Most commercial real estate loans are written to have a term of about seven to ten years with an amortization schedule of 20 to 30 years, hence at maturity have a balloon payment due. That balloon payment must be satisfied by a refinancing or a sale of the property. That's a risk that so many participants brushed aside when times were good and money freely available. Now those balloons are causing pain for both the owners and the lenders.
Battleship Ben sketched out some plans to provide enough support for the commercial real estate loan market to help it get over this crunch, but nothing significant was done. Today's WSJ reports that a first step might occur soon to open the market for commercial real estate loans.
From Briefing.com: "The Wall Street Journal reports Vornado Realty Trust (VNO) is planning on raising between $550 mln and $600 mln through a bond sale that would qualify for a key government program aimed at resuscitating the commercial-property market, according to people familiar with the matter. The potential deal, along with two by shopping-center giant Developers Diversified Realty (DDR), would be among the first batch of offerings of commercial mortgage-backed securities that will take advantage of the TALF program. Those deals are expected to hit the market in the fall, these people say."
This is the last piece needed to clear the financial markets of debris from the last year's wreck and bring about normal conditions. If it works or seems to be going to work, I expect commercial real estate and REITs to move up strongly. I need to add some money to that asset class. I'll be watching closely.
Actions
Nothing. I'm back to looking for a few good stocks that can go up at least 50% in six months.
Languages
I decided to re-learn Latin, too. [I had three years of Latin in high school many moons ago.] I pondered trying ancient Greek, but I had enough pain 37 years ago with Russian to know that a language with a different alphabet is another level of difficulty that I don't need now.
Word of the Day
"Prevenient" - adjective, formal [$10]
Prevenient means preceeding something else.
Sentence: Saving is necessarily prevenient to investment. Obama's proposed huge increase in taxes on people having the most disposable income to save must cause a drop in investment. This lesson was learned in the 1970s. Do we have to re-learn it ?
La Palabra de la Semana
"Pensare" - verb, regular -are conjugation
Pensare means to think.
La frase: Io penso, perciò io sono. [I left the pronoun "Io" for emphasis.]
Sentence: I think, therefore I am.
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30 comments:
"a key government program aimed at resuscitating the commercial-property market,"....Bman is this TALF? has this program been approved? seems vague
yes, part of TALF. Yes it's approved but they had to adjust seom terms to make it work for commercial real estate. One adjustment was making the qualified loan maturities longer.
'stocks like NVAX disgust me'
great job mern
Bman are you a proponent of the 'new normal' ?? i am...... Pimco believes 1-2 gdp growth and 7% plus unemployment for at least 5 more years
it does appear to be different this time
well well well.....hows your game Bub? Whistling Straits? did we get the walkoff?
No, I think "the new normal" is just another way of saying, "It's different this time", whihc has almost always been wrong.
Sheesh, people saying "the new normal" when the recession is just ending.
rather US--centric in my "humble" opinion.
people are the same as they were ten years ago ... 100 years ago.
world conditions are better.
In all seriousness Bunkerman...throw out all the cliches and green shoot nonsense, do you really believe the US is moving out of recession and back into a period of 4-5% annual GDP growth?
you didn't answer my question Bman
when do you see 4-5% unemployment and 4-5% gdp growth ??
listen ace..........aren't you a yankee fan now ?? didn't you say you bleed navy and white......yes you did
well i don't associte with yankee fans............scum sucking cockroach pedophiles..........all of them
"normal" GDP growth is 3%; on a pop out of a recession, it can hit 4-6% for one or two quarters.
it usually takes unemployment a couple years to get back to normal out of a recession.
bought some MT; added to FCX.
Guess I'll be buying them on the way down.
I figure they are down big just on the Chinese stock selloff.
I'll check the Obama Fund stocks as I had some little Chinese names there, maybe they pulled back enough now.
"The market has stayed extended for over a week now and if you have been trying to position on the short side, you have been suffering some pain."...thx jim
Ace says ppffttt...FXP EDZ DZZ SMN...dark FCX UNP X QCOM...oh man...bank.
uh Bunky...we are short FCX.
Frosty said...
what if Bunky and Spin met on the mean streets of dodge city 100 yrs ago...Bunky leaves six in the dirt before his colt clears the holster...Spin with a shake of his head, pats bunk on the back and buys him a beer.
July 22, 2009 11:06 AM
oh you guys have a time frame of a day or week.
Mine is six months or a year.
RIMM worked out for me. Not perfect but good enough.
Heck I can go days without even looking at my stocks.
Bud that was meant to be sarcastic sir....I despise the Yankees as much as you do....
in fact I banned young Nicholas from wearing the Yankee hat his grandfather bought him...and replaced it with an Indians hat purely out of spite...
yes, which Spin translated as I'd be buying all the way down..
BUt at least I didn't add at 60.
My first re-buy was 57.
Btw, the FCX stock I sold at 47 was bought at 20.
oh Bunky...likely I have more long positions on the books than you do looking for long term status.
probably true since I dumped the 50 Obama Fund stocks
Fido has 8 now.
My pemmican is superb - tasty filling & nutricious. Guess the prize for best trail food goes to "Kit Carson" Bman.
8 stocks...I should start a blog...you can visit and I will teach you the benefits of being a long term inwestor...Mrs B has it down pat, she is the best.
darn, looking over my ex-Obama stocks sure shows I did a cluster FUBAR whenn selling out before my Ohio trip.
yeah, she's got about 25.
no worries Bunky...life sometimes just gets in the way...you've had a great year already.
INO sweet
danke vielamls jim !!!!!!!!!!!
oh wait..........am i allowed to danke vielmals and highfive for 50cents in 10minutes ???
40 points my ass
this is a free & open blog - no rules for the common person.
You can high five for whatever you want ...
and of course others are free to give it the raspberry ...
well............i kept quiet but i can't take it anymore
what a disgusting lowlife dirtbag pos frosty is.........he keeps reminding Bman of the sales he made before his trip
what a scumbag.........rubbing it in.......like Bman doesn't feel bad enough......i guess Bob never made a bad trade............f'ng douchebag
i know how you feel Bman...........i make dozens of poor trades every week.......but we keep pluggin along........thanks for all your help
PS...........still wanna be friends ???
don't make me call the FBI
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