It's summertime and the living is easy, but if you're a distressed debt broker, this is no time to be mixing Cuba Libres at the beach. There have been 72 bank failures in the first eight months of 2009, compared with 26 in all of 2008 and just 3 in 2007. So it should be no surprise that distressed debt offerings are taking off like a teenager after a paternity test, and distressed debt traders are definitely going to have their day in the sun, whether it be by hook or by crook.

Last week, $487 million of bad commercial real estate loans were offered for sale, and $235 million of it was on behalf of just one seller. The collateral was literally all over the map: Arizona, Illinois, Wisconsin, Tennessee, Indiana, Kansas, Florida, Nevada, California, Texas, North Carolina, Missouri, Minnesota, Ohio, New Mexico and Arkansas. And this week, the Wall Street Journal chronicled the mess at Maguire, which will soon let loose another $1 billion in bad debt on the market, with collateral concentrated in Southern California.

What's happening is no mystery. These loans are succumbing to conditions that can't be contemplated if your stock in trade is acquiring property with OPM using interest-only debt, and this is just the tip of the iceberg. While many 2005 and 2006 borrowers are still alive, the hold your breath and hope strategy they have adopted will come to an end in 2010 and 2011. Just like the mid-market loan barons at CIT, these commercial real estate owners are pressing for an assist from Uncle Sam, but aside from TALF and PPIP, and just like the situation at CIT, additional government assistance is unlikely to materialize.

The reason is that the magnitude of the problem is being overstated. One could produce a graph showing all commercial loan maturities through 2013, and if one were to do that, it would show that there are $1.4 trillion in commercial loan maturities through 2013, and it would also show that the majority of those loans, over $1 trillion worth, are held by banks and thrifts. With bank failures increasing at an exponential rate, these the figures would be the ones that the Real Estate Roundtable would use to bully the government into smothering this grenade with tax dollars: