Blackstone defaulting on a loan could be Lehman Bros level stuff. Here we go!

9,144 Views | 51 Replies | Last: 2 yr ago by Definitely Not A Cop
BTHOB-98
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2:14p, 3/9/23
Blackstone Rattles Market With First European CMBS Default
Blackstone Group rattled the market last week when it defaulted on a European commercial mortgage-backed security deal for the first time.
The U.S. private equity firm and servicer Mount Street failed to agree a one-year extension on a 297.1 million securitised loan backed by secondary Finnish offices. Market sources said bondholders are concerned the same could happen in other CMBS deals.
"If Blackstone is starting to get a bad reputation it is not easy to sell CMBS in the future," said a market participant speaking on the condition of anonymity. "Buyers are limited; there's only 20 or so guys in the market."

https://product.costar.com/home/news/shared/656826657?utm_source=newsletter&utm_medium=email&utm_campaign=money&utm_content=p2&t=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJjb250YWN0SWQiOiI0NTI1MjU3IiwiY3VsdHVyZUNvZGUiOiJlbi1VUyIsImlhdCI6MTY3ODM5MjgwNH0.e1w076dVmx4xYqdMA-a8JN4psQ7MSf8NVu7_AVDJJts
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jagvocate
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2:50p, 3/9/23
AG
Lot of dominos yet to fall
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txaggieacct85
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In reply to BTHOB-98 • 3:06p, 3/9/23
AG
BTHOB-98 said:
Blackstone Rattles Market With First European CMBS Default
Blackstone Group rattled the market last week when it defaulted on a European commercial mortgage-backed security deal for the first time.
The U.S. private equity firm and servicer Mount Street failed to agree a one-year extension on a 297.1 million securitised loan backed by secondary Finnish offices. Market sources said bondholders are concerned the same could happen in other CMBS deals.
"If Blackstone is starting to get a bad reputation it is not easy to sell CMBS in the future," said a market participant speaking on the condition of anonymity. "Buyers are limited; there's only 20 or so guys in the market."

https://product.costar.com/home/news/shared/656826657?utm_source=newsletter&utm_medium=email&utm_campaign=money&utm_content=p2&t=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJjb250YWN0SWQiOiI0NTI1MjU3IiwiY3VsdHVyZUNvZGUiOiJlbi1VUyIsImlhdCI6MTY3ODM5MjgwNH0.e1w076dVmx4xYqdMA-a8JN4psQ7MSf8NVu7_AVDJJts
that a way to create some panic
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LMCane
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3:09p, 3/9/23
Silvergate Bank collapsed yesterday

SVB bank in the Silicon Valley appears to be collapsing today down 65% and trading halted

lots of dominos
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Talon2DSO
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4:11p, 3/9/23
AG
During a Biden Administration, they'll be bailed out and called too big to fail. Feds will buy Class A shares and use that to bolster Blackstones already ridiculous ESG push.
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Stat Monitor Repairman
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4:25p, 3/9/23
I still don't understand how commercial real estate is still going. That was the first thing folks pointed at to fail during the aftermath of covid. I guess the plan was to float everything along until well clear of covid, let it fail and blame it on something else like WW3.
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YouBet
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5:58p, 3/9/23
AG
This is about to be another time where I ask myself, "Self, why didn't you get out of the market on 3/9/23?"
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TheHungryDonkey
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6:30p, 3/9/23
AG
Peter Thiel advising portfolio companies to pull money out of SVB. Tomorrow could be a bloodbath.
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aggie_wes
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6:41p, 3/9/23
AG
Already sold about half of what's in my IRA. Not sure what else I can do without getting murdered on taxes.
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YouBet
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In reply to Stat Monitor Repairman • 6:48p, 3/9/23
AG
Stat Monitor Repairman said:
I still don't understand how commercial real estate is still going. That was the first thing folks pointed at to fail during the aftermath of covid. I guess the plan was to float everything along until well clear of covid, let it fail and blame it on something else like WW3.


