DailyFinance.comhttp://www.dailyfinance.comDailyFinance.comhttp://o.aolcdn.com/os/df/2013/img/2-dailyfinance_logo_m.pngDailyFinance.comhttp://www.dailyfinance.comen-usCopyright 2013 Weblogs, Inc. The contents of this feed are available for non-commercial use only.Blogsmith http://www.blogsmith.com/Beyond Investing: Buffett Tackles 'Terrible Journalism'http://www.dailyfinance.com/2010/03/03/beyond-investing-buffett-tackles-terrible-journalism/http://www.dailyfinance.com/2010/03/03/beyond-investing-buffett-tackles-terrible-journalism/http://www.dailyfinance.com/2010/03/03/beyond-investing-buffett-tackles-terrible-journalism/#commentsFiled under: ,

Warren Buffett's latest annual letter to Berkshire Hathaway (BRK.A, BRK.B) shareholders, viewable in its entirety here, is filled with the kind of insightful observations and straightforward explanations that have led Buffett to be regarded as not just the world's best investor, but one of the best writers on matters of business. In recounting the year that was 2009, Buffett made a very trenchant comment about the nature of business journalists to use a sound bite heavily if it will grab more attention than a full quote will.

Specifically, Buffett wrote that his view of the economy as being "in shambles throughout 2009 -- and probably well beyond" was loudly reported, while the end of that same thought -- "but that conclusion does not tell us whether the market will rise or fall" -- was essentially ignored. This "sound-bite reporting" is "terrible journalism" and was costly to anyone who was unduly influenced to avoid stocks because they missed out on big gains as the market rallied for the majority of the year.

With his far-reaching interests in insurance, consumer products and banking, it's easy to forget that Buffett knows a thing or two about journalism: In addition to being the majority shareholder in The Washington Post Co. (WPO) and owner of The Buffalo News, he was the owner of the weekly Omaha Sun when it won a Pulitzer Prize in 1973. At DailyFinance, we believe we appropriately balanced and conveyed Buffett's thoughts in the headline -- "Buffett says economy is in shambles, but still likes stocks" -- and in the accompanying article.

Unfortunately, Buffett isn't the only well-known investor to have his words taken out of context by the sound-bite culture: Jim Rogers, a former partner at George Soros' hedge fund, recently was credited with saying that the British pound "could collapse within weeks" -- a statement that made waves in the market. Except he said no such thing: It came from a conference promoter trying to drive business.

As consumers of information in an era of compressed media cycles, readers and viewers should take a lesson from the childhood game of "whisper down the lane": What isn't heard, or what gets lost when information is relayed, is often the most important detail. So minimize the influence breathless TV personalities and loud headlines have in your financial decisions, even if they claim to be conveying the words of the great investment minds, and spend more time beyond the headlines.

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]]>journalismwarren buffettJames CullenWed, 03 Mar 2010 10:30:00 ESTNobel Winner Stiglitz Calls for More Government Debthttp://www.dailyfinance.com/2010/02/24/nobel-winner-stiglitz-calls-for-more-government-debt/http://www.dailyfinance.com/2010/02/24/nobel-winner-stiglitz-calls-for-more-government-debt/http://www.dailyfinance.com/2010/02/24/nobel-winner-stiglitz-calls-for-more-government-debt/#commentsFiled under:

Joseph Stiglitz, the 2001 Nobel Prize winner in Economics and a professor at Columbia University, offers a very controversial viewpoint in a recent interview with Henry Blodget: the U.S. government needs to borrow even more money for additional stimulus, and it needs to do so now. Warning against "deficit fetishism" that he sees sweeping through public sentiment, Stiglitz argues that additional spending could actually pay for itself over time if done prudently, and that concerns over deficits and debt levels are simply a new manifestation of the short-sightedness that led to our current problems.

The rationale Stiglitz presents leaves much to be desired, however. His main point seems to be that, at current levels and interest rates, the U.S. has no problem paying its debts -- which is true. But, in a stunningly quick reversal for someone who decried the short-term nature of financial markets in the same interview, Stiglitz breezily ignores recognizing projections that total deficits in the coming decade will amount to $9 trillion, nearly doubling the current national debt. This "minor" oversight is accomplished by arguing that targeted spending in education, technology and infrastructure will pay for itself if the government allocates the money correctly; thus, in the long-run, spending that returns about 6% annually will actually lower the total debt.

