The Quiet Collapse

(Cops are people, and people have wide interests...especially as we approach retirement. This post gets into the weeds a little, but it's on our mind and the minds of 1,000 near-retirees right about now)

If you do the shopping for yourself or your family, you know things are off. Paychecks aren't going as far, you're might be actively seeking out sales and coupons, maybe eating out a bit less and bringing your lunch to work....all while the media is singing about the "best economy" in years and Bidenomics working miracles.

But away from the media spotlight and your bank statements, this is happening:

• A Loop office building is headed to the auction block, roughly a year after former owner Marc Realty was hit with a foreclosure lawsuit.

  The vintage 10-story office building at 216 West Jackson Boulevard will be up for grabs starting Feb. 20, with an opening bid of $1 million, Crain’s reported. Farbman Group brokers Bill Bubniak and Todd Szymczak are marketing the property, and Ten-X will handle the auction.

  The opening bid equates to a little over $5 per square foot. Marc bought the 185,000-square-foot building in 2013 for over $22 million, about $120 per square foot.

That's a 95% drop in value.

And nearby:

• One stark example of the lost value just one block from 216 W. Jackson came late last month, when a local investor paid just $4 million for the leasehold interest in a 20-story building at 300 W. Adams St. — 89% less than it was worth just more than a decade ago.

Sure looks like downtown is hurting what with the looting, continually boarded up building fronts, restaurants going out of business and retail shops fleeing.

Here's one explanation of the coming storm....from the United Kingdom, since the US "press" can't be bothered to disrupt the narrative:

• In the US, vast swathes of office space are empty. The landlords have some brutal decisions to make as $117billion is due in financial payments this year for commercial property. If the landlords cannot re-negotiate their loans, they go bankrupt, dumping property on the banks, which in turn will have to face their loan portfolios going delinquent. Which could of course cause them bankruptcy.

  Banks are already tightening up on their lending as hard times come. They know full well which clients are a lost cause, which are liabilities and which will be able to re-negotiate. It is thought some 30 per cent of bank loans in America are already delinquent and in arrears. No one knows, as the banks are not telling anyone yet.

  Meantime banks are queueing up for central bank loans and help. Which indicates that the banks have a problem.

J. Paul Getty stealing a famous John M Keynes quote:

• If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem.
  

The banks are currently owed Hundreds of Billions. BIG problems.