Bankruptcy Warning: Experts Predict More Troubles for US Banking and Industries

Investing.com – At a time when investors are already starting to forget about the banking crisis, several well-known personalities are warning that banking and other industries are likely to run into trouble again very soon, with more bankruptcies expected to come.

Such is the situation for billionaire Stanley Druckenmiller, who fears a recession after more than a year of massive interest rate increases by the Federal Reserve, with no tangible results on inflation.

The well-known investor said on Wednesday that despite the recent resilience of the US economy, which posted low unemployment rates and positive GDP growth in the first quarter, a “hard landing” is inevitable.

“Our main argument is that there is still a lot to be done – in addition to asset markets – in terms of the economy in particular,” he told Bloomberg on Wednesday.

Druckenmiller said that could lead to more problems in key sectors of the economy, as was the case for regional banks in March, when the Silicon Valley bank failed, forcing regulators to step in.

He pointed out that the faltering commercial real estate market, especially the office sector, is one of the sectors that may face difficulties. But he also warned of the possibility of a “credit crunch”,

“There’s a lot more hiding when you go from such an environment, which is the biggest asset bubble ever, to 500 basis point hikes in interest rates a year, I think,” he said. Silicon Valley Bank and Bed Bath and Beyond (OTC: themselves at the tip of the iceberg.”

“I don’t know the exact timing, but certainly by the end of 2023,” he declared, speaking of the possible entry into recession in the United States, which are projections that reflect Expectations Wells Fargo (NYSE: ) and Deutsche Bank (ETR: ).

Finally, it should be noted that Don Fitzpatrick, Chief Investment Officer of the Soros Fund Management, also yesterday warned of the risks of other bankruptcies in the US, predicting in particular the failure of other US banks, emphasizing that small lenders are particularly at risk.

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