Last week I wrote an item about Ron Paul and the danger he posesto the Fed, the economy and the capital markets with his extremeand absurd views that the Fed should be eliminated or at leastunder the direct control of the bozos in Congress, and that fiatshould be replaced by the gold standard. Much to my surprise thiselicited a stack of responses from the Ron Paul lunatic fringe whoactually believe these things to be good for the economy. Thesepeople are so imbued with the Ron Paul Kool Aid that they areunable to understand even the basics of capital markets and thefunctioning of the monetary system. Normally I would simply dismissthese people as nothing more than irrelevant background noise, butthen the Republicans actually appointed him as head of the monetarycommittee. He wasted no time at all in coming forth with statementsas to how he intends to audit the Fed and impact policy. If you arenot paying attention yet, you need to. When Paul combines with hisleft wing lunatic equal, Bernie Sanders, there is only dangerouspolitics coming out of Capitol Hill for the capital markets andmonetary policy.

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What the country and the world needs is a stable and well runmanagement of interest rates and monetary and fiscal policy,especially in emergency situations like the latter part of 2008.Whatever anyone wants to complain about, the reality is TARP andPaulson/Bernanke saved us form true catastrophe and brought astabilization to the capital markets that was unprecedented. TARPis proving to be not only a success in saving the banking system,but a profitable venture for the taxpayers. Something truly unique.By the time the whole thing is unwound and the government is out ofAIG and GM, and maybe even Chrysler, there will be a profit.Despite all of the erroneous media reports, the main profits camefrom the investments in the big banks, and the TARP losses aremainly in the small Main St banks.

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While I prefer to deal more with the happenings in the capitalmarkets and specific trends and transactions as they relate to realestate, I feel we all need to pay a lot of attention to what isstill happening on Capitol Hill and the danger to our futuresuccess if we do not. The wild reaction of Democrats to the taxcompromise and the complete failure of leadership ability by Obamaon the issue is indicative of how any show of bipartisanship is nowimmediately attacked as some sort of subversive act, even by thepresident’s own party. Clearly the message of the election that thevoters are fed up with the highly partisan childishness fighting onboth sides, had no resonance with Pelosi and her followers. HarryReid continues to try to ram through legislation that the countrydoes not want and rejected on election day. It is going to be along two years and none of it is good for asset values or theeconomy.

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We need to get back to the center, and to have a president whoknows how to lead and to build consensus and coalitions, and leaders in Congress who understand that the art is compromiseand not the dictatorship of the left or the right. They wonder whycorporations are sitting on $1.9 trillion in cash and not investingin long term capital projects. Why would anyone take the risk whenwe have a dysfunctional government and a total lack of realleadership anywhere in the political spectrum.

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Joel Ross

Joel Ross began his career in Wall St as an investment banker in 1965, handling corporate advisory matters for a variety of clients. During the seventies he was CEO of North American operations for a UK based conglomerate, and sat on the parent company board. In 1981, he began his own firm handling leveraged buyouts, investment banking and real estate financing. In 1984 Ross began providing investment banking services and arranging financing for real estate transactions with his own firm, Ross Properties, Inc. In 1993 Ross and a partner, Lexington Mortgage, created the first Wall St hotel CMBS program in conjunction with Nomura. They went on to develop a similar CMBS program for another major Wall St investment bank and for five leading hotel companies. Lexington, in partnership with Mr. Ross established a hotel mortgage bank table funded by an investment bank, and making all CMBS hotel loans on their behalf. In 1999 he formed Citadel Realty Advisors as a successor to Ross Properties Corp., focusing on real estate investment banking in the US, UK and Paris. He has closed over $3.0 billion of financings for office, hotel, retail, land and multifamily projects. Ross is also a founder of Market Street Investors, a brownfield land development company, and has been involved in the acquisition of notes on defaulted loans and various REO assets in conjunction with several major investors. Ross was an adjunct professor in the graduate program at the NYU Hotel School. He is a member of Urban Land Institute and was a member of the leadership of his ULI council. In 1999, he conceived and co-authored with PricewaterhouseCoopers, the Hotel Mortgage Performance Report, a major study of hotel mortgage default rates.