4 ms·
It appears that the only thing that has declined here is the free money support for the fantasy valuation being claimed by the REIT. There are a lot of reasons
by evgen 3y ago
It appears that the only thing that has declined here is the free money support for the fantasy valuation being claimed by the REIT. There are a lot of reasons that hundreds of billions in commercial real estate loans are going to be written off in the next few years and the original article mentioned none of them...
- fallingknife 3y agoApparently it wasn't a fantasy valuation because the banks lent against it. It is now a fantasy valuation because the properties have massively declined in value.
- hef19898 3y agoBanks loaned subprime mortgages, enough actually to tank the global economy. Banks loaned for Musk's Twitter purchase. Free money tends to move the risk assessment done by banks in not a good way. Just ask SVB.
- ufo 3y agoFWIW, SVB didn't go broke because of subprime loans. They had a bank run.
- Fervicus 3y agoThey mismanaged their risk. You make it sound like they did nothing wrong.
- ddorian43 3y agoCan the other banks handle the same thing that happened to SVB?
- hef19898 3y agoFrom memory, yes. At least better, since SVB had an unusual high amount of uninsured deposits and Edit: other banks have more short term investments to cover withdrawls that were marketed to market, meaning they were more like cash equivalents than the long term stuff SVB had to sell at huge losses. And those losses kind of killed SVB.
- briandear 3y agoIf it’s a fantasy valuation then was the government collecting property taxes based on those fantasy values?
- onlyrealcuzzo 3y agoThere's even more reasons that interest rates won't stay this high for long enough to matter.