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]]>creditdeficitJoseph StiglitzStiglitztreasuriesJames CullenWed, 24 Feb 2010 09:00:00 ESTThe Newest Franken-Finance Creation: Liquidity Derivativeshttp://www.dailyfinance.com/2010/02/16/the-newest-franken-finance-creation-liquidity-derivatives/http://www.dailyfinance.com/2010/02/16/the-newest-franken-finance-creation-liquidity-derivatives/http://www.dailyfinance.com/2010/02/16/the-newest-franken-finance-creation-liquidity-derivatives/#commentsFiled under: , , , ,

With Wall Street now under the harsh glare of public and government scrutiny, one might assume that big banks -- especially those that benefited most from government support -- would be treading cautiously in trying to expand their trading operations. Fortunately for the financial blogging community, no healthy sense of irony appears to have developed among the credit-trading team at Citigroup (C): They're trying to create a market for liquidity derivatives, which would theoretically allow borrowers to hedge the risk that another financial crisis might makes credit access more costly or less available.

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]]>bankscitigroupcredit crisisderivativesfinancialstradingJames CullenTue, 16 Feb 2010 12:01:00 ESTTwo Giant Spanish Banks Could Tumble Hardhttp://www.dailyfinance.com/2010/02/08/spanish-banks-trying-to-maintain-baseless-optimism/http://www.dailyfinance.com/2010/02/08/spanish-banks-trying-to-maintain-baseless-optimism/http://www.dailyfinance.com/2010/02/08/spanish-banks-trying-to-maintain-baseless-optimism/#commentsFiled under: , ,

Last August, an article I published on DailyFinance highlighted that something seemed amiss with two international banking giants headquartered in Spain: Banco Santander (STD) and Banco Bilbao (BBVA) were buying up foreign banks, even as conditions in their home country worsened dramatically. Instead of buckling down to face an inevitable spike in loan losses on existing business, the banks expanded their balance sheets through acquisitions and became more leveraged.

But after a string of relatively benign months for equity markets, investors have recently grown skeptical of these two companies and sent shares down sharply. Santander shares have dropped 17% since the end of August, and Banco Bilbao shares are off 26% over the same period.

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]]>banksbbvaeuropefinancialssantanderspainJames CullenMon, 08 Feb 2010 08:25:00 ESTWhy Politics Makes It Hard to Fix the Bankshttp://www.dailyfinance.com/2010/01/31/why-politics-makes-it-hard-to-fix-banks/http://www.dailyfinance.com/2010/01/31/why-politics-makes-it-hard-to-fix-banks/http://www.dailyfinance.com/2010/01/31/why-politics-makes-it-hard-to-fix-banks/#commentsFiled under: , , , ,

Bank earnings season is under way, and with the financial results will come disclosures about average per-employee compensation that politicians seeking support for additional regulations or taxes on big banks will pounce on. Some of the proposals may make their way in some form into President Obama's financial reform plan.

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]]>bailout billbailoutsbanksBarack ObamaFederal Reservefinancial reformfinancialsLendingstimulusstimulus packagestimulus plantarpTARP moneyTARP repaymentJames CullenSun, 31 Jan 2010 09:00:00 ESTObama's Bank Rhetoric Misses the Markhttp://www.dailyfinance.com/2010/01/22/obamas-bank-rhetoric-misses-the-mark/http://www.dailyfinance.com/2010/01/22/obamas-bank-rhetoric-misses-the-mark/http://www.dailyfinance.com/2010/01/22/obamas-bank-rhetoric-misses-the-mark/#commentsFiled under: , , , , ,

The viability of President Obama's proposals on bank reform remains to be seen as they pass through Congress, but they send an undoubtedly sharp signal about what the next battle after health care will be. The principles are difficult to argue against, since the financial system has become increasingly concentrated in a handful of top-heavy firms, and overlap between retail banking and more complex trading activities has not been reduced. In this situation, the specter of systemic risk is held back only by the precedent of a nearly-unlimited commitment by the U.S. Treasury and Federal Reserve to prevent such a disaster.

