(CRE)amated!

CREamated!

I have spoken here often on how commercial real estate ("CRE") follows residential in falling off the cliff and how lately it has really, really been taking a dive. I thank Calculated Risk for educating me in this respect. We have way, way too much CRE, including hotels, retail space, office space and the like. AND I MEAN WAY TOO MUCH!! We have twice the retail space per person as any other country and most have a fraction - a small fraction - of what we have. And for the government to now be acknowledging that CRE may be a problem is, well, a vast understatement. We will see.

http://www.calculatedriskblog.com/2009/07/bernanke-cre-may-pose-risk.html

Pinching the Pensioners

I have read a good bit on pension problems, and I mean major problems. I am part of the 401(k) crowd, so pension talk does not normally peak my interest, but it has so infected what I am reading that you cannot ignore it. There are still a lot of people near or in retirement these days dependent on pensions to retire that it is a major issue, especially for baby Boomers. A lot of these are government workers and, seemingly, a lot live in California - an area particularly hard hit this time around. It would appear that the California Public Employees Retirement System (Calpers) is in need of an infusion, which means current employees will undoubtedly need to increase contributions and reduce eventual benefits. In short, they have both short and long term pain ahead.

http://pensionpulse.blogspot.com/2009/07/californias-100-billion-whooping.html

This is one of many reasons why I think - while we may be reaching a bottom - we will be bottom feeding for years to come. I do not see a bounce, just stabilization, in our future for years to come.

By the way, pension pulse has a lot of good pieces on our pension problems. The are many and far spread.

Real Estate Stabilizing but Foreclosures - Not Yet

Apparently foreclosure activity, at least in CA, is not at peak yet and may pick up in the third quarter. Prices seem near a bottom but loan defaults, especially on higher priced real estate, seem to still be on the increase and banks are finally taking action on these homes. There was some talk that banks were holding foreclosed homes off the market because conditions were so horrendous. We will see where this leads.

http://www.calculatedriskblog.com/2009/07/dataquick-california-mortgage-defaults.html


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