Moon Kil Woong

Commercial Real Estate: Evidence that It's Ready to Come Crashing Down

Sadly, I suspect a large percentage of commercial property loans and bond risk has already been transferred to the taxpayer via the Federal Reserve's backstop system. However, full details are not forthcoming.

As for the Treasury, it would seem that even the repaid TARP money will not be enough for them in the future or they would not be fire selling their assets to the likes of Goldman. I don't believe for a moment that Geithner does not realize the extent of looming real estate problems that are still growing behind the synthetically rosy numbers due to government tax credits, faked interest rates by the Mac and Maes, and rising losses banks are having to deal with in real estate asides from the housing market which the government has already approved to let banks essentially cheat on the accounting as to how much loss they are facing.

Furthermore the taxpayer can't seem to catch a break. If assets the US buy goes up they give them away. And if they go down we keep taking hits. Goldman's point on this matter was well said when they completed their last deal with Geithner. It is as follows:

The CEO of Goldman Sachs, Ivana B. Richmore, remarked “This transaction solidifies the long standing relationship between our firm and the US Treasury, which over many years has been very beneficial to both parties, or at least to us."

Really, we are getting sick of the smug remarks of bankers who continue to take taxpayer money and then make veiled jokes as to how stupid the government is. It's true that they are stupid, that's why they have no business being in the private sector at all, but it is our money.

The only reasonable thing to do is make Obama eat his commitment not to give a single penny more in bailout money and prevent the wholesale giveaway of American assets to private banks. Revoke Goldman’s deal and block further bailouts to Fannie Mae, Freddie Mac, and every other rotten financing business out there. When the next hurricane hits lets make sure the taxpayer is not the one standing outside in the rain. It's time for those responsible to take the drenching. We call it capitalism. It's about time the US government learns about what that means.