By Pam Martens and Russ Martens: October 31, 2024 ~ The New York Fed, long the quintessential keeper of secrets for the Wall Street megabanks that it has been bailing out since the financial crisis of 2008, has suddenly decided to come clean on a big threat to capital at these and other banks. The New York Fed has created gasps in the corridors of power in the banking world by releasing a paper that documents how banks have ginned up their capital by “extending and pretending” on their underwater commercial real estate (CRE) loans. The new paper was written by Matteo Crosignani, Financial Research Advisor at the New York Fed, and Saketh Prazad, a former Research Analyst at the New York Fed who is now a Doctoral Student in the Business Economics program at the Harvard Business School. The authors get right to the crux of the matter on page two of … Continue reading New York Fed Report: 27 Percent of Bank Capital Is “Extend and Pretend” Commercial Real Estate Loans