Reason #2 for the Commercial Real Estate Lending Pullback

Well, it's been about ten days since the Bear Stearns collapse and the details on the final deal are emerging with the price offered by JP Morgan rising into the $10 range.

Last time I checked that is still less than the market value of the Bear Stearns New York office building all by itself.

AND JP Morgan gets all of the company's assetts, clients and personnel. That is quite a deal.

In my last post I talked about the general pulling out of Commercial Real Estate Financing activities seen on the street last week. I initially thought it might be because of uncertainty about continued lending given the Bear Stearns collapse.

My colleague Dennis Ryan and Morgan Capital Management in Minnesota points out another reason why the institutional money raced for the sidelines.

They saw the STEAL JP Morgan got Bear Stearns at and are wondering if their capital might be better used to snap up a similar bargain if another institution falters.

Blood in the water and the sharks are circling.

It is still a great time to be holding a lot of cash and we aren't anywhere near the bottom yet.