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]]>AIGbacbanksBarack ObamacitigroupfinancialsJPMWFCJames CullenFri, 22 Jan 2010 15:00:00 ESTSovereign Debt Crisis Could Be Story of 2010http://www.dailyfinance.com/2010/01/12/sovereign-debt-crisis-could-be-story-of-2010/http://www.dailyfinance.com/2010/01/12/sovereign-debt-crisis-could-be-story-of-2010/http://www.dailyfinance.com/2010/01/12/sovereign-debt-crisis-could-be-story-of-2010/#commentsFiled under: , ,

The opening last week in Dubai of the Burj Khalifa, the world's tallest building at 2,717 feet, is a physical reminder of an underappreciated risk for 2010: the possibility that countries that rode the debt issuance boom of the mid-2000s will have trouble paying their creditors. (The Philadelphia Inquirer and Britain's The Independent have also documented the human cost of Dubai's rapid construction.)

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]]>James CullenTue, 12 Jan 2010 06:00:00 ESTGoldman Sachs' favorite emerging-market bet for 2010http://www.dailyfinance.com/2009/12/09/goldman-sachs-favorite-emerging-market-bet-for-2010/http://www.dailyfinance.com/2009/12/09/goldman-sachs-favorite-emerging-market-bet-for-2010/http://www.dailyfinance.com/2009/12/09/goldman-sachs-favorite-emerging-market-bet-for-2010/#commentsFiled under: , , , ,

goldman-sachs-favorite-emerging-market-for-2010The growth stories in the BRIC countries appear in sharp contrast to the view in developed markets, which are struggling to stabilize and reignite wide swaths of their economies; leading indices in Brazil, Russia, India, and China have all handily outperformed the S&P 500 ($SPX) in 2009. But only one country was singled out by Goldman Sachs (GS) macroeconomic and commodity analysts in a note to clients highlighting the group's "Top Trades for 2010" -- and that is the low organic growth, commodity-driven economy of Russia.

Citing a "still bullish long-term view on energy and the broader commodity complex," Goldman is targeting a 25% return from a U.S. dollar-denominated index known as the Russian Depository Index (RDX), of which three stocks -- Gazprom (OGZPY), Lukoil (LUKOY) and the oil company Rosneft -- comprise more than 50% of the weighting. In addition to oil and natural gas, the index also has companies exposed to steel, gold and nickel. Goldman estimates that oil prices will average $90 per barrel in 2010, which will allow a quick and healthy rebound in profits for Russian energy companies, leading to the stocks trading at a mere seven times forward earnings.

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]]>Brazilbricchinacommoditiescrudecrude oilenergygsin focusIndiamacronatural gasoiloil pricesrussiaJames CullenWed, 09 Dec 2009 11:00:00 ESTOne Year Later: Goldman Sachs's amazing reboundhttp://www.dailyfinance.com/2009/09/15/one-year-later-goldman-sachs-and-the-anatomy-of-a-rebound/http://www.dailyfinance.com/2009/09/15/one-year-later-goldman-sachs-and-the-anatomy-of-a-rebound/http://www.dailyfinance.com/2009/09/15/one-year-later-goldman-sachs-and-the-anatomy-of-a-rebound/#commentsFiled under:

The financial crisis crystallized the realities of systemic risk -- the idea that in certain panic-stricken environments, no company reliant on functioning credit markets is safe, even if it is fundamentally sound on its own merits.

No company may have been hurt more by guilt-by-association during the market's meltdown than Goldman Sachs (GS), widely recognized to have been the best positioned investment bank entering the fall of 2008. As Bear Stearns and Lehman Brothers went under, the competitive landscape was theoretically clear for Goldman to make sizable market share gains. But the same reliance on short-term financing and market fears of potentially hidden risks in the company's assets forced drastic changes.

Goldman joined Morgan Stanley in becoming a bank holding company, transitioning away from the high-leverage investment bank model to gain access to emergency lending facilities created by the Federal Reserve to stabilize credit markets. At the same time, Goldman was also early in raising equity capital from Berkshire Hathaway, effectively gaining the endorsement of Warren Buffett as it bolstered its balance sheet. On that day, Goldman stock traded at $120; it entered this weekend nearly one year later at $175, even as the worst economic macro-environment since the Great Depression continues to unfold.

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]]>financial crisisfinancialsgoldman sachsgoldman sachs groupgsin focusOne Year Laterreboundsystemic riskJames CullenTue, 15 Sep 2009 13:00:00 ESTBernanke's other banking problem: Identity thefthttp://www.dailyfinance.com/2009/08/26/bernankes-other-banking-problem-identity-theft/http://www.dailyfinance.com/2009/08/26/bernankes-other-banking-problem-identity-theft/http://www.dailyfinance.com/2009/08/26/bernankes-other-banking-problem-identity-theft/#commentsFiled under: ,

Some critics of recently reappointed Federal Reserve Chairman Ben Bernanke argue that he was too slow to realize that the financial system was teetering on the brink of collapse during 2008. But Bernanke might have had another, more personal banking issue on his mind at the time, Newsweek reports: his wife Anna's purse was stolen in August 2008, and the thieves used its contents to access the couple's joint checking account.

