"Commercial real estate debt rally continues May 22nd, 2009
By David Goldman
The Markit indices of AAA-rated commercial mortgage backed securities, a key component of bank portfolios, continues to soar:
This is why banks can earn enough to keep one nostril out of the water, as I told Tom Keene on Bloomberg News on Tuesday — distressed assets yield enough to compensate for high losses elsewhere. The zombie strategy, in short, is working out just dandily, thank you. This means: No collapse of US national credit for the time being, and lower volatility (hedging costs) overall — but NOT economic growth."