Shark Tank star Kevin O’Leary sounded the alarm on one disaster that could sink Joe Biden

Photo by Randstad Canada, CC BY 2.0, via Flickr,

The economy is a house of cards under Joe Biden.

It’s all about to come crashing down when one domino falls.

And Shark Tank star Kevin O’Leary sounded the alarm on one disaster that could sink Joe Biden.

The warning signs have been flashing red for banks after the sudden collapse of Silicon Valley Bank in March becoming the third biggest bank failure in the country’s history.

Three of the four biggest bank failures in American history occurred between March and May raising concerns about a banking crisis.

S&P Global recently downgraded its credit rating for five regional banks with significant exposure to commercial real estate: Associated Banc-Corp., Comerica Inc., KeyCorp, UMB Financial Corp. and Valley National Bancorp.

S&T Bank and River City Bank had their outlook lowered from “stable” to “negative” by S&P because of their commercial real estate exposure.

Credit rating agency Moody’s previously lowered their rating on ten banks.

Shark Tank star Kevin O’Leary predicted that the regional banking sector is a ticking time bomb.

He said the turmoil with commercial real estate could lead to “a real run” on regional banks from rising interest rates on commercial real estate loans during an appearance on Fox Business.

“Now you’re just starting to see the chips start to fall,” O’Leary said. “The reading is as follows: The regionals are not yet known, they don’t know yet what their capital requirements are going to be so their loan books have closed like a turtle in a shell.”

The Federal Reserve is poised to continue raising interest rates with inflation still proving to be sticky.

“At the same time 40% of their balance sheets, majority of them, are in commercial real estate as you suggested. Those turn in 24 to 36 months,” O’Leary continued. “They were financed at five to 6%. They will now be eight, nine, 10, 11%, depending on the risk of the building. That’s going to cause a real run again on these banks.”

A slow-motion crisis is underway in commercial real estate as interest rates climb and lower demand for properties after the pandemic.

Commercial property owners could go bust as they grapple with higher interest rates and a sluggish economy leaving regional banks on the hook.

The turmoil surrounding regional banks is causing lending standards to tighten and making it more difficult for small businesses to get loans.

A perfect storm is brewing while the economy is teetering on the brink of a recession.

President Joe Biden could be starting a meltdown in the banking sector just as his reelection campaign begins to ramp up.

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