Banks' eagerness to lend could end in disaster

Total debt on commercial buildings is soaring, yet yields on most properties are below borrowing costs. Meanwhile, Man Group is openly announcing its intention to 'use and abuse' cov-lite loans.

Of late our Conclusion has concentrated upon the global liquidity story and its continuing development. The story is key to just about everything, it is a credit expansion of unprecedented scale, which will undoubtedly end and afterwards the world won't be the same again for a very long time!

The big question now is whether or not the sovereign wealth story will manifest itself, if so a Wall of Money amounting to $2.5 trillion will swamp the system and the price of just about everything will go past the Moon on its way to Mars. However, Walls of Money have a funny habit of disappearing and this one might well just do that. Nonetheless, we have to take on board the possibility that this could happen, in which case the shape of things will change and we will take that into account.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
MoneyWeek

MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.