Writing from the nadir of the Allied war effort in 1942, Winston Churchill said: “Now is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” In a similar vein, market observers today are starting to suggest that perhaps the “end of the beginning” is at hand in the struggle to place a floor under the global financial system.

After global coordinated government efforts and unprecedented market interventions, the immediate risk of “financial Armageddon” appears to have passed. The overnight dollar borrowing market has slowly returned toward “normalcy,” with the overnight rate once again matching the Federal Funds rate and the three-month dollar rate inching toward 1 percent at year-end. The “crisis,” however, is far from over.

Property investors today are dealing with two fundamental and related problems that flow directly from the broader collapse of global credit markets: (1) a continued dearth of debt