ELIZABETH WARREN: Oh golly -- 2,988 banks that by the terms of their own regulators are too concentrated in commercial real estate. These are the medium size banks. By the end of this year, half of all commercial real estate loans will be underwater, and they are coming in ‘11, ‘12 and ‘13.
The reason this is such a bad problem anyway -- think about that, nearly 3,000 banks out of a total of 8,000 -- it’s the very banks that do small business lending who are about to get socked in the nose on real estate, commercial real estate losses.
CHARLIE ROSE: So we’ll see banks going under because they’ve got too many loans out there are not being repaid?
ELIZABETH WARREN: We’re seeing banks that don’t want to lend because they see every dollar that comes in the door and say "I’ve got to hold on to it to try to fill my commercial real estate hole or else I will be gone."
And lastly, on the imminence of the double dip:
CHARLIE ROSE: Joe Stiglitz, who you know who was here last night, basically says he fears we’ll see a double dip recession, so the economy has to do with inventory and the end of the stimulus and a whole range of issues, unemployment staying where it is.
Do you have that kind of, even though you’re a lawyer and not an economist, fear about this economy?
ELIZABETH WARREN: I am afraid. I’m afraid because of what I see in the real economy. I’m afraid because I don’t see books that are clean, balance sheets that have been cleaned up. I’m afraid because in October of 2008, Secretary Paulson came to the American people and he said the problem is toxic assets on the books of the banks, and they’re still there.
Watch Streaming Broadcast Live:
Live Chat Telegram
Share this page with your friends
on your favorite social network: