So Bernake and Conference signaling a recovery?
More regional banks will fail as their loan portfolios is loaded with construction and commercial RE loans
Commercial property prices may fall as much as 40 percent from peak-to-trough, Todd said. Prices are down 11.5 percent from October 2007, he said, citing Moody's Investors Service.
Given the outlook, special servicers may adopt an "extend everything" policy since liquidating assets in a distressed and illiquid market may cause deeper losses, Todd said.
"It has become increasingly obvious that commercial real estate credit problems will finally materialize and intensify in 2009," he said. (Editing by Dan Grebler)
Sorry I couldn't resist. If this happens an another wave of global markets being rocked.
A report that Chinese state-owned companies will be allowed to walk away from loss-making commodity derivative trades provoked anger and dismay among investment bankers on Monday as they feared it may set a damaging precedent.
The State-owned Assets Supervision and Administration Commission, the regulator and nominal shareholder for state-owned enterprises (SOEs), told six foreign banks that SOEs reserved the right to default on contracts, Caijing magazine quoted an unnamed industry source as saying in an article published on Saturday.
While the details of the report could not be confirmed, it was Monday's hot topic in financial circles from Shanghai to Singapore as commodity marketers feared that companies holding underwater price hedges could simply renege on the deals, costing banks millions of dollars in profit.
The warning from SASAC follows a series of measures from Beijing this year to crack down on the sale of derivative products by foreign banks to Chinese enterprises, principally big consumers, who bought protection against higher prices last year only to watch the market collapse -- leaving them with losses.
While many companies including top airlines have come clean on the losses, some analysts fear another wave may follow.
"I wouldn't be surprised if more state firms emerge with big derivatives trading losses, otherwise SASAC wouldn't come out with such a radical move," said a Hong Kong-based derivatives analyst, who like most other industry officials and bankers declined to be named due to the high sensitivity of the issue.
<There is no reason the market has to go up before it goes down.>
Correct. But that is where experience and skill comes into play. You win and lose some but make sure you win more at the right time and manage your bet/risk.
So far I'm winning :). Ask all those boomers who buy and hold Real Estate and Equities. Hope they don't plan to retire soon and cash out at significantly reduced wealth.
You are assuming I'm playing the "small" temporary bounces up and down. If I do it's small measured play money.
I'm waiting for the biggie contraction/expansion cycles remember? That's where the real money is made.
You are playing Russian Roulette with this market. If you believe your own prognosis, you shouldn't be trying to squeeze that extra five to ten percent out of the upside. You will end up selling in a panic at prices lower than today's.
Boy was I lucky to pull out last week :)
Don't worry folks I'm optimistic there will be a few more temporary bounces up until the eventual and gradual decline trend.
September and October will be very interesting.
<Well that's the center of the argument. You believe in a future I do not.>
Sort of like arguing religion or blind faith?
For me it's all about probabilities of outcomes and whether one wants to prepare for it - Even if this dire prediction has 10% probability of outcome. Black Swan events do happen just ask Lehman Brothers, Fannie Mae, and AIG etc as well as RE owners.
If major correction doesn't happen then I will be happy. If it does happen I'm going to make some serious money.
If a major correction doesn't happen then you will be happy. If it does happen you could be down over 50% for a long time.
It's really that simple.