Not only is the war in Iran a great Distraction de Jour for the Epstein drama, massive fraud in Minnesota, and peaceful protesters assaulting ICE deportations, it’s also a perfect distraction for the Acceleration of the Private Credit collapse.
The WHAT collapse?
It’s called private credit.
And the time bomb has already been ignited…but the public is, for the most part, totally unaware.
Unless, of course, you own some private credit bonds.
Cue up: Blackstone Private Credit Fund, where, according to Bloomberg, Blackstone is facing record withdrawal requests from its flagship private credit vehicle.
Totally flying under the radar in the last quarter, investors sought to redeem 7.9% of the fund’s shares in…the largest redemption wave in its history…amounting to roughly $3.8 billion.
This is MASSIVE.
The fund, which holds about $82 billion in assets including leverage, typically limits quarterly redemptions to 5%.
As a result, this unusual surge in withdrawals has become a panic mode where Blackstone expanded a previously planned 7% tender offer and stepped in alongside employees to absorb the remaining 0.9%.
Translation: Employees are now on the hook with Blackstone of a rapidly descending asset…with no end in sight.
We’ve noted many times in the past few years how regional banks and private credit were “living on borrowed time,”
Making things worse, they are propped up by commercial real estate exposure, subprime auto lending, and generous marks on illiquid loans.*
(* Note: Read how they lie about their bonds as they Mark to Market vs Mark to Fantasy (HERE)
Private Credit Collapse
Question: Does anyone remember the build-up to the 2008 market meltdown fueled by the sub-prime mortgages?
(Hint! Hint! Its roots were in private credit)
If so, then you should remember that the rescue plan for all the major banks (who were bankrupt) consisted of duct tape and bailing wire to patch their balance sheets.
And they NEVER fixed the core problem.
Trying to absorb all the problems we currently face in the markets makes us want to scream: WHAT A PERFECT TIME TO START ANOTHER WAR.
Just remember, when the Presstitutes are screaming at you to “Look Here! (Iran war) Don’t Look There,” you can rest assured they don’t want you to see the havoc that is undermining the bond markets as we speak.
And when they finally address this issue by saying:
“I’m shocked, I tell you…SHOCKED…Who could’ve foreseen this happening?”
They will then very conveniently say the problem was caused by war with Iran.
