First a correction. A few days ago, I wrote a blog article about how deflation is sweeping the world. In that article, I mentioned that deposit rates in Germany are slightly positive. I am pretty sure that this statement was wrong. Listening to Bloomberg today, I just discovered that the yield on ten-yield German bunds…
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Another Great Recession might be on point. The mainstream business media picked up the same theme on Thursday and Friday, as the Dow lost ground. There will be some severe economic consequences from the coronavirus. Even if COVID-19 never gets out of control in the U.S., hundreds of thousands of small businesses in China are…
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Now that I have mentioned it, you will start to hear the term, Modern Monetary Theory, all of time. The commentators use it a lot on Bloomberg, CNBC, and Fox Business. The financial commentators will often just use the acronym, “MMT”. According to Wikipedia, Modern Monetary Theory (MMT) is a macroeconomic framework that says monetarily…
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Having a money sense is critical to becoming successful in life. When an entrepreneur chooses to get to the next level, it is imperative that he takes into cognisance such things that can mar his progress in business. Among the things that can make or mar a business is taking loans. People take loans to…
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George Smith Partners recently released a tombstone about a commercial loan closing that used a financial term of which I had never heard: “George Smith Partners arranged $23,750,000 in bridge financing for the refinance of a 229-key, full-service hotel located in Downtown Minneapolis, Minnesota… The Property, built in 1986, underwent a PIP in 2017.” What…
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When a bank makes a commercial construction loan, it is certainly not going to take all of the risk. A bank will usually require that the developer cover at least 20% to 30% of the total project cost – land cost, hard costs, soft costs, and a contingency reserve equal to 5% of the hard…
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I have a great training article about commercial loans for you today. How do conduits price their commercial loans? After all, commercial lenders cannot buy a forward commitment from Fannie Mae or Freddie Mac, like a residential mortgage banker; yet most commercial loans today are fixed rate loans. How on earth do the commercial loan…
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