(via Syd O) I was just talking to a friend the other day who does some private equity investing and he was saying how we haven't even seen the worst of the recession - the commercial real estate bust. Many commercial loans are over leveraged by the banks and just as troublesome as the mortgage-backed securities that sank the housing market. Plus we're shedding, what, 600K jobs a month or so? When those people start closing up shop in the commercial parks and the banks are left with the notes, we're going to be in huge trouble.
Slate has a good article on all of this.
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1 comment:
I won't believe that our economy is ready to turn around until unemployment begins to go back down (which won't be anytime soon) and consumer spending picks up for an extended period.
It is only a small problem that people and small businesses can't get loans right now. The main problem is that individuals don't have enough income to want to get loans, and businesses are afraid to expand because there aren't enough buyers out there for their products and services. We need a bottom up stimulus!!
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