US Credit Markets Still Frozen: Big Trouble Ahead

[hard rain]

Especially vulnerable are the $50 billion dollars of commercial real estate debt that is coming due in the next year. Securitization of this kind of debt has pretty much ceased to function. This will add up to widespread nonperforming loans, defaults, foreclosures, bank failures.

The banks may be pumped full of taxpayer money, but credit markets, the vital heart of our kind of economy, are DOA.

Welcome to the Dead Man Walking economy: the mouth and limbs are moving, but in reality, at the heart, it is already dead.

We may be witnessing the death throes of one of the last great civilizations. Next up or happening now, depending on where you live. is contraction, dieoff, senseless war, repression, famine, pestilence, all the various plagues of humanity crammed into one century. Perhaps by then hapless humanity will at last be cut down to size, so that the earth and the bulk of its innocent and humble life forms might actually thrive.....

http://www.nytimes.com/2009/10/07/business/economy/07shadow.html?hpw

[mtlouie]

Here's what is strange about this whole freezing up of credit:

It's all blips on a computer screen.  It's all fake, phony, illusion.

So, the fact that "they" are freezing up credit, means that they are doing it on purpose to bring down the system. 

[Domscott66]

Mtlouie, why ever would they want to do that? What benefit is had by taking America to the brink of collapse or to allow it to collapse?

[Suspect Zero]

Die off, and the USA is the catalyst. 

[kats]

There was a NYT article about this this morning. Banks have as much as 45% losses from commercial real estate mortgages. They are not taking the losses and writing them off because as long as they keep them on the books, these loans contribute to them having adequate capital. i.e. if they took the losses, many would be out of business. Many bank failures loom.

[mtlouie]

Mtlouie, why ever would they want to do that? What benefit is had by taking America to the brink of collapse or to allow it to collapse?

I'm assuming you forgot your purple.

Anyway, the answer is:  It's our turn.

[cz]

There was a NYT article about this this morning. Banks have as much as 45% losses from commercial real estate mortgages. They are not taking the losses and writing them off because as long as they keep them on the books, these loans contribute to them having adequate capital. i.e. if they took the losses, many would be out of business. Many bank failures loom.

Exactly.  Mark-to-fantasy at work.  As long as they keep that $1million loan on their books, its 'worth' $1million, even if in reality they aren't getting payments on it, and the underlying property is worth 1/2 that.  As soon as they foreclose they take the loss (presuming they could even get the $500K for it, they'd take a 50% loss of that "capital").

[Leonytus]

If I were a bank I would not be lending either. Sure it could be some conspiracy to kill millions of people.....(Retarded statement)....Sure it could be some mechanism with which the globalist elite are passing the torch to emerging markets (Possible)...but more than likely it is simply that because of the horrible default rates within the current economic reality....it is just bad for business

Bankers in general are not doomers...

[RMG]

If I were a bank I would not be lending either. Sure it could be some conspiracy to kill millions of people.....(Retarded statement)....Sure it could be some mechanism with which the globalist elite are passing the torch to emerging markets (Possible)...but more than likely it is simply that because of the horrible default rates within the current economic reality....it is just bad for business

Bankers in general are not doomers...

The bankers' current, cautious approach to lending seems to fly smack in the face of their behaviour just a few years ago - lending to any and all on the flimsiest of oversite, including lending to dead people no doubt.
How the tide has turned, makes me wonder if they ever knew, and know, what they are doing.

[Grower]

Lending, for banks, is bad for business. Ironically intended?

[Leonytus]

You have a point Grower. If I were a bank, and did lend, and the person or people or company defaulted, could I not simply go to Uncle Sam, write up some exacerbated numbers and make a profit? Bleh, it is seriously all one crap shoot at this point.

[mtlouie]

Lending, for banks, is bad for business. Ironically intended?

It's fucking Leo, Grower.   I now find out that Leo has been spouting his right-wing pro-big-business bullshit all this time, and he doesn't work, and he lives with his mother, AND he doesn't pay child support.

Now there's a picture of someone who listens to right-wing radio and Fox News.  Although he SWEARS he doesn't listen to anything.  You know-  like all those idiots- they thought it up ALL BY THEMSELVES.  

And his knowledge of how a fucking BANK makes money is about the icing on the cake.

[mtlouie]

LEO!!!

BANKS EXIST AND MAKE MONEY BECAUSE THEY LEND MONEY AND CHARGE INTEREST!!!!!!

Honestly, the mind reels.

[Suspect Zero]

If I were a bank I would not be lending either. Sure it could be some conspiracy to kill millions of people.....(Retarded statement)....

That's what the wink was for dip wad.

[Leonytus]

Here we go, Mtlouie deflecting the OP and would rather discuss me and her obsession with Faux news and some random radio stations....take your meds please.

Also, your personal attacks are pretty unwarranted. Or would you like to go on a rant and demean everyone who is unemployed, forced to live with family, and unable to pay their bills at this point in America??...Ridiculous display