Lessons from Silicon Valley Bank

Oaktree/Howard Marks/4-17-2023

“My sense is that the significance of the failure of SVB (and Signature Bank) is less that it portends additional bank failures and more that it may amplify preexisting wariness among investors and lenders, leading to further credit tightening and additional pain across a range of industries and sectors.”

USAGOLD note: The latest client memo from Howard Marks recounts a growing concern among top-notch analysts that the bank liquidity crisis will morph into a full-blown credit crunch. He is particularly worried about commercial real estate loans. “Notable defaults on office building mortgages and other CRE loans,” he says, “are highly likely to occur. Some already have.”