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Showing posts from March, 2016

The Trump Wall & Trade Pacts

Candidate Trump has stirred the pot on many issues, perhaps none so meaningful as those related to immigration and trade. As those who read about the world surely know, this issue is hardly one that challenges only the U.S. Western European nations are besieged with millions of people each year trying to enter their countries, fleeing less pleasant lifestyles in Africa, the Middle East, and the Balkans. The WSJ reported that as many as 800,000 will try to enter Germany this year alone. This represents a full 1% of that nation’s population.

CMBS In Flux

The CMBS market has been in a period of upheaval, with dramatic spread widening on bonds and a resulting much more expensive cost of capital for real estate borrowers who depend upon this channel for their debt financing.Market participants today wonder whether we’ve entered a period like the summer of 2011, when spreads on bonds last widened this dramatically and then snapped back within a year to provide tremendous returns for those who were courageous enough to purchase bonds at the time when there was panic selling.Or, people wonder, is this recent downturn a prelude to a structural or systemic problem, like what was experienced in 2007, when spreads widened and sucked investors in, only to punish those early responders with a much more dramatic price collapse in the next 24 months.