither of those points are "wrong" but, they certainly represent incomplete trains of thought.

It comes down to short term and long term initiatives. In the short term, doing the above is good. In the long term, it guarantees no stability whatsoever unless the direction of the economy over the next few years comes to warrant it. Ensuring that, is the job of all government and business leaders who have a stake in the current economy. And what will bridge all of these efforts together, is their visibility. As more corporations and government sections start to make clear efforts in their own ways to show leadership for financial stability and independence in the long term - more and more people will be willing to join them in their respective missions.

In the end, trust will be created as a result of these initiatives. There are factors that can easily diminish the effectiveness of this type of plan, such as the continuation of the war, among others. And while I agree that "this is not the bottom", I do have an optimistic outlook on what amazing opportunities and benefits can arise from the prospective economic rejuvenation that will follow this period.

After the new President is chosen, and the banks have had sufficient time to re-organize, and people learn how to read mortgage contracts before signing them, and credit cards are not used as if they are monopoly money we have a good chance of recovering from this dramatic display of haywire behavior. Spending money is always alot more fun than figuring out how we are going to pay for it.
The same people who are complaining now, didn't mind reaping the benefits when the economy allowed for speculative spending. How long is the government expected to play Santa Claus?
We are intelligent people. We are capable of solving difficult problems. Looking at what's wrong will lead to solutions for fixing something that is broken, not destroyed.
Cheer up! Before long this will be forgotten, and the media will have something new to talk about.
Life goes on... you'll see.

As a friend of mine says, we’re back to the times that we have to believe in our capacity to go on, we have to change our mentality in our way to do business, were I live in Spain, I am leading a group of companies and our meaning is to take a good benefit out of this crisis, is it possible to do that?, sure, first of all we must have illusion, create illusion and transmit that what we want to do is possible, have an attractive project that we can negotiate with our government , and be sure that in moments of crisis is when big projects take place. In the Spanish crisis of the 90’s, I have done the same as I am doing now and on that time I have started a tremendous leisure project that launched the economy of our area with an investment of 600 million Eur, meanwhile the rest of the country was stopped, it was a great success, so I think that I have some experience in what to go out and successfully in what a crisis concerns, so now we are planning a big development in our city (witch is on of the most visited cities in Europe, and still in this moment), a big development witch includes a great leisure area including casinos as a part of leisure. This project witch is in a very primary phase, is starting to generate a lot of illusion in the business community, witch starting to believe in it, a project that will attract investors, that in this moment are running away of the stock market witch is the most insecure place to have money. In our area, construction and leisure has been our main business since we have started round the 50s, and our non stop grow has been very successfully since our days.

We will find the bottom line by ourselves as soon as we decide to go on in one way or another and don’t keep waiting to see what is going to happen, if every body is waiting that some one move first than nothing moves, this I have learn years ago, I will recommend you and your friend of Colony Capital to have a trip to Spain and visit us at the Mediterranean coast to see what we are planning and perhaps we can transmit you part of our illusion and see that is possible to go on and that there are a good business to do specially in this moments, because the sensibility of our governments and the need to support special projects is tremendous, so what we will became now, will be impossible in normal times. If we believe in our capacity, and we are capable to use our experience to go on, we don’t’ need to keep sitting waiting for the bottom line. May be others will do.

As a friend of mine says, we’re back to the times that we have to believe in our capacity to go on, we have to change our mentality in our way to do business, were I live in Spain, I am leading a group of companies and our meaning is to take a good benefit out of this crisis, is it possible to do that?, sure, first of all we must have illusion, create illusion and transmit that what we want to do is possible, have an attractive project that we can negotiate with our government , and be sure that in moments of crisis is when big projects take place. In the Spanish crisis of the 90’s, I have done the same as I am doing now and on that time I have started a tremendous leisure project that launched the economy of our area with an investment of 600 million Eur, meanwhile the rest of the country was stopped, it was a great success, so I think that I have some experience in what to go out and successfully in what a crisis concerns, so now we are planning a big development in our city (witch is on of the most visited cities in Europe, and still in this moment), a big development witch includes a great leisure area including casinos as a part of leisure. This project witch is in a very primary phase, is starting to generate a lot of illusion in the business community, witch starting to believe in it, a project that will attract investors, that in this moment are running away of the stock market witch is the most insecure place to have money. In our area, construction and leisure has been our main business since we have started round the 50s, and our non stop grow has been very successfully since our days.

