The world order has been torn asunder by Obama and Hilary, and 70 years of arduous diplomacy and victories over the Soviets and terrorists, have been rendered useless. We are now in a very dangerous time where all out war is very possible due to the weakness Obama has shown and the vacuum left by the US pull back. This is how WWI started, and this is a replay. Russia and Iran now know Obama will do nothing but talk when they take over territory or take control of countries like Syria. He will do nothing to stop the threats to Israel and Saudi Arabia, the bulwarks of our security systems in the Mideast. So now Mossad appointed a foreign policy expert as head of Mossad so Israel can cut intelligence and military deals with the Saudis under the table to fill the void left by Obama and Hilary. ISIS knows it can spread across the world and Obama will not do much, as he just tries to pass the time until 2017.

So for you and CRE, what does all this matter? Just look at the junk bond market, the stock market, December retail sales and the newly announced closures of Wal Mart and Macy stores, which are just the start of a wider closings trend. The capital markets are in huge risk off mode which will make it harder to raise equity for your development deals. While there is a continuing flood of foreign capital coming here to hide, it will not necessarily be looking to invest in a development or an existing asset outside the gateway cities. The new FIRPTA rules will just push more foreign capital to those same cities, and not help secondary cities. The rising dollar will make foreign capital less available by lowering its value.

The good news is the US banking system and consumers have never been in better balance sheet position. The housing market is sound. The CRE lending market has been stopped from once again committing suicide by a clamp down by the regulators on LTV, but it also means you are not getting the loan you thought you might get. We are not going to have a replay of 2008-9. But we are not going to have a boom like we should be having with near record low rates and sound balance sheets in the financial markets and for consumers. All the things I described above have scared many investors who are now frozen. Equity will be much harder to find and more costly to you. China has instituted much tighter capital controls, and most small and mid size companies are in serious cash flow trouble due to a major slowdown in their ability to collect their receivables. Yuan that might have come here is now being used to save Chinese companies. To get cash out of China now requires answering pages of questions about how you got all this cash. Nobody wants to explain the past 20 years of corruption to the police. Businessmen who had been making a lot of money until recently are now in default on their shadow banking loans, and over the last 45 days have sunk into a very bad situation financially. This is getting much worse at the moment, further diminishing the flow of capital available to come here. The anti corruption program has become so tough recently that cash is being hidden, or the person transferring is having to pay 10% off the top to people who can get it out for them. US hotels are in for a nasty shock as Chinese tourists start to disappear as the dollar rises, the yuan devalues and China sinks into further economic problems. As the housing market continues to trundle along at too low levels, and as retail continues to close stores, and hotels see a decline in NOI, there will be a struggle to maintain decent growth in the US. Wages will stay stagnant and consumers will continue to save much of the extra cash they have from lower energy costs.

2016 is a year to hide in the foxhole, sell while you still can, and wait for the next buying opportunity in two years.