By Forrest Lowell

There is one more shoe to drop before the market can truly move higher in a convincing way. In my view this Shaquille O’Neal sized shoe is the commercial real estate market. The troubles of General Growth Properties (GGP) has been well publicized, but what about the other similarly structured companies? Just as a quick comparison I have included screen shots of General Growth’s and Simon Property Group’s balance sheets. Look at the two balance sheets and tell me which one is trading at 40 cents and which one is trading at $31.50.

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While picking the bottom is a fools game, a bit of calculus shows that there are signs of improvement.  According to the second derivative of numerous sets of data, the rate of decline is decelerating.  (For those who need a refresher on calculus, the first derivative measures a function’s slope; the second derivative measures how the slope changes.)  (more…)