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BANKER LETTER
Volume 10: Issue 1
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January 25, 2022
This letter is intended only for commercial real estate loan officers working for banks, credit unions, conduits, and hard money lenders. Today we'll discuss the case for gold. We also have lots of cute, clean jokes, some funny pics, and a video of some of Betty White's best moments.
Hey guys, if we make you chuckle today, won't you please-please-please refer a turndown this week to CommercialMortgage.com? Seriously, guys, this searchable portal is free, and it contains thousands of commercial lenders. You really are doing them a favor.
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Joke Du Jour
A fellow came into a bar and ordered a martini. Before drinking it, he removed the olive and carefully put it into a glass jar. Then he ordered another martini and did the same thing. After an hour, when he was full of martinis and the jar was full of olives, he staggered out. "Well," said a customer, "I never saw anything as peculiar as that!" "What's so peculiar about it?" the bartender said. "His wife sent him out for a jar of olives.”
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Why You Must Follow C-Loans on Facebook
You are missing important free training. It takes old man Blackburne four to five hours to write one of our popular blog training articles, but he can knock a short training article about commercial mortgage brokerage or commercial real estate finance (CREF) in minutes. In the past two weeks, he has written mini-articles on why banks hate blanket commercial loans, asset-backed securities, family offices, co-living properties, tuck-under parking, the net-worth-to-loan-size ratio, and an unknown, Federal government, mid-market PPP-like loan that can inject $5 million to $300 million into large businesses struggling to survive the coronavirus crisis.
To view these mini-lessons, come to the Facebook page for C-Loans. Look for a tab with three dots, “…”. The first drop-down selection is, “Follow.” Once you follow our Facebook page you will receive one or two free mini-lessons every week.
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- Today's Observation -
The Case for Gold
Two very senior strategists for Blackstone, the same brilliant folks who bought up tens of thousands of rental houses eight years ago, recently issued their list of the Ten Surprises of 2022.
This is the 37th year that Byron Wien and Joe Zidle have given their views on a number of economic, financial market, and political surprises for the coming year. Byron and Joe define a "surprise" as an event that the average investor would only assign a one out of three chance of taking place, but which the two believe is "probable," having a better than 50% likelihood of happening.
One his surprises is that the price of gold will rally by 20% in 2022 to a new record high. Despite strong growth in the US, investors will seek the perceived safety and inflation hedge of gold amidst rising prices and market volatility. Gold will reclaim its title as a haven for newly minted billionaires, even as cryptocurrencies continue to gain market share.
I personally think they make a good case. While gold can be a decent, if not the best, hedge against inflation,
gold is one of the rare investments
that is not the debt of another.
When the stock and bond market are crashing, as everyone is fleeing to cash, gold typically falls the least. Make no mistake; gold still falls during financial crashes - like the S&L Crisis, the Dot-Com Meltdown, and the Great Recession - because even the baby and his bathwater are for sale.
Gold typically falls the least, however, because it is not the debt of another. Gold cannot default. That is a wonderful thing when household names and Fortune 500 companies are defaulting on their bonds and going bankrupt.
How will Bitcoin and other cryptocurrencies do during the next financial crisis? I suspect they will underperform, and some might even go to zero. Anonymous entries in a blockchain remind me an awful lot of “eyeballs” during Dot-Com Mania. Most (all?) big financial crises involve huge losses in some sort of malinvestment (a boneheaded investment), and cryptocurrencies would sure fit that bill. The two smart guys from Blackstone, guys who are clearly smarter than me, only suggest that cryptocurrencies will continue to win converts. We’ll see.
The markets, especially the real estate market, are due for their regular meltdown, which seems to happen every 10 to 14 years. It has now been 14 years since the Great Recession.
The property meltdown in China may be the trigger. Will the Chinese authorities be able contain the Evergrande Crisis to the peeing section of their swimming pool? I doubt it. Some little kid, lining the parade, just shouted out, "President Xi is naked,” and “the Chinese real estate market is greatly overbuilt.” Smart kid, huh? Haha.
So maybe its time to own a little gold in your portfolio.
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Cello Joke
"A cellist in Oregon was arrested after police found over 100 pounds of marijuana in his car trunk. Thankfully, when they pulled him over, he didn't resort to violins.” — Seth Meyers
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Sweet Zoo Joke
This nice lady tells the story: My favorite spot at our local zoo is the House of Night, where nocturnal creatures crawl and fly about. One very bright day, I stepped into the exhibit and was plunged into total darkness. Almost immediately, a small hand grabbed mine. And who do you belong to?" I asked. His answer came swiftly, "I'm yours until the lights come on!”
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Mime Joke
"According to a new study, women are more attracted to men who talk less. Which is why you often overhear women say, 'Check out that mime.'” — Conan O'Brien
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Learn Commercial Finance
9-Hour Video Training Course
It would be a lot easier to close your commercial deals if you actually knew the subject matter. Are you finally ready to learn the financial ratios and the advanced terminology of commercial real estate finance? Just $549.
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Become a Hard Money Lender
One reason why hard money brokers make ten times more money than desk-and-a-phone mortgage brokers is that they approve their own deals!! Four-hour video course, How To Find Your Own Private Mortgage Investors. Just $549.
Now available online!
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Video - The Best of Betty White
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Final Funny
A man walks into a bar and asks the bartender, "If I show you a really good trick, will you give me a free drink?" The bartender considers it, then agrees. The man reaches into his pocket and pulls out a tiny rat. He reaches into his other pocket and pulls out a tiny piano. The rat stretches, cracks his knuckles, and proceeds to play the blues. The bartender pours the man a drink on the house and he puts the rat and piano away. After the man finished his drink, he asked the bartender, "If I show you an even better trick, will you give me free drinks for the rest of the evening?" The bartender agrees, thinking that no trick could possibly be better than the first. The man reaches into his pockets again and pulls out the tiny rat and tiny piano. The rat stretches, cracks his knuckles, and proceeds to play the blues. The man reaches into a third pocket and pulls out a small bullfrog, who begins to sing along with the rat's music. While the man is enjoying his beverages, a stranger confronts him and offers him $100,000.00 for the bullfrog. "Sorry," the man replies, "he's not for sale." The stranger increases the offer to $250,000.00 cash up front. "No," he insists, "he's not for sale." The stranger again increases the offer, this time to $500,000.00 cash. The man finally agrees, and turns the frog over to the stranger in exchange for the money. "Are you insane?" the bartender demanded. "That frog could have been worth millions to you, and you let him go for a mere $500,000!" "Don't worry about it," the man answered. "The frog was nothing special. You see, the rat's a ventriloquist."
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www.C-Loans.com
555 University Ave
Suite 150
Sacramento, CA 95825
P: (574) 210-6686
F: (916) 338-2328
CA DRE #1330173
NMLS #167100
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Tom Blackburne
General Manager
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