We will find the bottom line by ourselves as soon as we decide to go on in one way or another and don’t keep waiting to see what is going to happen, if every body is waiting that some one move first than nothing moves, this I have learn years ago, I will recommend you and your friend of Colony Capital to have a trip to Spain and visit us at the Mediterranean coast to see what we are planning and perhaps we can transmit you part of our illusion and see that is possible to go on and that there are a good business to do specially in this moments, because the sensibility of our governments and the need to support special projects is tremendous, so what we will became now, will be impossible in normal times. If we believe in our capacity, and we are capable to use our experience to go on, we don’t’ need to keep sitting waiting for the bottom line. May be others will do.

Thanks for your very informative blogs, Mr. Trump.
With regard to your previous post about there being tankers around the world brimming with oil, I think people should wake up and take heed of this information.
I can see why you are such an admirer of JFK's presidency, because, like him, you have a critical mind and are unafraid to ask probing questions... a rare trait in this age of apathy.
I think you would make a terrific president if you ever chose to run.
With every good wish to you and yours.
Eric Smith
Victoria, BC, Canada
commentaryman@hotmail.com

This is a reality check from the middle class to the middle class. Everyone thinks that the only ones hurting in this crisis are the people that overextended their credit limits. We blame and fairly enough the upper managment of Fannie Mae and Freddie Mac not to mention the corruption in our Government.
There are some of us out there who pay their mortgage on time and pay their bills and have never asked anything from our Government ,only paid into it. This crisis has legs that no one has yet to see. We had a job transfer last March which was the beginning of a long hard road. My husbands job took us from GA to NC. The kids and I stayed back for 3 months, but eventually you have to have your family in one place. We are now stuck in a market that is not moving and paying a mortgage on a home we are not living in. We are also renting a small home in NC. Now, the bigger picture Two homes, Two power bills, gas prices through the roof and groceries that are unafordable and keep going up.
We have bought and sold three homes in the past 15 years and never had a problem selling. For a middle class family we have always made pretty good money and reinvested it into a new home. We are now looking at loosing all of our equity from the past 15 years in order to sell our fourth home. Is there an answer out there?
In my opinion, I am looking for someone to blame. I am mad! We played by the rules and yet we stand the chance of loosing everything we have worked for. This crisis is not over and many more who have played by the rules will be affected in the long run. I hope some one has some answers and I am open to any advice that may help.

Re: member1880244
Dear madam,
You have made an excellent point, and you are most definitely not the only one. There are many people who have obeyed all the rules, worked hard to protect their families and financial interests including their credit; yet they are faced with increasingly difficult challenges to overcome in their daily lives.

It's fair to say that this situation was caused by gross mismanagement of the government in general and specifically the high-risk lending crisis incurred primarily by Fannie Mae and Freddie Mac, along with negligent actions taken by certain government and business leaders which in turn compounded the problem.

A basic presidential answer might be: "Vote for me, and we will turn this country around", but that is not helpful to anyone at the moment; and even if true, will take time to materialize into tangible results for the average American. It seems that the best strategy for those people wishing not to have their lifelong efforts for financial stability go in vain, is to a) Persevere a little bit longer, work hard and not lose hope and b) Wait for the new president to take office, and see what options he makes available in regards to renegotiating your mortgage(s) to make them at least slightly easier to pay off.

In essence, people need to find ways to buy time. The good thing, as mentioned in Mr. Trump's latest post in this blog, is that the voter turnout for this election will be record-breaking. Which means that the American people are finally paying attention, and in all probability countermeasures for this crisis will follow shortly after. Having said that, it's important to try to do as much as you can for and by yourself without relying completely on the government to take care of you. It sounds harsh and unfair, but it's the simple truth.

The republican nominee promises to punish those who caused the crisis, but has a fairly bad recovery plan among other questionable strategies. The democratic nominee probably won't exact that same level of revenge that people seek, but his plans make much more sense for middle class citizens like yourself and they will also (in my personal opinion) restore America's image within the rest of the world, which will hopefully lead to further international agreements and relationships that could help speed up America's recovery if executed correctly. In both business and personal aspects, having great allies is one of the most valuable assets, and it can make a world of a difference.

Finding a skilled financial advisor and accountant might help you squeeze out that last bit of profit which would help you stay afloat longer. Never give up, always look forward and persevere. It may take time, but things will certainly get much better. Good luck!

Education needs to be part of this bailout solution. The financial crisis was created by irresponsible borrowing and spending. This situation is sure to reoccur unless consumers exercise fiduciary discipline. Money obtained too easily is not respected for its' innate power.

There is a void in our educational system that needs dire attention. How is it that we spend billions of dollars teaching historical methods and ideas, but scarely little is dedicated to financial education?

I challenge you to teach one person how to be responsible with their money!

My personal opinion is that the credit crisis is a great 'unravelling; or 'de-leveraging' process. Essentially, recent economic growth has been based not on the declining manufacturing industries or real production but on the creation of a vast asset and financial bubble whose foundation was the 'fraction' of real money in deposits that was the 'fractional lending' system. It was based trust and confidence and increasing the leverage factor. Currently, however, we have a self-feeding cycle with increasing bad news and 'runs' on institutions taking away this trust. The 'fraction' is under siege as the leverage multiplier is reduced or gets the carpet pulled out from under it.

