Don Tishman's Real Estate Development and Investing Solutions

Subsequent to the announcement last week of the financial bailout program, Public Private Investment Program( PPIP), financial institutions, fixed income asset managers, hedge funds, and private investors are awaiting the details of the two programs included in this PPIP  announcement. These have a potential market of $500 billion to $1 Trillion. Here how the Plan works:

                   1. The Legacy Loan Program- essential elements of the program include the following

a. Banks would identify which assets they would like to sell. Financial Institutions of all sizes can participate.

b. Loans would be auctioned by the FDIC to the highest bidder.

c. FDIC will provide a loan guarantee to finance the asset purchase with a maximum 6:1 debt/equity ratio.  The FDIC will receive a fee for this guaranty.

d. The equity capital will consist of a 50/50 co-investment of the private investor with the Treasury.

   2. The Legacy Security Program- The Treasury plan is to tackle legacy securities is in two programs: An extension of the TALF program, and Treasury co-investment with private investors.

a. TALF Expansion- The TALF program was extended to non-agency Residential Mortgage-Backed Security (RMBS)  which were rated AAA at original issuanc.  Plus  Commercial Mortgage-Backed Securities (CMBS) and Asset Backed Securities (ABS) that are currently rated AAA. The ABS can be  credit cards, auto loans, and mortgage loans, to esoteric cash flows from aircraft leases, royalty payments and movie revenues.  Through this program non-recourse loans will be made to investors to fund the purchases of legacy securitization assets. Many of the details were not provided such as haircuts, lending rates, minimum loan sizes and loan length. 

b, Side by Side Co-investment- The Treasury will provide up to five asset managers who will raise private equity capital to purchase the qualifying securities.  The Treasury will match 100% of the private capital raised.  The asset manager will have the chance to to subscribe for senior debt of 50% to 100% of the capital raised subject to certain restrictions. Treasury expects the PPIP backed funds to initially target non-agency RMBS and CMBS originated prior to 2009 with a rating of AAA at origination. Reports indicate that PIMCO, one of the world’s largest bond managers has expressed an interest to participate in the co-investment program.  Their co-chief investment officer said:

“This is the first win/win policy to be put on the table and it should be welcomed enthusiastically…. We are intrigued by the potential double digit returns as well as share them with not only clients but the American taxpayers.”  

Why did the government offer 83% loans for the loans while offering 75% loans for the securiries?

In most cases, the loans have not marked to market, unlike securities. This creates an uncertainty as to value. More due diligence will be required to determine value.Their are no indexes to consult for value.

The PIIP offers possible leveraged return that are estimated at a 30% to 40% range. This probably suggests that hedge funds will be players  as opposed to fixed income mutual funds that generally do not use leverage.

Looks like the Treasury wants to move fast.  

Asset managers must submit their applications by next week, April 10th. Treasury is supposed to give preliminary approval by May 1.   

The real question is whether there is sufficient incentive to get banks and others to sell the loans and securities into the program. A few  Banks that have recently merged have already marked loans and securities down. These include State Street Corp.,Bank of New York, PNC, Bank of America, Wells Fargo, and Prudential.

Other Banks that have recently written loans and securities to market are:

MI-Marshall and Tinsley

FITB- First-Third Bank

RF-Regions Financial

CRBC- Citizens Republic

FHN- First Horizon 

SNV- Synovus

As Mies VanDer Rohe said” God is in the details” This is the real key

This morning I read a column by Princeton University economist Paul Krugman in the New York Times criticizing the Obama plan for the Public Private Investment Program (PPIP). Krugman says “ I don’t think that this is just a financial panic; I believe that it represents the failure of a whole model of banking, of an overgrown financial sector that did more harm than good”   Professor Krugman presents no alternatives.

