Office rents falling

timely piece by Jeff on urbandigs, as he wrote that piece late WED and I only published it late Friday.

http://www.urbandigs.com/2008/06/office_market_rolling_over_why.html

What I have been saying forever: "the whole model for banks and investment banks looks to be changing to one that will limit the size of these institutions for a long time to come."

Not to mention that 5-letter word: bonus.

you and me both Steve; 6 months ago is link below, well after I switched focus to credit crisis in July/Aug 2007 on urbandigs...why dont you start a blog, and put your time into that instead?

http://www.urbandigs.com/2008/01/bonuses_its_2009_that_will_hur.html

"When I first starting trading equities professionally in 1998, stocks were listed on exchanges in fractions. What I mean is, the level 2 trading quotes that the trading software accessed showed bids and asks in fractions. For example, when EBAY was trading around $100 a share, the bid would be say 99 3/4 and the ask would be something like 100 1/8. The spread between the bid/ask was 3/8's (often spreads got as low as 1/6 or teenies as we used to call them). This spread, wider as a result of the equity trading in fractions, opened up the opportunity to trade and exploit the spread. It also made stock movements much more volatile, and as a trader, volatility is a very close friend!

Then came decimalization around 2002 I believe, can't remember. Stocks no longer traded in fractions, and instead started trading in dollars & cents. So, that same EBAY trade that I described above would now have a bid / ask more similar to say 99.98 x 99.99, giving us a penny spread. With spreads so tight, stocks just didn't move the way they used to; and a crash from the dot com bubble didnt help either. The game was over in my mind!

Back to the discussion so I can relate the analogy. The derivatives trade of securitizing loans and selling them off in pieces on the secondary mortgage markets generated billions in revenue for these banks & brokerages. Now that the housing bubble popped nationally, risk has been re-priced, secondary mortgage markets are not functioning properly, liquidity dried up for mortgage backed securities, and the announcement of billions in losses and potential insolvencies, THE GAME IS OVER! How will these banks and brokerages generate the kind of revenue that they got used to generating the past few years? "