Ethan Harris chief economist with Lehman Bros. stated that the economy is in a recession.  “The economy is likely to experience an extended period of very weak growth, a rising unemployment rate and significant further Fed rate cuts.”Â

Additionally, Banks have borrowed 160 billion in Term Auction Facility from the Fed since mid-December.  This borrowing has been done to address “heightened liquidity pressures in term funding markets.”

If we repeat a melt down such as the S&L Crisis of the 80’s then we should see banks fail as result of massive defaults on loans.  I haven’t seen anything that indicates this is about to happen, however each day is bringing more and more bad news.  My interest is what effect all on this negative news is having on commercial real estate.