We never sugar coat the news, but rather provide the latest installments of information, unfettered, and in a timely fashion.

Our mission is to evaluate events and provide our clients and strategic partners with critical information that will immediately become valuable assets in their business and personal lives. Todays entry is no exception ….

Chairman Ben S. Bernanke testified before the U.S. Senate today (July 15, 2008) in the Fed’s Semiannual Monetary Policy Report to Congress.

The Howe Street correctly points out that what was UNSAID in the Fed Chairmans statements is as important, if not more so, than what was said.

So what did he opt to omit ?  Bernanke did not mention a thing about the impending commercial real estate downturn.

Here are the facts: As we all know, the expansion of commercial real estate was the last economic driver for jobs. Every major corporation that drove the market — Wal-Mart, Target, Home Depot, Lowes, Starbuck, Pizza Hut — and many more are cutting back, and in a significant way. Accordingly, the Shopping Center Economic Model Is History.

There is a rising glut of vacancies and downward pressure on rents. We know this to be true. Additionally, we know that many regional banks that escaped the housing debacle, undertook commercial real estate bets, instead. Commercial real estate is just one reason why Bank Earnings Won’t Recover. Indeed, as we are now seeing, there are Many Hurricanes, Many Eyes. Many experts believe that Bernanke still maintains a myopic eye, which is focused on the last hurricane (sub-prime lending), and based on his public comments today, he appears is unable or unwilling to see the other significant storms that are soon approaching, right over the horizon.

Now we all have the news. It may not be great, but we can nonetheless plan accordingly.

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Posted in CMBX, Commercial Real Estate | One Comment