Charlie Munger supposedly alerts of problem for the U.S. business residential or commercial property market

Charles Munger at the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska, April 29, 2022.

David A. Grogan | CNBC

Charlie Munger thinks there is problem ahead for the U.S. business residential or commercial property market.

The 99-year-old financier informed the Financial Times that U.S. banks are loaded with “bad loans” that will be susceptible as “bad times come” and residential or commercial property rates fall.

“It’s not nearly as bad as it was in 2008,” he informed the Financial Times in an interview. “But trouble happens to banking just like trouble happens everywhere else.” 

Munger’s caution comes as U.S. regulators have actually asked banks for their finest and last takeover deals for First Republic by Sunday afternoon, the current in what has actually been a turbulent duration for midsized U.S. banks.

Since the failure of Silicon Valley Bank in March, attention has actually relied on First Republic as the weakest link in the American banking system. Shares of the bank sank 90% last month and after that collapsed even more today after First Republic divulged how alarming its scenario is.

Berkshire Hathaway, where Munger acts as vice chairman, has actually mainly remained on the fringe of the crisis regardless of its history of supporting American banks through times of chaos. Munger, who is likewise Warren Buffett’s long time financial investment partner, recommended that Berkshire’s restraint is partly due to dangers that might emerge from banks’ various business residential or commercial property loans.

“A lot of real estate isn’t so good anymore,” Munger stated. “We have a lot of troubled office buildings, a lot of troubled shopping centers, a lot of troubled other properties. There’s a lot of agony out there.”

Read the total Financial Times interview here.


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