Conspiracy theory fans, tin-foil hat wearers everywhere, Nostradamus wannabes, the broadly unhinged and, of course, our professional purveyors of doom and gloom roosting on evening cable news see patterns where there are none, embrace straight-line projections based on disparate and unrelated data and loudly and often shrilly bleat that the end is nigh. That’s all … Continue Reading
Each year about this time, I sit down and try to cobble together predictions for the performance of the economy and the performance of the CRE market in the coming year. Of course, I’m wrong every time. It’s not for lack of trying. I do try to think hard about where we’ve come, what things … Continue Reading
I wrote a week or two back about my expectation that significant economic dislocation awaits us. I still think that. The morning after I published, hordes (ok, maybe not hordes) of PhD Villeins were outside my house with pitchforks and burning torches, loudly asserting that I had wildly overstated the likelihood of material distress in … Continue Reading
It’s coming up on awards season. The Emmys were last week and weirdly, I got a thought bubble about nominees in the Black Swan category, walking the red carpet looking for attention! Think the Masquerade scene from Phantom of the Opera when the Phantom comes prancing down the stairs to harsh the festivities (at least … Continue Reading
Happy Inauguration Day (I hope). Every turning of the year makes for a convenient point to look backwards, and of course, forward, but this year seems to actually denote some sort of inflection point and, as a card-carrying member of the blogosphere, I feel compelled to burden you with my views as to what the … Continue Reading
I am trying to figure out how much I care, as a businessman (as opposed to an actual living, breathing human being), about the chaos swirling around us. Every day’s news seems more the stuff of a dramatic conceit of someone’s next thriller than reality. Throw in a car chase and some sex, and we’ve … Continue Reading
We have virtually no bandwidth to deal with anything other than the pandemic, do we? The marches of every conversation begin with “you’re okay, I trust” and end with “take care” and now we really mean that. It’s exhausting, isn’t it? It’s hard to even remember the “time before.”… Continue Reading
I’ve been offline for a bit. An amalgam of writer’s block caused by the enormity of the Coronavirus mess – what can be said that’s useful – and the consequence of being wildly busy as everyone across financial markets tries to pivot to the new reality. Unburdened by any knowledge of science, medicine or epidemiology, … Continue Reading
Here is something helpful that has surfaced amidst the fallout, pain and confusion of the global COVID-19 crisis. The implementation date for the all-too-simple in theory but not-simple-at-all in practice CECL accounting standard has been pushed back by the passage of the CARES Act for banks until the COVID-19 national emergency declared by the president … Continue Reading
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 … Continue Reading
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 … Continue Reading
Back in the febrile, hyperventilated times that birthed the Dodd-Frank Wall Street Reform and Consumer Protection Act (blessedly known simply as Dodd-Frank), one of the issues that energized the activists’ intent on “fixing” what was wrong was the notion that the ratings agencies were complicit in the overpricing of financial assets. In a “want for … Continue Reading
Just when you thought the regulators had forgotten about HVCRE ADC, they issued a new notice of proposed rulemaking like they were Beyoncé surprise-dropping a new album. And then…they disappeared again! We were waiting for more news before alerting our readers but nothing has come to date. To bring those not in the HVCRE ADC-hive … Continue Reading
Just a few short months ago we took on the breathtakingly ill-conceived Current Expected Credit Loss (CECL) standard that the Financial Accounting Standards Board (FASB) proposed to implement starting in 2020. CECL will require major shifts in the way lenders model, forecast and reserve for future losses. It would materially drive up capital requirements, impair … Continue Reading
Tim Sloan resigned as the CEO of Wells Fargo a few months ago. I had briefly worked with Tim and much admired him so, on a personal level, this was sad. Now, Mr. Sloan’s resignation might have been a compelling and obvious move in any crisis consultant’s playbook, so I get that – but – … Continue Reading
Beany & Cecil was a cartoon. The Current Expected Credit Loss accounting rules, better known as CECL, which the FASB is insisting will go into effect at the beginning of next year for publicly traded banks and lenders and a year later for all other GAAP reporting entities is not. Now, heaven forfend that I … Continue Reading
God help me, I’m finally writing about climate change. This commentary assiduously avoids the obviously political (we take the view that complaining about and belittling our elected representatives and the permanent bureaucracy for doing boneheaded things is entirely apolitical). And while even the phrase “climate change” carries with it a certain frisson of a capital … Continue Reading
The new Opportunity Zones program that came to us in 2017’s major tax reform offers investors the chance to roll the capital gains from the sale of any appreciated property into new investments, located within specially designated areas known as Opportunity Zones, and defer—and potentially partially eliminate— capital gains taxes on such sale. The program … Continue Reading
In February, the D.C. Court of Appeals ruled in The Loan Syndications and Trading Association v. Securities and Exchange Commission and Board of Governors of the Federal Reserve System, No. 17-5004 (D.C. Cir. Feb. 9, 2018) (the “LSTA decision”) that a manager of an open market CLO is not required to retain risk under the … Continue Reading
The shear complexity of the modern world makes fools of us all. It’s no wonder that conspiracy theories, just plain weird ideas and deeply counterfactual views abound these days. We don’t like to be bewildered or shocked by unexplainable events, and, regrettably we confront plenty of these every day. Confronted with the inexplicable, it is … Continue Reading
You can never go wrong starting off a commentary with a butchered bit from the Bard, right? “Now is the winter of our discontent” spake Richard III, an unamiable leader perhaps reminding us all today of our unamiable governing class. Old Gloucester rhymed to presage war and chaos. Apparently, all that happened because the poor … Continue Reading
We published the below commentary, In Defense of Securitization, last week and we are republishing it today as, let’s face it, we’re all getting very French, and many of us took most of last week off. Enjoy, if that’s the right word. Returning to the theme of my most recent commentary entitled God Hates Securitization, … Continue Reading
Returning to the theme of my most recent commentary entitled God Hates Securitization, I want to elaborate on the point I made there (yes, if you stuck with me all the way through to the end, there was a point): We need to fight the narrative that banking, finance and securitization are evil. I am … Continue Reading
When House Speaker Paul Ryan announced earlier this month that the House would vote on S.2155, I wasn’t holding my breath (you know you’re on your last lame duck leg when a “senior GOP lawmaker” says you’ve “run out of juice”). Miracles do happen AND sometimes I love to be wrong (but – shh…don’t tell … Continue Reading
