Commercial real estate is a bubble: Dick Bove

Commercial real estate is a bubble: Dick Bove


THE SENIOR ADVISER TO CLINTON SAID MANAGING PARTNER MARK PEN IS HERE AS WELL. JAMPACKED SHOW IT IS A GOOD BIG ONE. MORNING. IT WILL BE MUCH ABOUT THE FINANCIAL SIDE OF THE CAPITOL HILL TESTIMONY FROM FEDERAL JAY POWELL WILL MEET WITH THE SENATE TODAY I WAS HUNGRY HAWKINS TESTIMONY AT THE SENATE TODAY AND ARE AT THE HOUSE. FINANCIALS GOT A BOOST YESTERDAY AFTER REPORTING NUMBERS ON STRONG EARNINGS FROM JPMORGAN CHASE LAST WEEK THAT THE MARKETS WERE MIXED AT THE CLOSE. GOOD TO SEE YOU. NOBODY KNOWS THE BANKING SECTOR BETTER THAN YOU. BANK STOCKS UNDERPERFORMING. WE HAD A PRETTY GOOD RUN IN THE LAST COUPLE DAYS. WHAT IS YOUR TAKE ON THE EARNINGS STORIES?>>HE SANG BETWEEN THE YIELD CURVE IN EARNINGS. CURVE, THEY SELL THESE STOCKS. EARNINGS ARE ACTUALLY PRETTY GOOD COMING OVER THE LAST FEW DAYS DID THEY BUY THESE STOCKS. THE QUESTION BECOMES WHAT IS THE MORE COMPELLING OF THE TWO WHEN YOU LOOK LONG-RANGE. IF THE ECONOMY DOES GROW AT THE RATE PEOPLE ARE PROJECT TEAM, THEY WILL CONTINUE TO GO UP AND THE STOCK SHOULD BE OKAY. SERVICES SECTOR.>>IT IS VERY CLEAR LOAN GROWTH HAS COME OFF THE BOTTOM. IN OTHER WORDS, IT WAS DOING REALLY POORLY AT THE TURN OF THE YEAR AND NOT STARTING TO RISE. IT IS NOT UNIFORM. YOU SEE AN IMPROVEMENT IN A DECREASE IN AUTO LOANS. IF THE BANK IS MORE ASSOCIATED WITH LENDING TO BUSINESSES AND DOING REALLY WELL. IT’S ASSOCIATED WITH LENDING TO THE CONSUMER IS NOT DOING AS RESULT. LATER THIS WEEK WE’LL GET MORE OF THE REGIONAL RESULTS. WHILE THIS TRANSFERRED TO THEM?>>THE MID-CAP BANKS ARE ACTUALLY HITTING THE BALL OUT OF THE PARK. BUT 12%, 10% A MONTH AS THE BIG BANKS ARE STRUGGLING TO GET LOAN GROWTH AT THE 3% LEVEL. IF YOU WANT TO JUST MOVE DOWN A OF THE STOCKS.>>WE ARE 10 YEARS INTO THIS ECONOMIC CYCLE. IT’S A TIME WHEN IT GOT US THERE WONDERING IF THE EXCESSES BUILDING SOMEWHERE, TO ADD THE EXPANSION. WHERE DO YOU SEE ACCESS OF IT ALL IN THE FINANCIAL SECTOR? I THINK THAT YOU ARE GOING TO SEE LOAN LOSSES COMING UP IN THAT SECTOR. IF THE ECONOMY WE CAN MEANINGFULLY COMING HE WAS VIA CROPPING UP AT BANKS IN THE AREA.>>WHAT BANKS ARE EXPOSED TO THAT? YOU ALWAYS HAVE TO WONDER WHAT BANKS WILL GO DOWN.>>UNFORTUNATELY TO CONTRADICT WHAT I JUST SAID, THE BIGGEST MID-CAP EGGS. SO THEY ARE DOING EXTRAORDINARILY WELL BECAUSE THE SECTOR HAS DONE EXTRAORDINARILY WELL. IF THE SECTOR POPS, THEY ARE GOING TO GET HURT. NO WAY TO AVOID IT.>>THE QUALITY OF LOANS HAS REMAINED VERY STRONG BECAUSE THERE’S MAJOR CONCERNS THEY ARE TAKING OFF MORE DEBT. THE QUALITY HASN’T BEEN IMPACTED YET.>>FEEL THE PLACE FOR QUALITY BLENDING HAS BEEN IMPACTED AS IN THE AUTO INDUSTRY. BEATEN-DOWN AND ALSO DEALS BEING MADE WITH DEALERS OF CARS THAT MARGINS ARE STABLE.