There is currently $3.5T of debt associated with commercial real estate, about half of which is...

There is currently $3.5T of debt associated with commercial real estate, about half of which is on the books of banks. In his testimony, Fed's Greenlee says they've been following this situation closely. And Simon Johnson wonders: "Why do I not find this reassuring?"

Comments

[Archman Investor]

I think this charade can go on for quite awhile.
Investors and traders alike have to have their eyes wide open to any scenario.

[Elias]

I'd be very scared. Unemployment is going up which means less business demand for office space. At the same time the business that are still operating will likely be paying less to renew their leases in the future. Banks have many problems to content with and the worst case scenario, according to the stress tests for 2010, was 10.3 percent unemployment - a figure we can easily see by the end of the year. All this translates into lower commercial real estate values and higher delinquencies for all type of consumer and residential loans.

Disclosure: Long FAZ (Short Financial) and Long SRS (Short Commercial real estate) and with good reason.

[Neil459]

Because the government of late has failed in almost every one of its mandated responsibilities.

Because the SEC failed to monitor and regulate.

Because the Fed bent to political pressure to keep an overheated economy going.

Because the FIDC is protecting banks that should have already failed be keep public perception at bay.

Because the DoJ and SEC have so many insiders that they cannot possibly conduct an impartial investigation.

Need I go on.