This is not the first time in U.S. history that we have financial disasters where financial institutions have gone broke. After each disaster, there have been plans created that helped our country survive and recover.  Shortly after FDR took office there was a huge request by depositors to remove their deposits from banks because of fear of bank failures in 1933. FDR called a bank holiday that closed banks to allow cooler heads to prevail.   Later after Banks had  failed in the Depression, FDR presented Congress with an program that protected depositors and imposed regulations for banks. Congress passed The Glass-Stegall Act in order to stop banks from speculating. Congress created the Federal Deposit Commission (FDIC}, separated commercial banking and investment banking, and  enacted Regulation Q which mandated that  savings and loans would pay more for savings deposits than commercial banks could.

In 1980, after seeing the huge hoards of cash accumulating in savings and loans, banks successfully  lobbied Congress to repeal Regulation Q. What followed was a huge flight of capital to banks from saving and loan companies. The result? The collapse of the savings and loans companies in the late 1980′s and the 1990′s.  This caused the failing saving and loan companies to file a huge amount of foreclosures of commercial real estate. The Resolution Trust Company (RTC) was formed to take over the foreclosed properties of the failed savings and loans. The RTC arranged the sale of these properties. Prior to the sale of these assets, the commercial real estate market was devastated like the residential real estate market has been now. After these RTC sales, the commercial real estate prospered better than ever before. The PPIP that Professor Krugman takes issue with is similar to the RTC plan.

Then in 1999, after the banks looked at the huge profits of the Wall Street investment bankers, they again successfully lobbied Congress in their favor to remove the restrictions in the Glass-Steagall Act prohibiting banks from being in the investment banking business. History repeated itself- now both  banks and the investment banks have  failed.

Two lessons can be learned from this:

1. The foresight of the writers of the Glass-Steagall Act and the other programs that recovery plans FDR presented prove financial institutions must be regulated.

2. When inexperienced business people enter a sophisticated business they no little about, disaster follows for many.  The repeal of Regulation Q brought lenders of home mortgages into lending for sophisticated  commercial developments they did not comprehend. The repeal of Glass-Stegall prohibitions brought commercial bankers into investment banking that did not understand, but even worse was into a field completely opposite from their risk adverse training.

With all these accusations of greed and finger pointing, let us first  get back to basics. A definition of capitalism would be of an informal economic system in which property is largely privately owned, and in which profit provides incentive for capital investment and the employment of labor. Capitalism is also the philosophy that the government’s role in the economy should be strictly limited and that the forces of supply and demand in a free market, while imperfect, are the most efficient means of providing for the general well-being of humankind.

Money is the most liquid asset. Why do people invest their money?  The answer is simple: to make more money.  Wall Street is where many investors look for advice and places to invest their money. In order to do a favorable job of investing other people moneys, Wall Street recruits what they think is the best and brightest by offering them the opportunity to make huge sums of money through wages, bonuses, and/or  stock options.  The best proof of this is the many managers of huge hedge funds being paid billions per year. Many people on Wall Street sign employment contracts that stipulate how they will be paid. This furor over A.I.G. paid bonuses is about contractual obligations that A.I.G. previously agreed to. The failure that allowed these bonuses to be paid was a failure of the Bush Administration to specify what the TARP funds could be used for and what the funds could not be used for.  To complain about the Wall Street greed is hypocritical. Most investors want to make as much profit as possible while taking as little risk as possible. Many forget the old bromide that the greater the return the greater the risk.  Through the use of private credit rating agencies, investors were assured that there was little risk in what turned out where very risky investments. Based on the credit ratings of these investments, financial institutions  guaranteed the investors their investment. It is these guarantees that are the reason for many bailouts. I am amazed that there has not been a rash of constructive fraud lawsuits against the rating agencies for these erroneous ratings.

Don’t throw out the baby with the bath water.

Nobel Prize winner Krugman infers he advocates just that for the banking system. Development and purchase of assets require capital. In nations that require cash buyers for the purchase of homes, there are very few homeowners.  Our answer must be make changes in the banking system that will protect against a repeat of the present  disasters, while providing private sources of available affordable capital.  History books are full of stories of once world dominant countries that are now also rans.  That is what happens when nations do not make plans that will allow them to recover from a disaster.  Obama’s people are developing these essential plans. We need to support them.  Together we will recover to much better times.

