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Capmark To File For Bankruptcy, More FDIC Headaches

Tyler Durden's picture




 

It's game over for Capmark, which is expected to file for bankruptcy within 24 hours. The firm which was formerly GMAC's commercial real estate business (Or GMAC Commercial Holding Ccapital Markets Corp in short), and had originated over $10 billion in CRE loans (by the way, did we say that CRE REITs are undervalued? if you didn't buy at least 5 shares of some multi-apartment or hotel REIT yesterday with every share of Amazon you were covering you are a bubble uninflating traitor and have to be shot for not believing in a 100x P/E), was LBOed by KKR and Goldman in 2006. Needless to say, that particular investment won't be making the next Calpers pitch book.

Hopefully at least Warren Buffett will make off like a bandit:

Capmark recently entered an agreement to sell its North American
servicing and mortgage-banking operations to a new company owned by
Warren Buffet's Berkshire Hathaway and Leucadia National Corp. for as
much as $490 million. Under the deal's terms, the sale could occur
while Capmark is in bankruptcy, but would require a bigger cash payment.

The other question is how this bankruptcy will impact Ms. Bair's soothing message that all is well with the banking system.

Adding to Capmark's pressures, the Federal Deposit Insurance Corp.
had notified the company that it must raise capital and boost liquidity
at its Utah bank, which has roughly $10 billion in assets.

The bank would not be part of Capmark's bankruptcy filing, a person familiar with the situation said.

Maybe not tomorrow, but give it a few weeks. If the operating company was specialized in underwriting the kinds of loans that were responsible for a $1.6 billion second quarter loss, one can imagine that GMAC's bank which in May changed its name to Ally to cover its tracks, can't be far behind, especially not with Ally desperately trying to poach depositors as recently as 4 months ago with abnormally high interest rates. Zero Hedge previously wrote about the ABA's complaint against Ally: if Ally was that desperate for deposits that it would pay far higher rates then, one can only imagine how bad things must be. And with $10 billion in assets getting the traditional 30-40% haircut, there goes another $4 billion that the insolvent FDIC does not have.

 

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Sat, 10/24/2009 - 15:38 | 109560 DBLTapViper
DBLTapViper's picture

Anyone ever play that "Tumbling Tower Game" were you pull out the blocks until the Tower falls?

Each day a "block" is pulled out of the "Tower" called the US Economy.

DBL

 

 

Sat, 10/24/2009 - 16:17 | 109578 ptoemmes
Sat, 10/24/2009 - 16:57 | 109610 glenlloyd
glenlloyd's picture

It's called Jenga and it does remind me of the crumbling US economy.

Someone might also liken it to the Tower of Babel as well. Just sayin

Sat, 10/24/2009 - 22:07 | 109798 tallystick
tallystick's picture

Yes, it's called Jenga. In Argentina they televise celebrities playing it while talking smack. They have learned to make comedy out of crashes. We will too.

Sun, 10/25/2009 - 11:24 | 109992 Anonymous
Anonymous's picture

I see it differently though...Same metaphor, only the blocks are already scattered about and the tower is down...Only the media and the USgov have convinced everyone that the tower is still standing and actually getting higher.

Sat, 10/24/2009 - 15:38 | 109561 buzzsaw99
buzzsaw99's picture

Ally can kiss myass. I wouldn't give them the sweat off my nuptials. I won't deposit money with an insolvent fascist ahole for an hundred bps, not for 500.

Sat, 10/24/2009 - 15:46 | 109563 bonddude
bonddude's picture

What a value !

By the way, In light of Ms. Bair's veiled warning any ideas on C or CIT?

Sat, 10/24/2009 - 15:57 | 109571 Anonymous
Anonymous's picture

That's JENGA (the tumbling tower game). Very fun at parties.

Sat, 10/24/2009 - 16:08 | 109575 Anonymous
Anonymous's picture

According to Barry they are going to use tarp to bail cit. What do you think all that smoke about smaller banks not lending was all about? The TGTF refuse to roll cit's garbage. Tarp will be used to pass it off on the tax payers and maybe uncle Ben has room to sweep the rest under the carpet.

Sun, 10/25/2009 - 09:23 | 109950 deadhead
deadhead's picture

we already have 2.3 billion of tarp into cit.....

