Be careful about this talk of recovery. Marc Courtenay at Seeking Alpha presents us a list of commentators saying this rally has a while to run yet. That's dangerous talk. Regardless of this talk, the reality is September-October are always dangerous times for the market. Lehman Brothers, if you remember, went bust in September 15 2008. Let's not forget that you don't get rid of a decade's worth of leverage in just 18 months. That takes many years. Think of Japan.

Now The Wall Street Journal reports that the US commercial real estate sector is headed for a dive. It's suffering delinquency rates of 3.14%, more than six times the level a year earlier, and building owners are struggling to refinance loans. As the WSJ says, the problems hitting the commercial mortgage backed securities sector will damage what's left of the banks.

WSJ reporters Lingling Wei and Peter Grant write: "Banks hold $1.7 trillion of commercial mortgages and construction loans, and delinquencies on this debt already have played a role in the increase in bank failures this year. But banks' losses from commercial mortgages have the potential to mount sharply, and the high foreclosure rate in the CMBS market could play a role in this. Until now, banks have been able to keep a lid on commercial-real-estate losses by extending debt when it has matured as long as the underlying properties are generating enough cash to pay debt service."

The problem is owners were lent money on the assumption that occupancy and rents of their office buildings, hotels and stores would keep rising. But with the market meltdown, the opposite has happened so a growing number of properties aren't generating enough cash to make principal and interest payments.

For the banks, that spells trouble. The commercial real estate sector looks like it could trigger another mortgage crisis.