From the NY Post:
The next wave of the credit crisis is about to hit -- a collapse in commercial real estate and potential explosion of bank failures...
Nearly half of all US commercial-real-estate-mortgage loans come due within the next five years. Deutsche Bank believes that 65 percent or more will fail to qualify for refinancing.
Absent new job creation -- and whatever nascent recovery is underway seems unlikely to produce net new jobs for several years -- vacancy rates will remain high. The action in commercial real estate will be largely subleasing -- at rents of 50 percent to 85 percent of scheduled lease rates. These lower sublease rates will eventually become the real market rates, putting further downward pressure on property values.
As things stand, this next wave of the crisis will sabotage the recovery -- driving up bank failures, FDIC bailouts and problems for some large insurance companies. Indeed, Congress will surely wind up having to bail out the FDIC itself.
8 comments:
I knew this was coming as soon as Ben Bernake and the stooges got on the TV/Radio and declared "THE RECESSION IS OVER!"
"Faith" in the "recovery" will be demonstrated by the consumers' spending habits during the upcoming winter holiday shopping season.
Retailers beware!
Bring it on. I will fiddle while Bloomberg's ney NYC burns, and I will roast marshmallows from the flames, while the greedy developers and politicians take nosedives from the Triboro-oops-RFK Bridge!
A second collapse? Aren't we still in the first one?
"Triboro-oops-RFK Bridge"
Ja, zat vas anudder gut von. (Vere's der penzil? I vill write zat down in der book.)
NO...we're DEFINITELY not out of the first collapse yet!
That was just the left hook and now we're waiting for the right cross...the 'ol "1-2"!
Shock then aftershock...a financial earthquake has its similar pattern too.
Didn't somebody just say the that national unemployment level won't be expected to improve significantly for yet another year?
SO WHERE'S THE F-----G RECOVERY IF A LOT OF CONSUMERS CAN'T AFFORD TO BUY SHIT OR MIGHT WIND UP BEING KICKED OUT OF THEIR HOMES IF MANY CAN'T FIND A JOB SOON?
Not to worry...the economy won't crumble completely because the Chinese can still afford to buy our goods...or are they today as much as they did yesterday?
So who needs American consumers anyway?
There's gonna be a lot of cheap land available soon in the USA to anyone who's got the cash to buy in!
The Fed has gone a bit too far with this and taxpayers will be the ones paying for all this while the big time bureaucrats are spending their dirty money in their loaded Swiss account all over the world. Very disturbing...
Take care, Elli
Yes, we agree. I have been E-mailing friends,and family about the second real estate "tidal wave" about to hit. So maybe this administration should have been thinking more about creating wealth, and jobs then on free health care for illegal aliens.
And just where did all that bailout money go to anyway, probably the same folks who got us into this mess.
But not to worry, "the recession is over" and I still think the Muppets are real..Lou from Queens.
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