I am an entrepreneur. After closing some 300 mil EUR of real estate deals in Central Eastern Europe I set up my own boutique real estate investment brokerage. Maybe it was bad timing but I have been good enough to close some deals. I have had 200 mil EUR of deals bust in the last weeks due to investors losing confidence or finance becoming scarce (hopefully next week I should be able to close a small 30 mil EUR portfolio but this is by no means certain). The credit crisis has lost me hundreds of thousands in fees. I get the feel of it earlier than the mainstream press as the property funds and developers have strong relationships with the banks and they have advance warning of how bad it is.

I will be setting up a small development platform and hopefully over then next few months I should be building up expertise and sourcing projects so that ideally I will be in a perfect position when the upturn
happens in 3 years or so. Or maybe I am wrong? You see, the scary thing is that things are getting worse with some way to go before any kind of bottom. If I extrapolate this downward trend further then should we all prepare for a melt-down? The crisis after all is largely (but not exclusively) fueled by mortgage defaults and prices are not even half-way through their falls. Are commodities rich and 'real economy' countries the places to be? Maybe a countercyclical sector is the best idea? Should we wait it out and consolidate or look at some other sector?

Jack

BTW Think big and kick arse everybody :)

In hindsight, I think, perhaps, the Feds made a mistake with the bailout - certainly the way they did it so loud, dramatic and abrupt.

That is what has created the tailspin in the global economy. It was the cry of doom by the leaders that did it. When Bernanke and Paulsen spoke and foretold the future the way they did, obviously the government had to jump - high.

But the problem is, they scared us all to death, from Brooklyn to Bangkok, Mumbai to London, Rio to Rome. THEY SCARED EVERYBODY. The feds are who did it with this $700 billion white elephant bail out. It sent the message to the world that America wass colapsing, that the tectonic plates had shifted violently and that the aftershocks were going to be pretty horrific. And that is why stability is so hard to achieve now. Because people are scared witless. That's why they are taking out all their hard earned money from these markets. This may not have even been a natural earthquake. It was probably totally synthetic, and totally avoidable.

Now we are in the aftershock stage of a terrible earthquake which may have happened anyway, but probably as opposed to being a 10 on the Richter, it would have been about a 3.

Now what? Dig out of the rubble person by person, town by town, country by country. The governments of all the countries in the world are the only ones who can undo what they did. They instilled the fear now they have to drain it out. It has to be a gradual, sustained, calm, focused, directed effort by the global powers that be. Stop with the big, quick fix. It scares people. It creates pandemonium. Take the problem in little chunks and bit by bit, build back. I mean, this ain't rocket science. It's just geology. Okay?

by Marion TD Lewis, Esq. New York

The economy has everyone looking for a way to lighten the load.
I found this: They are selling their family picture on E-Bay (Item number: 280281951487). The minimum bid starts at $200,000.00. They plan to use the money to pay off their mortgage, loans and credit card debt. Bidding started November 2, 2008 and will continue for 10 days.
Peeople are getting creative in the failing economy but would this work for them?

i agree, its gonna be harder now that we have a defferent president

I believe that the financial crisis is not going to be fixed for a very long time. the government can keep on giving bail out money to the auto industry but for what reason. There are too many people who are currently out of work or most likely working for minimum wage who can barely pay their bills on time. I am one of those people. I was working for a mortgage company for a very long time and I was happy with the pay that I was getting. Unfortunately for me, my moral ethics just can't stand the way the business is going and decided to leave the business. I am currently working for not even a fourth of what I used to make and is struggling to pay my bills. I was using my credit cards to pay for groceries and other bills and the creditors decided to cut my credit limit even though I was paying on time. Now, I can't even afford to make a minimum payment whatsoever since I had to stop using my credit cards. I know I am not the only one with this situation and I know I am at fault for using credit cards to pay my bills. I had to do it to survive and now, all I can think of is how can I end my suffering and be able to keep my condo, my car, and feed my kids.

The stimulus package is not going to help the people who are now suffering. The help is only going to the large companies who created this problem in the first place. I need help. People need help. Giving the auto industry the money to keep their company is not going to help the people who can't afford to buy their cars. Lenders are not going to loan money anymore since there are more unqualified people since their credit is nowhere looking as good as before. What I need to know is how is the stimulus package going to help the people in need now?

These days the price rate of land are getting low day by day due regression in market. If you have dream for your own house than it is a good time to get your dream come true. It is the time to invest your money and can do investment for the future.
Joanna Eden
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