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Volume 7: Issue 11 | Date: October 3, 2019

This letter is intended only for commercial real estate loan officers working for banks, credit unions, conduits, and hard money lenders. Today we’ll discuss why interest rates keep falling. It’s NOT because of the Fed. We also have lots of cute, clean jokes, some funny pics, and a cute video of a dog being a drama queen. Make sure you catch my Final Funny at the very bottom.

Hey guys, if we make you chuckle today, won't you please-please-please refer a turndown this week to CommercialMortgage.com? Seriously, guys, this searchable portal is free, and it contains thousands of commercial lenders. You really are doing them a favor.


Joke Du Jour

The psychiatrist was interviewing a first-time patient. "You say you're here," he inquired, "because your family is worried about your taste in socks?” "That's correct," muttered the patient. "I like wool socks.” "But that's perfectly normal," replied the doctor. "Many people prefer wool socks to those made from cotton or acrylic. In fact, I myself like wool socks.” "You DO?" exclaimed the man. "With oil and vinegar or just a squeeze of lemon?”


Free Commercial Loan Software

C-Loans has just developed some brand new commercial loan software that is super-easy to use, even for a complete newbie to commercial real estate finance. You just fill in the blanks. You can then take your professional-looking commercial loan package and submit it to any lender in the country. This new commercial loan software is also 100% free.


Communists Joke

Q: Why do communists only write in lower-case letters?

A: Because they hate capitalism.


Free Commercial Loan Leads

C-Loans.com, is our original portal. C-Loans.com has been phenomenally successful, boasting over 1,000 commercial loan closings totaling over $1 billion. We will list banks on C-Loans.com for free, and they will receive free leads by email, as well as calls and emails directly from borrowers.

If the bank closes a commercial loan, however, the bank owes to C-Loans.com a software licensing fee of between 25 to 50 bps (usually 37.5 bps.) In real life, all of our banks simply bump their normal loan fee from 1.0 points to 1.375 points, so C-Loans.com effectively costs the bank nothingPlease click here to get listed on C-Loans for free. (You must be a bona fide direct commercial lender servicing at least $20 million in commercial loans.)


Chameleon Joke

Did you hear about the older chameleon who could no longer change color? The poor guy developed reptile dysfunction.


Need a NMLS License? Need to Renew Your CE Hours?

This fun instructor makes these hours bearable.


Pronunciation Joke

Two tourists were driving through Louisiana. As they were approaching Natchitoches, they started arguing about the pronunciation of the town. They argued back and forth until they stopped for lunch. As they stood at the counter, one tourist asked the "blonde" employee: "Before we order, could you please settle an argument for us? Would you please pronounce where we are at... VERY SLOWLY?" The blonde girl leaned over the counter and said... "Burrrrrrrr, Gerrrrrrr, Kiiiiing"


How C-Loans Actually Works

Think of C-Loans.com as a giant filter. We start with 750 participating commercial lenders. Every time you enter more information into the application - loan amount, property type, loan type, state, credit - dozens of lenders are filtered out. Upon completion, you are left with a list of 20 to 30 perfect lenders. You put a check mark next to six lenders at a time and press submit. Soon you are receiving quotes and offers. No good offers? Come back and submit to six more lenders, then six more, and so on. And C-Loans.com is free!


Math Exam Joke

If I got 50 cents for every failed math exam, I'd have $6.30 now.


Use Cheddar Stacks to Get Commercial Loans

Imagine 19 business men and women, all working in industries centered around real estate. Each has an app on their cell phone that makes it easy to shoot each other leads. Folks, referral leads are worth THIRTY leads from advertising. Click here for more details.


Fire Hydrant Joke

A fire hydrant has H-2-O on the inside and K-9-P on the outside.


- Today's Observation -

Why Interest Rates Keep Falling -

It's NOT the Fed

There are more than $16 trillion in Japanese and European bonds now selling at a negative yield. Can you imagine loaning $1,000,000 to the German Federal government, receiving no interest payments for ten years, and then only getting $970,000 back at the end? It seems unimaginable.

Interest rates in the United States resumed their downward march this week, and I predict that Treasury bond yields will eventually go negative.

You might think that the reason why interest rates are falling is because of the Fed. You're on the right track, but the central bank that is really stirring the pot is the European Central Bank ("ECB"). The population of Europe is old, and it is shrinking. Most countries in Europe are desperate for workers, and Sweden, Germany, and Norway are actively recruiting them.

