How banks may lose $430 billion more

[girl gone mad]

FWIW, I've seen estimates that the Dubai default will cost around $80B, with European banks, HSBC in particular, being hit the hardest (and it's likely that Abu Dhabi will offer strategic assistance).

Meanwhile, American banks are still facing another half trillion in commercial real estate losses, and their only hope for salvaging these loans is that we somehow re-inflate the ridiculous property bubble.

How banks may lose $430 billion more
http://lansner.freedomblogging.com/2009/11/25/how-banks-may-lose-430-billion-more/45087/">The OC Register

Banks are projected to lose $430 billion on commercial real estate loans in the next two to three years, a Newport Beach receiver’s agent told the National Association of Realtors convention earlier this month.

This year’s commercial real estate defaults are projected to be 6.5% of outstanding loans, added Stan Mullin, an associate with California Real Estate Receiverships in Newport Beach. Mullin was one of the featured speakers at the NAR convention in San Diego. His message:

The impacts of the housing slump will pale in comparison to the potential impacts from the coming wave of commercial real estate defaults.

Highlight’s of Mullin’s talk:

* $1.4 trillion in commercial loans are coming due in the next five years.
* That’s equal to the same amount that came due in the last 15 years.
* Lenders could take massive losses on their real estate portfolios from 2010-2013.

“If commercial is a nine-inning game, we’re in the first inning going into the second,” Mullin said. “We’ve got a long ways to go.”

A second speaker addressing commercial real estate woes, Robert Goldstein, president and CEO of Hospitality Consultants Inc. in Orlando, Fla., said there’s a “coming tsunami in defaults.”

Goldstein said that $260 billion to $300 billion in bank loans maturing in the next two years are not likely to qualify for refinancing because of falling property values.

[notesdev]

1. Then we get the derivatives domino chain

and who knows who ends up exposed to this and by how much? If they're warming us up with a $430B figure, the final cost (to the taxpayer, of course) is likely to be ten times that.

[dixiegrrrrl]

2. But...but...Green shoots !!! Green shoots !!!

They said so.
Me, I listen to Denninger, who said exactly the above back in early 2008. First the residential crash, then the commercial crash.Then the US crash, again and for real, as no bubbles are left.