By Wednesday there seemed to have been a collective decision by most people in the capital markets to ignore the jerks in Washington and to leave Europe to destroy itself. In short, to ignore the noise and just get back to doing deals. In the past few days I have had excellent response to a $150 million debt placement on a portfolio. I have several other transactions which are moving forward. I think things in Washington have gotten so bad that the rest of us have simply decided to get on with life and try to make money. That is very encouraging. This is clearly not 2008. The banks are well capitalized and even B of A will get through this. It is possible that B of A will eventually spin the mortgage business into a bad bank or some other version of that. However, the bank itself is going to get through this. The investment banks will be fine, such as are remaining. There is an enormous amount of available capital in many hands looking to do deals. US corporations are awash in cash and are raising a lot of added long term capital at an almost nil cost of capital, which will keep their balance sheets strong for years to come. Long term holders of solid real estate can refinance now for rates none of us ever dreamed possible. That means they will be solid investments throwing off strong cash flow over the long term. In short, the Fed is accomplishing what it wants. Historic low cost of capital to help companies and investors get through this and be tempted to invest.

The real issue, as we all know, is the administration, the total lack of leadership, and all of the regs and pro union stances such as the NLRB with Boeing, proposed new Dodd Frank rules, and other economy killing decisions by EPA. The absolute lack of leadership is so apparent after his useless speech on Monday, that it virtually assures that gridlock will continue as the Republicans see the weakness and go for the kill. The selections for the new debt commission virtually guarantee that nothing good will happen. Instead of selecting the members of Simpson Bowles or the Gang of 6, they chose ideologues like Patty Murray who is incapable of intelligent discussion of financial issues and is there only to try to make sure they never solve the entitlement problem. The selections simply prove that Washington, as now constituted is incapable of solutions and we will be again treated to more insanity in October as this group of bozos stake out more stupid positions and as Obama makes more ridiculous statements designed to scare voters like you may not get your social security check.

In the end, I believe all of this bodes well for good quality real estate. If you own a good asset, not even core, just a good property, and if you know how to run it well, then you will likely find it is the best place to be in the storm we are experiencing. Whether it is a hotel, office or multi, if you buy on a conservative cash flow yield basis, do not assume any growth in rents for several years, and finance it with reasonable leverage at incredible low rates, then you will make a good cash flow return while we wait this out and a new president takes office. In time the economy will get better and values will increase. That all assume Obama is replaced and Congress gets some new leadership. Europe will come apart. The Euro cannot survive long term. There needs to be a complete reset of European currencies and social and fiscal policies. That means several years of social unrest and economic disruption. That makes the US a better place to invest. It means more flight capital coming here.