Never one for flowery language, Shark Tank investor Kevin O'Leary had some strong words when he spoke to CNN about President Biden's plans to handle the Silicon Valley Bank collapse.
"What effectively happened over the weekend is that [President Biden] nationalized the American banking system. It's no longer a risk. It's no longer private in any sense. It is now backstopped by the government, ultimately the taxpayer,” O'Leary said. "[A] good example is what happened [to] Silicon Valley Bank, that was a combination of a negligent board of directors and idiot management. That's a very powerful cocktail [...] and it completely wiped out that bank--and that's what should have happened.”
DON'T MISS: Jim Cramer Explains Why Meta's Layoffs Are Normal
"When the President steps out in a few moments he's basically saying, 'look, I can't take this risk anymore, I'm just going to nationalize the whole thing'. And that's the way we should look at banking going forward," O'Leary postured, "--nothing more than highly-regulated utilities."
The financial media star also had drastic predictions about what that means for bank stocks, saying it "has profound impacts for you as an investor. If you thought putting your money into bank stocks was a good idea, you should change your mind."
He continued, "and should you own bank bonds? Never. You were taught that lesson over the weekend. If you owned equity in Silicon Valley Bank, it's worthless. If you own the bonds. It's worthless."
O'Leary also speculated that the mistakes of bank managers left even major banks like JP Morgan Chase (JPM) and Citigroup (C) capable of failing. He also said that he "would never put my money into a bank stock ever again."
Action Alerts PLUS offers expert portfolio guidance to help you make informed investing decisions. Sign up now.
