Research Zeitgeist: Commercial Real Estate Next?
Concerns about the commercial real estate market bubbled to the top of Research Recap this week as visitors looked back to a June report from Standard & Poor’s: CMBX Index Causing Commercial Real Estate Capital to Dry Up.
More recently Moody’s noted this week that US commercial real estate prices fell for the fourth straight month in June, and today the New York Times reports that Some Fear Commercial Property Loans Will Be Next Stage in Downturn.
Also popular was Audit Integrity’s report that Forensic Analysis Gives Clues to Lehman Problems, which noted that Lehman’s travails can be traced back to mid 2006. Rumors continue to swirl around Lehman’s future, most recently with reports of a possible foreign buyer or a hostile takeover.
Fannie Mae and Freddie Mac appear to be inching closer to some sort of potentially hostile takeover by the federal government. Fannie CEO Daniel Mudd told public radio’s Diane Rehm that Fannie had neither requested nor been offered a bailout and he did not anticipate asking for one. Indeed, listening to the podcast you’d think there was not too much amiss at Fannie Mae. Asked about Fannie’s subprime debt Mudd described it as “very tiny, actually it rounds out to about zero percent of our overall book.”
While nobody expects the number of failures that characterized the savings and loan crisis, Regional US Banks May Need Rescuing, according to a well-read post from Oxford Analytica. However, unlike the largest financial firms, regional banks may not be regarded as too big to fail.
Embattled monoline insurers showed signs of life this week after S&P reaffirmed the AA status of Ambac and MBIA, but in another popular post, CreditSights opined that the resulting Monoline Stock Price Rally was Overdone. CreditSights remains skeptical about the monolines’ plans to restructure themselves.
Research Recap Quote of The Week:
The Wall Street consensus is that at least 150 institutions may fail over the next 18 months.- Oxford Analytica.
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