Here's Bloomberg:
A Federal Deposit Insurance Corp. plan to auction more than $1 billion in assets seized from failed banks next month, including a loan to build a W Hotel in Atlanta, may trigger writedowns that weaken lenders nationwide.And here's the money quote from the attorney of the affected banks:
These banks can’t believe that the regulator they pay to protect them is going to sell these loans to someone who can flip them and cause them serious losses,” said Robert Reynolds...“Our banks just cannot believe they’re being treated in a way that ultimately hurts the FDIC’s insurance fund, because some of them are right on the edge.”
Love how he got the talking point "...in a way that ultimately hurts the FDIC's insurance fund" in there.
Bloomberg's article is saying that this is an symptom of the coming (or ongoing) implosion in commercial real estate loans. They're saying this was largely a regional bank issue (something I didn't know), which casts an entirely new light on all those condos popping up all over town. Wonder how many of my local lenders are on the FDIC's balooning watch list.
Worth a read.
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