Summary
The folks quoted in this article have to be kidding. They must be the same people that didn't question the era of cheap money and low cap rates either.
Analysis
This is a constant theme we keep hearing that the commercial real estate meltdown won't be so bad. One of the quotes was this will be like the 1990's but the economy can handle it.
This current period is the worst since the Great Depression. This time all credit has essentially dried up.
How can one be so glib about the fact the Regional Banks are the ones which will take the hit. Don't worry about the securtized marketplace because that is being held by Wall St not main street...
Without the free flow of credit (it does not mean free money) the economy will go nowhere. The fact that commercial real estate has lost 40% as the article states is enough of a worry.
I guess we've become desentitized about the numbers that get thrown around.
Regional and local banks are the true life blood of the medium to small business community. Without those businesses the economy will continue to slog along.
Everyone is getting excited about the rumor the Country is evolving out of the Great Recession...but yet unemployment remains consistently high.
These people quoted in the article in addition to having rose coloured glasses, haven't yet figured out that employment drives commercial space absorption.
We have entered into a new paradigm where people are saving more and spending less and reducing their personal debt. That is not a prescription for any sort of meaningful recovery...statistically perhaps the Federal Reserve can play with the numbers but the reality is our economy is not going to begin growing until employment turns around and the housing sector stabilizes. Neither of those elements are in play.