 

Sun, 10/25/2009 - 10:49 | 109979 Anonymous
Anonymous's picture

a billion here a billion there and you are still
talking chump change...

Sat, 10/24/2009 - 16:24 | 109585 Fritz
Fritz's picture

I'm sure its no sweat for the squid - they just push all the dogshit off to managed funds and let their clients take the hit while Squid & CO pockets deal fees.

Maybe the bankruptcy will show how much Goldman and KKR pulled out of Capmark over the last two years.

Sat, 10/24/2009 - 16:32 | 109594 Anonymous
Anonymous's picture

crapmark to file....hmmmm

Sat, 10/24/2009 - 16:33 | 109595 Anonymous
Anonymous's picture

Bickering begins, I hope Michelle Caruso Cabrerra doesn't fid out about this:

NEW YORK, Oct 20 (Reuters) - A Sumitomo Mitsui Financial Group Inc (8316.T) affiliate sued Credit Suisse Group AG (CSGN.VX), saying the Swiss bank failed to reimburse $21.64 million for its share of a loan to troubled commercial real estate company Capmark Financial Group Inc.

http://www.reuters.com/article/financialsSector/idUSN2045661620091020

Check out listings up for sale (while it lasts):

http://www.capmark.com/CAPMARK/MainPage.aspx?id=180&TSMTID=180&TSMTT=1&T...

Las Vegas Boulevard South
4915 Las Vegas Boulevard South
Las Vegas, NV

Summary
Price: Contact Broker
Building Sq. Ft: 76,765
Region : West
Year Built : 0

Description
# 120 feet of frontage on Las Vegas Blvd
# FAA approved building height of 266 feet
# Entitled for 493 units

Any offers?

Sat, 10/24/2009 - 20:33 | 109753 torabora
torabora's picture

Fifty US dollars. Sight unseen.

Sat, 10/24/2009 - 16:38 | 109600 deadhead
deadhead's picture

"...you are a bubble uninflating traitor and have to be shot for not believing in a 100x P/E),"

that is some funny shit there....

Sat, 10/24/2009 - 20:56 | 109766 geopol
geopol's picture

Not only is the PE dog shit  but I understand that the drywall is Chinese.

Sat, 10/24/2009 - 16:47 | 109605 Anonymous
Anonymous's picture

So what might this suggest about the high-flying REITS?

Time to buy SRS?

Sat, 10/24/2009 - 17:51 | 109652 VLee
VLee's picture

DRV all the way!

Sat, 10/24/2009 - 16:47 | 109606 Fritz
Fritz's picture

Undoubtedly, this is the reason for the strange relative strength that REITS had on Friday. The PPT must have wanted to get out in front & started pumping the REITS in advance.

Next 2 weeks = numerous REIT 3Q earnings.

The PPT will have their hands full to keep a bid under REITS.

Sat, 10/24/2009 - 16:50 | 109607 Unscarred
Unscarred's picture

I'm tired of hearing people say that "Only 100 or so banks have failed.  Over 6,000,000 failed during the S&L crisis in the 1990's."

I was only a kid then, but it all my research, the dollar figures (even in real terms) are nowhere close to the bailouts we're talking about today.

I get that the Resolution Trust Corp. was created and funded by the U.S. Government.  However, $1 trillion later, the FDIC is STILL requiring member institutions to pay 3 years worth of fees in advance so it can stay operational.

If this is supposedly "no biggie," then what the hell am I missing?!

Sat, 10/24/2009 - 17:00 | 109614 Anonymous
Anonymous's picture

A cup of kool-aid?

Sat, 10/24/2009 - 19:06 | 109707 Sqworl
Sqworl's picture

LOL, LOL

Sun, 10/25/2009 - 00:53 | 109867 Anonymous
Anonymous's picture

The old S&L number included piggy banks, too, so yes, it is somewhat inflated relative to today. Oh, and to some extent the US was then a capitalist society where losers were entitled to fail.

Sun, 10/25/2009 - 07:56 | 109927 KevinB
KevinB's picture

"I'm tired of hearing people say that "Only 100 or so banks have failed.  Over 6,000,000 failed during the S&L crisis in the 1990's.""

Six million?! Where do you get that figure? Less than 1,000 S&L's failed; 750 is the number I see most often, and we're already up to 15% of that number, and I suspect that the number of failures is only going to accelerate.

