Elizabeth Warren, Chair of the Congressional Oversight panel over TARP, says that we have a serious problem with commercial real estate and it’s going to affect a significant number of banks.
I am afraid. I’m afraid because of what I see in the real economy. I’m afraid because I don’t see books that are clean – balance sheets that have been cleaned up. I’m afraid because in October of 2008 Secretary Paulson came to the American people and said the problem is toxic assets on the books of the banks, and they’re still there. I’m afraid because Secretary Paulson said there’s too much concentration in the banking industry and there’s even more concentration today than there was fifteen months ago…
We haven’t yet put our feet on solid ground and begun to rebuild an economy we can believe in.
This is not some random web site author or blogger with a confirmation bias talking about the possibility of doom and gloom.
This is the chairman of the panel that oversees the near trillion dollar TARP bailout program.
Believe the spin from mainstream pundits and analysts talking their books if you wish.
But this women is not lying to you.
In addition to the coming second wave of the residential real estate meltdown , one in five Americans out of work, and a contraction in across-the-board credit lending, we have commercial real estate exposure that involves some $1.4 trillion dollars. Elizabeth Warren’s warnings are clear:
A big enough wave of commercial mortgage defaults would trigger economic damage that would touch the lives of every American. Empty offices, empty hotels, and empty stores could lead directly to job losses. Banks that suffer losses or fear they might could grow even more reluctant to lend, which could make it even harder for you to get a loan.
The largest loan losses are projected for 2011 and beyond, but the stress tests conducted on big Wall Street banks last year examined their stability only through 2010.
Even more significantly, community banks tend to hold much greater concentrations of commercial real estate than big Wall Street banks, but comunity banks never underwent any stress tests at all.
In total, nearly 3000 community banks, that’s nearly 40% of all the banks in America, have what the regulators call concentrated commercial real estate holdings, which means they have a very high proportion of commercial mortgages on their books and are at particular risk of being overwhelmed.
Mrs. Warren sums up our economic situation very well. And if you’re paying attention, then you probably have a good idea where this is headed.
We hate to be negative, but our mission is to provide our readers with the truth. And the truth is, No Bailout Can Stop It.
Watch Elizabeth Warren discuss Commercial Real Estate in her COP’s February Report and an Interview with MPTV World:
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Unfortunately, I see more and more MSM articles simply labeling Warren a “kook.” It’s amazing how much power is in a label, subverting any need to develop specific, logical counter arguments (and I’d love to see them vs. the Kevin Bacon “all is well” imitations).  ÂÂ
On the other hand, there are a lot of people working very hard to prevent this outcome. Is it like trying to stop a tsunami by holding an umbrella towards the wave? I don’t think so. People in the FIRE sectors have had the fog lifted, they are not in the same mental position they were in a couple of years ago. It’s when these things are a complete surprise they are most damaging, and CRE certainly isn’t a surprise at this point. Just because they haven’t “come clean” to the public doesn’t mean they are unaware — just that there is no up side to that exercise (lower stock price, flight of capital, higher priced credit, etc.) Here’s to hoping they pull it off!
She may not be lying but her answers to the problems are the same progressive nightmare offered by all the neo-marxists. She is just playing the “good cop” part for the “government is the answer” crowd.
I’m afraid……
me too
The true at heart know whats coming and are getting prepared.
Willie – what is the solution then?ÂÂ
Ms. Warren seems to have a genuine concern, and I haven’t seen or heard that there is a larger” gov’t is answer” in her statements. ?ÂÂ
I have come to the conclusion that we have 3-6 months from now, to prepare for the devastation that lies ahead…
1. Start storing some food. #10 cans, 5 gallon food storage buckets, mylar bags etc.
2. Pay off as many debts as you can.
3. Put together an emergency kit with key essentials.
Once the floor falls out, there will be weeks of pandemonium in the United States. Grocery stores will be emptied within a day.
Government will announce a “bank holiday” shutting down all banks. Crime will pick up ten-fold. People will stay home and Pray.
The answer has been presented many times, it just scares people because they have become accustomed to the nanny state.
