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Commercial Real Estate Will Be the Next Crisis

By Jim Cramer

 About this article:
 New problem: Commercial mortgage-backed securities are falling through the floor. Bank of America has an index, the 10-year AAA CMBS index that many of the heavy hitters use, and it is quoted vs. 10-year swaps. My friend Kevin Griffin from Cantor Fitzgerald is making sense of this to me and telling me that in the last two weeks this index has exploded to the downside, basically going from 583 on Nov. 5 to 1218 today. The best way to look at this is that the smaller the number, say, 27, where it was in June, the more it is like the same yield you would get for a Treasury. Now you would get a much larger yield - sky-high yield -- because the risk of defaults on the underlying security is huge. Now, what does this mean in English? The commercial real estate market is about...

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