I’m confident that the trend for REITs will be down through the end of 2009. That’s why I suggest buying the UltaShort Real Estate ProShares ETF (NYSE: SRS. Current price $18.52) as a way to profit from weakness in the REIT sector. But fasten your seatbelt! SRS will be volatile!

What do the Fed’s recently concluded “stress tests” have to do with commercial real estate? Everything. The stress test results convey the illusion that America’s largest banks possess adequate capital. But that’s not true. And since America’s largest banks possess inadequate capital, they will be reducing their exposure to commercial real estate loans. REIT-holders beware!