Much smaller FEDERAL government, basically be true to the constitution. No more lobbyists, strict term limits (or even make congress like jury duty eliminating campaign waste, fraud and lies, and REAL citizens will be represented.), re-institute the STATES rights to allow them to rule themselves as they see fit as long as they abide by the constitution (2nd amendment, etc). Abolish the Federal Reserve, repeal the 16th amendment, repeal NAFTA, eliminate the IRS, and open up domestic oil drilling until RELIABLE alternatives can be developed. That should go a long ways towards fixing things.
Willie Wonka,
You are right, that IS the answer.
But it will NEVER happen.
Too many poor people who are dependent on the government. They are slaves to the government. Especially when it gets to the point of do what i say or you wont eat.
Besides, we know that history repeats itself. Every major civilization has collapsed from within due to moral decay and corruption.
Its inevitable.
Scary thing this time is that it is happening with the worlds sole superpower in which EVERY world economy is connected!
Well said Bleako. Nice to see some positive thinking on here. I enjoy reading the site because it keeps me informed but the negativity and proclamations of doom can be too much sometimes. By the way I agree witha lot of what you said.
Tony,
And you know all this how? Why would anyone believe you have any credibility?ÂÂ
Thank you for another great post! I’m afraid too, makes me wanna dig a hole in the side of the basement wall and put in a vault for myself and family
Tony’s comments on timing seem more realistic than anything thus far. Last year it was supposed to be the summer of hell 2009, but for some reason I felt TPTB would be able to kick the can much further, although who could have guessed they could have kicked it this far.
Somehow, I’m thinking now that day of reckoning is coming soon. Things just seem to be simmering a bit more now, FDIC talk of getting funding from pensions for pete’s sake, Barney Fwanks(sp on purpose) sending a letter to the four biggest banks asking them to forgive 2nd liens(helocs). FDIC ramping up offices, banks changing on demand accounts to notice required for withdrawals(just a notice as of now). An article today from MSM that said states are 83 Billion or some odd amount short tax revenue thus far, the worst revenue intake EVER.
The list of signs goes on and on, its all there. The question is will the math force economic armageddon or will it just be the extend and pretend, mark to myth, fraudulent balance sheets and hope and pray that keeps it all afloat?
/kudos to everyone’s comments – between the great posts and comments I feel like I get a sense of what J6P thinks
Indeed. Something is coming…and for all I know it will all work out for the best…
I know it sounds cliched or something, but it feels like I’m staring across a big valley watching a big shadow working it’s way toward us…and I can’t really see exactly what it is making the shadow…but something is there.
http://www.youtube.com/watch?v=1IvC3RftZTo
Best album ever.
Comments…..know one thing people, the middle class is the pillar of every great society, they are the nucleus the rich and poor revolve around , destroy the middle class you destroy everything. That is why we are dying a slow economic death.When the middle class is gone everything collapses inward.
Tony,ÂÂ
While the statement  that “too many poor people are dependent on the government” has some validity, I do not think it is the “poor people” who hire lobbyists and throw money at the elected representatives. The derivatives market was not devised by the “poor people”, nor are they the ones making hundreds of billions of dollars off of the taxpayers to pay these off. One of our biggest issues is with the very wealthy and politically connected  who make their money, not by producing a product that is better than than any competitor’s, but by the good ol’ boy network that allows them to rig the game in their favor. Some might call that cheating. Ayn Rand wrote a book called Atlas Shrugged which addresses exactly this point. I know it is easy to look at some crackhead or welfare mom with six kids and want to blame them for America’s problems, but they are not the ones who stole the TARP money or the missing 50 billion in Iraq reconstruction funds. There are certainly poor people who have issues, but I don’t think any of them are receiving bonuses for creating our current financial issues. Our issues as a nation are the responsibility of nobody but ourselves. We argue that the Republicans are better than the Democrats, the Democrats are better than the Republicans. The last time I checked, it’s been nothing but Republicans or Democrats in control. They are not producers of wealth, they are facilitators for those who wish steal the wealth of a nation.
Buy silver, buy gold, have faith.ÂÂ
gather round children…. this is just gettin started! 3 more years to go. This isn’t going to bottom out till 2014. And then will drag on for another ten to fifteen years. Unless we go to global war!
