The Second Wave of the Credit Crisis
• Emacs Stock WatchIt's a compelling, comforting storyline. The stock market is enjoying a bungee-cord bounce the likes of which have not been seen since the '70s, the housing market appears to be reviving, and economic green shoots may be starting to sprout from the fiscal fertilizer the government has spread around. Not so fast. Wall Street economists and analysts say they are now bracing for the second wave of the credit crisis, another tsunami of poisonous loans that could swamp the banks and a still floundering economy. Prices in the $3.5 tn U.S. commercial real estate have fallen about 39% from the peak in mid 2007, according to the Massachusetts Institute of Technology's Center for Real Estate, with no signs of the plunge stopping. The 39% drop in commercial real estate prices has already eclipsed the 27% decrease during the S&L crisis of the late '80s to early '90s. And losses from commercial property loans for housing complexes, strip malls, office buildings, hotels
