A lot of people who were standing on the sidelines are now realizing this is their time to get in. When this occurs and the 100 plus Vulture funds begin acquiring South Florida's unsold inventory, the word will quickly spread and the pent up demand will begin to flourish. This buying power available & ready will be a clear sign to show the world our market had bottomed, bringing us to a rapid recovery. The trend is and has been occurring along the beaches this year and Downtown will soon see a transition from depreciation. The majority will agree when the Vulture funds begin buying strong, others may start buying as well.

Who does it better than Jorge Perez of The Related Group? A recent article in Miami Today tells us Perez partnered with private equity firm Lubert Adler Pertners in a bulk purchase of 120 units at 50 Biscayne, a project Related codeveloped with Atlanta based Cousin Properties.

"The Cousins Related partnership will retain joint ownership of seven units in the 54-story, 528-unit project. Cousins estimated its share of the pre-tax profit on the project to date at about $18 million before minority interest." -MiamiToday article

"Lucas Lechuga, a Realtor with Miami Condo Investments, said it's hard to say if and when the vulture fund's action will affect prices. "Right now it doesn't do anything until we see what happens," he said. "If the buyer puts them back on the market at a discount it will affect the price and make it very difficult for people trying to sell individual units. Most Realtors won't take it into account because it won't show up as closed sales in the MLS though more astute Realtors may eventually consider it. But it will take some time for them to realize that this sale was made."

 The problem that Vulture funds face is that the majority of developers see the Miami real estate market slowly improving and are deciding not to let their efforts go so cheaply. Their is enough clarity in the South Florida market for developers to realize there is an overstatement of the Miami crisis in the world media and fund industry and it's not always necessary for such deep discounts. Other rookie desperate developers in a financial crisis with their lenders may view these large discounted condo purchases as a blessing. If the project is inferior and overpriced, these developers will have to cut and run from the headaches.

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 Their are a few outstanding new projects in South Beach with unsold inventory and major potential.  Are any South Beach developers in financial trouble and needing to sell at 50 cents on the dollar? NO. I'm working with investor groups seeking to purchase low & mid rise "boutique condo buildings" at majority ownership along the beaches and the goal is 15 to 20% off list with a market SP/LP average at 10%. On a cash purchase the return is typically 2.5% to 3.5% with the planned potential for the next boom on a long term hold. The tax advantages for any savvy investor holding real estate also make great sense year after year. Supply decreasing & demand increasing with limited space along the beaches and an ever increasing amount of tourism with the weak US dollar. Time will tell but I am bullish on the beaches! Let the readers know your thoughts on this topic. The Miami Beach blog has now surpassed 20,000 viewers! If you’d like to receive new blog postings & updates once available, you can easily be notified by RSS feed (see upper left column) or by email every time a new posting occurs. Have a great week and call any time toll free 1.888.383.7326 or view new condos here.

God Bless Free Enterprise,
System Divine,
Stand beside her, and guide her,
Just as long as the profits are mine,
Good old Wall Street,
May she prosper,
Corporate finance may it grow,
God Bless Free Enterprise,
The status quo,
God Bless Free Enterprise,
And let's make dough.     - Ann O'nymous

Newly introduced legislation would prevent vulture creditors from the ability to prey on vulnerable countries deemed fit for debt relief.  This legislation was introduced in the House in August 2008.   If passed, this legislation would make sovereign debt profiteering unlawful.  It would protect countries and allow them to utilize the debt relief for needs of the people. ("Stop VULTURE Funds Act")

"Zambia loses 'vulture fund' case" BBC News Online. 15 Feb. 2007 <http://news.bbc.co.uk/2/hi/business/6365433.stm>

"Stop VULTURE Funds Act" H.R. 6796. The Library of Congress. 1 Aug. 2008 <http://thomas.loc.gov/cgi-bin/query/z?c110:H.R.6796:>

Legislation Link:  http://thomas.loc.gov/cgi-bin/query/z?c110:H.R.6796:

Sponsor:  Rep Waters, Maxine [CA-35] - 8/1/2008

Co-Sponsors:

