Doug Casey is an American free-market market economist, financial author and entrepreneur. He has been writing a monthly investment newsletter, the International Speculator since 1979 and I always find his ideas quite refreshing.

I the paragraphs below, he is interviewed by Louis James, editor of the International Speculator.

L: So, Doug, it’s well known that in addition to investing in resource stocks, especially gold juniors, you also have a passion for playing the real estate market. What can you tell us about real estate in today’s world?

Doug: Real estate has been very, very good to me. The reason that’s true is that I buy only things that I like myself. I don’t try to second-guess what other people may want. If you do that, you’re guaranteed to wind up with mediocre stuff that nobody really wants. I have an inclination

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Where’s That Cracking Sound Coming From?

by Robert Williams, Publisher
Wednesday, November 18, 2009

When I saw the latest cover of BusinessWeek – “Why the Commercial Real Estate Crisis Looks So Scary” – I immediately fired off a text to my friend and Investment U colleague, David Fessler.

“We scooped ‘em by six whole months,” I texted.

Dave’s been tracking (and cautioning us about) the commercial real estate market for the better part of a year now. (You can read Dave’s June article on the commercial real estate fallout or his April article on the commercial real estate sector.)

“Last year, commercial real estate sales fell off a cliff, plunging 73%… But it’s going to get worse… much, much worse,” asserted Dave, months ago.

He nailed it. The market is indeed cracking.

BusinessWeek reported that $6.4 billion worth of commercial real

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If You Thought the Housing Meltdown Was Bad… Doug Hornig, Senior Editor, (Casey Research):

…wait until you see what’s in the cards for commercial real estate.

That’s right, the next train wreck will be in commercial real estate. Couldn’t be worse than last year’s residential market crash? That remains to be seen. But it’s coming soon, probably as early as the second quarter of next year, and there’s nothing that can prevent it. The government will intervene, trying desperately to delay the day of reckoning, and may even succeed. For a while. But make no mistake about it, that train is going off the tracks no matter what.

Every part of the sector – from multifamily apartment buildings to retail shopping centers, suburban office buildings, industrial facilities, and hotels – has accumulated a huge amount of defaulted or nonperforming paper. It’s an impossible, swaying structure that cannot long stand.

Just ask Andy Miller.

Andy

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China Housing & Land Development Inc. develops residential and commercial properties in northwest China. The company today announced its unaudited financial results for the third quarter ended September 30, 2009, posting a 215 percent increase in revenues.

CHLN reported revenues at $23.8 million, an increase of 215.3% from $7.5 million as compared to the same period of 2008, up 5.3% from $22.6 million in the second quarter of 2009. The company attributes the increase mainly from its JunJing II phase one and two projects, which are under construction.

“We are pleased with our results for the third quarter as we continued to see stabilized sales trends and higher average selling prices, most notably with our two major projects – JunJing II phase one and two. With 91 percent of units sold and 82 percent of available GFA sold, we have pre-sold most of JunJing II phase one’s available residential units in

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This post is a guest contribution by Asha Bangalore* of The Northern Trust Company.

The main aspect that stands out in the October 2009 Senior Loan Officer Opinion Survey is that lending conditions were less tight than survey results of July 2009 indicated and there was a substantial improvement from the October 2008 survey when credit markets had frozen. The net fraction of banks that reported tightening standards on commercial and industrial (C&I) loans for large firms dropped to 14% during October from 31.5% in July and was noticeably below the peak of 83.6% reported in January 2009 (see chart 1). A similar reduction in the number of banks reporting tightening lending standards was reported for C&I loans to small firms (see chart 1).

However, demand for C&I loans continued

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CB Richard Ellis Group Inc. (CBG) reported third quarter earnings of 4 cents a share. Excluding one-time charges, the company earned 8 cents per share which was a penny down from the Zacks Consensus Estimate of 9 cents. The company had earned 27 cents on an adjusted basis in the year-ago period. CB Richard Ellis reported a net income of $12.4 million or 4 cents a share, down from income of $40.4 million or 19 cents a year earlier. The credit market downturn and the economic recession have significantly impacted major investment sales and leasing markets globally. Increased unemployment levels coupled with store closures by retailers are significantly impacting the commercial real estate market and thereby impacting the company’s earnings. However, the company is experiencing the benefits of the cost containments measures and remains right on track to achieve its goal of reducing annualized operating ...

StanCorp Financial Group Inc.’s (SFG) third quarter earnings of $1.21 per share were just a penny ahead of the Zacks Consensus Estimate of $1.20 per share. The company had earned $1.46 per share in the year-ago quarter. High unemployment rate and rising joblessness continue to impact the company’s earnings. Quarterly results reflect higher-than-expected claims activity and reduced premiums in the group insurance business. However, the company benefited from the expense reduction initiatives. Insurance Services segment reported income before income taxes of $84.3 million compared to $103.4 million in the year-ago quarter. The decrease was driven by unfavorable claims experience and a drop in premiums in the group insurance business, partially offset by comparatively favorable claims experience in the individual disability insurance business. Results for this segment were also hurt by a 50 basis point reduction in the discount rate to 4.75% for the newly established disability ...

The Economist’s Buttonwood Gathering, a conference bringing together global regulators and bankers to discuss and debate new ideas and develop a new set of guidelines moving forward, has just taken place in New York. Michael Panzer, writer of the Financial Armageddon blog and author of “Financial Armageddon: Protect Your Future from Economic Collapse”, was in attendance and has kindly shared some of the more interesting quotes on his blog, as reported below.

Secretary Tim Geithner, United States Department of the Treasury:

“Generally, we did not do enough.” (Referring to the failure to address growing concerns over excessive risk-taking in the period leading up to the financial crisis.) [Editor's note: understatement of the year?]

Stephen Roach, Chairman, Morgan Stanley Asia:

Those who are looking for a “V”-shaped recovery are in for “a rude awakening.”

“The imbalances going into the crisis were large to begin with.

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Investors have filed a class action lawsuit against Regions Financial Corporation (RF) on charges that the bank had obtained shareholders’ approval for the 2006 acquisition of AmSouth Bancorp by misleading investors about its own financial condition.  In November 2006, when the bank announced to purchase AmSouth Bancorp for $10 billion, it allegedly made false representations about the benefits of combining the two banks into a single operation. AmSouth Bancorp has a significant presence in residential loans in Florida market, which suffered losses when the housing bubble burst. Thus, the investors had been unaware that the purchase would expose the company to potential losses.  In January 2009, Regions announced a $6 billion write-down of goodwill stemming from the AmSouth acquisition. AmSouth was supposed to bring about $6 billion in goodwill to Regions, besides the prospects of doubling its operations in Florida's real estate market. Regions had overstated ...

Jones Lang LaSalle Inc. (JLL), a leading real estate investment trust (REIT), has been selected by SunTrust Banks Inc. (STI), a premier banking organization in the U.S., to provide integrated facility management services across its entire portfolio spanning 16 million square feet.

With the deal, Jones Lang would be entrusted to effectively manage the day-to-day tasks related to the operations across SunTrust’s facilities. SunTrust operates an extensive branch and ATM network throughout Florida, Georgia, Maryland, North Carolina, South Carolina, Tennessee, Virginia and Washington, DC. Jones Lang’s leading position in property and corporate facility management services would enable it to improve the operational efficiency of SunTrust.

On the other hand, the deal strengthens Jones Lang’s position in the market and offers it an expanded role in the operations of one of the largest banking organizations of the country. Jones Lang is a leading full-service real estate firm that provides corporate, financial,

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