US banks facing $1.4tn crisis over commercial property loans

[CHIMO]

America's fragile high street banks are bracing themselves for a fresh financial crunch as a wave of commercial property mortgages go sour on offices, shops and factories, causing losses of up to $300bn (£192bn) hitting nearly 3,000 small- and medium-sized financial institutions.

A congressional oversight panel charged with scrutinising the Obama administration's bailout efforts has warned that $1.4tn of loans covering commercial premises will reach maturity between 2011 and 2014. After a plunge in property prices, nearly half of these loans are underwater, with borrowers owing more than their underlying property is worth.

An analysis by the panel found that 2,988 of America's 8,100 banks have potentially dangerous exposure to commercial property loans. The impact could damage hopes of a US economic recovery and could cause a further squeeze in the availability of credit to consumers and businesses.

http://www.guardian.co.uk/business/2010/feb/11/banks-crisis-commercial-property-loans

A billion here a billion there, pretty soon you're talking about real money. My how life changes.

[DCBob]

1. This is the next shoe to drop but...

it might not be the financial disaster many are predicting if it is spread out over a few years.

[Autumn]

2. Can another bail out

be on the horizon? And will the American people stand for it?

[obxhead]

3. yes, I've been reading/hearing about this coming for a year or more now

I sense another bank bailout. Maybe we can get this one right and do something about the bonuses etc this time.

[w4rma]

4. And they had better not be bailed out this time. (nt)

[dixiegrrrrl]

5. Gee, I wonder who can bail them out from this new mess?

Hmmmmmmmm

http://3.bp.blogspot.com/_11-nzoYFuQU/SZA2GyHNEQI/AAAAAAAAFE8/6kvTJroFUSQ/s400/wondering+baby.jpg

[HCE SuiGeneris]

6. Crank up them printing presses!

More ink I tells ya! More ink! :hangover:

[HCE SuiGeneris]

7. Apparently this is just a *yawn* here at DU.

sigh

[pokercat999]

8. Since these are businesses they will walk without remorse.

Many more small and medium size banks hold this paper. This could be real fun.

[jtrockville]

9. The same banks who threatened us if we dare speak an unkind word?

Let 'em fail.

[Odin2005]

10. W-shaped depression. How appropriate.