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CRE Slow Burn
America's slow-burning commercial real estate crisis continues to produce a slow drip of headlines.
Steve Mnuchin said Thursday during an interview with CNBC that the biggest problem at the bank he now effectively runs is its New York office portfolio, which isn't especially likely to improve.
A day after Mnuchin's Liberty Strategic Capital injected a billion into NYCB, the bank said it lost around 7% of its deposits over the last month. That bleed will presumably stop now, but what happened t
This is what’s scary about the economy and markets: Most people think “They” know what’s going on, and They are managing it, and so nothing can go (terribly) wrong.
That was proven wrong in the aftermath of the GFC. We did recover eventually, thanks to a bazooka of monetary and some fiscal stimulus.
A lot of observers note that, just like during peak covid lockdowns and the attendant economic damage, with the government (Fed), we can always print our way out of any serious crisis. It is a strong and valid point in my opinion, but I wonder whether the very strong belief in this causes moral hazard at some large scale, with possibly devastating consequences sometime down the line.
Thinking back to lessons learned in GFC and Tech Bust. When something big and multi-tentacled is going wrong, you don’t try to understand or quantify it – you just get far away and watch. With that cowardly confession out there, who has been tempted to get into NYCB?
Work from home leads to devastating homelessness, drug problems and crime in CBD’s/downtowns, which leads to people continuing to choose to not live downtown (see “Los Angeles”). This is a negative spiral that is still spiraling.