Boston Properties, which has seen its share price slide from more than $100 to about $60 in just two months, illustrates recent woes for the typical REIT. "There's nothing you can do about your stock price," said Doug Linde, president of Boston Properties. Linde said the REIT is doing everything it can to solidify its position and weather the downturn.
For the first time, the Federal Reserve's balance sheet exceeds $2 trillion as the central bank continues to lend huge sums of cash to financial institutions to keep short-term funding markets alive. The Fed's balance sheet grew from $1.953 trillion Oct. 29 to $2.058 trillion on Wednesday. Banks pulled back on direct borrowing from the Fed's discount window, but the industry remains dependent on the lender of last resort.
The Fed's program to bring liquidity back into short-term corporate lending is showing results, with lending under the Commercial Paper Funding Facility increasing to $243 billion over the past week, from $144 billion a week earlier. Businesses and financial institutions were forced to look to the Federal Reserve for help after the traditional sources of debt, including commercial paper, dried up in the wake of the Lehman Brothers collapse. One analyst said the Fed "is tapping all the keys on the keyboard, and it does seem to be helping."
A survey of financial firms found that more than 90% are reluctant to participate in the Treasury Department's Troubled Asset Relief Program because they say it lacks clarity. Nearly an equal amount of firms said issuing warrants in return for assets Treasury might take from them would also be problematic.
The U.S. pared another 240,00 jobs in October, putting unemployment at 6.5%. Expectations had put the loss at 200,000. Close to 1.2 million jobs have been lost this year, most of them in the past few months. President-elect Barack Obama will face an uphill battle on the economy when he assumes office in January. "Superman couldn't change what's in store for the U.S. economy. It's going to be ugly," said Rich Yamarone, director of economic research at Argus Research.