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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (44972)	9/11/2008 3:55:06 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 70763

Font size: Sep.09 9:17 AM ET Tuesday, 9 Sep 2008 Commercial Real Estate: The Next Big Credit Problem? Posted By:Bob Pisani Topics:Investment Strategy \| Stock Market Companies:Deutsche Bank AG \| HSBC Holdings, plc. \| UBS AG \| CAPITALSOURCE INC \| Procter & Gamble Co \| BHP Billiton Limited \| Sovereign Bancorp Inc \| Wells Fargo and Co At a hedge fund idea dinner I attended last night, many of the participants seem focused on what they feel is the next leg of the credit problem that will manifest itself: commercial real estate. After the close yesterday, RBC Capital put out a note essentially echoing that concern: "Next Credit Shoe to Drop on Banking Industry: We believe commercial and industrial loans (C&I), commercial real estate and non-resi construction loans will be the next credit problems for the banking industry brought on by the weakening in the US and Global economies." Oil is at a fresh 5-month low, and airlines are trading up in the mid-single digits on light volume. OPEC is meeting in Vienna. European banks like UBS[UBS 20.78 0.55 (+2.72%) ], Deutsche Bank,[DB 85.61 0.89 (+1.05%) ] and HSBC[HBC 79.19 0.92 (+1.18%) ] are also trading up. Elsewhere: 1) As expected several banks announced impairment charges related to investments in Fannie Mae and Freddie Mac preferred securities. a) Wells Fargo [WFC 31.70 0.53 (+1.7%) ] said its charge relates to $480 million of securities it holds for sale. Wells said the preferreds now trade at 5 to 10 percent of face value. Oppenheimer's Meredith Whitney lowered her third quarter estimates by 9 cents to 17 cents. b) Sovereign Bank,[SOV 8.41 -0.29 (-3.33%) ] the second-largest savings and loan, said it held $622.6 m of Fannie and Freddie preferred stock. 2) BHP Billiton [BHP 57.25 2.80 (+5.14%) ]said the slowing world economy would likely cause commodities to continue to decline in price, but the decline would not their proposed buyout of Rio Tinto. 3) Proctor & Gamble[PG 72.39 0.50 (+0.7%) ] downgraded at Merrill Lynch, saying they can't just the premium the stock trades at relative to its peers. 4) CapitalSource, [CSE 11.27 -0.46 (-3.92%) ]a REIT that specializes in commercial finance and residential mortgages, down 9 percent pre-open as they cut their dividend 92 percent. 5) Forrester Research says that 43 percent of large businesses cut their overall tech budget this year.