Tuesday, August 02, 2011

Fallout

The manufactured debt crisis in Washington is over, but Washington's prolonged intransigence is seeping into the economy and the credit markets.  Bloomberg details new concerns in the CMBS market.  Delinquencies are at 9.88%, and are now at record highs.  Here is a quote from the article:

Borrowers are falling behind on payments as a revival in new debt sales stumbles after investors pushed back on deal terms. Wall Street banks sold $3 billion in commercial mortgage- backed securities last month at the highest yields since issuance resumed in November 2009 and Standard & Poor’s exacerbated market turmoil by withdrawing rankings last week on new deals.

S&P’s decision forced Goldman Sachs Group Inc. (GS) and Citigroup Inc. (C), to scuttle a $1.5 billion deal after it was placed with investors.
CRE Review noted the aborted Citigroup and Goldman deals last week along with the departure of the head CMBS trader at both firms.  Wall Street needs to ignore the games in Washington and focus on putting together good deals.  It's no time to start playing credit games. 

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