Which way do we go, George...which way do we go?

Please pardon the Dennis Miller-esque references to Looney Tunes cartoons, but I was listening to his show this morning. Anyway....

Where are we going? No one, of course, really knows. And that shows in some opinions out there right now.

For instance, here is a story on the rest of the year and looking into 2010. The gist?

Call it optimistically hopeful, but federal policymakers this week said the national recession could end this year, with the beginnings of recovery possibly taking hold in 2010. A pair of recent reports suggests that all is not lost for battered commercial real estate investors as well. In fact, the reports predict that a window of opportunity will probably open up within months for shrewd and well-capitalized investors as troubled assets begin to enter the disposition pipeline.

In particular, analysts expect institutional investors to be in a good position this year to take advantage of changing conditions in a market that has swung hard over to the downside, according to a report by Prudential Investment Management (PIM), the asset management arm of Prudential Financial, Inc., titled "Turbulent Markets: Challenges and Opportunities for the Institutional Investor."

That would be nice, but what do you do without credit? And the utter lack of liquidity is what is disturbing many institutional clients right now. That is what is a little more pessimistic.

For more than 18 months, the commercial mortgage industry has been in a deep freeze. Now, industry experts are hoping for a thaw this year, but much has to occur in the minds of both lenders and investors for the action to begin.

"I think 2009 is still going to be frosty," says Jeff Friedman, co-CEO of Mesa West Capital, a privately held commercial real estate lender based in Los Angeles.

John Pelusi, CEO of HFF Inc., a publicly traded mortgage banking and investment sales firm headquartered in Pittsburgh, agrees: "Unfortunately, we have a way to go. More losses are coming and financial institutions balance sheets are in need of additional equity capital just to keep the doors open and even more to start new lending. Hopefully, the financial institutions will complete their de-leveraging by mid-2010; however, at the asset level, it may take until 2014."

2014? Let's hope not.

I'm going to say it again, in three words: mark to market. Suspend that and the Dow rises 1000 points in my opinion.