CRE

CRE
Reggie Middleton's picture

The EU vs US - Who Crashes First? Reserve currency status is a very strong lever, historically. Equally important, the holder of said status has usually held the most powerful military and technology as well. Meanwhile, the EU has the twin problem of CRE debt rolling over on underwater properties and devalued (by up to 50%) sovereign debt held at 30x leverage as risk free assets at par by the banking system. True, the US has similar CRE issues + housing depression... So much to contrast & compare.

Reggie Middleton's picture

Have you ever looked beneath the hood of the big European banks? It's scary for the average layperson & it even scarier if you actually understand what it is you are looking at. What we have hear is EXACTLY what I found in early 2008, INSOLVENCY - laid out plainly for all to see - at least all who ever bothered to take a look! Throw Kilo after Kilo of leveraged fiat currency meat into the insolvent sovereign PIIGS' maw & you won't ever see it again:

Reggie Middleton's picture

I called it the coming RE Depression in 2007! I put MY money where my mouth was and sold off all of my investment real estate. I put YOUR money where my mouth was and shorted all that had to do with real estate (REITs, banks, builders, insurers). I called almost every major bank collapse months in advance. I warned the .gov bubble blowing does not = organic economic recovery. Now I'm saying we need to, and will, continue what's left of the crash of 2009, with ample global company. There will be no RE recovery this year, and there will be a crash. OK, you heard it here!

Reggie Middleton's picture

Last night, I spent an interesting time with the esteemed and world reknown macro economist, entrepreneur, NYU professor and strategist, Dr. Nouriel Roubini. Nouriel is a very, very bright guy. He has to be, he agrees with many of my viewpoints :-) On a more serious note, this article is the first installment of the valuation of real world, real assets and properties that are actually up for sale. I plan to walk my readers through the potential absurdity that is investing in a bubble that has not finished popping.

Reggie Middleton's picture

A reader wrote me complaining about the nonsensical bubble blowing in multi-family properties before the last bubble was even finished bursting. I feel his pain. Let’s run through a quick pictorial of how I see the macro climate for real estate as of right now…Everybody is getting squeezed, businesses, consumers, homeowners… Everybody!

ilene's picture

Ben lies: we're sheep; No more; and by being sheep we suffer the heart-ache and the thousand pricing shocks unmeasured by the CPI, 'tis a consumer tax, despite what you had wish'd. Ben lies; we're sheep: living a dying dream: Aye, there's the rub; when fleecing sheep what jobs may come when we have scuttled all their buying power?

Reggie Middleton's picture
Here’s a quiz for you. An ages old correlation that has pretty much remained rock solid is now upon us. Real estate has been highly correlated to inflation and has acted as an inflation hedge for a very long time. This makes sense, since hard assets that both throw off income and have an actual demand for physical use (in other words, they have have intrinsic value) that hold when fiat currencies assimilate toilet paper in both value and use as input prices skyrocket. But that correlation is now broken - or is it???!!!
Reggie Middleton's picture

As I warned last year, Portugal is on the verge of getting bailed out. Just like its already bailed cousins in insolvency, Greece and Ireland, Portugal declared to the very last minute that they didn't need, and would not ask for a bailout. Credibility is the key!!! What many may be missing is that the cause of all of this mess is the overleveraging of banks into over valued real estate. The default or restructuring of debt in Portugal, Greece or Ireland (or realistically a combination that may include larger countries) will spike rates that will make the 2008 real estate crash look like a bull rally. Here's the lay of the land...