Warren Buffett makes his bets (on GE and Goldman) and provesonce again in tough times cash is king -- he's in a position tomake what could be big scores. On the other hand if you are in adebt driven business or have used a lot of leverage on yourinvestments you are more likely to be flat on your back. TheWashington rescue/bailout package may prevent systemic collapse inthe credit markets, but won't change dramatically the gloomyoutlooks for folks who had been playing the debt game. Necessarydeleveraging will take time and deeply pain investors who borrowedtoo much and surviving lenders who ramped up volume at the expenseof underwriting discipline.

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And despite the significant damage already suffered across thecredit sector, commercial real estate has yet to take most of itslumps. Appraisers characteristically have been gazing in the rearview mirror. Just a few weeks ago, a well-known appraisal honchowas telling me about how income numbers were holding up in mostinstitutional portfolios "through June 30." Well, how about lookingat the next few months. Let's hope the credit scare abates, but noone should expect the lending spigots to flow again as unemploymentramps up and the government comes to terms with the fact that thecountry is essentially busted. The scary thing is that so manyAmericans have been living (large) off credit. The home equitylines, attractive car financing, the credit card deals --it's allover. Now what does everybody do to keep going when they are in thered and lenders out of self preservation start to turn thescrews?

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As previously noted, more retailers will be toast. Office rentswill decline. Warehouse activity sinks. And housing...please. How many people will have enough equity to buy homesin this environment under normalized (stricter) lending guidelines?Not enough to spur any rebound.

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Let's not kid ourselves -- the last few months represent an unprecedented crash of the debt markets and the way we have donebusiness for the past generation -- borrow and consume. It wasunsustainable. Now we must shift to paying off our debts, creatingnew businesses and industries, and adding value once again to theworld economy. It may not take a generation to recover, but thenext President has to hope things are looking better by the nextelection, and that's no sure thing.

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Jonathan D. Miller

A marketing communication strategist who turned to real estate analysis, Jonathan D. Miller is a foremost interpreter of 21st citistate futures – cities and suburbs alike – seen through the lens of lifestyles and market realities. For more than 20 years (1992-2013), Miller authored Emerging Trends in Real Estate, the leading commercial real estate industry outlook report, published annually by PricewaterhouseCoopers and the Urban Land Institute (ULI). He has lectures frequently on trends in real estate, including the future of America's major 24-hour urban centers and sprawling suburbs. He also has been author of ULI’s annual forecasts on infrastructure and its What’s Next? series of forecasts. On a weekly basis, he writes the Trendczar blog for GlobeStreet.com, the real estate news website. Outside his published forecasting work, Miller is a prominent communications/institutional investor-marketing strategist and partner in Miller Ryan LLC, helping corporate clients develop and execute branding and communications programs. He led the re-branding of GMAC Commercial Mortgage to Capmark Financial Group Inc. and he was part of the management team that helped build Equitable Real Estate Investment Management, Inc. (subsequently Lend Lease Real Estate Investments, Inc.) into the leading real estate advisor to pension funds and other real institutional investors. He joined the Equitable Life Assurance Society of the U.S. in 1981, moving to Equitable Real Estate in 1984 as head of Corporate/Marketing Communications. In the 1980's he managed relations for several of the country's most prominent real estate developments including New York's Trump Tower and the Equitable Center. Earlier in his career, Miller was a reporter for Gannett Newspapers. He is a member of the Citistates Group and a board member of NYC Outward Bound Schools and the Center for Employment Opportunities.