Save the banks at any cost!

No wonder ‘higher and longer’ has been abandoned when it comes to interest rates:

More than $100 billion in commercial real estate loans on US office buildings will mature over 2024, presenting owners with a formidable refinancing challenge. With interest rates significantly higher compared to when most of these loans originated in the last decade, billions in losses appear inevitable amid depressed property valuations.

https://www.business2community.com/business-news/us-economy-threatened-as-office-owners-face-impossible-117-billion-debt-wall-in-2024-02761211

Now ‘higher and longer’ will apply to inflation

I hope we all realize that $100 billion is minuscule in the world of debt in the USA. I mean, the treasury does more than that every Tuesday and Thursday (not combined, each day!) Much of that $100B will be restructured such that the current equity holders lose all, the existing debt holders lose a bunch, and the new debt holders will own the asset. But the number itself shouldn’t be so scary.

3 Likes

The way currency is being devalued I suppose that you might have a point :slight_smile:

Too true. The US government has to refinance $7.6 trillion in 2024

1 Like

Now if you want to quote a better reason why interest rates have to drop … this may be it.

1 Like