Headlines Getting More and More Misleading!!!!!!!
Global Economy Displays `Convincing Signs' of Recovery, FSB's Draghi Says
the headline went on to read: FSB's Draghi Says
“We observe signs of improvement here and there,” Draghi, who is also a member of the European Central Bank council and governor of the Bank of Italy, said in Basel, Switzerland. “Still, the fragilities of the economy and the financial system are there.”
Is the above "convincing signs" to you?
Now here is a little reality from our buddy CalculatedRisk:
Unfortunately, based on today’s market values, we estimate that none of these hotels have any equity remaining. The unprecedented decline in room revenues (California is down 21.5% year-to-date) combined with the jump in cap rates has resulted in a massive loss in values. We estimate that values are currently 50-80% lower than at the market’s peak in 2006-2007.
Hotel values DOWN 80%!!!! Just a 20% additional drop and some hotels will be worthless. At that point, Alstry will be the first to call a bottom. Just like Alstry's projection for land, The Institute of Alstrynomics projects we will reach a point where many shopping centers, hotels, and office buldings have zero to negative economic value.
It is not the end of the world.....simply preparation for change. Revolutionary Change. A change Alstry is beginning to embrace;)
A change Alstry will soon be blogging about.
HOWEVER, we are still in the deconstruction phase of the process. It has at least a year or two to play out before we reach bottom. Much of what we currently place value on will be valuless in the reconstruction phase. The oportunities will be incredible and exciting as we move forward.
In the meantime we must deal with the reality of the present, the DECONSTRUCTION PHASE. In this phase, many of the companies we currently discuss about in CAPs will not exist in the reconstruction phase. The key now is to determine which lives and which dies, which wilts and which thrives. Never before has there been greater opportunity......or risk.
Welcome to Alstry's World. The World of Alstrynomics......the fusion of facts and common sense to Economics. Where those without vision simply vanish while The Insititute of Alstrynomics applies perspective and insight to set the foundation for its mission......being right.