We have had massive monetary creation for decades now which we have finally come to the day of reckoning. We do not know if the top will be next month, next year or even later but we certainly are getting to the top where we cannot buy our way out of the problem through a new stimulus injection... The truth is that a terrible, deflationary depression is probably starting in the coming months. Words: 1581
Read More »Ever Increasing Foreclosures Mean Low House Prices for Many More Years
Anyone who sees a rising pool of millions of delinquent mortgages as the foundation of a recovery in housing valuations isn't considering the feedback loop which is now firmly in place. The foreclosure pipeline will be full for years to come precluding any "recovery" in housing valuations as supply will swamp demand. Words: 385
Read More »Major Commercial Real Estate Losses to Rekindle Financial Crisis
Over the next few years, a wave of commercial real estate loan failures could threaten America’s already-weakened financial system. Commercial loan losses could jeopardize the stability of many banks, particularly the nation’s 2,988 mid-sized banks that have these dangerous concentrations in commercial real estate lending and, as such, as the damage spreads beyond individual banks, contribute to prolonged weakness throughout the economy. In fact, between 2010 and 2014, about $1.4 trillion in commercial real estate loans will reach the end of their terms - and nearly half are “underwater” already. Words: 987
Read More »U.S. Real Estate? Fuhgeddaboudit for Another 5 Years! (+2K Views)
Real estate has definitely not bottomed in the U.S., and probably not anywhere else either. You have to take a long-term view of this. At this point in time I am completely uninterested in speculating in U.S. real estate – and I don’t foresee being interested for at least five years. I reserve the right to change my mind, but I think it’ll be at least five years. Words: 1340
Read More »Effects of Credit Crunch on Real Estate Market to Continue (+2K Views)
The effects of the credit crunch on the real estate market have been serious, but negative trends will not continue forever. Words: 512
Read More »How to Invest with Spectre of Rising Interest Rates on Horizon (+2K Views)
With the global economy growing, with federal deficits exploding, and with central banks printing money like there’s no tomorrow, there can be little doubt that rising markets will also bring rising interest rates. Who gets hurt when interest rates rise? The answer is all borrowers with debts coming due because they must pay more to roll them over and all lenders who have extended medium- or long-term credit at fixed rates because they suffer an immediate loss in the market value of their loans. Words: 928
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