Oh dear, you're sniping again. Where did you graduate from, and also from where did you get your MBA? Are you brave enough to answer those questions since you shirk from the rest of mine? Simple questions, no? Your message is mostly a non sequitur. Can you translate it into language even a layman like me can understand? But I will try, thank you.
In short, banks are better capitalized now than then. If you don't appreciate that then I can't help you. The CRE implosion, if it can be called that has been ongoing for several years. Newsflash for RE, Location, Location, Location!!! Maybe there is some middle level fallout that's already playing out. In the old days that was called creative destruction.
You mark these cutoff dates as a rank amateur with no experience in the real world. So your end of the world scenario is $2 trillion in CRE mortgages? ok, what's the size of the USA economy. And if push comes to shove you think the FED doesn't step in again, as they always have? That would be an interesting bet but definitely asymmetric. If you were a student of monetary policy then you'd know the FED always errs on the side of more money for all by various mechanisms since their original flaw of raising the Fed Funds rate in 1931. But that's a separate debate for another day.
But going back to your supposition... loan holders are generally accountants and bean counters. They don't want to reclaim physical property unless they absolutely have to. In terms of CRE unless bottom of the barrel loans there will be communication between the parties, extended terms, adjustments, redress, etc. Do you not know or understand that even with your MBA degree? The big thing with the GFC was the ginned up leverage on the derivatives vis a vis residential. Do you have an estimate, or any handle on how that market compares to current CRE? Yeah, I didn't think so. HBS would give a generous C- on that presentation, but thank you!
You have a big mouth, so why don't you fill in the concluding paragraph to your wackadoodle thesis in your disjointed message? I actually have a real life to tend to so let's chat later, ok?
Respectfully yours,
Mr. nicewatch |