A court affadavit filed in June shows that 10 people are charged in the fraud, which used the Bernankes' bank account to inflate the value of other accounts that then had money withdrawn from them. The 22-page document identifies a victim known as "B. B.," who had $900 stolen from his account, but another complaint against one of the alleged members of the ring used Ben Bernanke's full name.

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]]>ben bernankeidentity theftJames CullenWed, 26 Aug 2009 17:10:00 ESTLow-priced financial stocks dominating trading volumehttp://www.dailyfinance.com/2009/08/26/low-priced-financial-stocks-monopolizing-trading-volume/http://www.dailyfinance.com/2009/08/26/low-priced-financial-stocks-monopolizing-trading-volume/http://www.dailyfinance.com/2009/08/26/low-priced-financial-stocks-monopolizing-trading-volume/#commentsFiled under: , ,

August is known as a quiet month for the stock market, as many institutional investors and traders take advantage of the waning summer to go on vacation. Trading volume dries up, and some large price swings can be attributed to the lack of liquidity, but this news about the concentrated nature of trading is truly odd.

According to Reuters, four beaten-up financial companies -- Bank of America (BAC), Citigroup (C), Fannie Mae (FNM), and Freddie Mac (FRE) -- have accounted for upwards of 40 percent of the trading volume on the New York Stock Exchange to begin this week.

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]]>aigbacbankscitigroupFannie Maefinancialsfnmfrein focusmortgagesspeculationtradingvgJames CullenWed, 26 Aug 2009 12:30:00 ESTAre Spanish banks' growth strategies hiding problems at home?http://www.dailyfinance.com/2009/08/26/are-spanish-banks-growth-strategies-hiding-problems-at-home/http://www.dailyfinance.com/2009/08/26/are-spanish-banks-growth-strategies-hiding-problems-at-home/http://www.dailyfinance.com/2009/08/26/are-spanish-banks-growth-strategies-hiding-problems-at-home/#commentsFiled under:

Spanish banks BBVA and Santandar looking riskyJust as speculation about the health of the banking system in the U.S. seems to be quieting down, there's reason to believe that foreign banks -- particularly two Spanish institutions -- are about to go under the microscope, even as the pair snaps up assets in foreign countries.

Banco Santander (STD) and Banco Bilbao (BBV), with a combined market capitalization of $200 billion, must deal with double-digit unemployment in Spain and a bursting property bubble that threatens to wipe out shareholders, according to a research report from Variant Perception (via FT Alphaville). These two are also working on integrating disparate acquisitions.

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]]>banksbbvfinancialsreal estatespainstdJames CullenWed, 26 Aug 2009 08:00:00 ESTStocks in the news: Staples, Lowe's, and Goldman Sachshttp://www.dailyfinance.com/2009/08/25/stocks-in-the-news-staples-lowes-and-goldman-sachs/http://www.dailyfinance.com/2009/08/25/stocks-in-the-news-staples-lowes-and-goldman-sachs/http://www.dailyfinance.com/2009/08/25/stocks-in-the-news-staples-lowes-and-goldman-sachs/#commentsFiled under: ,

The following is a round-up of some of the companies making major headlines today:

Office products retailer Staples (SPLS) announced that second quarter earnings were $0.16 cents per share, excluding a one-time charge. That number was in-line with analyst estimates. Revenues of $5.5 billion were slightly below expectations.

Lowe's (LOW) is bringing its home improvement concept to Australia, teaming with Woolworths in a joint venture that expects to open its first stores in 2011. The Australian housing market is healthy, unlike its U.S. counterpart, and home improvement spending is still growing.

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]]>bkcgslowsplsJames CullenTue, 25 Aug 2009 09:00:00 ESTSurging market gives government $11 billion profit on Citigrouphttp://www.dailyfinance.com/2009/08/24/surging-market-gives-government-11-billion-profit-on-citigroup/http://www.dailyfinance.com/2009/08/24/surging-market-gives-government-11-billion-profit-on-citigroup/http://www.dailyfinance.com/2009/08/24/surging-market-gives-government-11-billion-profit-on-citigroup/#commentsFiled under: ,

Step aside, John Paulson -- there's competition for reaping billions from bets on the financial sector, and it comes from Uncle Sam. The government, which owns 34 percent of Citigroup (C) following a conversion of preferred stock from the TARP and asset guarantee agreement, has booked an $11 billion paper profit as shares have risen to $4.85 in trading today from the original $3.25 conversion price. The conversion was meant to bolster Citigroup's Tangible Common Equity, or TCE, a new measure being used to determine a bank's ability to absorb losses.

