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Nicholas Glinsman

lines on the record: 119
first: 2023-05-18
most recent: 2023-05-18
sittings or episodes: 1
sources: podcast

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“Away from decentralization? How is that manifested? Well, you would imagine with a weakened economy, you would want to keep the people that really help the economy, the tech entrepreneurs. Well, we've seen tech really slaughtered by the CCP. You have to have CCP built into any private company now. So I think back to any of the viewers that have watched Dr. Chivago, there was that famous scene on the train where the communists at Parachic said, you've got to do this, this, and this. And it was completely illogical. That's how meetings of the company. They have to ask permission of the CCP representative whether they can do this or that.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Don't get healthcare, you don't get unemployment benefit in China, it's not socialism, it's communism. So it should be communism with Chinese characteristics. Now those characteristics change dramatically with Xi's arrival. And his third term, when you saw Hu Shintao taken off the podium, And you saw his economic specialist from the Politburo removed, effectively. Everybody that is close to him now and advising him are political ideologues. The probably the most famous of which is Wang Huning, who's the one that writes the books. There's rare photos of him in the White House. And the books he's written are very critical of the American system and the capitalist system. So if we've seen she declare a shift away from centralization, how have we seen that manifested”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“There is not ketoris parapus. All things are not equal. You heard that there was a story of Mark Mobius, couldn't get his money out for quite a while. Then he was able to do so. But there's something else that's occurred. So if we look at, let's take the history and then I'll hit something else. So China's economy was decentralized by Deng Xiaoping in 78 to 89 that period. You had socialism with Chinese characteristics continue up until Xi Xinping in 2013.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Yes, you can, but there is a de-emphasis of putting presence there, there is a de-emphasis for vanguard, of raising Chinese funds, because they're not going to emphasize on raising.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Absolutely, absolutely. Although it sometimes gets stopped, that investment banker, Bao, I think his first name, I never remember his second name, who's disappeared, a real rainmaker for a lot of these tech funds in China. He was disappeared at the time he was trying to move 200 million from Hong Kong to Singapore to set up a family office for him and his family. It's fluid, not liquid, it's fluid. And it's, you know, so you're seeing these change of laws. And what people are not anticipating, you are seeing a lot of movement out. Vanguard closed its office and got rid of its local employees. One of the Canadian pension funds closed its Shanghai office. Investment back to, I believe, Toronto.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“So, the goalposts are like this all over the place. And that's why, for example, Singapore is now prevailing. I think it's outperforming six to one in terms of new family offices and fiduciary funds and hedge funds setting up there.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“That aspect of it gave you an example of how things can change. I'll give you a very simple example as a practical anecdote from a friend of mine who's involved in a venture capital fund and they had an investment in a Chinese startup which has just gone IPO in China. And in the documentation it said obviously restrictions for early investors is one year thereafter you can sell your shares. One year has passed and they went to sell the shares VC fund and the Chinese regulator said well you can't you're going to have to wait another six months a year or whenever I say you can and they said well but in the documentation it stated we could set up well I can decide”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, yeah. I mean, now, you know, it's a question whether in the appeals court in Hong Kong, the Hong Kong authorities are now saying we don't need UK appeals charges anymore. This was fully up until 2019, Hong Kong was still acting according to common law. Then they changed it with the democracy riots and everything. It was that change in law, which was the national security law, I think it was, that caused, overrode everything else in the legal system. That was the end of common law in Hong Kong.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“If you recall in our paper Hong Kong Singapore on the US dollars future, the reason why Singapore is outperforming Hong Kong and attracting family office money and fiduciaries is because Singapore is still under common law, which is a system of law used by the UK and the US. It's basically the law of finance and guarantees property rights. Hong Kong has changed. Hong Kong is not no longer common law. It is subject to the law of Beijing. You don't have law of contract, you don't have law of tort, you don't have law of trust, trust being as in trusts as opposed to trusting somebody as in trusts. So your legal status is subject to the whims of an ever-changing legal system in China.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Are you going to be making those investments? You may not be able to because due diligence is one of the core facets of an investment process. And it got so bad with Bane that the Chinese arrested six of their local employees. And this is done. This is where it gets interesting. The updated espionage law, at the same time, President Xi took the state security agency, which is an equivalent to the KGB, made it independent from the The policing saddle of China is now independent, acts like the KGB, and it reports only to Xi. Now we've stated that The markets are the Chinese economy is becoming infinitely more centralized.