Scottsdale, AZ --(SBWire)-- 02/25/2013

Government By Crisis Can Not Work. Now The Sequester, We Had the Fiscal Cliff. The Debt Ceiling Is Ahead. Indecision and Politics Hold Back the Economy.

The US economy is languishing, weak and struggling to recover. What is needed is economic growth. The Sequester is a bunch of spending cuts that will have a negative impact on the economy. It is not an enormous disaster. What it should be is a reallocation of spending to programs that will stimulate the economy.

At the present time our economy is weak to the point of almost a depression. Politicians in Washington and the news anchors on TV talk about the out of balance budget and the national debt as if they are critical problems. They are not and cannot be fixed by spending cuts. The answer is that they can not be corrected without economic growth. The first tool to achieve economic growth is by Government spending programs that will create jobs, increase middle class income and increase middle class spending. The second tool to achieve growth is to dramatically increase the marginal tax on the highest income earners. An increased marginal tax rate is not just a revenue generator. It will change the way people think about their tax planning and force them to put their money into active and productive investments. Investments that expand business and create jobs.

We have been trying to use monetary policy to correct the ills of our economy. The FED has created enormous liquidity and has held down interest costs. Unfortunately this has stopped working as it is supposed to because our economy is in a “liquidity trap”. This also took place in the 1930s. Monetary policy alone cannot fix the economy. The excess liquidity has been flowing into the stock market because it has few other places to go. That does not create jobs and help the economy.

We can expect that the sequester will happen. Then there will be some adjustment to both spending allocations and to taxes. What will not happen is a substantial change that will have a real and positive impact on economic growth. It will be another kick the can down the road. The next stop on the parade of government by crisis will be the debt ceiling. While this is going on nominal unemployment continues in the high 7% range. The FED has told us that they will continue a policy of high liquidity and low-interest rates until unemployment falls to 6.5%. That will take a long time without any real change in government programs and tax policy to stimulate economic growth.

Take advantage of the low-interest rate world of today. Refinance any properties that you can. There will be a change in the future, either at the ballot box, as the Europeans are learning, or by the politicians realizing that they are out of touch with the people and the real world of the economy.

Scottsdale, AZ -- (SBWIRE) -- 12/13/2012

The Fiscal Cliff Is Nothing to Fear. It Is Not Even a Slippery Slope

There is a lot of hype on TV and in the news from people who have no knowledge about the economics involved and the timing and gravity of the situation. It makes good headlines and captivates audiences but it really doesn't amount to much. It is not even a slippery slope said Victor Weintraub, noted economist and President of First Charter Financial Corporation.

The two major components of the “Cliff” are first the expiration of the Bush tax cuts. This will result in a tax increase, more on upper income people, and an increase of the marginal tax rate. The other major component is the “Sequester”. This will result in cuts to defense spending and to some entitlement programs. The other components are the expiration of extended unemployment insurance and the end of temporary payroll tax cuts. You must recognize that when President Clinton raiser taxes unemployment went down from 7% to 4%, the economy expanded rapidly and the budget went from a deficit to a surplus. Earlier this year I published a study that establishes a positive correlation between increased taxes with an increased marginal tax rate and an expanding economy and declining unemployment. Contrary to what a lot of commentators and politicians say, increasing taxes and especially the marginal rate will stimulate the economy and reduce the deficit. Do not fear a tax increase.

The “Sequester” will cut the defense budget. It is way out of a rational relationship with our economy and our defense needs and should be cut to balance the budget. So far as social and entitlement program cuts, I do not think that will really last.

It appears to me at this time that there will not be any agreement in Washington. I expect that we will go over the “Cliff”. When the new Congress takes over in January, then we will see some adjustment of middle class taxes, some restoration of entitlements and a spreading out of defense cut. We will have turned the corner toward restoration of our economy and a boost to the middle class.

First Charter Financial Corporation is in the business of advising our clients on their financing needs and placing Commercial Real Estate Financing for them. It is my opinion that we will see continued but slow improvement to the economy. This will be reflected in improved occupancy and leasing activity. I expect to see interest rates remain very low and that the availability of funds for commercial mortgages will remain liquid. From a historic standpoint this is a very advantageous time to finance property and to lock up rates for as long as possible.

First Charter Financial Corporation is a leading independent mortgage company conducting business on a nation wide basis. We specialize in arranging financing for commercial propertied throughout the US. The projects that we handle include office, retail, multifamily, hospitality and specialty properties. We arrange loans in amounts ranging from a minimum of one million dollars up to as large as 100 million dollars. We maintain relationships with large and small insurance companies, retirement and investment funds, regional, national and multinational banks and we are very active with capital markets funding sources. Victor Weintraub is the President of First Charter Financial and has been in the business for over forty years. Contact First Charter Financial with your commercial mortgage needs and concerns. 480 970 0990. Email Info@fcfcorporation.com

Scottsdale, AZ -- (SBWIRE) -- 12/24/2012

Now Is the Time to Refinance Commercial Real Estate

“I have been in this business for over forty years and I have never seen interest costs as low as they are today.” Said Victor Weintraub, President of First Charter Financial, a nationally recognized mortgage firm.

Now is the best time to refinance commercial Real Property. The opportunity to save very important money is here now and it will not last forever. Wise property owners will take advantage of the historically low interest rates that are available today. There is the opportunity to have real cost savings for the next ten years by refinancing into a new fixed rate mortgage now.

It is the result of “Quantitative Easing” by the Fed. Liquidity in the monetary system has forced interest rates down and swelled the availability of loan funds. The slack economy also plays a part in the present capital markets situation for commercial properties. Interest costs for many classes of commercial properties are in the mid four percent range and multifamily interest costs are well below three percent. Easily two percent below where interest costs were just a few years ago. A saving of two percent on interest cost equals $20,000 for each $1 million of mortgage. A $10 million mortgage would yield a real cash savings of $200,000 yearly. That is important money.

