The long-feared financial disaster is still looming. Bad court decisions could set it off.
The commercial real estate market is on its last legs and unless drastic actions are taken, the effects on the broader economy will be catastrophic. The obvious problem is the excessive amount of debt placed on the properties and the amount of debt that has to be refinanced during a relatively short period of time.
Between now and 2013, at least $1.3 trillion of financing comes due, of which $160 billion was the result of securitizations. Unfortunately, as a result of the virtual disappearance of the secondary market, the weakened condition of the banks, and the amount of debt already held by insurance companies and pension funds, even under the best of circumstances, less than half of the outstanding debt can be refinanced. This is compounded by the collapse of the commercial rental market in the last 18 months as a result of the Great Recession. For example, office rents in prime areas of Manhattan that were in the $100-$120 a square foot range in 2007 are now trading (with rent concessions and work letters) at half that amount.
After two years of one financial crisis after another, the Fed has fewer cards to play, and the foreign investors who bailed out commercial real estate investors in the past are sitting on the sidelines waiting for the prices to collapse. This problem is exacerbated by the lingering effects of the recession: absence of credit; growing job losses as a result of falling prices, consumer demand and credit; the insolvency or near insolvency of so many institutions; and the loss of confidence in the U.S. economy by our trading partners
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Prepare for the Great Depression.
Survival Seeds
Warren Buffet is AGAIN being paraded around by the Government to calm the corrupted markets. If you remember, he was the one who was on multiple media sources on a Monday in March, the exact DAY this Obama rally began. When bad news comes out, especially on a Monday or Friday, Warren "the insider" allows himself to be used, for future financial gain. How he is going to stop, what will soon be the falling commercial real estate market, will be interesting!
ReplyDeleteSigh! I remember soon after Halloween they were already playing Christmas music to try and bring the sheeple into the stores.
ReplyDeleteWhat desperation these people have to try and save their commercial empire which is about to collapse.
But anyways, there is GOOD news to this. If you have cash on hand and you NEED (Not want) something you will get it dirt dirt cheap in January.
Now your probably saying, "Well that is always the case in January".
Oh no! This year is going to be abysmal. They will be slashing by 80%-90% just to try to save their asses.
However, it wont work and the commercial collapse will ensue by March but you will get some great buys.
But remember take this advantage to buy things you NEED for what is coming.
NEED NOT WANT!
Very wise advice 10:45. Thank you for sharing.
ReplyDelete10:45. True that! This is not an excuse to buy a big screen or another junket, but purchase smart things that will add value to your life.
ReplyDeleteWhat worries me BIGTIME is we are staring to read these stories in the MSM, they are not hiding it anymore, and the pillage continues! They are even throwing a carrot to us, to warn us, but the sheeple are fast asleep...baaa baaa
baaa
Life is good, credit cards, a few hundred bucks to my name, etc.
"mommy, I want that toy!"
"of course little jimmy!"
THe hell with saving or paying down debt. let's TAKE A VACATION and stick it on plastic!
What the hell! I won't have to pay it back, since I will default anyway!
I noticed the other day that the local slaughterhouse (where the first case of Mad Cow disease in the US was traced to) has their single strand of Christmas lights on already.
ReplyDeleteWhat is fast coming down the pike with the commercial market, may well be a part of the plan from the Chinese to take over the U.S. They could already collapse us and call all of our loans due if they wanted-- due to the fact of their owning billions in Treasury Bonds, Notes, dollars, etc., etc.
ReplyDeleteBUT........They do not want to kill the Golden goose! So what we may find happening next year when commercial Real Estate prices drop, is that more purchasers of the malls and other commercial properties are really backed by Chinese companies. I know they own a lot of the U.S. already, but this would give them an opportunity to cash in on properties at bargain basement prices!!
Then, they'd be so kind as to rent it back to us, thereby slowly bleeding us dry as more of our cash goes to China and they slowly drag us into the abyss of other 3rd world nations as we become indebted (enslaved) to the Chinese.
There is but one way out and it could be known as the 2nd American Revolution. Don't look to our Politicos for help as 90% of them have been bought and paid for with Chinese money.
Merry Christmas!