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“There were three of them actually. It was Bain. Myths and Cap vision, I think, was the other one. These are three consulting firms that do a lot of due diligence for an array of American clients and for that matter European clients. Let's start with the American side. They do due diligence on their investments. That can be for private equity or venture capital, but that can actually also be for large funds taking big positions. Now back at the end of April, China changed the legislation on the espionage act to include consulting. And it's bringing due diligence into these new laws and regulations. Brings due diligence within espionage terminology. So, if you are an investor, whether you're a public share investor or private equity or venture capital, and you can't, or corporate, you can't do your due diligence.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“He is likely to be a rising policy influencer, foreign policy influencer in Washington. And Mike is really driving this. It is very bipartisan, both in the House and in the Senate. So we expect, and this is the order that seems to originally been accepted by President Biden, we expect Congress to issue legislation wherein you will add to the outbound investment barred or subject to notification clean energy technology, biotech and biomanufacturing, particularly biotech, critical minerals. Now we also expect that will then start to see publicly traded investments curtailed and retroactive clawback on previous investments. So, the reason that last square is there is not just because this is something Congress is looking at, but if you've noticed We have noticed that China is retaliating. Tell us about that.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Is imminent, absolutely is imminent. Now, the interesting aspect of this is. In the American Constitution, I think it's Article 8, Congress is actually responsible for trade policy, not the president. But when it's national security, the president can act as in an executive order or Trump's tariffs. We expect the EO not to be broad enough for Congress and the leader in terms of congressional terms is Mike Gallagher, who runs the House Committee on China, which was set up. About six months ago. So, you actually have a committee in the House. Just focuses on China. Now Mike Gallagher is a really interesting character. This is not your typical politician. Mike Gallagher, seven years duty in the Middle East as a U.S. Marine officer, he's also got a PhD in international relations from Georgetown.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Outbound investment, which would be subject to notification, I believe that notification, although it should go to commerce, is probably more likely to go to treasury, but that's still up in the air. That would restrict quantum computing investments and artificial intelligence investments. And if you're aware of Mark Warner, who heads the Senate Finance Committee for Intelligence, he's really worried about the AI side of things. And where capital will be impacted. As I list there, venture capital private equity, corporate investments. So if Intel were to Want to open a new factory in China producing advanced semiconductors, they will be stopped. And all this applies to new investments only.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Reverse Cyphius, okay, Cyphus is what controls if there's an investment from a Chinese entity into a sensitive industry within the US, the administration can review it and reject it. Reverse Cyphus is this is where it gets interesting. I think the new word is firmer, but reverse Cyphius is now. You may want to bring up that chart. The reverse Siphius is now looking at outbound investment. So what we're looking at with an executive order, and I've split that chart into now and later, later represents what Congress will bring in now as the executive order. So outbound investment bard would be advanced semiconductors. And the Dutch and Japanese are even on board with the idea that the machinery to make advanced semiconductors, which they specialize in, is also within the scope of reverse.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Well, the executive order is coming. The initial talk over the last two weeks was it was going to come before G7. Then we had Jake Sullivan meet one year, a Chinese foreign minister. And it seems that there were two days of substantive talks. One wonders whether President Biden will be using reverse Cyphius with regard to an executive order as elements of it as a quid pro quo. It's unlikely we haven't heard that's going to be the case. So we're waiting for G7 to pass. The G7 members are aware of reverse Cyphus.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Yes, but that's Trump. Republican. So to be honest with you, I think they've, that was one thing they proved People can doubt whether the Fed is apolitical, but I thought that was actually quite a significant point. And by the way, and this segues into our next topic, I think the politics and the situation with China becomes much more Aggressive Stressed. We run into the election, I think you're going to see both parties try and outhawk each other on China. Now, I've been told that within Congress, the Democrats are not as hawkish as the Republicans. And I've been told, it's the one thing both sides can agree on. So if it's one thing that both sides can agree on, the politicking behind it will likely be quite aggressive. If we're watching, given what we've seen recently, is this a good time to move into the...”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“I don't know who he tweeted. I don't know who's a bigger threat to America. You know, President Xi Jinping or JPAL. I'm saying very anti-Powell things, saying he's going to threaten to fire JPAL. And what happened later? The Powell pivot of 2018, 2019.