Stop him if you've heard this one before.
Billionaire investor Charlie Munger, vice Chairman of Berkshire Hathaway (BRK.A), sees trouble ahead for the U.S. financial system because American banks are "full of... bad loans" due to falling property prices in the country in a situation that seems very similar to what caused the banking crisis in 2008.
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But unlike 2008, the bad loans this time are in the commercial real estate sector -- not the housing sector like it was 15 years ago -- but the potential for devastation is still there.
"It's not nearly as bad as it was in 2008, but trouble happens to banking just like trouble happens everywhere else. In good times you get into bad habits ... when bad times come they lose too much," the Berkshire Hathaway vice chair told the Financial Times in an interview.
Munger said that banks were already pulling back from lending to commercial developers as "Every bank in the country is way tighter on real estate loans today than they were six months ago. They all seem [to be] too much trouble."
Munger isn't the only person sounding the alarm about a commercial real estate sector that has struggled to bounce back since the pandemic forced workers into their homes for nearly two years.
Tesla (TSLA) CEO Elon Musk called it "by far the most serious looming issue" in the financial sector.