Pretty soon, we're going to be calling her "Sheila (The Cupboard Is) Bair".

 

Sun, 10/25/2009 - 09:33 | 109955 E pluribus unum
E pluribus unum's picture

He got his halocausts mixed up.

Sun, 10/25/2009 - 10:59 | 109984 Unscarred
Unscarred's picture

BUUHHAHAHAHAHAHAHAHAH!

Now THAT is FUNNY!

Sun, 10/25/2009 - 10:58 | 109982 Unscarred
Unscarred's picture

[Reaches up to make sure the 'sarcasm' light is still working]

Are you serious?  Nevermind, that's a rhetorical question - you must be to respond that way to a number like that...  (Are there even 6,000,000 banks in the world?!)

Just a sarcastic remark.  Well aware of how many banks failed during the crisis.

 

Sun, 10/25/2009 - 11:57 | 110004 KevinB
KevinB's picture

Your ability to manipulate the "sarcasm" light is questionable, based on many of your posts. Try refining that tiny quality you may presume to be wit.

Sun, 10/25/2009 - 15:24 | 110024 Unscarred
Unscarred's picture

[Edited] Change of thought:

Original post:

I'm tired of hearing people say that "Only 100 or so banks have failed.  Over 6,000,000 failed during the S&L crisis in the 1990's." ... If this is supposedly "no biggie," then what the hell am I missing?!

ALL comments:

A cup of kool-aid?

The old S&L number included piggy banks, too

He got his halocausts mixed up.

And then THIS:

Six million?! Where do you get that figure? Less than 1,000 S&L's failed

Over 10,000 people read this blog daily.  Everyone who responded got the quip, except you.  So either all 10,000+ readers have their heads up their asses, or you need to lighten up and develop a sense of humor.  (Funny, everyone SAYS they have one, but we all know so many others who don't.)

This isn't the WSOP where we have to continually go over the top to push someone else around or prove we're superior to them.  Likewise, you don't need to take your humorless shortcoming out on another contributor by going Chernobyl on them through the safety blanket of your computer.

Try refining that tiny quality you may presume to be wit.

Okay.  But for TYLER'S SAKE, do everyone else a favor and climb down off of your pedestal, join the other 10,000+ ZH members, chill a bit, and enjoy your stay.

Next time, look in the mirror and laugh at a joke that you didn't get, and leave your BLOG-rage at home.  It's cool, bro...

http://talentedapps.files.wordpress.com/2008/12/anonymous-peace-symbol-5...

http://northwestanglican.blogspot.com/2009/09/blog-rage.html

Sun, 10/25/2009 - 16:51 | 110138 mikeyv1970
mikeyv1970's picture

Now THAT was a well reasoned, logical, & cogent response.  HOOHAH Unscarred...

-Michael

Sun, 10/25/2009 - 18:06 | 110186 Unscarred
Unscarred's picture

It's too bad my new pal KevinB won't understand the amount of humor and sarcasm involved in it...

http://stuffunemployedpeoplelike.com/wp-content/uploads/2009/03/pointing...

http://www.projectswole.com/images/woman-pointing-laughing.jpg

Sat, 10/24/2009 - 17:07 | 109617 Cognitive Dissonance
Cognitive Dissonance's picture

To say that Warren Buffett is connected would be the understatement of the year. In fact, Grandpa Buffett is my nomination for Time Magazine vulture capitalist of the decade. If he keeps up this pace, he'll move up to century and we're not even out of the aughts yet.

How many times can this man show up at just the right time to sweep up the prize nuggets after some very interesting corporate explosions without someone asking something more probing than what he had for lunch? In a room full of horribly filthy people, I want to know how one man stays so clean and respectable.

His down home middle America "ah shucks" charm and dirty old man tendencies (notice he rarely gives interviews to anyone other than pretty young(er) females?) leads me to believe he's on a continuous IV drip of antibiotics to counter the near perpetual case of cooties he must contract from all those dirty deals he magically cleans up.

Sat, 10/24/2009 - 17:48 | 109650 E pluribus unum
E pluribus unum's picture

You wrote:

"...(notice he rarely gives interviews to anyone other than pretty young(er) females?) "

 

You'd be hard pressed to find a good looking woman who was older than Buffett. 

