https://www.federalreserve.gov/newsevents/pressreleases/monetary20240124a.htm?fbclid=IwAR1nq2z1AAD7cUUdhgSESS25XaM2EJ69vSE0kygOzOOXxnXNuKsET6o1BRE_aem_AdXQakNpyeZkLI50BpLDmSWuOQYCbreQzfUnf7VGxy1Uu_XZEEvIRNCAyuU8kX-HRDI#:~:text=The%20Federal%20Reserve%20Board%20on,of%20liquidity%20for%20eligible%20institutions


The Federal Reserve Board on Wednesday announced that the Bank Term Funding Program (BTFP) will cease making new loans as scheduled on March 11. The program will continue to make loans until that time and is available as an additional source of liquidity for eligible institutions

Your last sentence mentions that they will continue as a source of liquidity. Also, no, banks won't collapse unless people make a run on deposits.

Redassag94 said:

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Explain this to me like I'm five…. So I can explain to others.

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The money printer stops going brrrrr tomorrow

This was a temporary program set up in 2023
Bank Term Funding Program

• The Bank Term Funding Program (BTFP) is a loan program for banks operated by the United States Federal Reserve since 2023,[1][2]The Federal Reserve established BTFP to offer loans of up to one year to eligible depository institutions pledging qualifying assets as collateral, as a response to help stabilize the banking industry after the 2023 United States banking crisis. [3] The program was introduced on March 12, 2023[2][3]and is set to expire in March 2024.[4]

Aggies1322 said:

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Your last sentence mentions that they will continue as a source of liquidity. Also, no, banks won't collapse unless people make a run on deposits.

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That wont cause them to collapse because people have to pay bills and buy food (among other things), so the money will go right back into the system.

Is it foreclosed properties or ones the banks have invested in that's causing the issues?

So should I hold out on buying CRE for my business to run out of or buy it now. What's the best method of taking advantage or removing risk? Literally just put an offer in on a new property.

(Or like I've been telling all parties, we need to just dope up our treasury with bitcoin and watch where the pieces fall.)

There appears to be a consensus among the investment talking heads that any debilitating financial stress will be principally felt by small to regional sized banks, and it will increase in intensity as business loans fail. Keep an eye on the increasing reserves for loan losses.

If such occurs, it could induce a run on deposits, which would create a liquidity issue for the banks. Then, either the Fed bails them out, which appears unlikely, or large banks acquire the ones that can be "saved," while others are closed. Things may be okay, until they aren't.

Algorithmic Epiphany said:

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So should I hold out on buying CRE for my business to run out of or buy it now. What's the best method of taking advantage or removing risk? Literally just put an offer in on a new property.

(Or like I've been telling all parties, we need to just dope up our treasury with bitcoin and watch where the pieces fall.)

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You know your business and I don't do I'm in no position to advise you on specific properties.

However, historically, when countries are hopelessly in debt, they debase their currencies to keep the game going a little longer before an official devaluation of the currency. The way I have prepared for this is to own scarce, valuable assets. In my case those assets in order of effectiveness are Bitcoin, gold mines, rare earth mines oil and gas producing minerals, real estate, stocks in companies with pricing power and just enough paper dollars to pay taxes, meet payroll and for our spending needs.

It's hard to predict timing. America, Japan and others have kept the massive debt game going longer than I predicted. For instance I never thought of the "Fed balance sheet debt" trick. And I bet the gov will come up with other tricks to keep it all going just a little longer. But the end game is always the same. Massive borrowing, larger and larger QE which get less effective with every round, currency debasement, collapse and new money. But, for instance, beach front property is still very valuable because they aren't making anymore of it and people want it.

All good points, yet commercial real estate I think would be the absolute last thing I'd want to invest in or take out a loan on right this minute, absent a real need to own more/something for a business right now.

C@LAg said:

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they will save the bank collapse for closer to the election, to argue why we should not change administrations.

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A near banking collapse in 1932 and 2008 worked so well for the Republicans. If you think this would help the Dems win reelection, you don't understand how the swing people historically vote with their wallets more than anything else.

nortex97 said:

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All good points, yet commercial real estate I think would be the absolute last thing I'd want to invest in or take out a loan on right this minute, absent a real need to own more/something for a business right now.

