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Is there similar derivatives exposure on those commercial real estate loans as there was to residential mortgages in 2007/8? I've been thinking that there will
by motohagiography 3y ago
Is there similar derivatives exposure on those commercial real estate loans as there was to residential mortgages in 2007/8? I've been thinking that there will be a a blackmail/chicken play, where the banks with the exposure to the loans say to government, "here are what we say the consequences are if these loans go upside down. Your choice is between another bank bailout on these loans with real domestic unrest risk from consequent currency debasement and the ability to import food and other staple goods, or effectively legislating most people back into offices."
I lived in commercial warehouse spaces in the 90s, and not only were they cheap, huge, and awesome, but they created a condo boom for all those pretend "lofts," that cashed in on the cachet of that lifestyle our generation inspired. If the bulk of your personal net worth comes from flipping some 600sq' shoebox for almost a million dollars, you're welcome. The middle ground may be that landlords will turn a blind eye to live-ins again, and it will create some affordable housing for young people again, and with their influx, the downtowns can be revitalized from the globalized airport mall dead zones they have become. I think there's room for optimism.