Sat, 10/24/2009 - 19:09 | 109709 geopol
geopol's picture

CD It's bee an amazing two years,, Last night we observed 7 banks hit the rocks, a lovely speech by the cretin SB, gold going parabolic, equities with 50-1 pe, peak oil, demand destruction,ss is broke Medicare is broke Medicaid is broke Amtrak is broke, the military industrial complex is creeping, Obama calling an emergency H1N1, Fema camps, mass graves................

 

I'm so screwed up I don't know weather to draw straws or dial 201..

Sat, 10/24/2009 - 20:40 | 109757 Cognitive Dissonance
Cognitive Dissonance's picture

Sometimes you write something, read it hours later, and you realize the words don't convey what you meant to say.

What I was trying to say was women considerably younger than him, much younger than a Diane Sawyer for example. I don't remember seeing one extensive interview anywhere of him with anyone other than much younger females.

I'm not talking about a reporter sticking a microphone in his face and asking him a question. I'm talking about in depth interviews. Even Bloomberg TV seems to only have him talking to women. He decides who is going to interview him and they just happen to be female.

But you sir are a nit picker. :>) 

Sat, 10/24/2009 - 21:03 | 109769 geopol
geopol's picture

E pluribus unum,,,

Little  Becky Quick comes to mind on Buffetts Korean trip

Sat, 10/24/2009 - 17:16 | 109626 deadhead
deadhead's picture

Zero Hedge previously wrote about the ABA's complaint against Ally: if Ally was that desperate for deposits that it would pay far higher rates then, one can only imagine how bad things must be.

The irony of the COF ad popping up on this piece pitching a 2.30% CD is just.too.good.

 

Sat, 10/24/2009 - 17:48 | 109648 RobotTrader
RobotTrader's picture

Well I guess we have to wait and see what happens on Monday.

Will everyone sell this one off?

If so, where will the money go?

1.  Flee to bonds?

2.  Parked into money market funds?

3.  Pile into AMZN, BIDU, PCLN, AAPL, etc.?

Or will IYR actually go up on this news, with the notion that Capmark's failure means more fiatsco-flinging will the forthcoming, and even lower interest rates are dead ahead?

Thereby guaranteeing that Wall Street's Animal Spirits will remain elevated??

Who knows?

Sat, 10/24/2009 - 19:49 | 109728 deadhead
deadhead's picture

perfect post robo...covered all the bases.

Sat, 10/24/2009 - 19:58 | 109731 Fritz
Fritz's picture

The "Short CRE" play clearly is too intuitive.

Whomever has been jamming the REITs higher has a bigger wallet than I do.

However, there can't be much short interest left to cover. Massive air pocket under the REITS.

REIT common equity mushroom cloud is only a matter of when, not if.

Sat, 10/24/2009 - 19:08 | 109708 Anonymous
Anonymous's picture

Choice quote about Bernanke from this month's The Atlantic ("Brave Thinkers"):

"...prevented the collapse of AIG, Fannie Mae, and Freddie Mac; and somehow found time to bear the made-for-TV harangues of financially illiterate members of congress."

Strange. I didn't know that Dennis Kneale was a member of congress.. ;)

Sat, 10/24/2009 - 19:30 | 109718 Anonymous
Anonymous's picture

At somepoint the price of physical gold is going to
take off.

Sat, 10/24/2009 - 20:47 | 109763 Anonymous
Anonymous's picture

Speaking of Calpers, when are they going to investigate the kickbacks involved in its investment "program?"

Sat, 10/24/2009 - 20:48 | 109764 Anonymous
Anonymous's picture

Not necessarily. Expect $2 trillion stimulus bill in February 2010.

Sat, 10/24/2009 - 21:20 | 109778 Mark Beck
Mark Beck's picture

Buffet just wants to taste a little FDIC frosting. Even an old shoe tastes good with the right kind of frosting.

He was sniffing around for the tastiest bank insolvency gravy train, bided his time, and pounced.

You can hear him ask his staff, "which dog should we buy at fire sale prices?"

Sat, 10/24/2009 - 21:41 | 109794 Anonymous
Anonymous's picture

The capmark creditors should claw-back the bank being sold to Leucadia. They are stealing it like barclays stole Lehmans brokerage arm. Way cheap.

