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Banks are Left Holding the Bad on Commercia Real Estate Loans

|Includes: Bank of America Corporation (BAC), WFC

Who is holding the bag of rapidly rottening commercial real estate loans? Banks, led by Bank of America (NYSE:BAC) and Wells Fargo (NYSE:WFC), hold 50%, followed by collateralized mortgage backed securities 30%, life insurance companies 10%, and pension funds 10%.  It is no accident that these two banks have the greatest exposure  in the melt down states of California and Florida. The scary thing is that the banks with the biggest exposures are also suffering from a simultaneous assault on their balance sheets from defaulting residential home loans. As low as these stocks are, a rollover in global equity markets could send them right back into survival mode.  Use the Goldman Sachs rally to sell into.