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“But Okay I think that was a good expression of the Fed being apolitical. And remember Who put JPAL in and remember what party with whom he is affiliated? Yes, he's got more Democrat appointed members of the FOMC and the regional banks, but always remember the Fed isn't a democracy.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Sticky inflation will be the harbinger of a Fed staying put. Especially with unemployment where we are. So unemployment stays here until that inflation rate is sub three, why are the fake going to cut? They're not. There's no reason to. So That will create a whole different interest rate, risk-free environment. And we have to see, the market will tell you when there's a recession coming, and it's that ball steeply in the Treasury curve. That's the thing that's going to tell you. If you see that, and we've had a partial bull de inversion, but if the twos, tens gets to positive. You know stuff is getting bad.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Until it's systemic, I agree with you, but until it is systemic. Keterus paribus, let's use the economic phrase of the original economic raised all things being equal. If we are where we are now, and maybe one or two more of these regional banks, they can be big, fail. Again, they don't seem worried. You're not hearing that out of the Fed. You're not hearing that out of the Treasury. The FDIC are not talking about that. So the point is if we're still where we are now and unemployment is still at 3.4%. 3.6%. The Fed are going to disappoint on the cutting cycle. Because inflation, as much as Chinese PPI is coming down, inflation is proving quite sticky. And I suspect there are going to be areas of sticky inflation. We saw an uptick in wage pressures as well, given the non-farm payroll later room last week.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Okay, if we don't have any pullback on economic growth from where we are and unemployment, Fed's not moving. Why would the Fed cut rates until we're right back at 2%? If economic growth, if retail sales, but particularly if unemployment stays where we are.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“That's risk. Dr. Copper is a risk measurement. Gold copper ratio is a risk management. And gold is massively outperformed copper. And these are things you can't ignore in terms of what's going on elsewhere. You also started seeing trucking rates and freight rates internally into the US start to dive. Now they lag freight rates on the shipping side, but freight rates are back down to the lows. Can we see that again in trucking? It's quite possible. If that's the case, we've got a recessionary situation. And I think risk won't do well. Will those big tech companies Perform and keep Nasdaq higher, possibly, but I tend to think that I'm getting more indications from listening to MERSC on the shipping company side and Home Depot.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Which are pricing No, but you know until you said the next six months, that's fine. People are talking pivot June, cut the meeting. I mean, there's some nonsensical stuff going on because actually the Fed is a slow moving supertanker, rather like pension funds and investment and insurance companies on the buy side and sovereign wealth funds so much money they can't move that quickly If we see that bold steepening, that's a recession That's because of a recession then you see the Fed starting to cut I don't see how a recession is good for risk And if we look at Disappointing economic data and the implications of that right now, just look at where copper is. 366 wasn't that long ago it was over 400 on the Comex, right? That's got a long way to go down if that trend in Chinese economic data continues.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Yeah. And so right now it's negative. So the two year yield is higher than the 10 year inverted curve. And we say a bull steepening, that would mean that would move out of inversion, which has been happening because short-term, which are pricing a Fed cut, but you don't think the Fed's going to cut anytime soon.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Well, I think what you're going to see is bonds lower yields, the bond market low yields, I think you're going to start to see, and we've started, we've seen it already, where is it right now? Okay, twos, fives at 52 basis points. Two's tens, sorry. If that yield starts to gather pace on the bull steepening, so that would be bull de inversion and then bull steepening.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“The odds that the recession could be quite sharp. Okay, steer it slowly down to the recession. I know the failure of looking at a soft landing. Stop using that language, soft landing. It's impossible to steer to a soft landing.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Not be at the screen the whole time. But I think what's happened is everything gets faster. Reactions have to be faster. Time's compressed. This whole rate hiking cycle has been in a shorter time span because they lent on team transitory, whereas in fact they should have just, okay, we've got to start raising rates in a slower, coordinated way. And to be honest with you, rates are five and a quarter. So what? You know, before 07, you go back to the 90s, even the 80s, you go back, this was cheap. Where we are now was considered cheap. Back in the 80s for sure, right? There's this desire to avoid boom bust, avoid a recession. Well, actually, the longer you think you're going to avoid a recession increases the...”