Lower Interest Rates Won't Stop This Coming Disaster

It's much too little, much too late. [Shah Gilani's Total Wealth] BROUGHT TO YOU BY MANWARD PRESS Lower Interest Rates Won't Stop This Coming Disaster SPONSORED [How Can YOU Target Winning Stocks With the Help of ChatGPT?]( World-renowned hedge fund manager Alpesh Patel reveals... For the first time ever... The test results from his own ChatGPT-enhanced strategy. He says they can be summed up in one word... SHOCKING. [Watch Now]( [Shah Gilani] Shah Gilani Chief Investment Strategist We're in a spectacular bond market rally. It just knocked the yield on benchmark U.S. 10-year Treasurys down from 5.021% to 3.95%. And this week, markets celebrated the news that the Fed is looking to lower interest rates next year. But it's much too little, much too late to save the commercial property loan market. Lower effective rates at the fed funds level and lower yields on fixed income securities don't translate to commercial real estate because there's no price discovery (setting a proper price on an asset), says New York real estate finance banker Daniel Hilpert. Lenders haven't budged on loan terms or refinancing rates... and they aren't going to. Banks, insurance companies and real estate investors are afraid valuations have further to fall, so they're pricing in a significant cushion for themselves on any deals they're considering. Office properties aren't selling... because lenders would realize losses if they sold at today's severely depressed prices. Wells Fargo is a good example. SPONSORED ChatGPT admits... "[Industry X]( will grow at the same rate as the AI industry..." But these stocks sell for up to 97% less. [Click here for details.]( The bank is one of the nation's largest commercial property lenders. It saw its past-due commercial property loans rise by more than 50% to $3.4 billion in the third quarter. That's up from $400 million a year ago. But Wells Fargo hasn't forced many borrowers into default because selling busted loans or vacant, abandoned properties at big losses would severely impact the bank's earnings. But this hoary "extend and pretend" game that Wells Fargo and other banks are playing won't last much longer. Noting that Wells Fargo wrote off a tiny $91 million in commercial real estate loans in the third quarter, Mike Santomassimo, the bank's chief financial officer, said, "We haven't really seen any losses of significance yet, but we will." The frightening truth is that banks can delay the inevitable for only so long. SPONSORED [Will This New Tech Replace AI as We Know It?]( Experts are predicting that in as little as three months, AI as we know it could be totally blown away. And that means ChatGPT could be replaced by a new AI model that's thousands of times more powerful... something that could cause expensive tech stocks like Microsoft, Google and Nvidia to double - maybe even triple - in price in the months ahead. [Click here for all the details.]( Rising delinquency rates will start forcing their hands in the first quarter of 2024. The volume of past-due loans jumped 30% in the third quarter, according to industry tracker BankRegData. Things are getting worse. Leo Huang, head of commercial debt at Ellington Management Group, says, "Loan delinquencies are going to keep going up." And as delinquencies pile up, prices are sure to plummet. Chris Whalen, head of Whalen Global Advisors, says if banks take back buildings, "Values can get cut in half." I've been warning investors that a commercial real estate reckoning is coming. A 100-basis-point drop in interest rates won't make an iota of a difference. You've been warned. Cheers, Shah P.S. With this crisis comes opportunity. I've identified seven "Flip Trades" that have explosive upside potential right now... and they're only the beginning. [Get more details here.]( Shah Gilani Shah Gilani is the Chief Investment Strategist of Manward Press. Shah is a sought-after market commentator… a former hedge fund manager… and a veteran of the Chicago Board Options Exchange. He ran the futures and options division at the largest retail bank in Britain… and called the implosion of U.S. financial markets (AND the mega bull run that followed). Now at the helm of Manward, Shah is focused tightly on one goal: to do his part to make subscribers wealthier, happier and freer. You are receiving this email because you subscribed to Shah Gilani's Total Wealth. To unsubscribe from Shah Gilani's Total Wealth, [click here](. Need help with your account? [Click here](. Have a question or comment for the editor? [Click here](mailto:mailbag@manwardpress.com). 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