Economist: FDIC gearing up for bank closures - South Florida Business Journal:

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“They know they’re going to take down a largd number of banks andthey can’t do it untio they’re staffed up,” said Mark chief economist and directofr of research for the Real Estate Center at . Dotzouer made his remarks during an economic summitf hosted by the Tamp a chapters ofthe , CCIM, and NAIOP. He said he expects federal regulators to establishan agency, similar to the that disposec of assets belonging to insolvent S&Lds in the late 1980s and early “Once they start to sell [foreclosed real we’ll find out what the market really Dotzour said.
He blamed federal intervention for the lack of commercial real estatew investment activity inrecen months, as well as the failured of businesses to make majo r decisions. “Nobody knows what to do so they’re doinv nothing,” Dotzour said. Government, in its quest to help the is causing harm by propping up failingt companies and regularlychanging rules, he “No one can predict what the governmeny will do,” Dotzour said. “Peoples are frozen," he said.
"It’s not that they don’t want to investr in the future, the rules are He jokingly called the Federal Reserve “inksters” for routinely printing money to bail out big business, includingg banks that are stillo not making many loans. The government’s role in a capitalistid society, he said, “is to make the rulew and get off thedance floor.” Businesses and individualas that can’t pay their bills should resolve theirf problems in bankruptcy court, not with money from the he said. It’s a process that has workefd for decades, for generations. “Everyone has a lessom to learn here, including you and he said.
“We have to live withib our means.” Dotzour expects foreclosures rates to continue to real estate prices to fall more and cap rates to rise to at leasr 9 percent beforeleveling off. In 2010 and 2011, interest rates will beginm to rise, as will inflation. Once investors realize the market is at deals will begin toflow again, he said. In the he compared the bad loans that remainon banks’ bookd to a smelly cat litter box, and the feds keep throwingf more litter on top to mask the smell. But, they will eventually have to remove the organic materiapl to fixthe problem.