While there is no risk to JP Morgan from the mistakes made on their trades in London, the ramifications may have impact on the debt markets and so on real estate indirectly. We are already seeing the political types going vocal and holding hearings, even though there is no real federal issue involved. This was not Federal money, there is no FDIC issue, no taxpayer issues or any real need for Congress to hold a hearing. It is pure election year politics. There is surely no criminal behavior. That bit is purely to admonish Jamie Dimon for having the audacity to publicly raise real legitimate issues about Dodd Frank. The fear everyone now has is that Congress will go overboard on the regulations and instead of helping control risk, they will inhibit lending and possibly increase risk if they overly restrict banks hedging.

As though we needed even more possible underwriting scrutiny than we already have. Now all banks are really going to be in a risk off mode to avoid any issues with regulators. Loans will probably take even longer than they had to get closed similar to what has happened in the residential market.

When we now add on the complete uncertainty of Greece and France after their elections, then it is hard to really predict what might happen in the capital markets. One hopes the Greeks find a way to have the two major parties come together to try to have a rational outcome in the upcoming election, but nothing can really be predicted. Most likely Greece is toast no matter what happens. The country depends heavily on tourism and that is going to fall off badly now as there is a rise in crime, strikes and generally a decline in the quality of a vacation to Greece. As these things become more prevalent, the tourism business will fall further and the country will go down further. The death spiral is already underway. It seems that in time, and that might be soon, Greece will depart the Euro, it will be devalued and possibly there will be a social unrest of major proportions. While everyone is supposedly preparing for this departure from the Euro, and other countries and the ECB will do all they can to support Spain and Italy, it is hard to really predict what might happen in the currency and debt markets. We can be sure it will not be smooth or good. If you have currency exposure or interest rate exposure, you should be talking to one of the firms that assists borrowers to deal with these risks and see if you need to be hedging. There is a good possibility that US Treasuries will be in even stronger demand and rates might go down further. The problem is we have no way to know what effect all of this potential turmoil might have on the debt markets. Major impacts to currency markets have a spillover effect on debt markets.