Comments on: FusterClucked Again: The Commercial Real Estate Crash Is On

By: cut it

cut it — Sat, 15 Aug 2009 13:05:11 +0000

A non sad dork who uses Google Reader? For a multi-author feed the author byline shows up under the title in each item. I didn’t look at the orig RSS but I know it was there, and they changed it, so there you go.

By: khakjaan

khakjaan — Thu, 13 Aug 2009 17:07:52 +0000

8: Who the hell was lending at 99.5% CLTV, much less lending on mezz-equity? Are you sure you’re not confusing personal lines of credit with collateralized debt? Because those are entirely different beasts.

By: asd

asd — Tue, 11 Aug 2009 16:19:30 +0000

20% equity in CRE deals? ha-ha-ha. would have been great my friend, but the fact is that those manhattan deals in recent years, the “investor” had as much as 0.5% equity in the deal. The rest was provided by banks as 2nd, 3rd liens and other loans with a weird sounding name (sounds familiar from the subprime scene? no difference).

Now some of these exposures have been securitized, meaning the banks found some suckers who took over the credit exposure of these loans in form of CMBS/ CRE CDO deals. I remember a CRE CDO with a loan in it where the good Macklowe had put up 50 basispoints up front and the rest was provided by Deutsche Bank one way or the other.

The question is how much of this shit the banks could sell and much do they still have on their books…

By: nader paul kucinich gravel

nader paul kucinich gravel — Tue, 11 Aug 2009 15:43:09 +0000

Anderson Baldwin Carter Choate Clemente Gonzalez Gravel Kaptur Kucinich McKinney Nader Paul Perot Sheehan Ventura

Future of a Nation that can not trust the Government & Propaganda Media?
DNC & RNC have sold out the country in order to enrich themselves
Chronic lying as career path, intellectual prostitution for paycheck
Fool me once shame on you, fool me twice shame on me
Does the Government & Propaganda Media lie to you?
Wall Street Bailout Bill: Bush McCain Obama et al.
AIPAC 9/11 Bankers Extortion Blackmail Bribery
Independents agree on more than we disagree
Elite Ruling Class Greed or public servants?
Speak no evil, hear no evil, see no evil
Honesty compassion conscience guts
Both parties are corrupt to the core
Beware the divide and conquer
Whistle-Blower leaks multiply
A very RawStory on PressTV
InfoWars on a PrisonPlanet
Israel-first dual-nationals
Gung-ho Chickenhawks
JFK RFK MLK Malcolm
Anthrax Intimidation
GGreenwald

Left and rights of passage
Black and whites of youth
Who can face the knowledge
That the truth is not the truth?
Obsolete
Absolute

By: fajensen

fajensen — Tue, 11 Aug 2009 13:02:10 +0000

All in all, it would seem that maybe the Fed printing a stack of dollars one trillion high and throwing it at the banks might actually be working,

It *is* working – Wall Street paid out more in bonuses this year than they made in profits!

Basically, “The Plan” is that the FED swaps all the various kinds of debt at face amount with USD that foreign suckers pay for USD bonds. When enough debt has been swallowed up the FED defaults on it, either by Latin America in-your-face style or by printing the USD into Italian Lira range.

That plan will work too because the dumb-ass foreigners buying the soon to be worthless bonds don’t know what else to do than pretending that everything will be fine in the end.

By: zip

zip — Tue, 11 Aug 2009 09:57:24 +0000

why are you nitpicking about pseudonyms i don’t know, check the old exile.ru and see some real kick ass pseudonyms like Abraham Magomedov or Genghis Goldberg

By: Percy Chittington

Percy Chittington — Tue, 11 Aug 2009 08:46:21 +0000

@cut it out

If you need an RSS byline to realise that Dolan is the war nerd you need to read more Dolan or listen to the war nerd’s radio interview.

Also, it’s possible that the article was sent out under an incorrect byline – what kind of sad dork reads RSS bylines anyway? Such an error is very suspicious but not definitive proof.

By: doctor k

doctor k — Tue, 11 Aug 2009 04:28:16 +0000

I look forward to the smackdowns from the comments section in these types of articles more than I look forward to the articles themselves. there’s probably some serious knowledge gettin dropped here.

By: khakjaan

khakjaan — Mon, 10 Aug 2009 19:21:25 +0000

Dude, you totally ignore a critical factor that separates the trash from the gold: the debt service coverage ratio. Too much theory, not enough practice. 20% down on a commercial building wasn’t happening in 2000 in most markets and when it was, the DSCR had to be 1.35 or higher. Sure, asset prices are getting pounded, but you think lenders aren’t extending their notes? They are. As long as the asset can cover the debt service, the loans will keep getting rolled forward; even with bad LTVs. And those that aren’t? Well, the banks bought them– at the very worst– at market value (which is why borrowers need to cough up that 20% to begin with). I don’t mind gloom and doom, but surfing stats and actually testing new guides from nutty banks are two different things. I think you also fundamentally misunderstand commercial real estate and are also missing the trend that really will kill it off: commercial real estate is simply a cash generating vehicle to investors. When the market is bad, like now, nobody has the cash to buy those things, so instead of going for 10x net, they go for 6x net. What hasn’t changed is the net income. So even if the loans can’t get rolled over, the net income is still coming. If banks wind up owning a good portion of the loans and borrowers get raped by recourse loans, well, there’s your class revenge: the little millionaires get fucked. Your article states that these assets are straight up trash, going into a death spiral; which isn’t credible given that you ignore the rate of return on assets and the spread between cost of credit and Net Operating Income. Ames doesn’t like articles that see a bottom in collapse though, so I guess I understand why you can get away with rehashing an argument The Economist was making a year ago.

You’re happy the system of trading paper is showing cracks? Great, me too. But I alluded earlier to what will really kill the commercial real estate market: self-employment. Companies aren’t coming back and most people who lose their jobs who re-enter the workforce, are doing so as their own bosses. Why waste money on office space when you can just work from home? You should have focused on how commercial real estate is overbuilt, instead of buying wholesale the financial prestidigitation of Wall Street and critiquing the supply side of this equation.

Bottom line? Asset prices drop and have been dropping faster than the rate of return on those assets and that means the depreciation cycle is chasing bottom. If I wanted the false dualism of Coke v. Pepsi, I’d read the NYT.

By: cut it out

cut it out — Mon, 10 Aug 2009 15:41:45 +0000

Hey Mark, if you want to hide behind pseudonyms for your hard line libertarian econ opinions, you might want to remove your byline from the RSS feed, ie “from EXILED ONLINE by Mark Ames.” Ha. Dolan gave himself away as the author of the War Nerd column by making the same mistake. I’ve got the screen shot, so there goes “Mr. Walker.” The only one I haven’t busted is “Pancho Montana,” ie probably Dolan too.