1st – this is intentional-they are going to intentionally destroy the US fiat currency in the end-to push us all into excepting the IMF/ World Bank New Currency based on carbon credits. NWO is alive and well!
2nd-buy silver! 1 oz, 10 oz bars trust me… keep em at home… or your going to be trading the old green back 5-1 ratio for their new global currency. Losing 4/5th your savings-only real gold/silver will transfer over to equal value to the new currency.
3rd-do stock up on food 1-3 month supply, medicine, water. Do it now before all prices sky rocket… get dental done etc etc etc NOW!
4th-buy a good rifle and pistol-learn to use them-cleaning-safely handling them-these will protect you from the looters and neighbors who have lost everything and have nothing to lose when TSHTF. It’s going to be either you or them! Game Over!
5th-formulate a secondary retreat- back up location to go to for safety.
6th-Don’t Trust the Government-Local-State or Federal, Question everything??? Except nothing as fact until you completely investigate it for yourself. Suspicion will keep you alive.
7th-And do not take the damn SHOTS they are offering to you and your children or your dog from the Vets. No BS! They are destroying all your immune systems and making your children Autistic/ retarded!
8th-Be kind to yourselves and PROTECT the children!
We’ll see you all in four years hopefully still alive! This is gonna happen! We are already in a DEPRESSION! This is going to last atleast 10 to 15 years. Generations!
It’s all been planned out.
And they are having the common man for diner at the IMF/ World Bank/ Goldman Sacks.
Don’t be a sheep prepare to fight the NWO!
Comments…..
DON’T BE A SHEEP!
PEOPLE EAT SHEEP!
Forcing more government on us is not the answer…they are trying. Do know that all banks are currently ‘reworking’ their commercial loans. The FedReserve changed policy that allowed loans that are being ‘reworked’ to be left off the bad debt side. It was the only way to keep some banks going – the big ones. The quiet account change is either buying time for commercial loans to recover, or blowing up the bubble gum! Either way, it is going to be interesting. Get prepared, find your God, hug your family and HANG ON!
Michael Kenney,
I agree with what you are saying. Its not the “poor people” that are the cause of this, they are the factor that “allows” it to happen. They allow it because they are desperate. Instead of buckling down for hard times, taking the extra steps to survive like planting gardens etc. …they will take the easy route which the “elites” offer them to get their support. They are basically selling their FREEDOM to these government “elites” socialists, marxists, communists, dictators or whatever you want to call them.
Freedom has a price. Its called hard work, sacrifice, and faith in God.
Just as it has been throughout history, the evil doers always prey on the weak. During the weak times we are in right now, that is exactly what is happening. We are in the midst of a paradign shift…and history tells us it isn’t going to be good.
….until we see Revolution
seargentsecforc,
I believe it is going to happen alot faster than that. I believe by 2012.
Comments…..Tony you’re close , it’s 2016 lot’s has to happen yet between now and then.The art of prophecy doesn’t involve hocus pocus or speculation, it’ s intricate mathematical calculation.
Sam,
You could be right. It could take somewhat longer than i am predicting like around 2016, but I see 2011 as a terrible year leading into 2012 when the actual collapse happens. We are a terrorist attack or one terrible event away from it collapsing tomorrow!
Comments…..2011-2012 are going to be very tough on a lot of people just imagine there is going to be 3 times the mortgage resets  than the previous 2 years. How many more people will lose their homes, followed by the commercial collapse. Oh there is going to be a lot more thieving before the people say enough.Remember in economics, there is no destruction of wealth, only the transfer of wealth. When people have nothing left to lose, they will lose it (Gerald Celente).
Sam,
I agree
This woman is out to lunch.  It is in the interest of banks to re-mortgage their clients’ properties that are up to date in their payments – since they in turn need to pay their own loan lines. The bank cannot do anything by repossessing a building in its favour – they need mortgage payments, not collect real-estate portfolios.
An interview by Charlie Rose? He’s a true-blue CFR propagandist! They’re just getting us ready for Wall Street’s next swindle. (BTW, ‘Secretary Paulsen’ is also a criminal!) Charlie Rose? He’s not too different than the Nazi’s or Pravda …ÂÂ
Summer’s and Geitherner are smart? Gimme a break!!
Mass Mind Control …………….