Jim Munger: the US real estate market is in trouble: FT report

Charles Munger is warning of the problems ahead for the US commercial real estate market. The 99-year-old investor told the Financial Times that US banks are overflowing with "bad loans" that will be vulnerable when "bad times come" and real estate prices fall. He said the situation is far from what it was in 2008, but problems happen in banking, just like everywhere else.

Manger's warning comes at a time when U.S. regulators have asked banks to submit their best and final takeover offers for First Republic by Sunday night. It is the latest development in a turbulent period for midsize U.S. banks.

After Silicon Valley Bank's failure in March''s attention has shifted to First Republic, which has become the weakest link in the U.S. banking system.

Berkshire Hathaway, where Munger is vice chairman, has largely remained on the periphery of the crisis despite a history of supporting U.S. banks during turbulence. Munger, who is also a long-term partner in Warren Buffett's investments, suggested Berkshire's restraint is partly due to the risks posed by multiple commercial real estate loans.

"A lot of real estate is not so good anymore," Munger said. "We have a lot of distressed office''buildings, a lot of troubled shopping centers, a lot of troubled other facilities. There's a lot of suffering out there. "

The full interview with the Financial Times can be read zd.