Thursday, February 11, 2010

Elizabeth Warren Warns About the Next Bursting Bubble

Elizabeth Warren is saying the Treasury and the Fed aren't prepared for this one:
"Because commercial real estate loans typically have three- to five-year terms, those loans are constantly being refinanced. The problem is that loans made at the height of the boom -- 2005 to 2007 -- were based on inflated values during a time of easy money, and now they're coming up on the end of their terms.
'There was a big commercial real estate bubble, and it has to come down,' Warren said. 'And that means there will be losses to be borne by investors and banks.'"

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