Scottsdale, AZ --(SBWire)-- 01/30/2013

The Budget Deficit Does Not Matter. The National Debt Does Not Matter. Jobs and Economic Growth Are the Only Things That Matter

The United States has been in a recession for five years. We are dealing with something very different from the usual style recession. Nominal unemployment is still in the high 7% area. With over 4 million of cronicly unemployed, more than one year, real unemployment is much higher. The economy has recovered some but is not where it should be five years after the start of a recession. We are in a Depression. The cure is a large jobs creating government spending program.

Conventional wisdom says that when there is a recession the FED should lower the cost of money and increase liquidity in the monetary markets. Since the start of the current recession and the financial markets collapse in 2008 and 9, that is what the FED has done. Rates were lowered continuously to the point that short-term rates are effectively 0 today. The markets are awash with liquidity. There has not been the recovery that you would expect.

The economic rules have stopped working. Some economists have named this situation a “Liquidity Trap”, when increasing liquidity massively, along with reducing the cost of money, does not stimulate the economy much. This has happened only two times in well documented economic history. The first time was the great depression of the 1930s. The second was the economy of Japan in the 1990s. We are not in a recession. We are in a depression. Yes, it is not as bad as the 1930s. The small recovery that we have had is just too anemic. Not enough to give the economy the boost that it needs to bring the rate of unemployment down and to stimulate economic growth.

The depression of the 1930s was cured by a massive government jobs program. You know it as World War II. Not only was the depression cured within a year with full employment, but that government spending laid the foundation for the strongest growth period in our history. I am not suggesting anything on the scale of the WWII spending. What I am suggesting are programs that put people to work immediately. Programs concentrating on infrastructure, education and everything that can put people back to work. We can not depend on FED monetary policy alone. It can not do the job alone. What we need is a one shot program of $500 billion now. Then we can look at the result and if it does the job that is what we need. If it doesn’t, then we need to follow with a repeat until the economy is back on a growth path.

There are a lot of people and politicians who will cry out about the federal deficit and the national debt. The reality is that without the program that I am suggesting, the deficit will grow worse and the debt will increase anyway. A program of austerity, cutting spending, will only make the situation worse and we will never end the current depression.

What I am suggesting is to spend to stimulate the economy. Only a growing economy can generate sufficient revenue to bring the budget eventually into balance. To do the opposite will not work. There is not enough spending to cut to create a balance. As spending is cut the economy will worsen and the deficit will increase.

It is a very simple set of alternatives. We can spend to create jobs and to stimulate the economy. Grow our way out of the depression. Or, we can cut spending and slow the economy. That will deepen the depression. It will linger on a long time. The problem facing the United States is economic. It is not political. It can only be solved by economic means.

There has been some criticism of FED policy. We should all recognize that if the Fed had not acted as it did, the chances are that we would be in a depression more closely resembling the 1930s. That is not a pretty picture.

Scottsdale, AZ --(SBWire)-- 01/14/2013

The Debt Ceiling. Will the US Default or Kick the Can Down the Road.

Washington sends us from one economic crisis to another economic crisis. What is the impact of the debt ceiling on commercial real estate and your ability to operate your properties and to optimize your financing.

Now the next pseudo crisis is the debt ceiling. The President has said that this is something that is not negotiable. The radical, no spending Republicans, say that they won't let an increase in the debt limit be approved. This is like charging something on Uncle Sam's credit card and then saying that you are not going to pay the bill. The threat of not increasing the debt limit is to hold the credit of the United States hostage. It is a threat of destroying the credit of our nation. It is totally ridiculous and unacceptable. It is Congress who authorized the spending. Playing this kind of game is juvenile.

So the question is what is going to happen and how you should plan for your business looking forward. The one important thing that we did learn from the Fiscal Cliff experience is that when it does get down to the deadline, neither side wants to be seen as the one who caused an economic wreck. In the end the debt limit will be increased by enough to again delay the conflict for six months at the least. The Republicans will give in. They will try to put out some face saving compromise language.

We expect the economy to continue the modest recovery. We are expecting economic growth to be around an annual rate of 2.5% for the first quarter of 2013. From our perspective this means continued but slow improvement in leasing activity. We expect inflation to be tame. Operating costs should continue to be restrained.

Commercial mortgage interest rates should continue around where they have been. The bell weather for mortgage interest rates is the 10 year Treasury. Over the past several weeks we have seen a small upward blip in these rates. We do not expect to see the rate of the 10 year Treasury to move much over the next few months. The most important factor impacting this rate is the action and the policies of the Federal Reserve. The Fed has been very accommodating and we expect that they will continue this policy.

Commercial mortgage interest rates are near historic lows. There is abundant funding available. It is prudent to take advantage of the current mortgage market. Locking in the low rates of today for an extended period makes sense. First Charter Financial can evaluate your real property and suggest advantageous financing.

First Charter Financial Corporation is a leading independent mortgage company conducting business on a nation wide basis. We specialize in arranging financing for commercial propertied throughout the US. The projects that we handle include office, retail, multifamily, hospitality and specialty properties. We arrange loans in amounts ranging from a minimum of one million dollars up to as large as 100 million dollars. We maintain relationships with large and small insurance companies, retirement and investment funds, regional, national and multinational banks and we are very active with capital markets funding sources. Victor Weintraub, President of First Charter Financial, has been in the business for over forty years. He is also a noted economist. Contact First Charter Financial with your commercial mortgage concerns. Email info@fcfcorporation.com Telephone (480) 970 0990.

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