Friday, September 18, 2009

The Banking Crisis, Act Two, Scene One.

Last year (and the year before) focused our attention on ever larger number of defaults in the sub-prime mortgage market, which then laid waste to various securitzed exotica, which thus rendered our major banking institutions and non-bank banks insolvent. Roughly speaking.

If you live in New York, as I do, and hang out with Wall Street traders, as I sometimes do, you have been told for well over a year now: "you think subprime was bad, wait until the Commercial Real Estate (CRE) market begins to fall apart."