CS Monitor reports:
Now it’s the real estate developers who are slated to get a bailout.
By April, the federal government expects to have a plan to refinance office towers and shopping centers in danger of defaulting. The scale is likely to be massive: Last week Federal Reserve Chairman Ben Bernanke hinted at providing another $1 trillion in credit.
The goal, he said, is to head off a “looming crisis” that could spread far beyond “For Rent” signs and shuttered mall shops. For now, commercial delinquencies are few. But office vacancy rates are heading toward record levels, according to one estimate, and banks are exposed, with $1.72 trillion in commercial real estate loans outstanding as of Feb. 18.
The federal government wants to prop up artificially high priced retail space so you will have to pay higher prices at the store! This is madness.America's second biggest shopping mall owners is already begging.
Reuters reports:
Mall giant General Growth Properties Inc GGP.N intends on Monday to begin formally soliciting holders of $2.3 billion of its bonds to grant it another nine months of breathing room as it juggles its debts and strives to avoid bankruptcy, the Wall Street Journal said.
General Growth will start a so-called consent solicitation requesting that each bondholder abstain from demanding payment of principal and interest on the debt for the balance of this year, though interest will continue to accrue, the paper said, citing people familiar with the matter.
The federal government already was a big land holder after taking over Fannie and Freddie.Now this.You have to wonder where in the U.S. Constitution there is the authority to do all these bailouts.
