Real Capital Analytics Graph: Total Distress

I saw this graph on a Sperry Van Ness conference call and meant to post it at that time.  It’s eye candy and informative.  Note that the REO part of the market looks smaller than the “restructured” part of the market, and only slightly larger than the “resolved” part of the market.  The numbers on the y axis are billions.

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I have no way of verifying the RCA data, but I have no reason to disbelieve it.  Having said that, here’s an interesting thought.  With all of the talk about the impact to systemic credit from CRE, if the total distressed CRE market is $250 billion, it’s an amount that is 1/5 or 1/6 the size of Bank of America, a single (though very large) bank.

If I’m way off on this, I would be interested to see the proof.  I really don’t have a dog in this fight, I just keep hearing more and more smart people say that CRE won’t be the problem that some are claiming.  If I’ve been misinformed, please let me know as I am more interested in the truth than being married to this small point.

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