It is really funny though that with FED rates approaching 0 (Zero), the cost of capital is at 10-12-15% for REITs, companies, or even banks that want to get money from governments. This cannot last. Of course, credit markets are frozen, deleveraging is in full swing, and fear reigns supreme, but come on, the spread is ridiculous. At some point the money Fed keeps pumping into everything, should become available for loans and the cost of capital has to drop a lot.
Yeah, I know inflationists will argue that we will skip from zero fed rate - 10-15% loan rates to 10% fed rates - 15% loan rates, without going through 0 fed rate - 5% loan rates, but IMHO this is unlikely. ;)
I am not an expert in this though lol. :) |