The rebound in Citigroup shares, which fell to under $1 at the height of market distress, is part of a rally in financial stocks as confidence in the sector has been restored. Citigroup has received $45 billion in TARP capital from the government, in addition to a loss-sharing deal reached on a pool of assets in excess of $300 billion.

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]]>aigbankscitigroupfinancialsin focustarpus governmentJames CullenMon, 24 Aug 2009 16:30:00 ESTWhat's left after a newspaper bankruptcy: 20 cents on the dollarhttp://www.dailyfinance.com/2009/08/21/whats-left-after-a-newspaper-bankruptcy-20-cents-on-the-dollar/http://www.dailyfinance.com/2009/08/21/whats-left-after-a-newspaper-bankruptcy-20-cents-on-the-dollar/http://www.dailyfinance.com/2009/08/21/whats-left-after-a-newspaper-bankruptcy-20-cents-on-the-dollar/#commentsFiled under: ,

The parent company of the Philadelphia Inquirer, the Philadelphia Daily News, and the related Philly.com website could emerge from bankruptcy debt-free, if a proposal submitted by the ownership group that bought the paper in 2006 is accepted by lenders in court. Bruce Toll, of homebuilder Toll Bros. (TOL) fame, and public relations executive Brian Tierney are leading a bid to buy out the more than $300 million the company owes for 20 cents on the dollar in cash and real estate.

As the newspaper business continues to reel from a combination of high fixed costs and falling advertising revenue, established papers across the country have been going bankrupt or seeking help from wealthy local citizens. The Boston Globe, which the New York Times Co. (NYT) owns but is actively shopping for sale, has seen interest from at least two local groups, as well as one private equity fund. Even though such newspaper sales have not worked out well in the past, there is hope that re-making the Inquirer as a debt-free company will allow it to be marginally profitable.

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]]>bankruptcygcinewspapersnytphiladelphia inquirerwpoJames CullenFri, 21 Aug 2009 19:00:00 ESTCitigroup's loan disclosures: Over-provisioned or fudging fair value?http://www.dailyfinance.com/2009/08/21/citigroups-loan-disclosures-over-provisioned-or-fudging-fair-v/http://www.dailyfinance.com/2009/08/21/citigroups-loan-disclosures-over-provisioned-or-fudging-fair-v/http://www.dailyfinance.com/2009/08/21/citigroups-loan-disclosures-over-provisioned-or-fudging-fair-v/#commentsFiled under: ,

There has been a great deal of talk in the financial media of late about bank's loan values, which may be vastly overinflated due to flexibility offered by accounting rules. The SEC revealed that it sent a memo to a number of CFOs at banks, telling them, "Clear and transparent disclosure about how you account for your provision and allowance for loan losses has always been critically important," and "although determining your allowance for loan losses requires you to exercise judgment, it would be inconsistent with generally accepted accounting principles if you were to delay recognizing credit losses." (Hat tip, Zero Hedge).

Clearly, there is concern that many banks are not taking the appropriate marks on their loan portfolios. Last week, DailyFinance discussed the next hundred-billion-plus-dollar question for the banking system: whether or not the enormous gap between some banks' book values and market values was a cause for concern. One curious development since then has been the Financial Times' revelation that Citigroup CFO Ned Kelly was forced out by U.S. regulators shortly before reporting second quarter results.

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]]>bacbankscitigroupfinancialsjpmsec filingswfcJames CullenFri, 21 Aug 2009 14:40:00 ESTCredit concerns rise as stock market tests highshttp://www.dailyfinance.com/2009/08/20/credit-concerns-rise-as-stock-market-tests-highs/http://www.dailyfinance.com/2009/08/20/credit-concerns-rise-as-stock-market-tests-highs/http://www.dailyfinance.com/2009/08/20/credit-concerns-rise-as-stock-market-tests-highs/#commentsFiled under: ,

As the S&P 500 ($INX) flirts with highs last seen in October 2008, the credit markets have been on edge, and the perceived risk of default is risen to its highest levels in a month -- a time when the S&P was 50 points lower. Since reaching a low point the first week of August, the cost of insuring against default on a basket of investment grade-rated debt has risen 15 percent, and the same measure for lower-rated "high-yield" or "junk" credits jumped 16 percent, according to data from Markit CDX indices. Similar indices tracking subprime mortgage-backed securities and commercial MBS have also fallen sharply in the last few weeks.

