Star News

This week, reports on construction, manufacturing, and personal income & spending were mixed, indicating that the economy is experiencing modest growth although recovery remains fragile. Manufacturing output expanded in February for the 7th consecutive month, providing one of few areas of strength for the economy; however, the growth in manufacturing activity slowed compared with January, and overall, fell short of economists´ expectations.

Economists cautioned that manufacturers have been ramping up production for businesses who, in recent months, have allowed their stockpiles to shrink in an effort to save money. Should commercial and consumer spending remain tepid, manufacturing activity – as well as its contribution to economic recovery -- will decline.

Other sectors are also struggling, including construction spending, which fell again in January. A lag in commercial development activity including office and hospitality construction offset a housing rebound. Economic strains faced by both residential and commercial construction are likely to weigh on overall economic activity. Construction spending dropped 0.6 percent; while housing construction rose 1.3 percent, though such a gain may be temporary given the weakness in sales of new and existing homes during the month of January. Spending on nonresidential projects fell by 2.1 percent. The industry is expected to remain under pressure as home builders struggle to recover from the steepest slump in decades.

Though personal spending rose slightly more than expected, incomes were flat due in part to Social Security recipients having not received their customary cost-of-living bump. Weak income growth may depress spending in the months ahead and weigh down any potential rebound in the overall economy. We will keep you posted…

Hot Money
5.95% Ten year Fixed Rate Loans

We at Penstar are often asked the specifics on qualifying a borrower for the best available pricing. Currently we are working with a capital provider offering 10-year fixed rate financing as low as 5.95% to 55% of value on stabilized retail, industrial, office, and medical office buildings located nationwide. In addition to predictable cash flow, strong sponsorship with proven management and ownership experience will be required to obtain this below market coupon. Alternative sources of borrower cash flow will also aid in obtaining the loan commitment. Loan requests considered will range from $5,000,000 to $25,000,000. For more information, please contact Steven Hamermesh at (818) 883-9609 or Hamer@PenstarAdvisors.com.

Helpful Humor

The best antidote for those challenging transactions is to take a moment to have a hearty laugh. Helpful humor is our way of infusing laughter into your work-week

A cowboy appeared before Saint Peter at the Heavenly gates. “Have you ever done anything of particular merit?” Saint Peter asked.

“I can think of one thing,” the cowboy offered. “On a trip to the Black Hills of South Dakota, I came upon a gang of bikers threatening a young woman.” “I directed them to leave her alone,” the cowboy continued, “but they would not listen.” “I approached the largest and most heavily tattooed biker and smacked him in his face, kicked his bike over, ripped out his nose ring, and threw it on the ground.” “I yelled at the biker,” exclaimed the cowboy, “Back off; or I'll kick the crap out of all of you!”

Impressed, Saint Peter asked the cowboy, “When did this happen?”

The cowboy lowered his head and replied, “A couple of minutes ago.”