Wednesday, September 16, 2009

Liesman: Fed Reviewing Banks' Commercial Real Estate Exposure

CNBC's Steve Lieman, who is the Fed's go to person when they want to leak via television, is reporting that the Federal Reserve is involved a broad review of commercial real estate exposures at the nation's largest regional banks, which Fed sources say is both the result of concern in that area but part of the "new normal" for how they will be supervising banks.

I can make only one of two possibilities from this leak:

1. The Fed wants to show it is on the ball.

2. There are serious problems in the commercial real estate sector, right now.

My bet is on possibility 2.


  1. I bet on #2 as well. I have seen tons of stuff over the last few months indicating that the commercial real estate market is the next shoe to drop. But right now, as Dr. Evil says, "I can't back that up."

  2. Bob and Bob,

    This sounds yummy. Are you seeing how things are all lining up here for a massive takedown once again? And I don't mean "it's the fundamentals, stupid!" I mean the political entrepreneurialism that is going on.

    For review:
    1.) RP's Fed audit bill is approaching countdown to liftoff.
    2.) Money growth stalled.
    3.) Govt/Bernanke saying "everything is okay" and beginning preliminary discussions of how to roll it all back

    Now, if, when everyone is 'least expecting it' this massive economic wallop came slamming down, well, guess what Ginger? Ron Paul's audit is going to be put on the back burner as everyone in Congress, Fed and govt in general go into overdrive responding to this unpredictable event once again. And then the Treasury has another perfect shock to sell some more debt into.

    Now, I think the CRE problems are independently motivated and fundamental-based but, imagine if these calculating socialists had some whiz kid Harvard number cruncher somewhere in the bowels of the machine that had a model for predicting how quickly a given bill could get through Congress and be signed into law.

    If he could've predicted that RP's bill would make it in the fall, then Bernanke could start laying the groundwork for a fall of his own with similar timing...

    No, no, this is just crazy talk. I am getting paranoid. And yet still, something smells like a wet kitty with poor hygiene...

  3. You dont have to guess. Just read the latest Beige Book, something few seem to bother doing. All twelve district reports identify significant trouble in the commercial real estate sector.