2020

Trigger Warning:  If any of you, my readers, or your senior management, who might actually read this, are card carrying members of the global elite, please be assured that I am only talking about other people here. 

This season of election insanity, where only big ideas packaged in often eye rolling tropes have their day (you don’t get elected by saying, “Vote for me and I will make a couple of small annoying things just a little bit better”) got me thinking about where all these big ideas came from.  They come from think tanks, academics, opinion makers and talking heads of all sorts, of course, or, as they would say, the global opinion elite.Continue Reading Beware of Global Elites Bearing Consensus

The commercial real estate finance industry is facing substantial challenges due to climate change, particularly with respect to extreme flooding. As flood events continue to occur more frequently and with greater severity across the US, the role of the Federal Emergency Management Agency (FEMA)—and its administration of the National Flood Insurance Program (NFIP) and…

With apologies to Mr. Marquez for repurposing the title of his haunting book, it’s conference season here in CRE and ABS securitization-land and therefore a time to reflect (more Marquez) on the risks that the world will become more disorderly, or whether we will progress gently from a perfectly fine 2019 to 2020.  We attended CREFC in Miami, are currently attending MBA CREF in San Diego and SFA in Las Vegas (as mere vendors, we don’t get to go to Beaver Creek, more’s the pity). After having seen thousands of our best friends, we’ll have a pretty good sense of what the market thinks of 2020.  We’ve already published our outlook for the year, but now we test it against the wisdom of the crowd (or perhaps herd is closer to the mark).
Continue Reading Life in the Time of Conferences: CREFC, CREF and SFA

The Federal Reserve, OCC and FDIC have (finally) issued the Final HVCRE Rule (for background, our analysis of the 2018 Notice of Proposed Rulemaking and 2019 Notice of Proposed Rulemaking are here and here), regarding High Volatility Commercial Real Estate (HVCRE) regulations that affect acquisition, development or construction (ADC) loans made by banking organizations that are subject to the capital rule, including bank holding companies, savings and loan holding companies and U.S. intermediate holding companies of foreign banking organizations. The Final HVCRE rule becomes effective April 1, 2020. Here are the Top 10 takeaways from the Final HVCRE Rule:
Continue Reading Top 10 Things to Know About the Final HVCRE Rule

It is time to start originating Single Asset Single Borrower (SASB) large loans priced on SOFR.  There, I said it.  Not just LIBOR indexed loans containing a SOFR fall back when LIBOR inevitably goes away, but new loans indexed to Compounded SOFR, implementing all the necessary tweaks to documents, systems and processes to make that work now!
Continue Reading It’s Time to Originate a SOFR Loan! Really!

One of the good things about the 24/7 news cycle, perhaps one of its few positive externalities, is that it’s a boon for the pontification business. It enables all sorts of otherwise serious people to make fools of themselves day in and day out predicting generally gloomy stuff, as sunshine doesn’t sell.  As a card-carrying member of the chattering class, this empowers me to publish periodic outlooks about the future with little risk of any fundamental embarrassment.  It’s sort of a no risk undertaking, isn’t it?  If you happen to get something right (think blind cat finding dead mouse), you can claim to be a star.  If you get it wrong, well, everyone else got it wrong, too – and often on national television.

The other thing we’ve got going for us in the bloviating business is that we remain in fraught and friable times.  We are running short of good synonyms for shock and outrage and struggling to describe what might actually be viewed as extraordinary.  What really does extraordinary mean these days?  These make good times for the prediction biz.  It’s not much fun making predictions when not much changes.  Imagine that poor sod, talking to the Pharaoh during the Old Kingdom after reading many entrails,  I foresee…nothing really changing for 2000 years; more news at 11.

Unburdened by much of the way in data and little in the way of anxiety about getting it wrong, I’m ready to tell you all about 2020:Continue Reading 2020: An Outlook