Private credit is imploding, but Wall Street is still singing the same old tune.

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Marc Lipschultz (Co-CEO, Blue Owl Capital) on credit health and investor fears:

“The book is strong. We don’t see meaningful losses. We don’t see deterioration in performance… This monolithic view and action people are taking is going to prove, I think, quite misguided.”

📉 Dick Fuld (CEO, Lehman Brothers), right before the 2008 crash:

“The worst is behind us… Lehman Brothers has a great franchise, a strong balance sheet, and capital position.”

Sound familiar?

History doesn’t repeat itself, but it sure does rhyme.

Private equity has a problem. Wall Street has a fix: your 401k.

PE funds are sitting on trillions of dollars of companies they bought years ago and still cannot sell. Deal activity keeps falling, and the deals that do happen take longer and longer to close. The industry is gummed up.

So regulators just proposed opening private funds to everyday investors and retirement accounts. Read that again. The moment institutions stop buying what these funds are holding, the plan is to sell it to you.

These funds are illiquid, charge 2 and 20, and are hard to value. You may not get your money out when you need it. A pension can lock capital up for decades. You cannot. And the sponsor stocks themselves are down 12% to 36% this year.

When Wall Street is this eager to hand retail what institutions are backing away from, hold onto your wallet.

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