Next CRISIS..........Commercial Real Estate

This one’s gonna make the housing bust look like a tree fort collapse.

Job losses INCREASE because companies come under pressure. That pressure leads to two scenerios…1) Lay offs and consolidation. 2) Business closures.

The problem with BOTH those events leds to Commercial Real Estate problems. As business contracts they close down un-profitable locations.

If we think that HOUSING was bad bet for BANKS??? Wait to you see how BIG they bet on commercial properties.
During the BOOM they loaned money on projects all over the country. That was BAD in some cases, but what was WORSE was the BUYING that went on in EXSISTING BUILDINGS…I have a HUGE new mall within 15 miles from my home. During the BOOM it was bought and sold 3 TIMES!!! For ever increasing amounts of MONEY…It just entered BANKRUPTCY last week…Some bank is gonna take it in the shorts on that loan. This happened ALL OVER the COUNTRY!!!

As our jobs loses increase those properties will come under INCREASING pressure. A big number of those properties WILL FAIL. And on it goes…

I agree with your assessment. What is your opinion on the timeline for this crash to occur?

Currently, the stock market is down, but no big deal (it should have never been at 14,000 anyway). It is stubbornly hanging on to the 7,700 level as a bottom (which I don’t think we can sustain). Currently, the financial market is basically treading water with all the bailout money. Retailers are going to have a relatively bad Christmas, but not a catastrophe. The consumer is tapped out, but still holding on by his fingertips. Job cuts are just now starting to occur and I don’t believe they will be really felt until at least early 2009.

Got a guess on the timeline?


At some point, rational thinking will have to take it’s course. Keep “bailing” these industries out with tax-payer money, and you will need MORE tax-payer money to do it. Eventually, it will be forced to implode. There is not an infinite supply of tax-payer money.

Businesses, no matter the size MUST be allowed to fail. They have bankruptcy courts for a reason, and restructuring the debt with the accountability on the companies, banks, etc. and NOT the tax-payer is needed.

Keep allowing the government, a “corporation” already in worse trouble than any of these industries, to be the arbitors of how they are “bailed-out” is ludicrous at its core… They cannot take care of their own house, yet we are giving them power to take care of other industries in the private sector??? :banghead

BTW, I TOLD you you were being had with the TARP “bail-out” program…

Now, not only is there no oversight, but no power to stop them… They put all their proverbial eggs in one basket, no hearings, no questioning, just - WE NEED IT! Yeah, we needed it like a hole in the head…

This from the people who did not have the “forsight” to account for the scope of this thing, including the commercial aspect of this…

So now, the money is not going to purchase the “toxic assets” that were supposed to asuage the markets and get investment going again, but rather purchasing preferred stock in the banks that not only made the loans in the first place, but STILL have them on their books.

Half the money is not even going to be allocated until the new administration hits town… that is MONTHS from now. All during which, from September to then, we could have had hearings, put scrutiny on the TARP program, accountability and oversight.

The “safety net” is overloaded and ready to snap, and we’re going to have one he*l of a case of whiplash from it…

When will we ever learn…

My personal timeline is early to mid 2009.

Check this out…


This IS COMING…Bank on it!!! The scary part???

NO ONE IS EVEN TALKING ABOUT IT!!! :flush :flush :flush

The most intersting part of this article is the reference to the over $3 TRILLION that will need to be RE-FI’D in 2010 and 2011!!!


Think the banks took a hit with RESIDENTIAL??? That market is estimated a $2 TRILLION…This bad boy is sitting at $3.2 Trillion and WALL ST. bank own most of it…We all know what GREAT SHAPE their in…

Remember…in a couple of years…People will be saying…WHY DIDN’T I GET OUT WHEN THE DOW WAS AT 8000!!!


I did not agree with the TARP bailout, either. They should have taken $700 billion and used every penny to create JOBS! They could have spent some to repair the bridges that desparately need it. They could put 8-10 nuclear powerplants on the fast track. They could have spent a chunk on updating roads and schools. All of these would create some jobs to offset the thousands we are losing.

BTW, Ford is down to $1.26 this morning. I might have to get in now!

This IS COMING......Bank on it!!!! The scary part?????? NO ONE IS EVEN TALKING ABOUT IT!!!!!!

We’re talking about it!


I agree, but I am surprised at the extremely slow pace. The Wall Street firms are evidently in complete denial and still believe that this is a very short recession.

BTW, Ford is down to $1.26 this morning. I might have to get in now!

Yeah, that’s how stocks behave when the company is close to bankruptcy. On the good side, they become VERY volatile. It could be $1.26 now and $4.00 an hour from now! All we need is the government to say that the bailout is on!


Todays market drop…here’s one reason…

search…insurers slump on concern about commercial

Here’s another article posted on Yahoo today:

Jake, are you looking at very long puts right now for larger banks that have a lot of bottom left to them such as GS? This is only a matter of time before it is made publicly public. What I mean by that is this: sure-minded folks know it’s coming, REIclub for instance, but I’m sure there are MANY people still in the dark/ denial about the next crisis that we’re all going to face, the commercial sector. I’m sure there are A LOT of holders in these larger banks that don’t have the slightest imagination as to what they’re about to be faced with. It’ll be interesting to say the very least to see how the next year or two play out. Our government is basically playing all of this day by day anymore it seems.