Sunday, November 01, 2009
Chart: Historical Bank Failures...
Perfectly within the margin of error.
via The Big Picture
Confidence! New Budget approved! FDIC is FLUSH, again!
No, no. Just kidding. That really IS a serious trendline. Those Alt-A Option ARMs are just getting to that peak hump we talked about a few months ago. Commercial Real Estate is falling with an anchor and a piano around it's throat. There are very real pitfalls written into the next few 3-8 months.
Financial Times
Carl Icahn is a busy man. On the same day he agreed a restructuring plan with constantly-on-the-verge-of-bankruptcy CIT, he told Bloomberg’s Tom Keene he quite concurred with Wilbur Ross’ earlier assessment of the outlook for commercial real estate in the US, and that he was puzzled by the current valuations of real estate investment trusts.
Ross’ assessment, for the record, was overwhelmingly bearish: he expects a “huge” crash in the market.
As Bloomberg reported:“All of the components of real estate value are going in the wrong direction simultaneously,” said Ross, one of nine money managers participating in a government program to remove toxic assets from bank balance sheets. “Occupancy rates are going down. Rent rates are going down and the capitalization rate — the return that investors are demanding to buy a property — are going up.”You can also tune in to the audio clip.
…Ross, the 71-year-old chairman and chief executive officer of WL Ross & Co. LLC, said in an interview on Bloomberg Radio that he would use “extreme caution” before putting money into commercial real estate, especially office space, because properties are losing tenants.
This is a long-haul crisis, folks, and we're not yet to the hump. The next leg down is going to be brutal.
Monday Trading is going to be an ugly mess.
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Labels: Bank Failures, Collapse, Commercial Real Estate, Epic Fail
