Credit crunch: Not just a breakfast cereal
Wake up and good morning. "Credit crunch" may sound like a breakfast treat at this hour of the morning, but it's a hot topic in the news as the financial dysfunction on Wall Street, a still pending bailout and the weak economy continue to dry up lending. And Florida is right in the middle of the credit desert. Stories about local lending challenges appear in AP reports and dot the state newspapers from the Fort Myers News-Press and Sarasota Herald-Tribune to the St. Petersburg Times (including an explainer on how spikes in LIBOR, the London InterBank Offering Rate, are messing up short-term credit). All this lends credence to the probability that the Federal Reserve will cut interest rates before policymakers are next scheduled to meet.
There's even talk that many of the sports stadiums and arenas adorned with the names of certain companies -- marketing deals paid for at great price -- may see a big turnover as the businesses fall prey to tough credit and rough times. The Wachovia Center arena in Philadelphia and WaMu theater at Madison Square Garden and in Seattle are among the venues whose names face an uncertain future. Let's not forget the lucky players on England's storied Manchester United soccer team (controlled by the Tampa Bay Bucs' Glazer family) wear the AIG name on their jerseys, advertising a company that fell so deep into financial trouble that the U.S. government took control of it. Check out this photo of the shirts.
On the housing front, we keep getting occasional whiffs of fresher air that things in Florida may slowly be improving. I said slowly. But a new analysis from PMI Mortgage Insurance Co. sucks all the oxygen out of the room again. The Fall 2008 U.S. Market Risk Index, which shows increases in foreclosures and unemployment have significantly heightened the risk of future home price declines, ranks the nation's 50 largest metropolitan statistical areas according to the likelihood that home prices will be lower in two years.
So where do we stand? Florida's still taking it in the chops. The highest risk of future price declines remains in Fort Lauderdale-Pompano Beach-Deerfield Beach (99.5 percent), Riverside-San Bernardino-Ontario, Calif. (99.5 percent), Orlando-Kissimmee (99.4 percent), Miami-Miami Beach-Kendall (99.3 percent) and ... drum roll, please ... Tampa-St. Petersburg-Clearwater (99 percent). Are we making strides? Absolutely. Are we near our real estate bottom? Apparently not.
-- Robert Trigaux, Times Business Columnist