Hey, everybody, real estate ninja here. I hope you’re doing great. We’re going to talk about a story out of Fox Business. It’s entitled Commercial real estate trouble could trigger systemic credit crash. Fund managers say, well, we’ve been talking about this for what, two years now, cmbs. Matter of fact, not to my own horn. I was really excited to be a part of this. I was the first person on the Internet to talk about it.

And it’s getting worse and worse. But it’s a great example of how long and how far a can can get kicked down the road. Now, first off, commercial mortgage backed securities, they’re a lot bigger than what we saw with mortgage backed securities in 2005, 2006, that MBS mortgage backed securities are what took down the real estate sector and a lot of banks leading to ultimately Lehman Brothers. Commercial mortgage backed securities are the culprit and the cause of the banking crisis of last year and the coming banking crisis this year, which I believe you’re going to see in the news in March.

Okay. This is one of those situations where you see how long it takes to kick that can. Let me explain how they’re doing it one way. We did a story about the largest teachers pension fund in the country, Cal Sterrs, a California based teacher’s pension fund. They just took, I believe, if I remember right, it’s 20 billion, it could be 10 billion, but I believe it’s $20 billion loan.

And they said in their own words, they are taking this loan in order to stop or halt a fire sale in their commercial real estate sector. They went and took pension money. And I’m telling you right now, everyone that has a pension right now has exposure to the commercial real estate market, and it is imploding because interest rates have gone higher and because every about five years you have to refinance these commercial loans.

Nobody has the money to do it now. These are zombie buildings as businesses are closing shop, as this economy is turning down, companies like this pension fund, Cal Sterrs, goes and takes this $20 billion loan just to keep this band aid going because they know that they can’t even sell the properties for anywhere near what they paid for them. This is a horrific, this is serious. This is doom and gloom.

This is stuff that’s going bad. And so that’s one way that they kicked that can. They’re now taking pension money, taking a loan out. That’s less money to go to their people that are retired. Right. Because they have to put a band aid on this part of the economy. So out of Fox News. It says right here, fund managers are growing more worried that trouble in the commercial real estate sector could trigger a credit cris in the US.

There’s no could. It’s going to happen because as this gets worse and there’s not a band aid that they could put on it big enough to stop it because the Fed cannot lower rates. Because if they lower rates, they’re going to cause inflation to go up. So there’s no way out of this. Okay? It says. About 16% of participants in the global fund manager survey identified a systemic credit event as a top risk to markets in February, compared with just 11% the month prior.

It marked the third largest tail risk for markets being sticky, behind sticky inflation and geopolitics. The most likely source of a credit event, according to the fund managers, is the commercial real estate market. Other possible sources include shadow banking or non bank financial institutions that are not subject to regulation, including hedge funds, private equity funds, investment banks, and mortgage lenders, as well as us corporate debt. All of them have their hands in the commercial mortgage arena.

The commercial real estate sector. Okay, this is a big deal. Says about 1. 5 trillion in commercial mortgage debt is due by the end of 2025. But steeper borrowing costs coupled with tighter credit conditions and a decline in property values brought on by remote work have increased the risk of default. Roughly 929,000,000,000 worth of commercial real estate loans are set to mature this year. Remember, we have now went from, is the Fed going to lower rates? And then they went, okay, they’re definitely lowering rates now.

They’re going, crap. I think the fed’s actually going to raise rates. That is exactly what the mainstream media is finally figuring out because the Fed did not act quick enough and go high enough on those rates to quell inflation. Remember, the Fed’s ultimate job right now is to get you to lose your job. That’s what they want. Because if more and more people lose their job, less money is out in the real economy to spend to keep those prices high or even going higher.

It doesn’t matter what we’re talking about, whether it be tvs, furniture, travel, real estate, it doesn’t matter. Stocks. So you have a panic to the upside in stocks and real estate because people are trying to get some kind of yield because they’re losing money, keeping money in a bank, and then they’re pulling money out of bank, putting it in a money market account. So the m two money supply is collapsing.

This is unbelievable. This is so exciting. This is so much better. Than what happened in 2005 when I sold my real estate. This is exciting, but you see the evolution of how long it takes and how they kick this can down the road. So now if they raise rates even higher to try and slow inflation, it’s going to make the commercial mortgage sector even worse. And in turn, banks are, since they’re taking such a beating, like Silicon Valley bank, on their commercial mortgage backed securities, they’re going to slow the rate of loaning in residential normal home mortgages or credit cards, especially as delinquency rates are on the rise with credit cards.

So you’re going to have a credit crisis, you’re going to have an event where banks are going, oh, no, we’re not going to do it at the same time, remember, you got to know this. It’s amazing. The Federal Reserve has been in an emergency lending situation for quite some time. Remember after Lehman Brothers crashed the repo window, the repurchase window for the Federal Reserve didn’t open till January.

Lehman went down in September of eight. They didn’t open up the repo facility till January of nine. So they’ve had this open for quite some time. But as all the money they’ve been loaning these banks are now dwindling down, they’re lowering the amount. So banks are in turn going to go, well, if we don’t have the safety blanket of the Federal Reserve, we’re going to go ahead and slow the rate that what we’re giving loans at.

Okay. People need to understand this. And it’s not just banks at risk. We have private equity at risk as well. Okay? So that’s good news for you if you’re getting ready. Also, you want to talk about getting ready real quick? Blurb, last two days for the side hustle course, the links down below for $199 and the price goes up. But I want people to get the velocity or the gravity of this situation.

Okay? This isn’t like a go hide your head in the sand. It’s a get excited and do something about it kind of situation. So this should pump you up to get out of debt, right? And it should pump you up to start identifying opportunities. That’s what I teach all my students in my courses, how to pivot and how to identify opportunities. This is a great opportunity. There are real estate deals in Nevada that I want to do that are on the commercial side.

They’re not going to be selling anytime soon. I am so excited, and I’m looking for a 50% pullback. I want industrial areas because as everything crashes and nobody wants to touch those pieces of property because they’re like, well, who are they going to rent them to? I’m going to buy them and I’m not even going to have to rehab some of these. They’re amazing properties. And I am going to put clients and tenants in there and we’re going to start amazing businesses.

And I’m excited to buy at the bottom. When everyone says I’m nuts. Maybe I am, maybe I’m not. But I want to be ahead of the game. And like we say, the broken clocks right twice a day. Well, guess what? The time. You’re right. Oh, man, you’re going to be right big time. I hope you guys are getting ready for this. Let me know down below what you’re doing to get ready for it and how you see this.

But for people on Fox business to say this could cause a cris. Those morons, they didn’t even know what CMBS was two and a half years ago. So I’m telling you right now, it’s going to cause a crisis. We’re already in a crisis. We just need to wait for all those banks to figure out, oh, crap, this really is big. And daddy Fed’s not going to bail us out this time.

With that being said, guys, thank you so much for watching. Real estate ninja is out. .

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