Posted on 10/30/2009 12:07:33 PM PDT by Kozman
The Fed has just released a statement on commercial loan workouts...The Fed is probably also signalling that it is not going to do wholesale bailouts of commercial real estate loan market, the way it did to parts of the mortgage securitized sector.
This is a total reversal of the attempt to prop up the residential market. The Fed wants the commercial market down and fast.
BOTTOM LINE: This means major, major hits ahead for bank earnings and not all banks will survive.
(Excerpt) Read more at economicpolicyjournal.com ...
Generally Republican donors I do believe.
Ping.
Dictatorship.
Good. Let all of the damn zombie banks die, so we can get prices down where they need to be to start fixing this mess.
‘Bout freakin’ time. But let’s see if they follow through.
Ping
Another Friday- Another round of banks that will close.
On the comparison to the Residential crisis -
a) The government had not ever mandated “affordable strip mall space”
b) Consequentially, there was never the creation of exotic derivatives such as MBS’s and CDS’s that measured in the 10’s of TRILLIONS of dollars
c) While non-res construction will likely be down 15%+ next year and ~5% in 2011, the unwinding/workout of those loans will not result in a financial catastrophe that would have happened if the residential securities had been allowed to unwind in an unchecked manner.
I guess that means that Goldman Sachs is not heavily invested in commercial real estate loans (or even has shorted them).
Related
http://www.zerohedge.com/article/fed-abandoning-bailout-commercial-real-estate
http://www.zerohedge.com/article/wilbur-ross-beginning-huge-crash-commercial-real-estate
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