A Few Bits of Good News Lighten the Mood
Some preliminary signs that housing may be reaching a bottom have been warmly welcomed in recent days, with building permits, housing starts, existing home sales and new home sales all posting increases in February.  While the improvements were encouraging, trends remain well off year-ago levels, and should be taken in that context with all due caution.  Efforts by the government to help stabilize the housing market may be helping to encourage homebuyers coming off the sidelines to take advantage of record high affordability and the new homebuyer tax credit.  February was the first time since July 2008 that both new and existing home sales recorded increases in the same month.  With home sales already ticking up ahead of the spring home buying season, there is an opportunity for a sustained increase in sales activity: welcome news for a beleaguered home building industry.  We have heard reports from home selling realtors all over the nation that there is considerable increase in potential buyers looking at purchases.

Positive momentum continued on Wall St., which has been buoyed by positive housing data and the administrations plans to remove toxic assets off bank balance sheets.  The broader S&P 500 index closed trading on Thursday at its highest levels since mid-February while the tech-heavy Nasdaq Composite Index bounced back into positive territory for the year.  The Fed’s efforts to spark economic activity by freeing up the credit markets and keeping interest rates low have sparked market enthusiasm.  According to Freddie Mac’s Primary Mortgage Market Survey, Fed purchases of long-term Treasury bonds have driven average fixed mortgage rates to their lowest levels since they started keeping record in 1971.  While it is too early to assume the worst is over, the recent rebound in the equity markets indicate that at least  confidence has re-emerged.

The Economy 
Final estimates for fourth quarter gross domestic product showed the economy contracted at its worst rate since the first quarter 1982. The economy contracted 6.3% during the fourth quarter which is slightly higher than the preliminary estimate of 6.2% contraction. Turmoil in the financial markets, rising unemployment, and tight credit conditions continued to hurt the economy. This was the second straight quarter in which the economy contracted and the third time in the past five quarters that GDP has been negative. Steep drops in gross private domestic investment and exports were huge drags on the economy in the fourth quarter.  Residential investments continued to drag on growth as it fell 22.8% in the fourth quarter.

In the week ending March 20th, the MBA’s seasonally-adjusted Purchase Index increased to 267.8 from 257.1 in the previous week.  This is the third straight week that purchase activity has increased and the highest the purchase index has been since the end of January.  The latest figure reflects a 4.16% increase from last week but a 33.66% drop from the same period last year.  National average mortgage rates declined from the previous week to 4.85% in the latest Primary Mortgage Market Survey released weekly by Freddie Mac on March 26th.  This is the third straight week that rates have declined.  Fixed rates are now at their lowest levels since Freddie Mac started the survey in 1971.

Lawrence Summers, President OBAMA’S adviser, has stated there is real interest by private investing capital in the Public-Private Investment Program(PPIP). When will this PPIP actually start buying “toxic” assets and start the first auction of these “toxic” assets?  Only then will be able to see what effect this PPIP will have. Today the DJI closed at 7,924. Earlier this month the DJI was 6547. This was why this increase in the S& P 500 was the largest in a two week period since 1938.   That is the reason for this improved attitude.  

This enthusiasm must be shared by the banks that now have their heads in their hands. The Administration is spreading this risk that is crippling the entire financial from the banks to all the taxpayers. All banks regardless of size MUST have equal opportunity to participate.  This new life for banks is a reprieve from death. Now the banks should stick to “conventional” banking and leave investment banking, credit guarantees, to others.  They can lead the nation to a great recovery.

Great way to start the week. U.S. stocks rallied, capping the market’s steepest two-week gain since 1938, as investors speculated the Obama administration’s plan to rid banks of toxic assets will spur growth and investor Mark Mobius said a new bull market has begun.  The National Association of Realtors said Monday that sales of existing homes increased 5.1 percent to an annual rate of 4.72 million last month, from 4.49 million units in January. It was the largest sales jump since July 2003.  Sales had been expected to fall to an annual pace of 4.45 million units, according to Thomson Reuters.  What the “experts” predicted would be a 6% drop in sales was an increase of 5.1% or a difference of 11% from the economists prediction.

