Is nobody reading this stuff? Or has the market already internalized it? I'm VERY hesitant to believe in the efficient market hypothesis if the banks with the largest exposures are still believed to be solvent....
From the senate report:
"Between 2010 and 2014, about $1.4 trillion in commercial real estate loans will reach the
end of their terms. Nearly half are at present ―underwater‖ – that is, the borrower owes more
than the underlying property is currently worth. Commercial property values have fallen more
than 40 percent since the beginning of 2007. Increased vacancy rates, which now range from
eight percent for multifamily housing to 18 percent for office buildings, and falling rents, which
have declined 40 percent for office space and 33 percent for retail space, have exerted a powerful
downward pressure on the value of commercial properties.
The largest commercial real estate loan losses are projected for 2011 and beyond; losses
at banks alone could range as high as $200-$300 billion."
http://cop.senate.gov/documents/cop-021110-report.pdf
No comments:
Post a Comment