The conflicting signals -- either the stock market or bond market must be wrong -- are a sign that the massive rally in equities could be drawing to a close. The bond market is traditionally viewed as the more prescient forward indicator, and as credit investors show more risk-aversion (Treasury yields have also dropped in the last week) while stock investors bullishly march on, the odds of a negative shock jump. What stocks are most at risk?

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]]>banksbbtcdscredit default swapsfinancialsgsin focusmcomsratingsratings agenciesusbJames CullenThu, 20 Aug 2009 15:40:00 ESTBuffett: Economy out of the frying pan, into the firehttp://www.dailyfinance.com/2009/08/19/buffett-economy-out-of-the-frying-pan-into-the-fire/http://www.dailyfinance.com/2009/08/19/buffett-economy-out-of-the-frying-pan-into-the-fire/http://www.dailyfinance.com/2009/08/19/buffett-economy-out-of-the-frying-pan-into-the-fire/#commentsFiled under: , ,

The U.S. economy is out of the frying pan and into the fire, Warren Buffett writes in an op-ed piece in the New York Times today. The very actions that saved the financial system from the brink of ruin now threaten the long-term health of the dollar.

"The United States economy is now out of the emergency room and appears to be on a slow path to recovery," Buffett wrote. But rescuing banks and the unregulated "shadow banking system" comes at a high cost, and will result in a budget deficit of $1.8 trillion this year, or 13 percent of gross domestic product. Excluding World War II, this is more than twice as high as anytime since 1920.

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]]>budget deficitdollareconomyin focustreasuriesus dollarwarren buffettJames CullenWed, 19 Aug 2009 19:30:00 ESTMastercard CEO Selander plans his retirement -- by unloading his stockhttp://www.dailyfinance.com/2009/08/19/mastercard-ceo-selander-plans-his-retirement-by-unloading-his/http://www.dailyfinance.com/2009/08/19/mastercard-ceo-selander-plans-his-retirement-by-unloading-his/http://www.dailyfinance.com/2009/08/19/mastercard-ceo-selander-plans-his-retirement-by-unloading-his/#commentsFiled under: ,

Robert Selander, CEO of MasterCard Inc. (MA), looks to be getting ready for retirement, TheStreet.com says. According to a recent SEC filing, Selander plans to sell roughly one-third of his shares of the credit-card processor under a pre-arranged sale program for "personal financial management purposes" -- a common move for executives who might otherwise be restricted from trading because they possess material non-public information.

The sales are expected to begin in October and finish by February.

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]]>citigroupcredit cardsfinancialsmarobert selanderxlfJames CullenWed, 19 Aug 2009 12:00:00 EST$1 trillion in commercial real estate to be refinancedhttp://www.dailyfinance.com/2009/08/18/1-trillion-in-commercial-real-estate-to-be-refinanced/http://www.dailyfinance.com/2009/08/18/1-trillion-in-commercial-real-estate-to-be-refinanced/http://www.dailyfinance.com/2009/08/18/1-trillion-in-commercial-real-estate-to-be-refinanced/#commentsFiled under: , ,

As residential housing market data registers a blip on the EKG, commercial real estate has become the hot-button issue for those concerned about the potential losses lurking on bank balance sheets. Despite undergoing a 40 percent decline in property values from peak prices in 2007 -- the Case-Shiller home price index has registered "only" a 33 percent drop -- commercial real estate does not generally garner the same media attention. It's clear, however, that there are plenty of reasons to be concerned that future defaults will wind up being another $100+ billion problem.

CB Richard Ellis Group (CBG), the world's largest commercial real estate services firm, said in an investor presentation that vacany rates on office, industrial, and retail properties have increased 31 percent since the end of 2007, and are set to rise an additional 10 percent by the end of the year. CEO Brett White said on the earnings conference call that "the leasing business remains very much depressed and [moribund] and the sales market is just in a very-very similar condition as it was in the first quarter."

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]]>bankscbgcommercial real estatein focusloansreal estateJames CullenTue, 18 Aug 2009 18:20:00 EST