Filed under: Federal Reserve
Leon Black, head of Apollo Management, uses the term "black hole" to describe the pressure being put on commercial banks from nonperforming commercial loans. He estimates that it would take $2 trillion dollars to clean up the mess.
So far losses from commercial property loans have not been reflected on bank balance sheets. In the go-go days of the past eight years, money came in from private equity to buy up troubled assets, clean up their balance sheets, and resell them. Now that has all but dried up, leaving only a few firms in the market for distressed assets.
Continue reading Is commercial property debt the next 'black hole'?
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