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It's the absolute best time to get extremely wealthy in this asset class right now.

Yet everyone will wait to buy at peak FOMO

An office complex in a Boston suburb just sold for a shocking $25 per sq ft - yes, that's not a typo

The 236k sq ft complex in Quincy, MA sold for $6M

The seller bought the property in 2018 for $43M representing an 86% 'discount'

What's going on in commercial real estate has… pic.twitter.com/GrAhSmOZti

— Triple Net Investor (@TripleNetInvest) March 8, 2024

Any bank that took help, when the Fed first opened the BTFP, will have payments due beginning today. Over the next few weeks or months, we're going to find out which banks are still underwater on their asset portfolios (low interest bonds, CRE, multi-family housing, etc. Keep an eye on the reverse repo market charts on FRED. Banks may start pulling from this pool to pay off their BTFP debts.

::red face emoji::

The really messed up situation in all of this is that people's managed pensions and 401Ks are heavily tied to the underwater asset portfolios. I feel bad for people close to retirement. They don't have another 20-25 years to make gains in a long bull market run. Social security is a freakin' mess. Our government is giving our tax dollars to all of these foreign causes and conflicts but can't be bothered to help people here at home.

I'd say FJB but really...f- Keynes, central banking, fiat currency, and our worthless, bloated, spendthrift government institutions.

Quote:

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"Our public credit is good, but the abundance of paper has produced a spirit of gambling in the funds, which has laid up our ships at the wharves as too slow instruments of profit, and has even disarmed the hand of the tailor of his needle and thimble. They say the evil will cure itself. I wish it may; but I have rarely seen a gamester cured, even by the disasters of his vocation."
Thomas Jefferson to Gouverneur Morris, 1791. ME 8:241

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itsyourboypookie said:

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nortex97 said:

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All good points, yet commercial real estate I think would be the absolute last thing I'd want to invest in or take out a loan on right this minute, absent a real need to own more/something for a business right now.

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It's the absolute best time to get extremely wealthy in this asset class right now.

Yet everyone will wait to buy at peak FOMO

An office complex in a Boston suburb just sold for a shocking $25 per sq ft - yes, that's not a typo

The 236k sq ft complex in Quincy, MA sold for $6M

The seller bought the property in 2018 for $43M representing an 86% 'discount'

What's going on in commercial real estate has… pic.twitter.com/GrAhSmOZti

— Triple Net Investor (@TripleNetInvest) March 8, 2024

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You could be right as far as it being a good buy opportunity but I have read a ton of doom and gloom about occupancy rates too (office occupancy only around 50% of pre-pandemic still?) and they are still building a lot more in the US.

Anyway, I disclaim being any kind of expert here but multi-family might make the most sense, yet we have also built a huge number of apartments the past 5 years. I read some staggering Figure like 75% or something of Nashville area apartments are under 5 years old (too lazy to look it up).

C@LAg said:

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Kansas Kid said:

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C@LAg said:

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they will save the bank collapse for closer to the election, to argue why we should not change administrations.

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A near banking collapse in 1932 and 2008 worked so well for the Republicans. If you think this would help the Dems win reelection, you don't understand how the swing people historically vote with their wallets more than anything else.

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and you seem to think we still have legitimate elections.

the election swings have been decreasing by decades. while the thumb on the scale has only been increasing.

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If you believe that the election will go Dem no matter what, then the timing of a banking collapse wouldn't matter. All I am saying is anyone that thinks a banking collapse helps the Dems is ignoring history and common sense.

Banks aren't going to collapse at 9am......BTFP just ends today. They could have got a loan last Friday for the entire bond portfolio and still have a full year to pay the Fed back.


And to the CRE point, What I am seeing is weak hands dumping their crap properties onto the market.....I've been slammed in Jan, Feb and beginning to see the same for March. That is very abnormal for CRE. Usually, I see a slow/dead 1st two months with a tick up in March.

CRE won't kill the banks IMO. They can always dump stuff to stronger hands, lock things into foreclosure procedures,, extend and pretend the underperforming loans, etc. and in a worst case, they have daddy Fed to bail them out.

