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Jim Cook

 

RUNAWAY SOCIAL SYMPATHY

Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

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The Best of Jim Cook Archive

 
Commentary Of The Month
March 24, 2017
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THE NEXT DOMINO TO FALL: COMMERCIAL REAL ESTATE

By Charles Hugh Smith

The next global financial meltdown won't start in subprime mortgages – that sector has been wiped out, written down, or passed on to the poor taxpayers. The next crisis also won't arise on money-center banks, either. Central banks have figured out how to bail out the banks, and have rebuilt the bank balance sheets by stripping hundreds of billions of dollars in interest from savers.

What if the next crisis isn't caused by excessive leverage, but a systemic collapse of collateral as an entire sector – retailers holding millions of square feet of bricks-and-mortar store space – falls off a cliff?

Talk about an overvalued market set up for a fall. It isn't just malls becoming empty retail wastelands – it's Corporate America shifting to flex-work and work-at-home, slashing the need for floor after floor of costly business-park office space. It's about restaurants moving to smaller spaces as they move to serving more meals via delivery services. Commercial real estate is grossly overbuilt in retail and office space. Combine sky-high valuations with cratering demand and billions in short-term loans that must be rolled over into new loans, and we don't have a liquidity crisis, we have a collateral crisis – the assets supporting the debt are no longer worth the loan balance.