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  • The Economy & the Commercial Real Estate Bust

    This week, we take a fresh look at the latest economic reports, most of which have been positive and suggest that the recession is over and the economy is rebounding. Still, I expect that economic growth will only be mild in 2010, as I discuss in this week's letter.

    Our larger topic this week is the huge problem with commercial real estate debt, which could be the next shoe to drop in the credit crisis. Commercial real estate values have plunged apprx. 39% nationwide since the recession began, and some sources believe prices could fall another 20% or so before stabilizing. This is huge, but we don't hear a lot about it, even though banks are failing at an alarming rate as a result. This is a major problem you need to be aware of, so let's get right to it.