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Sunday, 26 July 2009

The Commercial Real Estate Collapse !!!

Dear Fellow Investor,

Before the bulls break out the champagne here, I would warn them not to get too far ahead of themselves.

After all, euphoria in these or any other markets is a dangerous emotion that can lead to big losses.

And as for Dennis Kneale's breathless prediction that the "recession is now over", the picture on that score is about as clear as mud... murky to say the least.

What is crystal clear, however, is that our problems are actually getting worse... not better. Fundamentally, things are as bad as they've ever been - especially in commercial real estate.

It's one of the brewing disasters the bulls just don't want to talk about as they break out the party hats, insisting somehow that the markets really can grow to the sky.

Of course, we know otherwise. If only it were so...

What they don't tell you or refuse to recognize is that commercial real estate is following the same exact path as the housing bubble - the exact same path!

And we all know how that one turned out.

In fact, losses on commercial loans could reach as high as $30 billion by the end of the year as property values plummet, rents decline and defaults reach record levels.

All of this is a recipe for disaster as industry leaders have estimated that 200,000 businesses and 10 percent of the nation's shopping malls will shut their doors over the next year.

That means that we're maybe only in the second inning here as the crisis unfolds.

Fortunately, my colleague Steve Christ has a profitable answer to it all. And it might not only save your portfolio during this $1 trillion crisis... it could also make you a small fortune along the way.

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