• Rep Conyers, John, Jr. [MI-14] - 8/1/2008 
• Rep Gutierrez, Luis V. [IL-4] - 8/1/2008 
• Rep Hinchey, Maurice D. [NY-22] - 8/1/2008 
• Rep Lee, Barbara [CA-9] - 8/1/2008 
• Rep Moore, Gwen [WI-4] - 8/1/2008
• Rep Norton, Eleanor Holmes [DC] - 9/9/2008 
• Rep Payne, Donald M. [NJ-10] - 8/1/2008 
• Rep Schakowsky, Janice D. [IL-9] - 9/9/2008
• Rep Wasserman Schultz, Debbie [FL-20] - 8/1/2008

Speculation, more speculation!

Speculation has driven food prices up, and is now driving gas prices up as well. It is a core feature of the ‘virtual  economy’ based on predatory finance, the main game of the global financier oligarchs who are now in practical control of the world’s strategic economic sectors.

Commodity speculation is getting to be a ‘plague of the 21^st century’ as claimed by a noblesse gentlaman from Europe, Italian Economics Minister Giulio Tremonti. How to stump out this plague is the greatest challenge facing mankind right now, at a time of recession in the Northern economies, recession that threatens to intensify into a global financial meltdown.

Below is an article from the Executive Intelligence Review that sums up the plague of the century. You may as well participate in the debates on how to curb it and reverse the global trend of financial madness.

[Writ 30 June 2008, Quezon City, MetroManila]

Tremonti: Commodity Speculation Is `The Plague of the 21st Century'

June 23, 2008 (EIRNS)—Italian Economics Minister Giulio Tremonti, an outspoken advocate of convening a New Bretton Woods conference, gave a speech in front of a meeting of the Italian trade union CISL, on June 22, calling on the trade unions to join him in the fight against the real causes of oil and food price increases: "international speculation."

According to the daily Il Messaggero, Tremonti called "surrealistic" his own government's plan, which projects a "planned inflation" of 1.7%. The reasons for that, he said, "are two. The first one is technical, the second one is political. The first one, everybody can get by calling the ECB, which demands to set an inflation rate under 2%." Tremonti gave the real ECB telephone number. "It is wrong to speak about inflation today. For at least the last six months, we should have been talking about speculation. International speculation was first financial speculation and in the past period, after some disasters, focussed on commodities, starting with oil." Therefore, either you fight a local battle, with old methods and old perspectives, or you fight a global fight, where you fight Public Enemy Number One: speculation.

"Speculation is the plague of this century, a specter that we knew would come, but not in this way and not so fast. Inflation can no longer be explained with the simple laws of supply and demand," Tremonti continued. He then attacked the left, because "in the Left camp, there are speculation managers who have been accustomed to smoke cigars and sail on yachts, and therefore the Left does not talk about speculation." The head of the leftist CGIL trade union, Epifani, protested. If what Tremonti says is true, he was asked, why does the government write the draft budget plan based on those figures? The draft, demanded by the EU, "is a surrealistic document of no use," Tremonti said.

The Anglo-Dutch financial oligarchy is realizing that Tremonti is becoming more and more of a threat. That might be the reason why the Financial Times today published a belated review of Tremonti's book Fear and Hope, saying in its headline, "Tremonti's Best-seller on Fear Strikes Chord." The review reports that Tremonti's actions are gaining popularity and support in Italy, and profiles his book from its weakest sides (anti-China, fortress Europe, etc.), but it does say that he calls for "a new, far-reaching Bretton Woods system," for "a strong state" and "deplores the left-wing protest movements of 1968."

Scammers like to run with the hot trend -- and right now the hot trend in real estate is foreclosures and distressed property.

Of course, there is money to be made by investing in distressed and foreclosed real estate.

But as with any other kind of investing, making money in distressed property and foreclosures requires significant expertise and experience and adequate capitalization. 

Before you trust your money to a stranger who tells you he has a sure-fire way to make lots of cash by investing in the hot, once-in-a-lifetime foreclosure and distressed property market, make sure that he has the expertise and experience and the capital (not just yours!) to back up his claims.