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Time has been compressed. Time to react to stuff has been compressed. You have to react. If you're a shorter term trader, which I'm not anymore, you have to react in a shorter time cycle on everything in the markets. And really, my view is the last six months hiding to nothing. You can stick with the views and you can trade the upper level and lower level and be reasonably okay with it such that with the Liz Truss Shall we say, consequences on the markets, you always buy sterling when it's close to one to the dollar, close to parity. And you know where you stop yourself out, but you always buy it. And that was a great buy. We told clients, buy sterling here. Well, where are we now? Just under 125. It was a fantastic buy. So there are things to be done that you can sit back and, you know,”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“I mean, you know, given the dependency on forward guidance when rates were low, right, they could afford guided, look, we're not going to stop, but we're not going to go crazy. We're not doing 50 or 75 basis points. Remember, Greenspan was the expert at 25 basis points move. Yes, he did higher rate hikes and rate cuts, but those were usually an exceptional circumstances. I think, you know, again, another part of the structural changes”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“A great chart comparing there, and they'll just screenshot how much their NIM, their loan yields, and their deposit costs went up during this rate cycle when it exploded higher versus 2015, 2017. It's just night and day.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“I think they don't want to be caught with their pants down ever again, ever being not ad infinitum, but they got caught. And that's why we've seen if we'd started to raise rates a year earlier, up from zero from Zerb and do it slowly. Probably some of this bank stress may not have happened.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Zero interest rate policy is expecting it. I think the floor has got to be one and a half percent. And I think that may even be stretching it. They want more flexibility. I mean, we can go into the Fed if you want. I mean, I agree with some of your previous guests. This is a Fed that has made, it's not just a Fed, the CCB and the Bank of England, horrendous error, teams transitory. And I'll give you an interesting critique of somebody who's now in the White House. Vice Chair of the Fed led Team Transitory, Lail Brainard. Lale was also responsible for the regulation of banks. Another error on the Fed. So two huge errors led by the person everybody leaned on for the economic view. Okay? And now she's in the Biden White House, right?”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Nick, are you confident enough in that view to put on some, let's see, what would they be? Short call spreads where you're basically betting that rates don't go to zero percent again. Because I know there are a lot of people, hedge fuel managers, people on Twitter, who say that they want to buy these call spreads, but I don't know, what do you want to sell one of these? If you think Zerpa's not going to be, you know, zero interest rate policy is expecting a path.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“I mean, or even before, to be honest with you, right? But again, I get back to this point about structural, not cyclical. Will rates ever go to ZERP again in our lifetimes? Or, well, let me put it in the next decade, I doubt it. I think there's a reticence to get back to that situation.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Yes, right when Black Friday, the pound collapsed. But when the pound collapsed, I remember we were there all night on the Salomon trading floor in London. One of the conversations was go to the bank the next day and refinance. into floating, right? And literally at 8.30, 9 o'clock, there's a whole bundle of people and I did it myself, went to the bank and said, I want to refinance.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“they should be okay for it they should be able to survive a year or two i mean otherwise the whole fractional banking system is not not set up i tend to think that you know i i had mortgages back in the uh late 80s in the uk which was 15 and you know the marginal change when especially after after dropping out of the rm sitting there going or before dropping out of the m”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Well, You're asking me whether the Fed's going to cut rates soon. Yeah, I am. And that's basically what you're asking. That's the call one's making.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“And if it oils at 140 bucks, it's not like that much more valuable because they have debt, not equity. So their upside is capped, perhaps. But Nick, what about, so obviously, your banks that have incredibly specific loans, you know, there are community banks that cater to different communities and different businesses and the like. But what about there are a lot of regional banks that actually their assets is pretty simple. 60% is mortgages to people at relatively low rates because they were made when interest rates were at zero. So a 3% coupon, 4% coupon. And they're probably going to pay it back because they have a lot of equity in their home. So it's not a 2008, 2007 subprime crisis.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think there are. of the regional banks You've got if you actually, and it's not necessarily a topic for today, but if we suddenly saw a reason that crude oil was going to rally hard, you'd have a look at the regional banks in the shale area because they're sitting on... I don't know whether they're sitting on equity, but debt to a lot of these small fracking or the smaller fracking companies. Who's loan to value would improve dramatically if oil was higher. So it depends on the region and depends on what their asset mix is. It's very speculative to say, would you buy? What's the rationale behind it? So we've just spoken about the CRE debt situation, but regional banks are not just CRE. A lot of them were exposed to the oil sector, oil and gas sector. I wonder how the question is are they doing okay? I suspect those loans”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“That's so, from my perspective, technology didn't work too well in terms of the banking system. You go back to 1907 when JP Morgan, you didn't have that chance. They closed the doors. JP Morgan calls in the next three biggest banks and said, we're going to do this. And it gets resolved. Fed didn't have that chance, nor did the FDIC. I think what we've got, again, it's back to structural is a structural trend towards a more concentrated banking market. Easier for the authorities to control.