The even bigger news is the announcement today of the details of the Financial Stability Plan announced on February 10th. Today the Treasury announced the Public-Private Investment Program by which the the newly formed Public-Private Investment Funds(PPIFs) will be used to purchase real estate assets. These are the assets that are congesting the U.S. financial system. As real estate declined in value, credit for real estate shut down. This caused real estate assets to become very illiquid and caused a further deterioration in real estate values. As a result, this loss in value impaired the financial institutions balance sheets, and made it impossible for these institutions to engage in new credit formation. The financial institutions could not raise new private capital. The Public-Private Investment Program is designed to draw new private capital into the market for these real estate assets by providing government co-equity and attractive public financing. These purchases will in turn free up the capital of these financial institutions to let them engage in new credit formations. In addition, determining the value of these assets should increase investor confidence and enhance the ability of financial institutions to raise new capital from private investors. The primary areas of focus for the government’s troubled asset programs are the residential and commercial mortgage sectors, including whole loans and securitization of loan portfolios. These troubled assets are held by all types of financial institutions including banks, insurers, pension funds, mutual funds and individual retirement accounts. While the program may initially target real estate, depending on market demand, it can include other asset classes.

The two key elements are:

Legacy Loan program-a program to combine a FDIC guarantee of debt financing with equity financing from the private sector and the Treasury to support the purchase of troubled loans from insured depository institutions.  The FDIC and the Treasury are launching this program clean up bank balance sheets and reduce the uncertainty of the banks contingent liability for these troubled loans. The capital will be 50% Treasury and 50% private capital. The FDIC debt guarantees and the Treasury matching the private equity investment has created much private interest in this program. The FDIC will organize the formation funding and the PPIF’s that will purchase assets from the banks. The assets will be purchased by a combination of the equity and debt. The debt is guaranteed by the FDIC. Private investors will maintain control of asset management. The debt guaranteed by FDIC shall exceed 83% of the cost.  This is a great program for both the private capital and the Treasury. Remember these assets have been marked down at least 30%. The private group successfully bids and gets the assets for $100,000. The private investor and the Treasury  put up $10,000 each. The FDIC guaranteed  loan is 80% or $80,000. They hold it two years, It increases in value 5% per year, the return on investment to the private investors and the Treasury is 50%. In the FDIC operation in the 1990′s, I know several groups that made $100′s of Millions by purchasing those assets. There were no loan guarantees from anybody then.

Legacy Securities Program: a program to combine financing from the Federal Reserve and Treasury through the Term Asset-Backed Securities Loan Facility (TALF) with equity capital from the private sector and the Treasury to address the problem of troubled securities. These include securitized housing  assets that were rated AAA by the rating agencies and commercial securitized real estate now rated AAA.. The TALF program is being expanded which may total $1 Trillion. Through this expansion of TALF, non-recourse loan will be made available to qualified buyers. The sellers will take a haircut. The consumer and business credit already purchased by TALF should give investors greater confidence to purchase these marked down assets.

In addition, under the Legacy Securities Program,  private investment managers will have the opportunity to be a Fund Manager. Treasury will start with five Fund Managers. The Fund Mangers will raise private capital for targeted asset classes that will be matched dollar for dollar by the Treasury. The PPIF’s created for these purposes are eligible for debt equal to 100% of the total equity capital from the Federal Reserve via TALF.  The Fund Managers will be required to provide a method for retail investors to participate. 

The Treasury has agreed to match the private equity dollar for dollar. Say the Fund Manager raises $100.  Treasury matches this. The Treasury would then loan up to $200 to the PPIF. So the PPIF would have up to $400 to purchase targeted securities.

