Banks and Commercial Lending Bust

Saturday, October 24, 2009
Posted in category Economics, Financial Markets

Yesterday, seven more banks were closed – quietly – as the number reached 106 for the year. The Wall Street Journal has an interactive map of bank failures (131) since the beginning of 2008. On a related note, as the commercial real estate bust heats up, Capmark Financial Group, Inc.  (formerly GMAC Commercial Holding Corp.) one of the largest commercial real estate lenders in the U.S., is heading into bankruptcy.

Capmark has originated more than $10 billion in commercial real-estate loans, according to Moody’s Investors Service.

It also represents a blow to the company’s private-equity owners. In 2006, a group led by KKR & Co., Goldman Sachs Capital Partners and Five Mile Capital Partners acquired the lender GMAC LLC’s commercial-real estate business and renamed it Capmark. As of March 31, the investor group owned about 75% of the company, with GMAC and its employees owning the balance.

The Horsham, Pa., company recently reported a $1.6 billion second-quarter loss and warned it might be forced to seek Chapter 11 bankruptcy protection. KKR has already written down its investment in Capmark to zero.

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2 Responses to Banks and Commercial Lending Bust

  1. cousin lucky says:

    October 25th, 2009 at 12:50 am

    Mike Taibbi’s recent article, (linked below) for me, shed some much needed light on some of the massive Criminal Behavior taking place in lower Manhattan by our hoity-toity Mega-Swindlers!!
    http://www.rollingstone.com/politics/story/30481512/wall_streets_naked_swindle

    It is very plain to me that these people have our government ” In Their Pockets ” and will thus get away with even greater crimes in the future.
    It is just Disgusting!! Their Greed is flushing this country down the toilet!!

  2. Steve Bernier says:

    October 25th, 2009 at 5:40 pm

    And the Federal Reserve thinks we’re out of the woods? The only sane economists I have read have been on mises.org and lewrockwell.com.

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