Because the counties of Europe are withering, at least in terms of reproduction, the ECB must constantly inject fresh Euros into the EU economy; otherwise, the European money supply would contract like a black hole. Without Central Bank intervention, the money supply in Europe could easily shrink by 40% in less than six months. We saw this happen in 2008, at the beginning of the Great Recession.

In order to prevent the entire money supply of Europe from contracting into a black hole (the multiplier effect working in reverse), the ECB has been forced to constantly inject new Euros into the European economy. Many of these Euros end up in the hands of old gomers like me, and we hoard our savings because we are close to retirement.

Now old gomers are not going to keep one million Euros stuffed under their mattresses, so they take their cash down down to the bank and try to deposit it. "No, thank you," says the bank. "We have more than enough deposits right now. We don't have any place to invest them."

In fact, there are so many banks bidding to own German, Danish, Dutch, and Swedish treasury bonds, they have bid up the prices of the bonds so high that the yields are negative - say, a negative yield of 0.15% annually. 

Now back to our desperate old gomers. "You simply must take my cash, Mr. Banker. If bad guys learn that I am keeping one million Euros under my mattress, they will break in and kill me!" So the banker says to the depositor, "Okay, we'll accept your deposits; but we are going to charge you a negative yield of 0.5% per year." In other words, the old gomer is paying the bank one-half percent per year to hold his cash.

Then the banker invests in bonds with a negative yield of just 0.15%, and the bank profits off the 35 basis-point difference. A basis point is 1/100th of one percent.

European investors are going to keep buying U.S. Treasuries because our yields are positive.  This will keep driving down U.S. interest rates for the foreseeable future. Sure, we'll have some periods when interest rates will spike back upwards; but the long-term trend for interest rates is still downward.


Ark Joke

Does anyone need an ark? I Noah guy!


Ever Wonder What a C-Loans Application Looks Like?

Here's a sample loan application.


Thesaurus Joke

I own the world's worst thesaurus. Not only is it awful, it's awful.


Won't You Please-Please-Please Refer Us Your Commercial Mortgage Turndowns?

If you have to turn down a commercial loan this week, you would really be helping your customer if you referred him to CommercialMortgage.com. The domain name is easy to remember.


Teeth Joke

Q: What is red and bad for your teeth?

A:  A brick


Get Four Training Courses for FREE

Are you desperate to learn commercial real estate finance, but you’re as poor as a church mouse? Get four training courses for free.


Stolen Office Joke

To whoever stole my copy of Microsoft Office, I will find you.  You have my Word!


Would You Mind a $21,250 Referral Fee?

We once paid a $21,250 referral fee to a website owner named Alan Dunn for referring us a $17 million deal. Please click here for details.


Semi-Colon Joke

Did you hear about the semi-colon that broke the law?  He was given two consecutive sentences.


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Video - Drama Queen (Make sure your volume is up)


FREE Commercial Loan Brokerage Training

From an Industry Veteran and Attorney

The C-Loans Blog: info.c-loans.com

Every week we publish one or two new blog articles that train commercial brokers in commercial real estate finance. We try to have fun with it, including lots of funny pics. If you want access to this FREE training, subscribe to George's blog by clicking the button below.


Final Funny (PG-13)

Two guys grow up together, but after college, one moves to Michigan and the other to Florida. They agree to meet every ten years in Vero Beach to play golf.  At age 30, they finish their round of golf and go to lunch. "Where you wanna go?” "Hooters.” "Why?” "Well, you know, they got the broads, with the big racks, and the tight shorts, and the legs …"  "OK."

Ten years later, at age 40, they meet and play again. "Where you wanna go?” “Hooters.”  "Why?” "Well, you know, they got cold beer and the big screen TVs and everybody has a little action on the games.” "OK."

Ten years later, at age 50, they meet and play again. "Where you wanna go?” "Hooters.”  "Why?” "The food is pretty good, and there is plenty of parking.” "OK."

At age 60, they meet and play again. "Where you wanna go?” "Hooters.” "Why?” "Wings are half price.” "OK"

At age 70, they meet and play again. "Where you wanna go?” "Hooters.” "Why?” "They have six handicapped spaces right by the door.” "OK."

At age 80, they meet and play again. "Where you wanna go?” "Hooters.” "Why?” "We've never been there before."

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Tom Blackburne

General Manager

Have questions? Email me.