When the regulations governing this are published, we will get them to you. This means-while  the whole country is sharing these losses, you may have a great opportunity to help your country get back on its feet and make a substantial return.  a Win Win for all!!!!  This what we have been waiting for!!!!!!

This week the Neurological Scientists are meeting in San Francisco. I was fascinated by a conversation with one one of the participating scientists.  I asked about the statements by physicians that stormy weather brings on an increase in births; Statements by police that strange behavior occurs on full moons- such as an increase in killings. I learned that much research is being done as what specific stimulus causes the brain to react in specific ways. 

In all sciences, the success in prediction is considered to be the most powerful evidence to support a theory or discipline in which it is produced. And equally the failure to predict successfully is considered a good reason to deny a theory or discipline support. 

This last year has been a bad one for predictions by economists. This severe drop in our economy was not foreseen by the crystal ball gazers for banks, investment bankers, or financial advisors. Each group have prepared multiple scenarios to illustrate all conceivable risks in the economy. None contained the scenario that included the devastated housing markets, nor the enormous  losses created by the credit guarantees.  These predictors comprised many well respected economists, even included many Nobel prize winners. What does mean? Is risk in the economy predictable?   Are the stimuli that result in economic disaster identifiable ?  Are there competing stimuli that are different and forever changing?  Or is this too complex for a solvable theorem?  The basic question is : Can you apply the same type of models extensively used in the natural sciences for social sciences? The failure of economics to successfully predict are:

1. The inability of economists to test hypotheses by procedures commonly used in natural sciences.

2. The intractability of the subject matter. These failures are usually attributed to changes in taste, techniques, resources, attitudes, and information. Unsuspected changes of structure do not occur in the salience in natural sciences that occur in the social sciences. In other words the economists “ifs” are always changing.

For centuries predictions and prophecy were made by ancient millennium prophets and modern experts concerning the fate of our planet and the future of mankind. Ancient prophets include Edgar Cayce, Nostradamus, Merlin, St. Malachy, the Book of Revelation, Mayan prophecies, Egyptian Pyramid prophecies, Hopi Indian predictions. Modern disaster predictions have included alien invasion, asteroid strike, genetic engineering, global epidemic, global warming, nuclear disaster, overpopulation, and WWIII. Modern predictions concern our weather, climate change, health and biology, the stock market, politics, trends, the spiritual, the stars, and inventions that will shape your future.  Many read their horoscope daily. Others seek the advice of fortune tellers. Others dismiss many of these predictors as quacks. The believers point to successful predictions, while the nay sayers reveal unsuccessful predictions. 

The predictions of physical scientists are accepted by most. An example of their detractors are those who today  do not believe in Darwin’s theory contained in On the Origin of Species (published 24 November 1859), a seminal work in evolutionary biology.

In the many years, I have been observing business cycles, the predictions are always changing, like the recent Dow-Jones Index, depending on the daily media.  A famous journalist, Jacob Reis, defined a crime wave as when a paper reported crime on the front page instead of page five.  During the Depression what changed attitudes about the state of the economy was  when the public saw the government spending money on the programs they had previously merely talked about. The goals of today’s programs to solve the recession are to put money in consumers hands.  Today this is only talk. Until this actually happens, consumers attitudes will not change. Remember, consumer spending is 70% of out Gross National Product. The consumer needs $$$ to spend.

Again back to the Depression, ( I do not call it the Great Depression because there was NOTHING great about it) remember the Republicans were against all the actions proposed by FDR, for the next 40 years the Democrats controlled one or both Houses of Congress. Now the although the conservative think tanks are reminding the Republicans congressmen about this, the voted last week 152 to 0, to stop Obama’s programs. We need to continue to have two political parties.

How do you perceive these times? What solutions do you propose? Let us first compare how many in this country and Japan are taking this downturn!

In the U.S. unemployment has jumped from 7.6% to 8.1% in the month of February, and 651,000 jobs disappeared in that month alone. In many key industries such as manufacturing, retail and financial services, layoffs are occurring so rapidly it seems that companies are discontinuing areas of business altogether. Many are demanding that  these numbers are indicative of the government’s need to begin training our entire workforce in new fields and sectors:– a complete overhaul of our economy.

