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LAS VEGAS REVISITED

28 March 2009 by Cullen Roche 2 Comments

MGM’s City Center is hiring BK lawyers.   I haven’t seen anything quite as stunning as City Center when I visited Las Vegas in November.  The City Center project was the very definition of real estate excess.   Looks like the problems are even worse than I assumed.

Commercial real estate looks very fragile and could potentially derail our little “recovery” assuming of course that we were ever back on the rails – I am much more skeptical than most.

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Comments
  • Wingobyte

    Hey TPC, doesnt the Geithner PPIP program covers these soon to be toxic CRE assets? Are the banks still marking these assets at cost on their BS? I know that the PPIP wouldnt be able to cover everything trading on CRE markets if these things start going bad but I guess they will just keep increasing the size of the PPIP program to accommodate this? The American people are getting screwed multiple times with TARP, TALF, PPIP, and whats next?

    03/28/2009 at 3:35 PM
    • Cullen Roche TPC

      PPIP will cover all toxic assets. Unfortunately, CRE is lagging residential by almost a year so the major CRE losses have not even hit yet. The PPIP does not matter in my mind. It only cleans up the banks. It does not attack the real crux of the problem – consumers. This is a consumer driven economy. No matter what Geithner does he cannot shore up the consumer balance sheet. And as long consumers continue to take on less and less credit this economy will remain very weak.

      03/28/2009 at 6:15 PM