Bacon appeared as a guest speaker at CityScape USA's closing, a three-day event that attracted investors, developers, architects, designers and consultants in the real estate industry. He did not address specifics behind the number of steps that need to be taken in both the short and long term, nor did he address further specifics. However, he did address where things currently stand, and said he is sure that "we will get through this," when speaking about the current state of the economy.

"Fannie Mae is a unique animal," he said. The government's conservatorship was done to ensure that Fannie Mae and Freddie Mac can provide liquidity at a time of stress in the markets, he explained. "The government is committed to making us continue to work, they are a stabilizing factor. …The ability of someone to provide liquidity in this market is essential."

Although at first, the initial assessment--both by the larger global financial community and the commercial real estate industry specifically--was one of cautious approval, Bacon said that things are looking positive, pointing to spreads already tightening on debt. "It still isn't roses and honey," he said. "There is still a concern." Bacon expects to see home prices decline 9% this year, but said that fundamentals are on our side. "Before, there was too much risk on loans and consumers didn't know what they were getting themselves into," he said, but people have learned.

Bacon did express concerns about job growth, recession, rate of transactions, and acts of God—pointing to Katrina. "There is a great divide between buyers and sellers because of cap rates," he said, "which says a lot about the state of the market. …Cap rates are edging north of debt markets." Bacon explained that although he doesn't know all and see all as far as when things will hit bottom, he said that California, for example, should expect to see a bottoming out in the next year due to high prices. Florida, he said, which had building driven by speculation and perceived demand, will take longer to settle out because it isn't only about pricing. "It is about property type and location," he said. "It is mismatched and will take longer to figure itself out." Bacon pointed to the many backlogged foreclosed loans in Florida presenting one of the many issues that needs figuring out.

Bacon said the biggest surprise to him in the whole credit crisis situation, was the breakdown in risk management. "People created complex securities and they didn't sell," he said. "I was surprised to see that happen. I was surprised they would focus so much on the return that they forgot about the risk." The bottom line, Bacon said, is that yes, there is reason to be concerned about the state of the credit market, but when you start dissecting it, long-term fundamentals are good, and the US government decided they wanted to act. "The result, I believe, is that there will be strong liquidity. Fannie Mae and Freddie Mac will bring stability to the market." Bacon hopes to rekindle optimism and urges the industry to step back in and "take advantage of the wonderful opportunities."