Huber Bongolan

Howard Marks’ memo “Coming Into Focus”

Read Date: 10/2020, Source

  • This is not a normal market cycle – most are stem from economic weaknesses and repaired by economic tools; this downturn was caused by an exogenous, non-economic development (the pandemic)
  • The same economic tools cannot be used to repair this – the disease must be brought under control
  • 17% of FHA-insured mortgages were delinquent in July and 27.2% of NYC mortgages were delinquent
  • Cities and states are in trouble because they cannot print money like the federal government can
  • Much of the stock market rise since March 2020 can be attributed to low interest rates
  • Theoretically, low interests cause low discount rates which lead to higher DCF values
  • Lower demand returns lead directly to higher valuations
  • The Fed has the ability to lower yields by buying bonds
  • Low rates encourage riskier behavior as investors search for yield 
  • The need to put money to work causes capital markets to open
  • The odds right now are not on the investor’s side and this market is ripe for negative surprises

Published by Credible CRE

Huber Bongolan has 9 years of experience in commercial and residential real estate finance. Mr. Bongolan has sourced $700+ million in debt and equity financing for land, construction, bridge, and permanent deals in all product types. Huber received a double bachelors, Business Economics and International Studies, from UC Irvine where he graduated Cum Laude. He then earned a double masters, MBA and MRED, with Program Distinctions, from University of Southern California. Mr. Bongolan is an Eagle Scout in the Boy Scouts of America, and holds leadership positions in both ULI (Urban Land Institute) and FIIRE (Filipinos in Institutional Real Estate). He enjoys competitive sports, mentoring youth, and teaching personal finance. Huber also enjoys writing about Real Estate trending topics and education. His blog posts can be found on

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