As investors anxiously watch the frail US banking system regain footing following the demise of two banks heavily invested in cryptocurrency, a local businessman and real estate tycoon yesterday said land is always a reliable investment.
In what is considered the largest US bank failure since the 2008 financial crisis, Silicon Valley Bank recently collapsed, causing a run on banks that led to US regulators closing it, as well as Silvergate Bank and Signature Bank.
Founder and Chairman of Better Homes and Gardens MCR Bahamas Mario Carey said the failure of those banks upset markets around the globe, unnerved consumer confidence and undermined a belief in too big to fail.
“So here we have two banks that were shaken to their roots, Signature Bank in New York, which was the third largest bank failure in history, and Silicon Valley Bank, which many believed was the heart of the Silicon Valley tech industry, with $200 billion in assets. And in no time, as shareholders or executives started selling off shares, they were crumbling like a sand sculpture too close to the water’s edge at incoming tide,” he said.
“I have no doubt that our local banks are well shored up and safe, but we learned a lot from the FTX bubble and from what is happening in other parts of the world in banking, particularly with currencies that are volatile or vulnerable to political instability,” he said. “With the exception of threats from climate change, land will always be there, solid, permanent, real. The strongest ‘currency’ of all is the earth you stand on.”
US bank stocks started to see a turnaround this week, however uncertainty remains.
In The Bahamas, land still remains one of the most stable investments, not just for Bahamians but foreign investors as well, according to Carey.
“A bank run that barrels along like tumbleweed gaining momentum can destroy what has taken decades to build,” he said.
“I will never forget the first four words I heard in my first appraisal course when I was studying real estate in college,” said Carey, who has gone on to handle more than $2 billion in transactions. “Under all is land.”
