For a guy who spends 8 hours per day in a lab, I have a pretty decent informal education in real estate and finance. Two friends work in private wealth management, one is a marketing director for a new real estate development, one worked in reverse mortgaging for the past several years, and one appraises commercial real estate. It is from this last friend that I've been hearing for acouple years now that the punctured residential real estate bubble has merely been the tip of the iceberg.

The coming trouble, he says, is that commercial real estate leases typically run on five-year terms before re-evaluation and negotiations for renewal. The favorable interest rates and cheap credit of the early and mid 2000s resulted in tons of business expanding, getting new offices, warehouses, production facilities, etc etc. Now they face the double blow of stagnant demand (though the economy does seem to be improving) and the end-term of drastically distorted leases they can no longer pay for. Bad enough for the lessees--many of which are downsizing already-- and a boon for appraisors like my friend, whose firm has never been busier, but a nightmare for property owners and banks. Yet, I hear surprisingly little about this in the media. Why, I don't know. I watch for such things in WSJ, The Economist, and HuffPost, to name a few, but perhaps the news cycle is just dominated by other, slightly more tractable problems-- such as the foreclosure crisis currently being subjected to government action and intense media coverage.

I'd like to think that my buddy is wrong, at least in his estimation of the magnitude of the problem, but I'm afraid he's not. Oy. Just what the country needs now-- another gaping hole in the mortgage market and empty buildings instead of productive businesses. Huzzah! Makes me pretty sick to think that the same banks that played a significant part in inflating the last credit bubble and financing, out of thin air, the building and purchasing of hundreds of thousands of homes that Americans truly couldn't afford, are now paying "Foreclosure robots" to stamp papers on even deserving homeowners, whilst the second wave of pain from this crisis is just ahead. Thank God I'm 26, rent, earn next to nothing, and have no kids.