[davelj]

I was in Palm Springs week before last and I took note of several large strip malls between Murietta and Palm Springs. Whoa, it was ugly. I was driving through in the early evening and some of these places looked like ghost towns. Several see-through 6-8 story office buildings. That furniture-oriented strip mall near Moreno Valley – the one with like 8-10 different furniture stores – was almost completely empty. Maybe 15 cars. A couple of store fronts were already vacant. That area is already turning into a disaster area.

The construction loans are coming home to roost big time. There were some write-offs at year end. There will be more write-offs in 1Q. But 2Q is going to be the really ugly quarter because much of the junk underwritten prior to late-2006 (right before bankers got construction religion) will be coming off their interest reserves. There’s nowhere to hide once the interest reserve runs out. You gotta be selling plenty of units or it’s Bedtime for Bonzo. Lots of losses on the way.

And then there’s the CRE. It’s going to be ugly. I still don’t think it’s going to be as bad as the early-90s were closer to the coast, but it’ll still be plenty painful. And all of that crap near newer developments (almost regardless of where those developments are)… oh my. Disaster.

[davelj]

I was in Palm Springs week before last and I took note of several large strip malls between Murietta and Palm Springs. Whoa, it was ugly. I was driving through in the early evening and some of these places looked like ghost towns. Several see-through 6-8 story office buildings. That furniture-oriented strip mall near Moreno Valley – the one with like 8-10 different furniture stores – was almost completely empty. Maybe 15 cars. A couple of store fronts were already vacant. That area is already turning into a disaster area.

The construction loans are coming home to roost big time. There were some write-offs at year end. There will be more write-offs in 1Q. But 2Q is going to be the really ugly quarter because much of the junk underwritten prior to late-2006 (right before bankers got construction religion) will be coming off their interest reserves. There’s nowhere to hide once the interest reserve runs out. You gotta be selling plenty of units or it’s Bedtime for Bonzo. Lots of losses on the way.

And then there’s the CRE. It’s going to be ugly. I still don’t think it’s going to be as bad as the early-90s were closer to the coast, but it’ll still be plenty painful. And all of that crap near newer developments (almost regardless of where those developments are)… oh my. Disaster.

[davelj]

I was in Palm Springs week before last and I took note of several large strip malls between Murietta and Palm Springs. Whoa, it was ugly. I was driving through in the early evening and some of these places looked like ghost towns. Several see-through 6-8 story office buildings. That furniture-oriented strip mall near Moreno Valley – the one with like 8-10 different furniture stores – was almost completely empty. Maybe 15 cars. A couple of store fronts were already vacant. That area is already turning into a disaster area.

The construction loans are coming home to roost big time. There were some write-offs at year end. There will be more write-offs in 1Q. But 2Q is going to be the really ugly quarter because much of the junk underwritten prior to late-2006 (right before bankers got construction religion) will be coming off their interest reserves. There’s nowhere to hide once the interest reserve runs out. You gotta be selling plenty of units or it’s Bedtime for Bonzo. Lots of losses on the way.

And then there’s the CRE. It’s going to be ugly. I still don’t think it’s going to be as bad as the early-90s were closer to the coast, but it’ll still be plenty painful. And all of that crap near newer developments (almost regardless of where those developments are)… oh my. Disaster.

[davelj]

I was in Palm Springs week before last and I took note of several large strip malls between Murietta and Palm Springs. Whoa, it was ugly. I was driving through in the early evening and some of these places looked like ghost towns. Several see-through 6-8 story office buildings. That furniture-oriented strip mall near Moreno Valley – the one with like 8-10 different furniture stores – was almost completely empty. Maybe 15 cars. A couple of store fronts were already vacant. That area is already turning into a disaster area.

The construction loans are coming home to roost big time. There were some write-offs at year end. There will be more write-offs in 1Q. But 2Q is going to be the really ugly quarter because much of the junk underwritten prior to late-2006 (right before bankers got construction religion) will be coming off their interest reserves. There’s nowhere to hide once the interest reserve runs out. You gotta be selling plenty of units or it’s Bedtime for Bonzo. Lots of losses on the way.

And then there’s the CRE. It’s going to be ugly. I still don’t think it’s going to be as bad as the early-90s were closer to the coast, but it’ll still be plenty painful. And all of that crap near newer developments (almost regardless of where those developments are)… oh my. Disaster.

[davelj]

There’s a precedent for REOs becoming rentals in SoCal from the early-90s. But, it didn’t happen very often. But I recall hearing recently about a bank that held onto about 500-600 SFR properties during the early-90s and rented them out and then sold them in the late-90s. It happens, but it’s pretty rare.

Given what’s happening right now, however, nothing would surprise me.

[davelj]

There’s a precedent for REOs becoming rentals in SoCal from the early-90s. But, it didn’t happen very often. But I recall hearing recently about a bank that held onto about 500-600 SFR properties during the early-90s and rented them out and then sold them in the late-90s. It happens, but it’s pretty rare.

Given what’s happening right now, however, nothing would surprise me.

[davelj]

There’s a precedent for REOs becoming rentals in SoCal from the early-90s. But, it didn’t happen very often. But I recall hearing recently about a bank that held onto about 500-600 SFR properties during the early-90s and rented them out and then sold them in the late-90s. It happens, but it’s pretty rare.

Given what’s happening right now, however, nothing would surprise me.

[davelj]

There’s a precedent for REOs becoming rentals in SoCal from the early-90s. But, it didn’t happen very often. But I recall hearing recently about a bank that held onto about 500-600 SFR properties during the early-90s and rented them out and then sold them in the late-90s. It happens, but it’s pretty rare.

Given what’s happening right now, however, nothing would surprise me.

[davelj]

There’s a precedent for REOs becoming rentals in SoCal from the early-90s. But, it didn’t happen very often. But I recall hearing recently about a bank that held onto about 500-600 SFR properties during the early-90s and rented them out and then sold them in the late-90s. It happens, but it’s pretty rare.

Given what’s happening right now, however, nothing would surprise me.

[davelj]

CDARs are totally legit for people who need more than $100K insured and don’t want to screw around with having accounts at multiple banks. I posted on this several months ago. For some perspective, I’m a director of a bank that offers CDARs.

[davelj]

CDARs are totally legit for people who need more than $100K insured and don’t want to screw around with having accounts at multiple banks. I posted on this several months ago. For some perspective, I’m a director of a bank that offers CDARs.

[davelj]

CDARs are totally legit for people who need more than $100K insured and don’t want to screw around with having accounts at multiple banks. I posted on this several months ago. For some perspective, I’m a director of a bank that offers CDARs.

[davelj]

CDARs are totally legit for people who need more than $100K insured and don’t want to screw around with having accounts at multiple banks. I posted on this several months ago. For some perspective, I’m a director of a bank that offers CDARs.

[davelj]

CDARs are totally legit for people who need more than $100K insured and don’t want to screw around with having accounts at multiple banks. I posted on this several months ago. For some perspective, I’m a director of a bank that offers CDARs.

[davelj]

Real men of genius:

“Ridiculous, totally ridiculous.” – Former Bear Stearns CEO, Alan “Ace” Greenberg, March 10, addressing liquidity-crunch speculation

“We don’t see any pressure on our liquidity, let alone a liquidity crisis.” – Bear Stearns current CEO, Alan Schwartz, March 12

“We’re like totally fucked.” – Various Bear Stearns executives, 10 minutes ago

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