The U.S. housing market is nearing its bottom, but the overall economy is likely to dip into a recession next year, real estate executive Sam Zell said Tuesday. Meanwhile, office buildings that are not in downtown markets or that are not considered top quality will see a slow, downward spiral in prices.
Warren Buffett plans to buy a $5 billion holding in Goldman Sachs through his Berkshire Hathaway investment vehicle, and he will get warrants to purchase as much as another $5 billion. Through a public offering of shares, Goldman plans to raise $2.5 billion. Investment by the "Sage of Omaha," announced one day after the investment bank changed its legal status to become a federal-holding bank, is a vote of confidence in Goldman.
Commercial real estate companies, already under pressure as a result of the credit crunch, are facing even more pressure following the events of the past two weeks. Centro Properties Group, New York developer Macklowe Properties, office-building investor Broadway Real Estate Partners LLC and others are all facing increased pressure as a result of Lehman Brothers' bankruptcy filing, problems at American International Group and Bank of America's acquisition of Merrill Lynch.
Fans of the uptick rule, which was eliminated last summer, are calling for its return. The rule, which prevented the short sale of stock unless the share price is higher than the last trade, is a better option than the current emergency order by the Securities and Exchange Commission, which outright bans short selling of more than 900 stocks. The temporary rules haven't helped markets, which "is pretty clear proof that it's not the uptick rule -- or the shorts -- that are the problem," said Dave Abner, director of institutional sales at WisdomTree Investments.