by Wolf Richter, Wolf Street:

As we have found out in the recent episodes of the commercial real estate nightmare, with landlords stiffing their creditors by either walking away from properties or loans and letting lenders take the massive losses: Those lenders have turned out to be mostly investors in Commercial Mortgage-Backed Securities (CMBS), Collateralized Loan Obligations (CLOs), and mortgage-REITS, not banks. Banks are taking some hits too, but not like these investors. Which gave rise to the theory around here that banks securitized most of their riskiest and worst CRE loans and sloughed them off years ago to investors that were chasing yield.