Good morning Apes of the world.
I do believe that Wall St started to package entire neighborhoods in to CMBS… They are essentially wrapping up entire neighborhoods and calling it “CMBS”. This has artificially kept the prices of housing/rents up.
The FED… Pays money to “member banks” to pass through to the real consumer and economy. Instead… Wall St has been hoarding all the homes to rent.
Please see my speculation post from yesterday if you have not.
The CMBS etf top hodlings are FHLM…
The FHLM corporation was started in the 1970’s to help American’s get homes. Instead… we find the Loans in the CMBS basket.
What is CMBS?
See above, Morgan Stanley wrapped up 2,106 homes in a neighborhood and sold them to “First Key Homes” as MBS. MS took 2,106 Mortgages, and wrapped it in to one portfolio, which makes it “CMBS”…
First Key Homes did a $600 million deal to acquire 2,106 homes…
Below is a $65M deal on an entire Denver Rental Community….
The list goes on…
Who issues CMBS?
It’s the same FED member banks… these are the banks that the FED gives money to, to spur economic activity. Rather than pass the funds on to people to purchase homes… they are wrapping up neighborhoods and passing them off to Private Equity firms.
JP Morgan has 17% of the market share, followed by Citi and Goldman.
Below is the Private Equity firms buying all the CMBS from the member banks…
KKR are the biggest, with $6billion plus in this space…
This CMBS market is almost $4 Trillion in size….
Issuance increased from 2020 to 2021…. they just cant help it…
In 2020 issuance slowed down and increase in 2021
But single family home CMBS was around 67% of all deals in the first half of 2021.
Wells Fargo notes that multi family homes make up 50pct of this market….
TLDR: Member banks are wrapping entire neighborhoods and passing them off as CMBS.
No sell until the people get the homes back…
Its no wonder we cant afford homes… and the FED invisible hand is the only thing sustaining the prices… it’s sickening… I hodl until these banks are zero’d out, and then I don’t sell.
The FED claim they care about “The Public Interest”… DRS and Hodl….
and if you did not know… the FED billed us $457m last year for their services.
The FEDERAL reserve banks had net income of $107.8B, they returned $107.4B and kept $457 million.
The FED billed the U.S Taxpayer more than $1bn last year…
But the best news about this is the FED is refusing to help – they own less than $9BN in the space… Big Banks are on their own this time… If the FED steps in to support CMBS in the future, this will be at 100% Ponzi scheme level (opinion)…