Post by Victor VVV on Jan 13, 2024 16:04:35 GMT -5
Banks Are Sitting on $684 Billion of Losses | Real Estate Becoming Worthless
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emergency video US banks are sitting on
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$684 billion in unrealized losses this
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is 33% of the bank's capital six times
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more than the worst moment of a subprime
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crisis in '08 and these losses will
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become very real in an event of a
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massive withdrawal of liquidity which is
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Bank runs now you probably have already
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seen the bank run last year which
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basically collapsed a few really big
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banks in the US we're looking at like
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top 20 top 30 type Banks and here's the
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thing almost a trillion dollars in
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unrealized losses but with the stock
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market doing so well what's going on
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here people are really wondering why is
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it that banks have so many unreal Li
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losses well it's because of the
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commercial real estate sector that's a
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large chunk of it and let's just Dive
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Right In about what's going on cuz even
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muddy waters you know one of the most
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infamous short sellers on Wall Street
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these guys make money by shorting
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companies that they think are vulnerable
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and Muddy Waters shorting Blackstone
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takes a lot of balls and Muddy Waters is
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saying that Blackstone mortgage trust
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they have a lot of bad commercial office
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loans and let me give you guys an
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example about how bad office loans are I
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mean residential real estate is already
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going down in some of America's biggest
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cities banks are taking fat losses in
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that department but the commercial real
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estate loan which is what Muddy Waters
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is trying to short is losing more money
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than the worst crypto they could find on
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coinbase so check this out Chicago
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office tower in the latest deal sells
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for $4 million it's half vacant it's a
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12 story building now you may be like
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hold on a second are they doing like a
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$4 million lease like what's going on
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here no like the whole entire building
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all 12 stories this massive 12 store
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office building in the loop in Chicago
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which is a good area sells for a easy $4
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million yeah that's right you heard that
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right sales for Just 4 million bucks
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guys you could go to Manhattan buy a two
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bedroom 1,300 ft condo for $4 million
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let alone a whole entire building in the
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Loop Chicago now this is very worrisome
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because this essentially put a lot of
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buildings around it worthless the
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valuation of this building dropped 90%
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so what about this building right here
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on the left hand corner it's probably
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down 90% what about this building
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probably down 90% what about that
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massive building up there probably down
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90% what about Chicago real estate well
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it's probably worthless and this what
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I'm talking about a lot of these
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unrealized losses are coming from one of
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the biggest commercial real estate
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bubble burst in human history we have
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the rise of remote work hybrid work and
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a lot of startups just simply don't want
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to go to a lot of these cities and a lot
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of the governing of the ultra big cities
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like Chicago you know Seattle Sacramento
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San Francisco you know Detroit are not
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good it's pretty bad so you also have
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the rise of construction booming You
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know despite commercial real estate
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being so worthless for some reason
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developers are building more commercial
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office spaces than ever before and
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there's also a massive increase in
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apartment construction I think there
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needs to be something done about this we
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are truly overbuilding for no reason
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we're building so many homes apartments
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multifamily retail space office
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that prices are just dropping I mean
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check out Oakland's Brooklyn Basin those
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guys dropped about 10 to 15% in rent
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because they overbuilt and you also look
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at this new home construction surged in
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November of 2023 single family units
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were the highest in more than a year
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they're just building and building and
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building who are they going to sell
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these to we don't know we don't even
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know why they're building this many
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homes I mean check out Austin right now
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so many freaking new homes are entering
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the market not to mention the amount of
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retail space that they're building is at
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an all-time high despite nobody wanting
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to rent malls or first floor shopping
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centers it is a bad Market but for some
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odd reason they're going all out and
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look at these Ultra Luxury listings like
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these absolutely beautiful homes here in
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Austin are there enough rich people to
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buy them no I mean yeah sure you have
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people buying these multi-million dollar
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units but are a lot of them doing it
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absolutely not you know if we look at a
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lot of these units it just not great
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we're see a lot of these plots lands for
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commercial use for residential use being
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on the market for a very long time some
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developers are smarter than others but
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just remember you know one of the most
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INF short sellers out there is shorting
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one of the biggest mortgage trust in the
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world with billions of dollars going
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into that bet and Banks 684 billion in
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unrealized losses that is scary thanks
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for watching guys and see you later and
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