US commercial loan crisis - time bomb waiting to explode

For all you bears waiting to get into action:

Half of the roughly $1.4-trillion (U.S.) worth of commercial loans coming due over the next four years are already "under water" and could trigger bank losses reaching as much as $300-billion per year, according to a Congressional oversight panel report released in February.

"A significant wave of commercial mortgage defaults would trigger economic damage that could touch the lives of nearly every American," the 189-page report concluded.

"In the worst case scenario, hundreds more community and mid-sized banks could face insolvency ... Their widespread failure could disrupt local communities, undermine the economic recovery, and extend an already painful recession."

America’s 8,100 banks hold about $1.5 trillion in commercial real estate (CRE) mortgages, all but $1 trillion of which must be refinanced in the next four years.

About 3,000 small banks will be disproportionately hard hit by the failed refinancing. These banks have what the Government calls “CRE concentration”, with CRE loans equal to at least 300 per cent of total capital.

The entire article can be found here:
http://www.globeinvestor.com/servlet/story/GAM.20100212.IBUSECONOMY12ART1937/GIStory/

http://business.timesonline.co.uk/tol/business/economics/article7023861.ece

PIGS crisis just the biggening?

The sovereign default fears in the European countries is very small compared to what the real scenario is...7 states in the US are bankrupt...there is a limit to how much money can be printed by governments...ultimately there is going to be tightening of policies to bridge the deficit...which leads to deflation, crash of equity, commodities...and a rally in the Dollar Index

Back home the Nifty has broken 4700 on an intraday basis..let us see if it closes below 4700...

US heading towards bankruptcy - shorting opportunity of a lifetime

US Debt including unfunded obligations is around $100 trillion
http://www.usdebtclock.org/
http://brillig.com/debt_clock/faq.html




The Guidotti-Greenspan rule states that reserves should equal short-term external debt (one-year or less maturity)for a country to avoid going bankrupt.

The USdoes not have reserves to pay the financing costs for the enxt 12 months.

The fact of the matter is than anybody who is overleveraged be it an individual, a company or a country (like what happened in Dubai) is at high risk for bankruptcy.

The US is on the tip of a massive collapse. Great fortunes can be made by shorting the DOW/S&P. It's just a matter of time before this situation pans out.