While in Japan, by contrast, the populace suffers quietly, stoically. The land of the 
rising sun has, after all, been in it for the long haul…
Small companies employing less than 300 employees form the
backbone of the Japanese economy. They employ 70% of the
workforce and they have been going to the wall by the hundreds
every week.
 In Tokyo. This warren of tiny factories, “mom and pop” workshops and miniature residential
houses is typical of Japan.
The narrow streets are meticulously clean. Beautifully manicured
trees stand next to ubiquitous vending machines. The tofu seller
pulls his cart through the ward every Wednesday blowing his
trumpet.
Despite flat-screen TVs, broadband wi-fi connectivity and
cutting edge technology, the place feels like an ancient village
steeped in conservative ritual. Flower boxes with geraniums adorn
workshop fronts humming to the sound of electronic chainsaws and
hydro-hammers…These Japanese understand that the economy has always been cyclical. These people are smiling, but very determined to quietly wait for a return to normalcy.

Here is somebody that remained patient in difficult times:

 Louis Kahn is one of the most acclaimed architects of our time. He graduated from U. of Pennsylvania School of Architecture in 1924. He struggled through the Depression, not having any work for several years. He survived teaching, designing houses, and doing additions to houses.  Finally after 27 years, although he was a respected architect but otherwise unknown, Kahn received his first commission for a major building, the Yale Art Gallery. This commission lead to international acclaim. Kahn began a new architecture. In his persevering search for the very beginnings of  the architectural form, Kahn readily sacrificed visual charm. Considerations of site and material – issues of primary importance to Frank Lloyd Wright- would be for Kahn secondary, although he used material with an equal appreciation of their inherent qualities. He was less daring in his use of geometries and innovative structure than Wright; in his determination to achieve the timeliness of great architecture, discovery being far more important then invention. Kahn repeated what Le Corbusier had done in Europe,  the antique notion of mass with structure openly depicted as bearing weight. The gallery was a loft with entire walls either glazed or closed. The hard exposed surfaces of Kahn’s Gallery harbored exposed utilities.  After completing this gallery, it was compared to some of Le Corbusier’s work. Kahn said ” When he saw  Corbu’s Chapel at Ronchamp, I feel in love with it , it is undeniably the work of an artist.”.  Le Corbusier was a famous artist, and Kahn was considered a good artist. 

According to Louis Kahn the power of buildings is derived from their mass and space.  For Kahn, mass was always analyzed rationally as a question of structure – the substance of a building;- while space was defined in terms of natural light- the energy that brought space to life. He loved to say that architecture itself began ” when the walls parted and the columns became – admitting light and creating a system of support”. TKahn believedthat the manipulation of both structure and light in making the room was the basic element of architecture. Louis Kahn’s work infused the International style with a fastidious, highly personal taste, a poetry of light. Timeless form in the making of significant architectural spaces is the role of natural light. Louis Isadore Kahn described structure as the giver of light. 

So we can say though Wright, Corbusier, and Kahn may have not agreed on everything, they all agreed that natural light was the most important element of architecture.  Light is the energy that brings space to life

 New U.S. housing starts and permits unexpectedly rebounded in February, according to data on Tuesday that provided a rare dose of good news for the recession-hit economy and fractured housing market.

The Commerce Department said housing starts jumped 22.2 percent to a seasonally adjusted annual rate of 583,000 units from 477,000 units in January. That was the biggest percentage rise since January 1990 and also marked the first increase since last April.
In looking at this joint release by the Census Bureau and HUD, let’s breakdown this release into building permits, starts, and completions. 

 Building permits in Feb. 2009 from Jan. 2009, increased only 3%. most of the increase was in permits for single family structures, with most of the activity in the South.