Here are 10 tips to avoid being taken in by scammers who promise you quick and easy returns on your real estate investment:

1. Be very skeptical and ask lots of questions. 

2. Get the names of the people who will be running the investment fund.  In particular, get the names of the people who will be making the investment decisions.  Demand that they tell you their business and investment track record and that they provide you with documentation of their claims. 

3. Check their qualifications.  Make sure that they are licensed securities or real estate professionals and not just telemarketers. 

4. Research all the names you get.  Use the Internet.  Do a google search for the investment fund and for anyone involved in the fund or business.  Search for their names and the name of the investment fund on scam.com, the Securities Fraud Search Engine, and  other community web sites and bulletin boards, as well as the Better Business Bureau.  Also check their names with your state Attorney General and the Securities and Exchange Commission.  Carefully read the online material on telemarketing fraud put out by the U.S. Department of Justice. 

5. Find out whether the people raising the money for the investment fund are licensed securities brokers.  If not, don’t invest.  You can check their broker status here.

6. Before you invest, get the advice of people you trust.  Ask your attorney, your real estate broker, your financial advisor, and your adult children what they think about the investment.  On the other hand, avoid pressure from relatives and friends to invest in "can't miss" schemes.

7. Get all promises or claims in writing and save copies of the paperwork. Verbal agreements don't mean anything. Demand documents and then review them carefully.  Ask your attorney, your real estate broker, your financial advisor, and your adult children to review them as well.  Even when you get promises in writing, remain skeptical, especially regarding revenue projections.  At best, these projections are guesses; at worst, they're outright lies.  Be particularly skeptical about projections in a business plan.  Remember that a business plan is not a legal document -- you can put anything you want in a business plan and scammers always do.

8. Take your time before deciding whether to invest.  Scammers use lots of tactics to pressure you to make a decision.  Don’t let anyone rush you into an investment.  If they tell you, “only a few lucky investors can get in, so you must act right away," it is almost certainly a scam.

9. Demand to know how much of your investment, or the total fund raise, is actually going to purchase property and how much is going to pay the people who are raising the money.  Don’t trust any investment where more than 10-15 percent of the total raise is going into the pockets of the fund-raisers. 

10. Live by the rule: If something sounds too good to be true, it probably isn’t.  If someone tells you that there is a “guaranteed return on your investment,”  it is almost certain that you should invest your money somewhere else.  Scammers play on greed and fear.  Deals that promise exceptional returns -- and deals that must be done now -- are the hallmarks of a scam.

The recession stays, the downward global economic spiral will continue for an indefinite time. This is the pattern that we can now see across the globe.

Stock markets have been crashing, going through a freefall for couples of months now. In Manila, the Philippine stock market is down at 2,500+ points as of this morning, or 800 points short of its best performance of 3,300+ late last year. The pattern is true in other stock markets as well.

One thing is clear: this is a global meltdown going on, and the spiral’s turn-around towards more positive gains in the succeeding months. Trillions of dollars have already gone down the drain, loses that may never be recovered again.

Many pockets are getting badly hurt, both from the fund-rich hedge funds and portfolio financiers to ordinary middle class investors. Just about two (2) years ago, everything was bullish in world stocks, most especially in Asia. That situation had since evaporated.

Unfortunately, the harbingers of liberal dogma are still banking on liberalization policies that have proved to be so bankrupt they are, in fact, the very cause of this global meltdown shaping up. The ‘virtual economy’ unleashed by liberalization resulted to looting sprees by fund managers and hedge fund operators, the same money that they partly utilize for corporate social responsibility.

Now the oil price hikes and currency market volatilities have compounded the recession. It’s just mid-2008 by the way, and there’s still the bombing of Iran that we all await as the non-surprise ‘surprise attack’ from neo-cons and Zionist fascists, which will guarantee higher prices for oil and better dollar leveraging power. This will come sooner or later.

Forecasting has been made simpler by anarchic events at this moment. There is no end in sight to the recession, oil prices will still move up, and the recession will lead to a deeper meltdown of the liberal financial-monetary system of casino-style looting by financier operators.

Better do some belt-tightening if you haven’t done this yet. Let’s continue to watch the horrible unfolding of events. Madness and unparalleled greed have shattered the financial-monetary system, the ‘virtual economy’ of predatory financiers.

