The Fed’s Second Round of Quantitative Easing (QE2) Wasted another $600 Billion; who’s up for Round 3?

From the stand-point of the commercial real estate industry, QE2 was a $600 billion dollar bust. Rates stayed low but lending stayed anemic. Trophy assets changed hands and big players with cash on their balance sheets got loans while bread and butter assets floundered because banks aren’t lending to the small operators or the mom and pops.

To further exasperate and prolong the problem, banks did not unload nearly enough of their problem loans or problem real estate. Why should they when they can stay solvent by borrowing money for free?

QE1 and QE2, while adding substantially to our national debt, did not solve our problems, it only allowed us to tread water and search the horizon for a rescue boat that we now must realize is not coming.

So what now? Do we print more money and buy the US Bonds that no one else will, or do we let the markets price our debt and go bankrupt?

Globe Street expresses the frustration that CRE execs feel in this recent post.

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