An empirical analysis of the most recent NY Fed and FDIC loan loss data shows things getting materially worse, despite the $75 billion foreclosure prevention efforts, quantitative easing, zero interest rate policy, and hundreds of billions of dollars of injected liquidity and MBS purchases. What can we expect with even the slightest blip upwards in interest rates... Complete mayhem among many dead banks would be my first guess.
I know you have heard a lot of negative stuff about commercial real estate, but most of it was after the fact, and the new stuff just doesn't seem to convey the gist of how far underwater many players actually are - or will be...
I read Diana Olick's Realty Check blog on CNBC.com
on occasion. I must admit that she is considerably more credible and
serious than the vast majority of personalities to be found over there.
In her latest piece she questions the validity of the sales bump seen
in the last three existing home sales reports. She queries Lawrence
Yun, NAR's chief economist. He volunteered,
When I first came out with the PPD research (which I released for free as a public service, may I add), many were doubtful as the market was literally manipulated upward. I feel by blog's patrons were confusing the alleged "Ponzi scheme's" fundamental viability over time (and ability to avoid regulatory discipline) with the overall movement of the market and beta. As you can see below, things are not going well for this company. If one had faith in the research and rolled puts and protected shorts over, one should start seeing some decent gains. If I am right and this market is simply in a bubblicious bear market rally, any aggressive action by the SEC will drive this beta driven stock into the ground.
Yesterday, I commented on Goldman's CMBS offering through the government's leverage program known as TALF. I was very nice and diplomatic, yet despite that I still received what I would consider, inappropriate feedback. Okay, let's take the politically correct gloves off - they never fit me anyway. This deal probably flew because Goldman Sachs underwrote it. Goldman thrives off of brand name value primarily. Contrary to mainstream media inspired belief, they are not better than everybody else at everything. I posit, they are probably not better than anybody else at anything other than marketing and lobbying.
The world's most handsome and charismatic blogger stands outside his beloved friends at Goldman Sachs headquarters at 85 Broad (see pic) to congratulate them on the outstanding CMBS offering made through TALF government leveraging for Developers Diversified Realty (notice the funny looks that I am getting from the women in the background, haven't they seen a handsome and charismatic blogger before???). A few questions still linger, though...
Maybe, it just may be the total collapse in credibility and trust in
the US Federal Reserve and Treasury. I mean, come on. Have you heard the bullsh1t that they spouted in the news this morning? Quick Bloomberg scan:
In Straight Talk From the Homebuilder CFO: The tricks builders use to disguise the true losses on their,
the impairment game was discussed as a method of hiding losses on
builders' balance sheets by taking impairments on what could be
considered exaggerated book values. The exaggeration may not be that
hard considering how far, how fast, and potentially how long property
and land values can continue to fall.
This is part 2 of my reposting of the coming land recession, originally published in October of 2007.
{Before you read this post, you may want to read part 1
of this guest bloggers tutorial, since he is not going to explain basic
terminology of land.} I feel this is one of my more important posts,
whereas many of my other posts will add further proof to what I am
stating in this post. That builder book value and equity is closer to
worthless (zero) than many think.
The land recession, as foretold over two years ago, the Reggie Middleton CRE short list - round two, and the macro argument behind why most pundits are actually still too optimistic regarding CRE
I just received this email and thought my readers may find this of interest. DDR is the company that was featured in the "bailout" post (Here's a Big Company Bailout by the Taxpayer That Even the Taxpayer's Missed!), a must read if you haven't done so already.
