« Downtown Brooklyn Gets College Bookstore | Main | AVP, theater hire Yormark, Nets to sell naming-rights inventory »
January 22, 2008
The McLaughlin Group: The Economy Tanking
Daily Kos
Though it's not specifically about Atlantic Yards, we thought that it was worth mentioning that real estate and publishing mogul Mort Zuckerman was on the McLaughlin Group explaining how and why credit is so difficult to come by.
I don't think it's an exaggeration. It's an understatement. You've heard me say here I think we are facing the worst financial crunch and crisis since the Great Depression. You have the entire banking system now that is virtually frozen and there are not just the sub-prime mortgage thing. There are other things called credit default swaps where they're going to lose as much money, 250 billion dollars on. The banks are frozen. They're not making loans because they have such huge debts that they have to take onto their balance sheets and nobody knows how to deal with that because you had a dramatic...you had two bubbles that have burst at the same time. The housing bubble which has collapsed in this country. The first time since the Great Depression that housing values have gone down for a year since the depression and it's going to go down even more next year. The credit crunch, you've just exploded the whole credit system in this country. We were way over leveraged. The banking system was over-leveraged. People didn't even know about it. The bankers didn't know about it. They didn't access the risk. Now that risk is piling in and every body's going to pay the price. Uh it's going to stimulate nothing other, I mean it's going to destimulate the economy. Nobody has money to lend. They're saving all their money to pay off their debts. They're borrowing money or looking at uh the rest of the world to enhance their capital and it's still not going to solve their problems.
NoLandGrab: This has to affect the local building boom, despite the fact that New York City has so far been immune from the national real estate slump, thanks to Wall St. bonuses and the 421(a) plan, which, for the past two decades, has served to subsidize new luxury housing construction.
Posted by lumi at January 22, 2008 4:19 AM