US CMBS is in a precarious situation now! - Part 2

Why did I say that CMBS was in a precarious situation?

The CMBX index chart showed that the CMBS prices have been falling since the beginning of 2020.  This pushed the US FED to buy the CMBS as part of the pandemic package because some big banks were stuck with unsellable CMBS in their possessions.  These unsellable CMBS will weigh on the cashflow since the banks cannot outsource their risks by selling them to retail investors.  Many insurance companies also possess such CMBS that they cannot sell to potential clients.

The US FED purchases insofar have not yielded any significant result because the commercial real estate transactions have continued to fall.  Ultimately, these declining transactions will impact the physical real estate prices and subsequently affect the CMBS prices.  In the end, the banks and insurance companies will have to shoulder the CMBS losses.

http://sg-stock.blogspot.com/2020/05/us-cmbs-is-in-precarious-situation-now.html