this post was submitted on 29 Aug 2023
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It's the commercial real estate mortgage backed securities market. If everyone doesn't pay office rent the collateralized debt of those places goes kaput, the security implodes like 2008 and the banking industry goes under.
These CEOs are all invested. They don't care about productivity, it's all about saving their investments.
This. I've been saying and seeing it since Covid. Offices are half empty. Main street footfall is shrinking. These zones are high premiun rents, owned by REITs and other comercial founds. If they are not occupied and ppl is not consuming on the next door shops, assets value is gone down. More colateral is going to be asked from their lenders. Also, municipalities don't want to lose population as this can result on less budget from government.. Of course they are going to put pressure on their CEO buddies to have spenders back to office.
Considering that the US has a almost nonexistent social system, the state is actively accelerating the gap between poor and rich by supporting onesidedly.
The loans for all the commercial real estate are also problematic. The banks don't have liquidity to cover them it's that simple. Hence the recent downgrade of banks which is a shot over the bow..