Commercial Real Estate

The Great Corporate Earnings Fraud

Corporate earnings reports for the fourth quarter are pretty much in the books. The deception, falsification, accounting manipulation, and propaganda utilized by mega-corporations and their compliant corporate media mouthpieces has been outrageously blatant. It reeks of desperation as the Wall Street shysters attempt to extract the last dollar from their muppet clients before this house of cards collapses.

A Contagious Crisis Of Confidence In Corporate Credit

Fundamentally, Credit is unstable. It is self-reinforcing and prone to excess. Credit Bubbles foment destabilizing price distortions, economic maladjustment, wealth redistribution and financial and economic vulnerability. 'Activist' government intervention and manipulation have pushed protracted Bubbles to the point of precarious systemic fragility.

Why Commercial Real Estate Is Next: 'Challenging Technicals' Are About To Become 'Weak Fundamentals'

There is a growing sense of tighter financial conditions, particularly to the commercial real estate sector. Late last year the regulators issued a joint statement on Prudent Risk Management for Commercial Real Estate Lending and the latest Senior Loan Officer Opinion Survey (SLOOS) shows that banks tightened their lending standards to commercial real estate meaningfully in 4Q15.... The growing sense of gathering clouds in terms of tightening financial conditions to commercial real estate translates into a more challenging road ahead for US commercial real estate.

The 4 Key Themes From Q4 Conference Calls

  • Theme 1: US economy appears insulated from global weakness
  • Theme 2: Strong domestic consumer demand persists
  • Theme 3: Managements remain devoted to share repurchases
  • Theme 4: Outlook for China is positive despite recent turmoil

Fed Reveals Which "Developments To Financial Stability" It Is Most Worried About

Broad equity indexes have declined significantly since July 2015, and forward price-to-earnings ratios have fallen to a level closer to their averages of the past three decades.
Leverage [among speculative-grade and unrated firms] firms has risen to historical highs, especially among those in the oil industry, a development that points to somewhat elevated risks of distress for some business borrowers.

S&P Downgrades Banks With Highest Energy Exposure; Expects "Sharp Increase" In Non-Performing Assets

Moments ago S&P continued its downgrade cycle, this time taking the axe to the regional banks with the highest energy exposure due to "expectations for higher loan losses." Specifically, its lowered its long-term issuer credit ratings on four U.S. regional banks by one notch: BOK Financial Corp., Comerica Inc., Cullen/Frost  Bankers Inc., and Texas Capital Bancshares. The  outlooks on these banks are negative.

What's The Next 'Energy' Sector In Credit Markets? UBS Answers

While there may not be another 'energy' sector this cycle, our proverbial list of candidates includes lower quality high yield (ex-commodities) and commercial real estate (CRE). More broadly, the OCC's own examiners would also likely add asset-backed and auto loans to the list.

Negative Interest Rates Already In Fed’s Official Scenario

"The severely adverse scenario is characterized by a severe global recession, accompanied by a period of heightened corporate financial stress and negative yields for short-term U.S. Treasury securities.... As a result of the severe decline in real activity and subdued inflation, short-term Treasury rates fall to negative ½ percent by mid-2016 and remain at that level through the end of the scenario."

3 Things: Fed Fails, Houston Horror, And Market Malaise

"With January looking like a loser, there is a 70% chance that February will decline also. The high degree of risk of further declines in February would likely result in a confirmation of the bear market. This is not a market to be trifled with. Caution is advised."

"How Bad Can Texas Get?" Goldman Answers

As we put it on Friday, "the Texas recession is only in its early innings," because we are just now beginning to witness the bankruptcies and shut-ins that will soon become endemic and sweep across the entire US oil patch as revolvers are reigned in and Wall Street suddenly refuses to finance uneconomic producers' funding gaps. So how bad can things get in Texas, you ask? Goldman has ventured a guess.