[Writ 12 June 2008, Quezon City, MetroManila]

Disgraced ex-New York Governor Eliot Spitzer might have just the opportunity you've been looking for.

Spitzer is putting together a real estate "vulture fund" to buy and flip distressed property, envisioning projects valued between $100 million and $500 million.

According to the New York Sun, "Eliot Spitzer, in his first big business venture since he was shamed out of office by a prostitution scandal, is shopping around a plan to start a vulture fund that would scoop up distressed real estate assets around the country, revamp them, and flip the properties for a profit. Late last month, the former governor of New York gathered a group of high-level Washington, D.C.-based labor union officials in a conference room at the headquarters of his father's real estate business in Manhattan and pitched them his idea for starting such a fund, a source said."

Eliot Spitzer's father is multi-millionaire Manhattan real estate developer Bernard Spitzer, known for building one of New York City's largest real estate firms (one of his properties is The Corinthian, a spectacular 55-story, 1.1 million square foot apartment building), as well as for bank-rolling his son's political career.  The ex-Governor has been working with his father's firm since resigning last March.

The Sun stated that "In the half-hour meeting, Mr. Spitzer told the officials that he was determined to take his ailing father's real estate company to 'the next level', the source said. Mr. Spitzer said he would lay out his business plan in greater detail at a later date, and would ask the labor officials to consider investing pension fund money under their control."

"Mr. Spitzer is moving aggressively to occupy a niche created by the credit crunch, the subprime mortgage crisis, a surge in foreclosures, and a declining real estate market. He is looking to mine for riches in projects that banks are no longer willing to finance."

Spitzer apparently believes that the prostitution scandal that cost him the Governor's office (and a fast-track to even higher political office) was really a blessing in disguise:

"During the meeting, Mr. Spitzer expressed relief that he was no longer burdened with the frustrations of being governor, according to the source. And, in contrast to his repentant resignation speech that he delivered beside his tearful wife, Silda Wall, he took a more relaxed view of his indiscretions. He has told friends and associates that he is consoled by passersby who stop him on the city sidewalks and tell him that sex is 'no big deal' and that the disclosure that he frequented prostitutes was distorted out of proportion, the source said. Europeans, the former governor has noted, have been especially supportive of him and perplexed by the fallout from the scandal."

Spitzer's real estate dreams may have to be put on hold, however, as federal law enforcement authorities might force him to make other plans.

The New York Post reports that " The noose appears to be tightening around sex-crazed ex-Gov. Eliot Spitzer."

According to The Post, "The federal case against him is so strong that prosecutors had no interest in striking cooperation agreements with the ringleader of Spitzer's hooker-supplier, Emperors Club VIP, and his second in command, sources told The Post's Murray Weiss. Prosecutors have records of Spitzer's transactions, phone records and taped conversations with Emperors Club, and are confident they need little more to nail him on charges that could include violating prostitution laws and money laundering, sources said. Probers are also said to be looking into whether he used campaign funds to pay for his pleasures."

"The case against Spitzer includes the cooperation of curvy call girl Ashley 'Kristen' Dupre and a second hooker. Her old boss, Mark Brener, 62, will plead guilty Thursday without the sweetheart deal he was hoping for - he'll have to serve up to 30 months in the slammer on money-laundering and prostitution-conspiracy charges."

In addition, Temeka Lewis, who worked for Brener at the Emperor's Club, pled guilty in a cooperation agreement that requires her to testify about Spitzer's involvement with the prostitution ring and his alleged attempts to conceal payments for sex.

We think that a "vulture fund" meeting with Eliot Spitzer where he pitches cashing in on the foreclosure crisis doesn't help improve the image of labor unions or union leaders.

We also think that anyone considering investing in Spitzer's real estate project should think about whether the fund could do without the presence of the ex-Governor for several years while he stays at the Gray Bar Hotel.

These investors – often called "vultures" although the Times calls them “market opportunists” – believe that “some people have thrown the good out with the bad, and that the prices of some investments have simply fallen too far.”

For example, the Times reports that one Wall Street specialist in so-called distressed debt “recently spent at least $450 million for assets of Thornburg Mortgage, the battered mortgage servicing company. Others are buying beaten-down corporate bonds and looking at car and credit card loans.” 

