https://www.youtube.com/watch?v=Ed-RGC7edfQIT'S OVER: China Dumps $300 Billion of US Real Estate!

102170463 : probably fake video from short seller.

10baggerbamm : it's not a fake video this guy is a doom and gloomer I've listened to him periodically speak and he paints these panic-stricken analysis
the fact of the matter is if we roll the clock back several years and we look at silicon valley Bank and you remember what these bobbleheads were saying on TV and on some very very astute money managers what they were talking about is the commercial debt crisis it is very real it does exist
in order for you to understand this we have to take a step back
commercial property only has value to A lender when it is cash flow positive meaning it is rented at a very high ratio we're talking 90 plus percent and it's close to 100 the value of that property is worth far more than a comparable property that's only 20 or 30% rented
if you are a commercial developer and you buy a piece of real estate it's broken down they call it a grade B grade c grade and it's all comes down to location location if you're downtown Manhattan or if you're in a major city and you have a beautiful iconic landmark that property is going to command a premium to a slumhole city like Detroit some areas in Detroit which are dumps where you have an enormous vacancy
and what's happened is these banks have been carrying these commercial properties on their books for 5 years 7 years 10 years and they have not been revalued.
and herein lies the commercial property crisis that is a trillion dollar debacle
if you loaned to a property that was worth $150 million prior to covid when people were going to office buildings and then covid started and people were not going to work they're using software to stay at their house and be as productive is going to an office and some of these people picked up a second job because they don't have to commute they're more productive working out of their house and their underwear.
these properties now have had tenants commercial tenants cancel leases not renew the leases
this dramatically marks down the value of this property because if the current owner tries to sell it the first thing you do is an analysis on rent roll and you see if it's cash flow positive or at a deficit
if you're 20 30% occupied you are at an enormous operating loss that property is worth 50 cents on the dollar $40 on the dollar 30 cents on the dollar from what it was loaned to
that's your trillion dollar disaster that's what this video is alluding to this is what the story was several years ago when we had silicon valley Bank

10baggerbamm : the bigger issue with China is they're the largest holders of US dollars and I talked about this in the past couple of weeks and I said when President Trump announced the government is buying $200 billion of MBS mortgage-backed securities I said I think this has some to do with lowering interest rates but it's also a proactive move to potentially offset the government of China selling US dollars.
you see when they own US Dollars they're not what you would envision they're not like these cartels in other countries that transact drug money in US Dollars and they're sitting in warehouses filled with billions and billions of dollars of cash and they've got to figure out how to wash this cash to put it back into the system China's not sitting on cash money billions and billions of Ben Franklin's
it's mortgage-backed securities MBS
so if China were to dump their mortgage-backed securities that's the story that's not this video the story is if China were to play hardball with President Trump and say we're going to dump mortgage back securities interest rates for mortgages in the United States they're going to shoot up to 7% and that destroys the housing market that destroys the lending environment
so I think part of the reason why president Trump announced the $200 billion MBS buy program is to potentially counter what China might do which is dump some of their mortgage-backed securities into the US marketplace.
and this is done strictly from a business standpoint this is two Business Leaders that are very smart running two very powerful Nations and they're playing chess and that's what you have to understand it's not personal both of these leaders have respect immense respect for each other this is each one is trying to win for their country.
so this video is real you don't need to panic because this story has been talked about for multiple years it's another reason why you want interest rates to come down so these properties can be refinanced at much lower rates which means the cash flow analysis of rent is going to be reduced when the cost of borrowing is reduced you don't need to have your properties as rented in order for to be cash flow positive