Sun, 10/25/2009 - 15:16 | 110094 Anonymous
Anonymous's picture

bercadia is getting the servicing, agency and mortgage banking.... no balance sheet assest of capmark finance or capmark bank. The creditors will get all of those legacy assets

Sat, 10/24/2009 - 21:59 | 109795 RobotTrader
RobotTrader's picture

Wonder why Grubb & Ellis was up 38%??

Must be set to make a vast fortune brokering all those foreclosed commercial buildings...

LOL....

Sun, 10/25/2009 - 12:16 | 110016 Rainman
Rainman's picture

Seems you're on to something here, Robo. Some savvy investors are digging through the CRE pile of turds and finding a rough diamond like CBE. It's similar to the Ryder pop . The newly foreclosed can't fit all their junk into a Honda hatchback.

Sun, 10/25/2009 - 16:19 | 110123 deadhead
deadhead's picture

they floated 90 million...think it was some type of convertible preferred.

Sat, 10/24/2009 - 22:36 | 109816 Screwball
Screwball's picture

Great commerical. That kid is priceless.

Sun, 10/25/2009 - 00:13 | 109846 Unscarred
Unscarred's picture

That kid is saying, "You guys did WHAT to my future earnings potential?!?!"

Sun, 10/25/2009 - 16:56 | 110141 mikeyv1970
mikeyv1970's picture

Unscarred, I suspect we shall see that kid as someone's avatar soon...

-Michael

Sun, 10/25/2009 - 17:58 | 110177 Unscarred
Unscarred's picture

I can't wait to see what their user name is going to be.

Sun, 10/25/2009 - 00:42 | 109857 Pedro
Pedro's picture

"Capmark To File For Bankruptcy, More FDIC Headaches"

Good, hopefully I can finally collect on my puts that Bernanke keeps screwing me out of

Sun, 10/25/2009 - 02:18 | 109887 Anonymous
Anonymous's picture

Unlikely. Capmark will likely get bailed out by Timmy. Same with CIT.

Sun, 10/25/2009 - 11:40 | 109997 Anonymous
Anonymous's picture

you are confusing Ally Bank with the Capmark Bank -- there is no relationship in terms of assets, underwriting or management. Different animals and different issues.

Sun, 10/25/2009 - 17:55 | 110176 deadhead
deadhead's picture

capmark just filed per bloomberg.

Sun, 10/25/2009 - 20:09 | 110258 cbxer55
cbxer55's picture

Here is a link to that.

This ones Reuters.

http://www.reuters.com/article/bankruptcyNews/idUSN2511609020091025

Sun, 10/25/2009 - 22:13 | 110337 Gilgamesh
Gilgamesh's picture

Nothing but green shoots on a Sunday:

ECB's Moyer:  "Most of the negative effects of the economic downturn on balance sheets yet to come."

http://www.forbes.com/feeds/afx/2009/10/25/afx7041813.html

Bombings rock Iraq's political landscape: DEADLIEST ATTACKS IN TWO YEARS

http://www.washingtonpost.com/wp-dyn/content/article/2009/10/25/AR200910...

 

And on this great news, the Risk Carry trades are skyrocketing! (along with SPY futures, of course)

Mon, 10/26/2009 - 01:32 | 110431 Anonymous
Anonymous's picture

"Needless to say, that particular investment won't be making the next Calpers pitch book."
Not sure why not? CalPERS seems willing to buy any old type of crap.

Mon, 10/26/2009 - 10:38 | 110549 Anonymous
Anonymous's picture

Many of my friends are teachers in Ca. who will retire in a few years. They talk longingly about their lush $100,000 per year retirment packages with lifelong no copay health care benefits throught CALSTRS. They praise their union for providing such a wonderful package and wonder why this can't be provided for all Americans throught a Government run health care system. Complete disconnect.

Mon, 10/26/2009 - 14:01 | 110718 mopgcw
mopgcw's picture

Ally Bank is NOT Capmark Bank -- it is misleading to tie them together; this does not mean Capmark Bank does not have issues nor does it mean Ally Bank does not have issues.  But one should try to be at least a little accurate and coherent.

Mon, 10/26/2009 - 15:51 | 110822 Anonymous
Anonymous's picture

Teachers pensions? I know someone in midwest retiring next year. She is expecting to receive 9,700$'s per month. She was a curriculum "planner". And , yes, she had summers off.

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