“They are buying up mortgages of hard-pressed homeowners, the bank loans of cash-short businesses, and companies that seem to be hurtling toward bankruptcy,” said the Times, “And they are trying to buy them all on the cheap.”

A former executive of the Countrywide Financial Corporation, one of the mortgage giants that fostered subprime lending, recently helped start a company to buy mortgages.

In addition, the Blackstone Group “just raised $10.9 billion from investors to scoop up real estate.”

GlobeSt reports that "According to a company statement, this fund was the largest real estate opportunity fund ever raised."

Blackstone senior managing director and New York City-based co-head of Blackstone’s real estate group, Jonathan Gray, stated that  "we believe there should be attractive investment opportunities for this capital given the market dislocation that exists today."

We agree that the current distressed real estate market offers tremendous opportunities. 

The time is right for active, intelligent investors to take advantage of the multi-billion dollar distressed real estate market.  The real estate market is brimming with profit opportunities for those with leverage and expertise

But this is not an easy market for individual, smaller investors to penetrate.

The truth is that most smaller investors do not have the leverage and expertise to succeed in this volatile and extremely competetive market.

In fact, the effort that the smaller, part-time investor in foreclosures and distressed real estate would need to spend identifying properties, haggling with lenders and distressed owners, attending auctions and establishing financing is equivalent to a full-time job — and even then, success is far from likely.

Most smaller investors in this market will get caught up in the buying frenzy, spending too much time and money on so-called coaching and how-to courses from self-proclaimed foreclosure gurus, and then spending too much on property that will continue to fall in value and fail to provide an adequate income stream.

Great real estate deals do exist across the country. But to be successful, investors will need a high level of sophistication in identifying properties, acquiring them and developing the right exit strategy for each asset.

Smaller buyers, beware!

UPDATE:

For the lastest on the real estate vulture fund being formed by disgraced ex-Governor of New York Eliot Spitzer, click here.

So there you have it, the business term “Vulture” has a new definition it means a transparent way of doing good business or way to balance the economy.

To contact HomeVultures call 954 624 5570

GregPalastOffice

The Continued story of the Vultures who prey on Africa's Poor.

www.GregPalast.com

see

Randi Rhodes Hunts Bush's Vultures with BBC's Greg Palast (vids)

Greg Palast on the Battle to End Vulture Funds (link; transcript)

Vulture Funds - Greg Palast (vid)

"Vulture Fund" Company Seeks $40 M Payt from Zambia on $4 M Debt + Zambia loses 'vulture fund'

Citing Democracy Now! Broadcast Conyers Confronts Bush & Demands Investigation of Vulture Funds

U.S. Vulture Fund Owner Wins Debt Payment from Zambia -- But Faces Possible Indictment at Home

Greg Palast

For those who didn't see it, legendary BBC interviewer Jeremy Paxman had to try incredibly hard to get Jubilee Debt Campaign spokeswoman Caroline Pearce to say anything of substance. The words "blood" and "stone" came to mind; anyone would think he was accusing her of something, and yet this was an excellent opportunity for her group to get its message accross. A certain amount of caginess seems normal, but Ms. Pearce refused to give a straight answer to Paxman's question "do you think [a ruling in the vultures' favour] will lead to deaths?".

Yes. It will. Certainly, it would be impossible to find a dead kid and say "Vulture funds killed this guy!", but it would be very reasonable to suggest that taking $40million away from a poor country might push mortality rates up. Indeed, not saying something along these lines seems inconsistent with Jubilee's mission. Martin Kalunga-Banda, Zambian presidential adviser and a consultant to Oxfam told Newsnight, "That $40m is equal to the value of all the debt relief we received last year." - so if cancelling debts could save lives then surely reinstating it can claim lives. So why not say so?

I tried looking into the Jubilee Debt Campaign, suspecting more to this than meets the eye. My fiancée's experience at Oxfam has taught me to be a little suspicious of brand-name charities. Large NGOs like Oxfam are becoming more and more like corporations, presumably in the hopes of promoting efficiency through competition. Never mind that more progress could be made cooperating than competing for sales, corporate charity in no way promotes efficiency because their "customers" are not the beneficiaries of their aid, but their benefactors.

