“Where have all the good men gone and where are all the gods? Where’s the streetwise Hercules to fight the rising odds?” Bonnie Tyler, 1985, (“Holding out for a Hero“, from the Footloose soundtrack)
A common theme in the modern world is the wildly optimistic, hopelessly hopeful, against-all-odds rescue story. Maidens in distress, burning buildings, meteors plummeting to earth: all require a superhuman, faster than a speeding bullet, able to leap-tall-buildings-in-a-single-bound kind of rugged individual who sizes up desperate situations and makes the right snap decisions at a moments notice.
If you’ve been awake the last 2 years, you’ve probably caught wind of the fact that the world economy could use a little intervention f rom the man of steel, or just about anyone who’s willing to assume the mantle. Just to be clear, I’m not volunteering; I look terrible in tights, and tend to go pale at the sight of blood.
However, an article I came across in BusinessWeek got me thinking about what this economy presents in terms of opportunity. As many of the business leaders interviewed mention, the shift of focus toward growth and optimism is happening, and it will be those who have the courage to take the leap of faith toward opportunity who stand to reap the greatest reward.
2008 was a brutal year for real estate. From the sub-prime meltdown in August of 2007, through the Bear-Stearns, Lehman Brothers debacles, and the subsequent banking crisis, the financial world has been in a constant state of upheaval. The home financing standards pendulum, which was tilted toward ludicrously loose (think “Liar’s Loans”), swung a full 180 to be so restrictive as to dramatically impact the ability of financially healthy businesses from securing operating capital. And, of course, there’s the wildly volatile stock market- what to make of that?
Signs that the worst may be over have arrived in the form of restrictive new legislation, such as the HVCC and HERA laws governing appraisal procedures and lending disclosure timelines. Both of these are, in my view, knee jerk legislation aimed at appeasing a few big lobbies who’ve wanted to get their fingers into some pies that aren’t theirs. I fully anticipate that we’ll see modifications to these rules and relaxation of some of the more heinously restrictive requirements. It will take time, but I believe those changes will come.
Back to our hero! If jobs are the crux of the problem, and consumer indexes won’t reflect real growth without them, it seems the place to start is with those businesses that have the ability to hire. However, as I mentioned earlier, the funds for businesses have been scarce in this downturn. Even firms with the financials to justify growth investment have been hesitant, or unable to, due to the paucity of affordable financing.
We’ve seen attempts from various government agencies to fill the role of hero, and have a legacy of debt, entitlements, and bureaucracy to show for it. Well, here’s a new idea- how about private investment funds to the rescue?! I tripped across this last night, and found it pretty intriguing. I’m not crazy about the outfit this gal’s wearing (um, hon- mini skirts and barstools are a combo best left to co-eds, not business professionals on-camera- and yes, I know this is ‘happy hour’!), but the message is certainly worthy of consideration. What do you think?