The real jump was in housing starts. There the increase in starts was in multi-family starts( 5 unit structures or more) with an increase of 79%. These increases in starts were: in the Northeast-88.6%, Midwest-58.5%, South- 30.2%, but in the West -(-24.6%) decline. 

Housing completeions for Feb. 2009  were up 2.3%, of this the single family comletions were down -(-8.2%), while the multi-family completions were up 27%. The overall  increase in the Northeast was 16.7%,  in the Midwest completions were slightly up at .9%, while the completions in the South were down (-10.7%) and in the West the decline was (-8.8%).

How accurate is this? How is this data put together?

New housing construction data are collected in two surveys:The Building Permits Survey (BPS) produces estimates of the number of permits issued for new housing units each month. This is done through a mail survey of a sample of permit offices. Permit offices not in the monthly sample report annual numbers at the end of each year. Monthly data for States, Regions, and the U.S. are weighted sample based estimates reflecting the total building permit universe.

 The Survey of Construction (SOC) produces monthly estimates of housing starts and completions. Census Bureau “field representatives” sample individual permits within a sample of permit offices. Then the builders or owners who took out the sampled permits are interviewed to obtain start and completion dates along with sale dates and characteristics such as size and number of bedrooms. In addition, within a sample of land areas where building permits are not required, field representatives drive all roads looking for new residential construction activity.

As a result of this information, some home building stocks and Home Depot’s went up.

Bank of America Chief Executive Officer Kenneth Lewis said on March 13 that his company was profitable in January and February, joining JPMorgan Chase & Co. and Citigroup in suggesting the nation’s three biggest banks are recovering from last year’s losses and profit declines.

The announcements last week helped spark a record rally in financial shares. The S&P 500 Financials Index surged 34 percent last week, the steepest advance since S&P created the gauge of banks, insurers and investment companies in 1989. Today, Citigroup Inc. had the Dow’s best gain.

What is the source of capital for these new multi-family housing starts?   Much is HUD, and FNMA. If so, most are units for moderate income families-80% to 120% of Area Median Income. When will the banks recover enough to start making commercial real estate loans?

It is Monday morning and I feel great and so do many others.   Global stocks climbed for a fifth day as the Group of 20 vowed to clean up toxic assets, Federal Reserve Chairman Ben S. Bernanke said the recession may end this year, and Barclays Plc reported a “strong” start to 2009.

Barclays, the U.K.’s third-biggest bank, jumped 17 percent. Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co., which triggered a record rally in financial shares last week after saying they were profitable in January and February, added at least 3.8 percent. General Electric Co. climbed 5 percent as UBS AG said the chances of more “negative catalysts” are lower. U.S. indexes extended gains from the best week since November as Bernanke said the U.S. will avoid a depression.

In New York. The Dow Jones Industrial Average rose  145.43  points  to 7,369.44 by 2 PM.. The MSCI World Index increased as stock gauges from Tokyo to London added at least 1.7 percent. Treasuries, gold and oil fell, while copper rose.

The other side of the coin is the causualties that have been caused by this economic downturn. 

Many business’s are suffering from the effects of this recession as their credit ratings have suffered.   After Congress took  Moody’s and Standard & Poors’ to the wood shed for severe whippings  last year for failing to flag troubled companies and securities that defaulted. Moody’s is being more aggressive about predicting such defaults, observers say. Airlines, casinos, energy companies and newspapers made up the bulk of the 238 companies on the list of troubled companies, but well respected  retailers are well represented, too. Among these: Barneys New York, Blockbuster, Bon-Ton Stores, Brookstone,Burlington Coat Factory, Claire’s Stores, Destination Maternity, Duane Reade, Eddie Bauer, El Pollo Loco, Finlay Fine Jewelry, Guitar Center, Krispy Kreme, Loehmann’s,Michaels Stores, Rite Aid, Roundy’s Supermarkets and Sbarro.

Here are specifics on retail store openings and closings by type and region:

Since Wal-Mart is the largest owner owner of vacant U.S. retail space, and the also the most successful retailer, what does that say to YOU?