SOS Commercial Property in US

For perspective, in the first half of last century, banks were required to hold 18 cents for every dollar of loans, or only 5.5 times leverage.

Today big banks, on average, have only 4.2 cents of equity for every dollar of exposure or 24 times leverage.

These capital levels are still so thin that a new wave of commercial defaults could require further capital-raising or larger government bailouts.

Today, 6 November 2009, US unemployment rate hit 10.2% (unofficial is about 15%).

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Will the commercial properties collapse cause another crisis? Looking at the number of foreclosures increasing almost daily, the likelihood is high. With unemployment rate at 26 yrs high, how do we expect the consumptions to revive? Stimulus is a temporary measure that does not solve the fundamental problems of over supply, but delay the implosion of the commercial properties.

Perhaps, this will be another catalyst for tsunami part 2.