In a joint congressional committee hearing today U.S. Treasury Secretary Timothy Geithner said that he expects commercial real estate to be a national problem for a long time with no quick fix. He also said that the economy can withstand the continuing commercial real estate challenges.
On Oct. 29 (Bloomberg) he said commercial real estate woes won’t set off a new banking crisis, in remarks to the Economic Club of Chicago.
“I don’t think so,” Geithner said, when asked whether commercial real estate could set off another banking meltdown. “That’s a problem the economy can manage through even though it’s going to be still exceptionally difficult.”
My thoughts are that until job creation gets started, commercial real estate will stay in the doldrums even if the stock market is booming.
Related to job creation, Mr Geithner stated in today's hearing that he would like to see TARP money provided to smaller banks specifically for loans to small business to encourage job growth. The problem he sees slowing this down is the negative perception the public has with banks accepting TARP money.
To me that would be a simple fix... use the funds, but call it something else.General