In the opening keynote interview, Starwood Capital Group's BarryS. Sternlicht set the tone of the day, expressing his discontentwith the artificial stabilization of the market. "The US will lagin recovery because we don't have the leadership, nor the jobs tobring about a recovery," he said.

Government initiatives, like TARP, are futile, he added, becausethey aren't truly addressing the dislocation in the market. Ifanything, these programs are protracting the pain, allowing deludedowners and banks to hold on to their underwater assets.

Both the Federal Reserve and the Federal Accounting StandardsBoard, Sternlicht said, are further exacerbating the problem,keeping interest rates artificially low and relaxing write downrules, respectively. "FASB recently said that if the appraisal of aloan is below the value, the debt doesn't have to be written down.That worries me," Sternlicht said.

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