Not So Happy New Year

I hate to be yet another pessimistic journalist more interested in dishing out bad news than trying to find a silver lining somewhere in this bad economy. But unfortunately, any silver lining seems to quickly get tarnished.

This recession will indeed be long and harsh. The reason is simple. The worst is yet to be.

Some retailers who are hanging on through the Christmas season will not survive into the New Year. They will shutter their doors and stiff their landlords. That will have a trickledown effect in commercial Real Estate, as shopping mall operators and developers realize they will not have the money to re-finance loans coming due.

Banks will not lend them the money to survive during this credit crunch. Monthly cash flow from rents and percentages of sales, the mother’s milk of commercial Real Estate, will slow dramatically. And sales taxes to state and local governments will dry up. Already commercial developers are asking for bailouts from the government.

All this will trigger more layoffs in retail and commercial Real Estate. More people will be unable to pay their credit card bills, and will turn to bankruptcy to survive for another day. That will make the credit card business the next to fall. After that, who knows?

All my life I have been an optimist. Unfortunately, now it is time to be a realist.

(Brian Banmiller is a national Business Correspondent for CBS News Radio, free lance writer and public speaker. The former television business news anchor in San Francisco can be reached at brian@banmilleronbusiness.com .)