A Commercial Loan Crisis?

I was surfing this morning and found this piece of information on CNN/Money:

A congressional watchdog panel warned on Thursday that mounting commercial real estate losses could endanger the banking system and thwart economic recovery.A total of $1.4 trillion in commercial real estate loans will require refinancing in the next four years, the Congressional Oversight Panel said in a report. More than half of those loans are underwater, written for properties whose value has dropped like a rock.

The expected losses when loans go bad could hit between $200 billion to $300 billion and threaten 3,000 small and mid-size banks with a disproportionate share of commercial real estate assets on their books, according to the panel.

The panel’s research found that 2,988 banks are heavily invested — with more than three times their assets tied up — in commercial real estate loans. Of that number, 2,500 banks each have less than $1 billion in assets.

The first thought that comes to mind is…”YA THINK?”

Gee if only we had more informed people that could have seen this coming….WAIT!……we DO!

On 6 January 2010 the great blog, “Info Ink” (okay I am biased), had a good post along these lines, but yet it took over a  month for the Washington insiders to come up with this conclusion…check it out:


My point is….apparently, we bloggers are a bit more perceptive than our counterparts that work for corporate media or the Washington machine…..maybe instead of putting all yoiur faith in the “media” you should read more and then you would NOT be so surprised when stuff bites you in the ass….Just a thought….

10 thoughts on “A Commercial Loan Crisis?

  1. Ther’s a very simple answer to the problem for Americans – just say in a VERY loud voice, “Who cares? Let ’em go fucking bust!”

  2. PS: Is the “Congressional Oversight Panel” SO very aptly named when you consider the alternative meaning of “oversight”? 😆

  3. omg lots of of the remarks individuals enter are such stoner remarks, many times i wonder whether they in truth read the publications and items before writing or whether they simply look at the post title and prepare the very first idea that drifts into their minds. at any rate, it is really pleasurable to browse intelligent commentary once in a while rather than the same, classic blog vomit that i frequently see on the net

  4. Call it what you want since the outcome is the same. Commercial real estate is overbuilt, with a huge excess of capacity. Since job numbers and general wealth of Americans has lost a decade already, and furthermore since our basic attitudes towards spending have changed, it seems to me that every bit of commercial real estate built in the last decade was a bubble. Some of the new buildings will displace older buildings but the net effect is the same and easily visible in my community and probably most communities around the US… empty store fronts galore, and often in brand new buildings. A bubble is a bubble. Commercial real estate development over the last decade occurred at a rate suitable for an economic outcome that proved illusory and overly optimistic.

    1. Robyn thanx for the visit…hope you like it and return often….

      I agree……there is some growth now…but it will be another crisis in 5 to 10 years….without some form of regs….we will continue to die slowly….

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