>>JAY POWELL TESTIFIED TODAY. PEOPLE WILL BE WONDERING IF THE SIGNALING FOR INTEREST RATE INCREASES THIS YEAR. DOES IT MATTER THAT MUCH OF THE BANKING SECTOR AT THE FED IS DOING THREE OR FOUR IN WHAT ARE YOU LOOKING FOR A POWELL?>>ACTUALLY COME IN LOOKING FOR THE PRESIDENT TO TAKE CONTROL OF THE FED. YOU’VE GOT SEVEN PEOPLE ON THE TWO OF THE THREE WERE PUT THERE BY THE PRESIDENT. TWO MORE ARE NOW WAITING FOR THE SENATE TO BE PUT HER IN TO MORE STILL THE PRESIDENT WILL PUT ON THE FED BOARDS. MARIA: I DON’T THINK ANYBODY WANTS THAT.>>I KNOW, BUT IT’S GOING TO HAPPEN. THERE’S BEEN CHANGED. IT DOESN’T MATTER WHAT THEY ARE. OR THAT OF THE OCC HAS CHANGED. EVERYONE OF THEM HAVE BEEN CHANGED IN ALL OF THESE PEOPLE ARE BANKERS COMING IN AS OPPOSED TO BUREAUCRATS AND LABORERS AND I THINK THAT I LIKE THE CHANGE. MARIA: IT MAKES SENSE BECAUSE IT’S GOING BACK REGULATIONS AND THIS IS A WHOLE NEW AGENDA. I UNDERSTAND. LET ME ASK WORK WITH BEFORE YOU GO. OR THE BANKS GOING TO PAY HIGH DIVIDENDS THIS YEAR AS A RESULT? CAPITAL. THE BIGGEST WEAKNESS RIGHT NOW IS IF YOU LOOK AT THE COMMON EQUITY OF JPMORGAN, BANK OF AMERICA, CITIGROUP BALL DOWN IF YOU NEED YOUR CAPITAL TO GROW THEY ARE MAKING A BIG MISTAKE HERE.>>DON’T GET IN IF YOU’RE AN INDIVIDUAL HIGH DIVIDENDS, WHICH IS A MISTAKE SO MANY REGULAR AMERICANS MADE DURING THE FINANCIAL CRISIS. NOT SAYING BANKS WILL GO OUT OF BUSINESS, BUT MY PARENTS OWN THE STOCKS BECAUSE THEY PAY HIGH DIVIDENDS AND WHEN THE ECONOMY TURNS, LOOK OUT BELOW.>>LAST TIME AROUND IT WAS REALLY PAINFUL. DAGEN: IT’S NOT JUST CUTTING THE DIVIDEND. IT IS CAPITAL LOSSES IN SOME

9 thoughts on “Commercial real estate is a bubble: Dick Bove

  1. Residential real estate is also a bubble

  2. Property taxes has a lot to do with real estate being stagnant.

  3. Our economy is great. In everything. This is all speculation. Meh.

  4. Commercial real estate has always been a bubble. Just look back at the commercial real estate boom of the early 80s. In Texas and Florida, there were abandoned Business Parks and warehouses by the thousands. Commercial real estate is easy to walk away from with ZERO liability.

  5. economy strong economy strong economy strong ?????

  6. Isnt it suspicious that there is so much talk about bubbles and potential recession lately

  7. I live In Chicago, my house is 80k underwater, what choice do they leave you when you can do nothing other than short sale? Which btw kills your credit. I need to get out of Chicago and Bank of America can have their house back I guess they do nothing if you’re middle class and work, I’ll put a bow in it, thx for the waste of 5 years trying everything not to do this!

  8. So Dick Move tells Maria B she swings… funny. Dont they all?

  9. Low birth rates, high abortion, immigration slowing, online shopping will destroy commercial real estate which was overpriced to begin with.

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