If only the market for development and relief work were so crowded that charities had to compete for the attention of the poor. In fact it's much the opposite, with too few NGO project managers having to choose between too many needy causes; starving children cannot be choosers. People who give money to charity can be choosers, and so the NGOs compete for their attention and their custom. As the main area of competition becomes fundraising, many NGOs effectively measure their success in terms of the amount of money that passes through their hands, demoting their actual work to an afterthought.

Most of the people who work in poverty relief and development do so because they are genuinely trying to make the world better, and they do get some very good work done. I really don't want anyone to take this post as an argument not to give them money - if anything, please give more money to charity - but be selective in your altruism. An NGO's corporate structure is likely to lead it astray, but when most of its management staff are taken from and based in beneficiary countries they are nevertheless likely to stay focused on their real objective. (That's why my standing order goes to Concern.)

Anyway, now the disclaimer is done with, excessive focus on fundraising can do more than just distract from the real work. An NGO has to simultaneously engage an increasingly cynical and easily distracted public and justify its usefulness to governments. Oh yes, Oxfam doesn't just get its money from second-hand shops, but also from the "institutional donors" of national and European government. This made, for example, the Make Poverty History Campaign of 2005 something of a joke. To get us out of our seats and onto the picket lines required ridiculously exaggerating what we were campaigning for, but keeping governments onside required staying within certain boundaries, not rocking the imbalance-of-power boat too much.

Which gets us back to debt relief. Public pressure in 2005 did pay off, and in 2006 some debt was dropped. Much debt was not dropped, and much of what was dropped was either offset by aid reductions or else bogged down with unfair and unproductive conditionalities - but many lives will have been made longer, healthier and crucially, freer. This small victory should embolden us to campaign harder, but mass marketing doesn't do sustained campaigns of small victories. Many of us did little more than turn up to free concerts, but MPH and its host of backslapping (and incredibly rich) celebrities had us believe that we'd just changed the course of history.

Ultimately, their reliance upon donors gives charities a vested interest in the status quo, and while we should not let their flaws detract from the good work they do, nor should we accept any messages of complacency. Something changed in 2005, but that something was essentially nothing compared to what still needs to be done. Anyway, Caroline Pearce's refusal to say that vulture funds were killing people seemed to be part of a conscious effort on her part to keep to a positive message. Most of us have only just heard of vulture funds, and I'd wager we're all pretty disgusted by them. Jubilee could take that disgust and turn it into a productive campaign to ban the vultures; why play it down?

To be fair to Jubilee, I checked out their website and found them to be anything but complacent. Anyone who bothers clicking through will find that they are clear, informative and realistic about the need for, nature of, and obstacles to effective debt relief. They've even, in the time since I started writing this post, launched a campaign against the vulture fund in question, and I have renewed faith in them. Their patronising insistence on playing up the progress already made instead of the challenges still ahead irritated me, but it does not seem to be a major part of their strategy.

Nevertheless, charities and NGOs often do exaggerate what they are achieving. This is counterproductive, but it's not their fault; it's ours. I've talked about Oxfam because its guilty of pretty much every count of donor-centrism you could level at the sector, but I certainly don't want to demonize them. I am sure that almost every single Oxfam employee would rather be working in the field to make a real difference than in madly marketing for your pennies. If we had any sense of social responsibility, they could. But we're fickle and self-absorbed; we're willing to give money away, but only if the results are spectacular. Campaigners like those at Jubilee have to work hard, for years, to slowly but surely get results - but we're not in the least interested in slow, sure progress. At a stretch, we'll take part if you promise it'll save the world; anything less isn't worth bothering with.

And that's probably how last night's Newsnight got up my nose in the first place. It kept referring to the 2005-6 debt relief as an act of immense generosity on the part of Western nations. Confusing "slightly less exploitative than usual" with "immensely generous" is hardly helpful. We all, to some extent or another, buy into an incredibly unfair system that creates crippling poverty in other countries. If you try to offset some of that with a small contribution towards alleviating that poverty then, good. So you should. But please don't call yourself immensely generous.