The stock market professional warns against loans to finance takeovers, which could become a problem for banks. Similar to the mortgage loans in the financial crisis, these loans were also resold. However, the market collapsed in 2022 and resale came to a standstill. Therefore, many banks now have higher risks on their books than they originally wanted.
Müller sees further risks in credit card debt, which amounts to a trillion dollars: “I don’t think it takes much imagination to say that some American households are now getting into trouble due to the rise in interest rates. And if the loans default, the banks have a problem again.” The same applies to car loans.
Dirk Müller sees risks in the real estate market
Müller also considers the situation to be dangerous for loans for commercial real estate such as offices: “That is clear: after Corona and the home office period, fewer and fewer people wanted to go to the office. And when the economy goes down, you also need less office space.” In the last twelve months, the prices for American office properties have fallen by 25 percent, and last month alone saw the biggest slump in 13 years. “There’s a lot of pressure here,” said Müller.
See the whole interview with Dirk Müller here
