More Government...more misery
Have you noticed how many commercial store fronts are vacant?  As you ride around in your own community just observe the for lease and for rent signs on vacant commercial properties.  As you do keep in mind that someone is responsible for making a payment on the property, keeping the insurance, grounds upkeep and utilities paid up.  Now ask yourself what would you do it that property belonged to you and you were the one responsible for this debt?  Without tenants there is nothing coming in, that does not alter the fact however that each and every month there are still debt payments due.
I read a report just today that the Federal Deposit Insurance Corporation has issued a policy recommendation that instructs banks who may be dealing with commercial loans in trouble, to work with the borrowers and ease the burden.¬† The report went on to say that along with the FDIC the Board of Governors of the Fed and Credit Union Administration issued a policy statement advising extensions or longer term loan restructures that were backed by income (commercial) producing properties.¬† The thought behind this of course is to keep the banks from slipping into the center of the black hole, once again, on their balance sheets.¬† All of this is due in part to the knowledge that property values are falling daily.¬† If a bank were to foreclose on a commercial property it would sell at a much lesser price and thus drive the price of surrounding properties down even further.¬† If the banks can work out a deal with the owners, either restructure or reduce the monthly payment in order for them to stay with the property, while continuing to look for tenants it is hoped that the market is going to turn and values will rise.¬† Hmmm, don’t count on that happening for a long, long time.
This sounds a little like Vegas to me.¬† You walk up to the crap table and the shooter is looking for a number, you bet that he will or will not make it, in either case it’s just a bet.¬† So the FDIC and the Fed are betting that if we can prolong this agony a little longer then perhaps, just perhaps things will get better.¬† Let’s examine why these commercial establishments went out of business in the first place. People who once shopped them no longer could because they had no money to shop with.¬† They found themselves with no money because they were unemployed.
If the Fed and the FDIC really want to do something to help this economy then I suggest they figure out true help for small businesses across this land. It¬†is be small business that will bring this economy back from the dead.¬† They are the true creators of jobs and pay checks.¬† As¬†you ride around today take a look at¬†the places you¬†once shopped¬†at that are now vacant.¬†One final question; do you think the FDIC and the Fed truly believe by sticking their heads in the sand, that all this is going to miraculously get better on it’s own?¬† They should realize that the definition of insanity is doing the same thing day after day and expecting different results.¬† As my dear grandmother use to say, “ain’t gonna happen.”
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