New Threat to Hundreds of Banks

You might want to hear this if you’ve got money in the bank.

Bloomberg is warning that defaults in commercial real estate loans could topple hundreds of banks.

This could leave taxpayers on the hook for potentially trillions in losses.

It’s no secret that commercial real estate is in big trouble.

The Fed first flooded real estate with low interest rates and cheap money.

Then when they hiked interest rates…

That put trillions of commercial real estate underwater.

This problem could mimic last year’s banking rout, where falling bond prices panicked depositors and they started taking out their money from the banks.

Yellen and Powell ended up bailing out every bank in America with loans and taxpayer guarantees through the FDIC.

But the problem was not actually fixed.

In fact, it’s only getting worse.

More and more debt is due as time passes by.

So now there is $929 billion in commercial real estate debt coming due in the next nine and a half months, according to Crombie.

This is 28% more than last year…

And getting bigger by the day.

New York Community Bank almost went bust this year.

But it was saved by a billion-dollar capital injection from private equity investors led by ex-Treasury Secretary Steven Mnuchin.

Now, I’m not sure if we will see more of this…

But a new study from the National Bureau of Economic Research estimates that up to 385 American banks could fail over commercial real estate alone.

If they’re right…

Many investors will be concerned again about whether their money is safe – and if they can earn income from a US bank.

Yours in Wealth,

Ian Wyatt