A crash is coming, it's just not going to start with CRE.

Zergling Rush said:

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Banks aren't going to collapse at 9am......BTFP just ends today. They could have got a loan last Friday for the entire bond portfolio and still have a full year to pay the Fed back.


And to the CRE point, What I am seeing is weak hands dumping their crap properties onto the market.....I've been slammed in Jan, Feb and beginning to see the same for March. That is very abnormal for CRE. Usually, I see a slow/dead 1st two months with a tick up in March.

CRE won't kill the banks IMO. They can always dump stuff to stronger hands, lock things into foreclosure procedures,, extend and pretend the underperforming loans, etc. and in a worst case, they have daddy Fed to bail them out.

A crash is coming, it's just not going to start with CRE.

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The other thing I would add to your point is not all CRE is the same. Offices are in trouble in a lot of areas, but not all. Other CRE like warehouses and industrial are still strong with no threat. Most medical and restaurants are also in good shape. I agree with you that CREs aren't going to collapse the banks. This isn't as big of an issue as the 2008/09 housing crisis. There was a lot more money exposed to the liar loans, inflated real estate prices, etc.

samurai_science said:

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Aggies1322 said:

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Your last sentence mentions that they will continue as a source of liquidity. Also, no, banks won't collapse unless people make a run on deposits.

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That wont cause them to collapse because people have to pay bills and buy food (among other things), so the money will go right back into the system.

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The system? I thought we were talking about banks. A run on deposits at a bank with low liquidity, would absolutely cause it to collapse. If people are asking for their deposits - and the bank no longer has money to give, what happens?

First payment due is $12 Billion on 15 March 2024.

BTFP Chart



Reverse Repo Chart

If they collapse this year, it's all on them this time, because all our money belongs to Ukraine

pfo said:

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Commercial real estate recession.

Banks holding treasuries at tiny int rates.

Interest rates not coming down quickly.

Debt increasing $1 trillion every 100 days.

The money is going broke just like Soros planned.

The debasement of the dollar is going to accelerate.

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AKA 'Biden's America'

ATM worked this morning

nortex97 said:

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itsyourboypookie said:

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nortex97 said:

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All good points, yet commercial real estate I think would be the absolute last thing I'd want to invest in or take out a loan on right this minute, absent a real need to own more/something for a business right now.

---

It's the absolute best time to get extremely wealthy in this asset class right now.

Yet everyone will wait to buy at peak FOMO

An office complex in a Boston suburb just sold for a shocking $25 per sq ft - yes, that's not a typo

The 236k sq ft complex in Quincy, MA sold for $6M

The seller bought the property in 2018 for $43M representing an 86% 'discount'

What's going on in commercial real estate has… pic.twitter.com/GrAhSmOZti

— Triple Net Investor (@TripleNetInvest) March 8, 2024

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You could be right as far as it being a good buy opportunity but I have read a ton of doom and gloom about occupancy rates too (office occupancy only around 50% of pre-pandemic still?) and they are still building a lot more in the US.

Anyway, I disclaim being any kind of expert here but multi-family might make the most sense, yet we have also built a huge number of apartments the past 5 years. I read some staggering Figure like 75% or something of Nashville area apartments are under 5 years old (too lazy to look it up).

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I dont doubt this for a minute. Nashville's skyline has gone up like Austin's. Tons of speculative building. Granted the city is being flooded with your healthcare dollars but no way this is sustainable.

Quote:

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Will banks start collapsing tomorrow?

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No.

you have $6 million in liquid assets to go buy that office building?

LMCane said:

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you have $6 million in liquid assets to go buy that office building?

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Dafuq?

CDUB98 said:

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LMCane said:

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you have $6 million in liquid assets to go buy that office building?

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Dafuq?

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LMCane just wondering if pookie needs some investors. He's ready to put that Accredited Investor title to use!

LMCane said:

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you have $6 million in liquid assets to go buy that office building?

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Just finished a 4 million dollar raise to buy a 80 unit mobile home subdivision in Keene. Closed Feb 29th.

This board could fund 100 million worth of real estate purchases, all cash, in 2 hours if they knew what amazing opportunities are here.

Could flip it back on the market once FOMO kicks in and triple our money.