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“He put out a warning back in October about watch the regional banks and spot off. I mean, it was really spot on. Did he put it out there? They're going to be exposed to CRE debt. No, did he put it out there that, you know, you can transfer all your money, click of a phone? And that's the big difference. It's the click of the phone transfer. You just have to have a, I mean, SVB, the thing that just tipped them out straight off was Peter Teal's announcement that he told everybody to get up of his investments he had out. He's got to be out.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Now, without doubt, within that group, there's concentration risk. That's where you've got to be careful. That's where somebody like Chris Wallen would be great because he knows the banks inside out the bank's balance sheets. If somebody said to me, we want you to do work on this, that's where I'd actually start. You know, okay, investigating, what's the CRE debt exposure? This 4,000 smaller banks. And I suspect you interviewed him last week, Patrick Perrot Green.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“The next 110 banks, I knew I had this data. This isn't really quite explicit. Next 110 banks, which have 10 billion to 160 billion of assets, held 800 billion, which is 16% of CRE debt. So that starts to increase the odds that there's a concentration risk in the medium. The 4,000 smaller banks held, this is where it's $750 billion, which is 15% of total CRE debt.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Of the 4.5 trillion CRE mortgage market. We're looking at multifamily having the largest share, then office, office at 12.9. Oh, it's not the second. Third is Office is 16.7. So those are the two worst sectors, right? The rest, you're looking at industrial is horrible, but people have got out of retail. There's no doubt. Hotel, healthcare, and other. Now, healthcare could be interesting, but the bank exposure itself, banks held 1.73 trillion, which is 38%, just over of CRA mortgages of income producing properties. Now I would argue that a lot of that was Okay, so banks and risks, 38.4, government-backed agency, 28.8, life insurance 14.7, CMBS, CDOs, and other 13.7 and other top 25 banks held 700 billion of CRE debt. 4% of their total assets. Insignificant, would you have a concentration risk in that? There's a possibility.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Silicon Valley Bank could not gate its deposits. It probably would still be around if it could. But in Europe, I've read from the ECB that it's a lot more open-ended fund, which would be a catastrophe”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Real estate investment runs that I don't believe that they actually are open ended on the liability side, unlike the shadow banks in the US, which you talked about Blackstone Real Estate Investment Trust, B read, oh, it's blocking, it's gating its people. That sounds bad for the investors, obviously, but it actually can force a stability because there can only be so many withdrawals. You can't have a bank run when...”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Even The risk is, and this is how you have to assess, I think, actually I'm just probably got a chart, but I didn't send it to you. You have to assess the handful of banks that people are very focused on. Let me see if I got this chart because there's clearly concentration risk in these regional banks, but only some of them. I would actually argue, and we can go on to that, there's a greater concentration risk in say Swedish banks and maybe German banks directly to commercial real estate. And there, there's a problem of complete illiquidity because they have real estate investment funds.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Well, you're now talking about an exercise that Michael Berry would have been really good at. You've got to go and look at what's in, for example, CMBS. What are those mortgages? So you've got to know the properties. You've got to have a property expert. You've got to know the offices in the portfolio. And assess accordingly. If it's a reason, I mean, if it's a recent property portfolio, you would be hopeful that it's got recent office building. But I don't think a lot of it is. I think a lot of the CMBS Consists of stuff you really wouldn't want to have.”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT
“Four days a week. I bet those four spread across the week. I bet the people who take Monday work from home, people that take Friday work from home. So that's the problematic and that's the structural aspect. We would hard to anticipate. And obviously hard to Execute in 2020, probably hard to execute in 2021 if you were going to do anything like this. CMBS, you should have been able to do something. You should have seen this. This was, you know, once they started talking about the problems of multi-residential commercial real estate, the obvious next stage to that was the office. This is intense human population within those real estate areas. That was clearly all going to change. So, you know, we've been telling people wouldn't touch commercial real estate, particularly office, for the last year and a half. What about now?”
2023-05-18 · Forward Guidance · Nicholas Glinsman on Banks, Commercial Real Estate, and China · IDENTIFIED FROM THE TRANSCRIPT