Delinquent loans actually moved the rest of the market...

The story on the two CMBS loans, while not trivial, actually helped push the rest of the market down. I don't think its a huge surprise two loans are having issues, although it is a bit soon, and it really is a big deal that 20% of an 8-month old deal is delinquent and likely to default.

Reading through the description of the Promenade in the prospectus (not the hard numbers, the glossy qualitative comments that are supposed to sell you on the loan) you can't help but wonder... It's a retail life center development, with a residential component, ... and a class A office components, a senior housing component, and well, what else can we throw in there, how about some resort stuff, a golf course, and, why not - a nature preserve. Instead of having a strategy, let's just pick every property type and throw it in the desert, and see if it'll work. While we're at it, let's use this strategy to build in 10 different locations, and literally spread them out from the East to West coasts and everywhere in between. We have a test-case.

The other loan is on two Westin hotels. Obviously hotels have got to be hurting in the current environment - I'm quite literally staying at a hostel in a couple of weeks (Yes, that is not a misprint, it is a HOSTEL, with an "S", and no, I didn't pick it and I'm arguably not really young by most people's measuring stick, but that's where I'll be sleeping nonetheless). One of the Westins in question is on Hilton Head and has beautiful ocean views - despite any short-term cashflow issues, it's a joy to stay there. The second collateral property is in the desert (Arizona) and derives at least half its revenue from corporate travel (I assume these are mostly conferences, given the location) - when the deal was issued, Moody's noted they didn't have enough meeting space, and the sponsors started building out more. Talk about a bad plan with bad timing.

Anyway - the whole market moved wider on the news. I can't find any other reason. Everyone's talking about it. Nothing changed politically.

*I'm pretty sure that's a knife in JP's hand in the picture, and that kind of freaks me out, but not as much as it should whoever just drug his fine name through the muck.