I don't get it either but I don't know that world. I think a lot deals were punted through renegotiations based on what I've read before but no idea how prevalent that was and it can't go on forever.
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Lake08
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7:59p, 3/9/23
You guys are always so positive……..
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p-townag
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In reply to YouBet • 8:42p, 3/9/23
AG
YouBet said:
This is about to be another time where I ask myself, "Self, why didn't you get out of the market on 3/9/23?"

Then, in 2025, that will be a time where you ask yourself, "Self, why did you sell and why didn't you buy like crazy in March of 2023?"
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txaggieacct85
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In reply to YouBet • 9:08p, 3/9/23
AG
If you could predict the future, you would be a trillionaire
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Spaceship
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In reply to Stat Monitor Repairman • 9:09p, 3/9/23
AG
Stat Monitor Repairman said:
I still don't understand how commercial real estate is still going. That was the first thing folks pointed at to fail during the aftermath of covid. I guess the plan was to float everything along until well clear of covid, let it fail and blame it on something else like WW3.

Commercial real estate isn't just office space. Industrial real estate is coming off record years and healthcare and multifamily aren't hurting either. Many office leases are 7-10 year terms so there is still a lot that hasn't turned yet. Some of that is coming though, but there are still landlords cashing monthly rent checks with empty buildings, so it's not fully realized yet.
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BTHOB-98
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In reply to Stat Monitor Repairman • 10:10p, 3/9/23
Stat Monitor Repairman said:
I still don't understand how commercial real estate is still going. That was the first thing folks pointed at to fail during the aftermath of covid. I guess the plan was to float everything along until well clear of covid, let it fail and blame it on something else like WW3.


There are many different aspects of commercial real estate. Office in our area is doing really well while office downtown still has not recovered from the pandemic. Industrial and retail are at 100% occupancy. When interest rates go up first time homebuyers can't afford to buy houses so they end up renting. This leads to more renters and to multi family being very strong. Texas is a very strong market in general.
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YouBet
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In reply to txaggieacct85 • 10:31p, 3/9/23
AG
txaggieacct85 said:
If you could predict the future, you would be a trillionaire


I know. Alas, I'm only a hundred millionaire.
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jh0400
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In reply to LMCane • 7:30a, 3/10/23
AG
LMCane said:
Silvergate Bank collapsed yesterday

SVB bank in the Silicon Valley appears to be collapsing today down 65% and trading halted

lots of dominos


Silvergate doesn't matter much in the grand scheme of things. Most of their business was tied to crypto, which IMO is mostly a free money fad. SVB is a little more troubling, but their risk profile is way over tilted to unprofitable tech cos that rely on a steady stream of venture funding to stay alive. This should be relatively easy to contain as long as we can avoid an uninformed run on banks due to clickbait headlines from people who just now learned about available for sale or held to maturity accounting.
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Cyp0111
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9:16a, 3/10/23
I dont think Blackstone defaulting on ringfenced assets is that big of a deal. SVB looks to be poor duration matching between the 10 year and deposits. They're getting crushed as their customer based loaded up on deposits and has subsequently pulled deposits as tech portcos and vs burn cash and search for more attractive yield.


I think commercial real estate sitting on the balance sheets of regional banks could be a big risk. Specifically, office.

I know people try to correlate everything to Lehman, however, that was a very different situation where essentially the entire financial sector had negative equity when marking for the toxic assets on balance sheet.
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TxAG#2011
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9:33a, 3/10/23
SVB is 10x bigger than FTX
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Diggity
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10:10a, 3/10/23
AG
Blackstone will have to give some properties back. It happens in these markets. Not sure why some random Europe deal is the OP's canary in the coalmine here.

The Silicon Valley Bank implosion is more interesting for sure.
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jh0400
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11:10a, 3/10/23
AG
https://giphy.com/clips/southpark-south-park-episode-3-season-13-MGozlcY9DpvolQLzFL


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11:31a, 3/10/23
Detmersdislocatedshoulder
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In reply to Talon2DSO • 11:31a, 3/10/23
Talon2DSO said:
During a Biden Administration, they'll be bailed out and called too big to fail. Feds will buy Class A shares and use that to bolster Blackstones already ridiculous ESG push.


bank bail ins.
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In reply to Detmersdislocatedshoulder • 11:34a, 3/10/23
Stat Monitor Repairman
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1:27p, 3/10/23
Quote:
LONDON, Feb 27 (Reuters) - Central banks need to "get the job done" when it comes to getting inflation back under control, the Bank for International Settlements has said, urging them to avoid the mistakes of the 1970's by declaring victory too early.

The BIS, dubbed the bank for central banks, said it was vital authorities didn't repeat the stop-start cycles of the 1970s when interest rates had to be hiked to painfully high levels after attempts to lower them resulted in an inflation surge.
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Scientific
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In reply to [removed post] • 3:06p, 3/10/23
AG
ac04 said:
yes. first major sign fed has over-tightened. you can almost hear the money printers warming up.

What other choice is there? I'm not absolving Powell, but it looks like hes going to stay firm on normalzing rates until he's forced to step down. This was a hot topic in 2020, and the can may have finally hit its wall.
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In reply to Scientific • 3:46p, 3/10/23
Dies Irae
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4:56p, 3/10/23
JPow needs to hoist the black flag and keep raising. There needs to be a lot of pain to get the ship at least turning towards the right direction
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Scientific
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In reply to [removed post] • 5:24p, 3/10/23
AG
ac04 said:
he has no choice other than swing back to QE to repair the damage they're doing. they can never stop printing.

you think QE is going to "fix" this? This is a decayed tooth that needs to yanked. Powell let the pressers run, but now he has to let this bleed out. The Fed exhausted all their moves to fight off a recession, it's a little now or never to get rates under control.
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5:25p, 3/10/23
YouBet
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5:58p, 3/10/23
AG
Don't see how they can fix it. The numbers are too big and too far gone. We are majoring in minors at this point.
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Heineken-Ashi
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In reply to [removed post] • 6:49p, 3/10/23
ac04 said:
he has no choice other than swing back to QE to repair the damage they're doing. they can never stop printing.
The damage was CREATED the last time they dropped rates. We never had a recovery. We had a bailout that enriched bankers everywhere at the expense of the middle class. What Powell is doing now is part of the playbook. Unwind the actual idiocy of the last 15 years, and when the pain starts to set in, crash the system so the people who caused it can be bailed out. Rinse repeat.

Stop falling for it.
"H-A: In return for the flattery, can you reduce the size of your signature? It's the only part of your posts that don't add value. In its' place, just put "I'm an investing savant, and make no apologies for it", as oldarmy1 would do."
- I Bleed Maroon (distracted easily by signatures)
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7:00p, 3/10/23
Heineken-Ashi
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7:04p, 3/10/23
The FED and its cartel member banks created this and is following the same playbook it always has. History always repeats and we continue to be suckers.

Remember.. the FED's single mandate is to prevent economic downturn events.

Why then have we had so many since the FED was created? Really think critically here. The group created by bankers and given power directly from the government, charged with preventing recessions, in any consecutive two decade period, has either never succeeded in their lone mandate, is too stupid to succeed in their lone mandate, or NEVER INTENDED to succeed at their lone mandate and is actually working against the people and FOR the banks that created it.

You pick. Because those are the only options based on 100 years of history.
"H-A: In return for the flattery, can you reduce the size of your signature? It's the only part of your posts that don't add value. In its' place, just put "I'm an investing savant, and make no apologies for it", as oldarmy1 would do."
- I Bleed Maroon (distracted easily by signatures)
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