/CMBS/MBS/ABS: Nomura analysts also noted...>

US TSYS: /CMBS/MBS/ABS: Nomura analysts also noted on "stealth leverage" causes

for 2018 that "Commercial Real Estate: During 2008-12, banks with high

concentrations of CRE loans were about 3 times more likely to fail than all

banks nationwide, according to Richmond Fed research. As specialized knowledge

on local real estate markets is often key to CRE loan markets, community and

regional banks are major credit providers. Risks associated with construction

and land development loans (CLD), the riskiest component of CRE loans, appear

concentrated in small banks, which may not have the stuffiest buffers to absorb

potential losses associated with CRE loans. In addition, CRE valuation remains

at the highs when compared with residential real estate."

- They added that "one area of consumer credit that has resurfaced on the radar

is subprime, but this time in the auto loan sector. The recent peak in 2015 saw

nearly 40% of all US auto loans go to subprime borrowers. There has been a

slowdown since and new origination versus total auto loans has decelerated (thus

a lower flag). However, the total existing debt load of the past few years is

about $0.4trn."