here are some of the things i heard at the PREA conference:
1. liquidity is on the minds of almost all institutional investors.
2. funny how quickly open-end funds turned from having a queue to get in to a queue to get out.
3. some institutions are increasing their allocation to real estate to take advantage of dislocation or distress opportunities.
4. is there liquidity in other asset classes vs. real estate?
one keynote was delivered by frederic mishkin, an American economist and academic at the Columbia Business School. He was also a member of the Board of Governors of the Federal Reserve System from 2006 to 2008.
1. i'm as scared as i've ever been in my life about the economic situation.
2. sub-prime losses will be more than $1 trillion.
3. what caused this?
a. financial innovation
b. asset price bubble
c. deterioration of balance sheets of financial institutions
4. if you 'nail the S.O.B.'s on wall street you may do harm to the economy in general.
5. a "let's get those rich bastards" attitude will destroy the economy.
6. restoring confidence is everything in solving the financial crisis.
7. if we really screw this up, like the japanese did, it'll take 10 years to recover.
8. medicare needs trillions to fix it; $700BB? that's chump change.
some stuff from a one panel:
a. i don't see a commercial real estate depression like the early 1990's.
b. opportunistic investors will be compensated for separating the 'good' bonds and loans from the 'bad' ones.
c. the transfer of assets will be of biblical proportion.
d. going down to the lower levels of the capital structure you can buy at distressed prices where there is no distress.
e. it's likely that a whole number of hedge funds will close up by 12/31/08.
and another panel:
1. global recession is a reality.
2. the downturn will last 16 months.
3. we are going to see the opportunities of a generation.
4. i don't want to be the last man standing.
5. not only is the sky falling, it's gone lower than the earth's crust.
6. 16 of the 20 headlines in the wall street journal could have been the headline of your career.
7. panic is not necessarily wrong when it comes to making investing decisions.
8. we see great opportunity in distressed residential mortgages.
9. that we can talk about whether GE will survive is almost unfathomable.
10. this is a generational change in america.
-Besides being helpful, kind, and understanding he MAKES you want to come to school.
-Tom Davis has inspired so many students to go deeper than they ever thought they would or could into philosophy and themselves; the comments he writes on your papers make it feel like a conversation he's having with you about your ideas; he's awesome, and for someone over 40, he's cute as ever! Ask to see the pics of him in his band when 20ish!
-He is the best professor you will ever encounter. He encouraged me to want to learn. He is dedicated to make sure that all of his students do well. He is an inspiration to me.
-An inspired and inspiring man. Zany, insightful, intelligent, interesting and benevolent. One of the best.
-he's just funny and smart and insane and entertaining and marvelous. he's somethin', that's for sure. :) he loves to jump down the rabbit holes. he doesn't ever make a student feel like their views are insignificant, he considers all points. at times i didn't know what he was talking about, but i never felt alienated.
-he seems like one of the few teachers that cares about teaching. Great guy.
-One of the most benign, charasmatic intellectuals I have ever met. He just happens to be the GREATEST professor I have ever had!!! I never learned so much as I did from him.
-he is great, very concerned with how every individual is doing within the class, he is also crazy and loved to dash around the room acting things out
-He is involved, unbiased, genuine-a phenomenal human being who should be providing seminars for teachers.
-Tom Davis is one of the greatest professors I have ever had and he's probably the nicest person you could possibly meet.
remember, these were written before tom died. i can only imagine what his current and former students are writing and saying about him now. what do people say about you? what will they say about you when you're in the next dimension? when you think about it, we all can be teachers. we can give something of ourselves to those starting out in the business and all along the way. you can 'teach your children' as graham nash of crosby, stills and nash sang. there is nothing more powerful than taking the time to help someone else be what they want to and can be. i never got the chance to take a class with tom and i never got to say goodbye to him but it's obvious that he was a very special teacher and a special person to those who came in contact with him in his 'life after everyone.' he's the first of our band to go and now we'll never play together again. it's like puggy, our lead guitarist wrote me, "it was good to just know tom was around." there'll be a memorial service for tom next saturday; i'll be there and have been asked to play a couple of songs that were close to tom's heart, "while my guitar gently weeps" and "imagine". but i'm also going to surprise his partner debbie with an old blues song which tom used to "knock out of the park" called 'sporting life blues' written by sonny terry:
I'm getting tired of runnin' around,
Think I will marry and settle down
This ole night life,
This ole Sportin' Life, it's killin' me
I got a letter from my home,
All of my friends, they're dead an'gone
It'll make you worry,
It'll make you wonder, 'bout days to come
My mother used to talk to me,
I was young and foolish, and could not see
Now, I have no mother,
My sisters and brothers, they don't care for me
Mama used to fall on her knees an' pray,
These are the words, mother, she used to say
She would say: "Wha-oh,
My son, please change your way"
Now, I'm goin' to change my way,
I'm growin' older each and every day
When I was young and foolish,
It was so easy, to go out and play
I was a gambler, and a cheater too,
Now, it's come my turn to lose
This ole Sportin' Life,
Got the best hand, what can I do?
There ain't but one thing that I done wrong,
I liv'd that ole Sportin' Life too long
Friends, it's no good, please believe me,
Please leave it alone
I'm getting tired of running round,
Think I will marry, and settle down
This ole night life,
This ole Sportin' Life, its killing me
here's a great version by j.j. cale and eric clapton [http://www.youtube.com/watch?v=Iebv1LZOInc&feature=related].
we lived the sportin' life together in that band. tom sang about it almost every night. now he's gone and all we can do is think about how the sportin' life affected us all. sometimes it's just a spot you race by in a fast moving train. but other times it's something that becomes a monkey on your back. there was not anyone that met tom davis that did not love him. we loved him. he was our brother. we miss knowing he's around. don't wait too long to see someone in your life who you miss. make plans right now. to wait may be too long.
part of growing up is dealing with reality and dealing with problems and learning how to solve them or let them solve themselves. the lessons we're learning as a society today (especially in america) are painful but keeping them in perspective, still not nearly as painful as those in the world who are dying from hunger or disease that can be prevented or in wars and skirmishes the underlying theme of which sometimes escapes reason. i don't know if we'll ever go back to when things were simpler but i for one am going to try to go forward by going back a little and appreciating the simple things in life; appreciating what i have rather than being jealous or unhappy over what i don't have. things can change in the blink of an eye. we never lose sight of that and let's live our lives accordingly.
Where will I be?
Oct. 6-8: London
Nov. 12-13: New York to moderate a panel on "Asset Transformation Case Studies) at the fourth annual PERE Forum (Private Equity Real Estate). NOTE: PERE is offering a 15% discount for "Friends of Steve". If you want to take advantage of it just use this code (PERENY_Bridge) when you go to register on their site (http://www.peimedia.com/Product.aspx?cID=5496&pID=174808&contType=1).
December (date TBA): London to moderate a panel at a seminar hosted by Reuters Real Estate (http://www.reutersrealestate.com).
Feb. 19-20, 2009: Chapel Hill, NC to attend the Kenan-Flagler Center for Real Estate Development’s Annual Conference and Real Estate Challenge Case Competition.