Teh Emerald Isle

We do not understand.
While legislation is putting forward in Ireland to mop up the mess in the commercial property loan department, we learn that bas assets will be bought up to 90 bln euro worth of property loans. In Ireland? That is huge. Well, an estimated 25 bln EUR is lent by Irish bank on commercial property projects in south-east England.
Wrong sector. Wrong island.

Sphere: Related Content

What happened?

Now, this was a quicky. From AAA to –BBB to AAA in one week.
From Bloomberg:

Standard & Poor’s backtracked on ratings cuts issued last week and raised the ranking on commercial mortgage-backed debt from three bonds sold in 2007.
The securities, restored to top-ranked status, had been downgraded as recently as last week, making them ineligible for the Federal Reserve’s Term Asset-Backed Securities Loan Facility to jumpstart lending.
S&P lowered the ratings on a class of a commercial mortgage-backed bond offering from AAA to BBB-, the lowest investment-grade ranking, on July 14. The New York-based rating company reversed the cut today, S&P said in a statement. In a related report, S&P said it adjusted assumptions on the timing of projected losses on the mortgages.
“It is a stunning reversal and certainly raises questions concerning the robustness of their revised model,” said Christopher Sullivan, chief investment officer at United Nations Federal Credit Union in New York. “It may engender further uncertainty with respect to ratings outlooks.”
Debt rated below AAA isn’t eligible for the Federal Reserve’s TALF. Investors sought $668.9 million in loans from the Fed to purchase so-called legacy commercial mortgage-backed bonds on July 16, the first monthly deadline to finance the purchase of the securities.

Throw the ratings agencies out of the window

Sphere: Related Content

Hey dad, I am off to do some shopping...

This one comes from Trader Mark:

Of course mall based REITs are among the best performers of the past few months as everything (and the sun) is "priced in". And the Federal Reserve is now expanding TALF to allow nearly every loan under the sun to be shielded from reality.

Commercial real estate is saved by the FED and the analysts, upgrading all REITS were they can lay their hands on.
In the mean time malls – the real American Idol – are emptying faster than I can hand out pocket money to my children. And believe me, they have a hole in both hands.
Tenants are fleeing, the industry’s woes are worsening and consumers are changing their spending practices.

What will the future bring? Sphere: Related Content

Let's bail everybody out

Good news for the commercial property industry. They will be saved too as the FED announced they will provide loans to finance the purchase of CMBS and other structures from July onward. The Fed is also evaluating the terms on which it could extend financing for investors to buy bubble-era subprime and jumbo mortgage-backed securities.
This crisis is unwinding as a fairy tale: we will all be saved in the end.

Elsewhere we mention that Congress is working on the Federal Reserve Transparency Act or known as HR 1207. As you know is the Federal Reserve Bank not really a central bank. They act as a central bank but they are a private company with shareholders as The Rotschilds, Goldman Sachs and many other names working in the shadow. They are not regulated and don’t have to report.

Since 2008, the Federal Reserve has loaned trillions of dollars in bailout money but refuses to tell Congress where it went. Legislative action is needed.
The Federal Reserve Transparency Act would give the GAO the authority to audit the Federal Reserve and report its findings to Congress. The bill was written by Rep. Ron Paul and has 165 cosponsors, mostly Republicans.
Democratic Congressman Alan Grayson is now working to get Democratic cosponsors for this bill (see Grayson's letter here).

Sphere: Related Content