These include First Niagara (FNFG), People's United Financial (PBCT), NewAlliance (NAL) and Glacier (GBCI). Increasingly I believe the FDIC will call on these banks to acquire others with bad commercial real estate precisely because they are brimming with capital. The objections to entities buying collapsing banks has to do with weak capitalization structure, particularly when it comes to private equity.

These include First Niagara (FNFG), People's United Financial (PBCT), NewAlliance (NAL) and Glacier (GBCI). Increasingly I believe the FDIC will call on these banks to acquire others with bad commercial real estate precisely because they are brimming with capital. The objections to entities buying collapsing banks has to do with weak capitalization structure, particularly when it comes to private equity.

These include First Niagara (FNFG), People's United Financial (PBCT), NewAlliance (NAL) and Glacier (GBCI). Increasingly I believe the FDIC will call on these banks to acquire others with bad commercial real estate precisely because they are brimming with capital. The objections to entities buying collapsing banks has to do with weak capitalization structure, particularly when it comes to private equity.

These include First Niagara (FNFG), People's United Financial (PBCT), NewAlliance (NAL) and Glacier (GBCI). Increasingly I believe the FDIC will call on these banks to acquire others with bad commercial real estate precisely because they are brimming with capital. The objections to entities buying collapsing banks has to do with weak capitalization structure, particularly when it comes to private equity.

Where is commercial real estate clustered? Often it is in small savings and loans that don't matter. Sometimes it is in banks like Corus (CORS), which is a huge condo developer in Florida. Corus is a helpful analogy here. Even though it is pathetic and is offering the second-highest-yielding CD because it needs to fund its awful operations with hot money

(By the way, if you are desperate for yield, Sheila Bair's allowing Corus to pay these high rates so why not take advantage of them?). There are bidders, shrewd bidders, who are willing to buy the assets of the bank. According to The Wall Street Journal, Starwood Hotels & Resorts (HOT) is interested and that's a real savvy buyer.

The trick is to recognize the walking dead from the robust because the robust will win, especially now that we see the government is willing to let a TARP taker, CIT (CIT), go belly-up.

That could mean that Zions (ZION), Regions Financial (RF) or even Suntrust (STI) could be in the crosshairs of commercial real estate. That's why you stick with the small regionals that have paid back TARP or had no need for it. That way you can sleep at night.