Even though industry lobbyists were able to persuade Congress to extend a loan program aimed at prodding the stalled securitization market back to life, several analysts said it was unlikely to head off a spate of defaults, foreclosures and bankruptcies that could surpass the devastating real estate crash of the early 1990s. “It will prop up a few deals, but you can’t stop the wave that’s coming,” said Peter Hauspurg, the chief executive of Eastern Consolidated, a New York brokerage firm.
The distress is still in its early stages, analysts said. “We are between the first and second inning,” said Richard Parkus, who directs research on commercial mortgage-backed securities for Deutsche Bank. “We’re going to have to get through a very difficult period.”
Mr. Parkus said that vacancy increases and rent declines already mirrored what happened in the 1990s, and until new jobs were created, generating an increase in demand for commercial space and more retail spending, this was not likely to be reversed.
The commercial real estate bust has not even begun – and it is going to be ugly. This is coming right behind the next wave of foreclosures that will begin when ARMs reset. Instead of paying attention to the economy, Barack Obama is continuing to push his health care “reform”. Complete with more massive spending.
We’re in for a rough ride, folks.
I mentioned a guy I know who had seen the gross monthly income from his shop plummet this year, from more than $25,000 to around $4,000 since January. Today he told me that he is closing his shop.
This is really bad news. He repairs computers. If people are not even paying to keep their computers alive, how bad is the real economy right now?
A refrain from my youth. Veni, vidi, vinci? No, no. Let’s see – maybe Nero and a fiddle and a minor brush fire?