Global Courant 2023-04-30 19:13:13
Charles Munger at Berkshire Hathaway’s Annual Shareholder Meeting in Omaha, Nebraska, April 29, 2022.
David A. Grogan | CNBC
Charlie Munger believes trouble is ahead for the US commercial real estate market.
The 99-year-old investor told the Financial times that US banks are full of “bad loans” that will be vulnerable when “bad times come” and real estate prices fall.
“It’s nowhere near as bad as it was in 2008,” he said in an interview with the Financial Times. “But problems happen in banking, just as problems happen everywhere else.”
Munger’s warning comes as US regulators have asked banks to submit their best and final takeover bid for First Republic by Sunday afternoon, the latest in a tumultuous period for medium-sized US banks.
Since the bankruptcy of Silicon Valley Bank in March, attention has shifted to First Republic as the weakest link in the US banking system. Shares of the bank fell 90% last month and then plunged further this week after First Republic announced the dire situation.
Berkshire Hathaway, where Munger is vice chairman, has remained largely on the brink of crisis, despite his history of supporting US banks in times of turmoil. Munger, who is also Warren Buffett’s longtime investment partner, suggested Berkshire’s reluctance is due in part to risks that could arise from banks’ numerous commercial real estate loans.
“A lot of real estate isn’t that good anymore,” Munger said. “We have a lot of troubled office buildings, a lot of troubled malls, a lot of troubled other properties. There’s a lot of pain out there.”
Read the full interview with the Financial Times here.
(TagsToTranslate)Real Estate
