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Market Currents

Friday, October 30, 2009
10:38 PM TweetThis
  • As troubled CRE loans begin to skyrocket, new guidelines from federal regulators will let banks keep loans on their books as "performing" even if they're underwater - describing about $770B of the $1.4T of commercial mortgages maturing in the next five years. The rules aim at loans that are being serviced but can't be refinanced, and essentially sanction the practice of "extending and pretending."
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This news story has 19 comments:

  •  
    setting up for massive 1 time write downs. Sounds much like Citi with their news today in fact
    Oct 30 10:53 PM | Link | Reply
  •  
    Lets keep bending rules and manipulating stats to keep this recovery going!!
    Oct 30 11:13 PM | Link | Reply
  •  
    Another well thought out "if we ignore it, maybe it will go away" Fed policy. Isn't anyone learning from the past. Heck, especially when the "past" is defined in months not years. I've heard of short term memory, but this is nuts.


    "The definition of insanity is doing the same thing over and over and expecting different results" - Albert Einstein
    Oct 30 11:34 PM | Link | Reply
  •  
    wow

    we are Japan
    Oct 30 11:44 PM | Link | Reply
  •  
    I love how they sneak this in on a Friday night
    Oct 30 11:58 PM | Link | Reply
  •  
    We will all be Icelanders soon.


    On Oct 30 11:44 PM TraderMark wrote:

    > wow
    >
    > we are Japan
    Oct 31 12:17 AM | Link | Reply
  •  
    This is a public admission that these banks are functionally bankrupt. The FDIC couldn't guarantee the deposits if they all closed. If they sold the assets to the Wilbur Ross types, they'd have to give it away. So, they will do work outs, and don't have enough loss reserves, either way.
    Oct 31 04:04 AM | Link | Reply
  •  
    OG: remember what I said about how Insurance companies deal with claims. Its a drawn out process over many years.

    This should not be a surprise, once Mark to Market was altered, the applcation could be applied to Any Financial Institution.
    Oct 31 05:18 AM | Link | Reply
  •  
    Come on guys this is accrual accounting versus fair value Accounting...not Japan ,Not Iceland,not bankrupt....please somebody
    take a simple accounting course.....banks are liquid and they are solvent (especially now) but they are not profitable...for awhile.....anybody want to discuss preprovision earnings??? or will
    that screw up the banking system rage.....
    Oct 31 05:58 AM | Link | Reply
  •  
    One-time writedowns to turn failing into performing, then "extend and pretend" on performing loans. Still, I expect the non-performing loans will give the market plenty of reality to deal with.

    Gee, ya think this will work better than mortgage modifications have? Wait....maybe this should apply to all those residential resets....extend without regard to the value of the underlying collateral.
    Oct 31 07:22 AM | Link | Reply
  •  
    That they continue to play "Kick the Can" tells me the Admin does not have the answers, and hopes with time that things will change and get better, like if
    " You took a sip of milk, found it to be sour, put it back in the frig with the hope it will be better tomorrow" this admin is comprised totally of radical Elistist who believe in their heart of hearts that they know better and refuse to accept they might not, that will be their downfall and ours, they are fully prepared to go down with the ship and make sure we are all aboard as well.
    Oct 31 07:46 AM | Link | Reply
  •  
    i sure hope fox news had a reporter awake fri.pm.
    Oct 31 08:06 AM | Link | Reply
  •  
    Faux News...


    On Oct 31 08:06 AM winnersdon'tquit wrote:

    > i sure hope fox news had a reporter awake fri.pm.
    Oct 31 08:22 AM | Link | Reply
  •  
    Impatient aren't we....


    On Oct 31 07:46 AM enigmaman wrote:

    > That they continue to play "Kick the Can" tells me the Admin does
    > not have the answers, and hopes with time that things will change
    > and get better, like if
    > " You took a sip of milk, found it to be sour, put it back in the
    > frig with the hope it will be better tomorrow" this admin is comprised
    > totally of radical Elistist who believe in their heart of hearts
    > that they know better and refuse to accept they might not, that will
    > be their downfall and ours, they are fully prepared to go down with
    > the ship and make sure we are all aboard as well.
    Oct 31 08:24 AM | Link | Reply
  •  
    I never expected anything more and didnt imply it in any way shape or form, I only stated the obvious, your misdirected statement verifies
    " neither glasses nor light will help those that refuse to see"


    On Oct 31 08:24 AM bbro wrote:

    > Impatient aren't we....
    Oct 31 09:57 AM | Link | Reply
  •  
    "Radical Elitist".....get the guns Mabel


    On Oct 31 09:57 AM enigmaman wrote:

    > I never expected anything more and didnt imply it in any way shape
    > or form, I only stated the obvious, your misdirected statement verifies
    >
    > " neither glasses nor light will help those that refuse to see"
    >
    Oct 31 12:30 PM | Link | Reply
  •  
    Your assertion that it's accrual v fair value is simple and naive.
    FASB temporary rules are supposed to change back in January.
    If FDIC enforcement was diligent, we'd have a hundred banks fail a week, rather than the nine that failed Friday night. Read what Wilbur Ross thinks about CRE epidemic failures to come:
    seekingalpha.com/insta...


    On Oct 31 05:58 AM bbro wrote:

    > Come on guys this is accrual accounting versus fair value Accounting...not
    > Japan ,Not Iceland,not bankrupt....please somebody
    > take a simple accounting course.....banks are liquid and they are
    > solvent (especially now) but they are not profitable...for awhile.....anybody
    > want to discuss preprovision earnings??? or will
    > that screw up the banking system rage.....
    Nov 01 01:54 AM | Link | Reply
  •  
    Me thinks WIlbur is talking his book.....


    On Nov 01 01:54 AM optionsgirl wrote:

    > Your assertion that it's accrual v fair value is simple and naive.
    >
    > FASB temporary rules are supposed to change back in January.
    > If FDIC enforcement was diligent, we'd have a hundred banks fail
    > a week, rather than the nine that failed Friday night. Read what
    > Wilbur Ross thinks about CRE epidemic failures to come:
    > seekingalpha.com/insta...
    >
    Nov 01 09:10 AM | Link | Reply
  •  
    The small banks went Commercial because they were small, they needed to enhance their revenue streams but couldn't through the usage of the Basics: fees, mortgages, competion for depositors. They were too small to issue their own Credit Cards (Thanks for that).

    The only saving grace is that there are so Many of them, the risks are spread over a large base.

    Its going to be painful to watch though.
    Nov 03 04:54 AM | Link | Reply
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