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Sunday, August 12, 2007

The Art of the Squeal

Donald Trump is calling for Federal Reserve rate cuts ... possibly even a full-fledged government bailout .. to help those suffering from the "credit crisis," which makes one wonder just how much of the crappy paper his young apprentices were holding in the Don's portfolios when the melt-down started. The Don, who has several spectacular bankruptcies under his belt, tells us he's just thinking of the little guy and that he has a sincere desire to maintain public confidence in the markets ... which could be true, but could also be code for "I just need enough liquidity to unwind my positions, but it wouldn't hurt to also get a good price on the way out ... thank you Freddy & Fannie."

Speaking of handouts, if you want to jump into property development, now is not a bad time to do it if you pick the right end of the market ... take a look at the "Affordable Housing" game, which is where everyone who couldn't hold onto their houses is going to end up in the next year or so. As a developer, you won't make as much money on the rent-rolls as you might like, but the local governments and even the Feds typically line up to throw tons of cash at you in the forms of grants, subsized loans, and tax credits for rehabbing thinkgs like old factories into multi-family housing and bringing the units onto the market, making these deals definitely profitable. And don't let the moniker "Affordable Housing" mislead you ... a lot of this stuff comes onto the markets at near-market rates. It really is quite a racket.

The Art of the Deal is Copyright © 1987, Donald J. Trump, and was published by Ballantine Books, an imprint and registered trademark of Random House, Inc. The copyright notice had this amusing caveat: "The Art of the Deal is a commonsense guide to personal finance. In practical-advice books, as in life, there are no guarantees, and readers are cautioned to rely on their own judgment about their individual circumstances and to act accordingly."

Uh huh? Then why did I buy this inspiratonal gem if I was going to follow my own gut?

Oh yeah ... always read the tiny print


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