Jeffrey Gundlach

Bloomberg: “Jim Zelter (President of Apollo) and Doug Ostrover (Co-CEO of Blue Owl) said the private credit industry failed to clearly explain liquidity restrictions to investors.” So shouldn’t you give them their money back?

Bloomberg: Moody’s ratings lowered its assessment of FS KKR Capital Corp to Ba1, one level into junk, because of what it described as “continuing asset quality challenges”.

Of course assets would have to be pledged as collateral for any borrowings to meet redemptions, under this thought experiment. Doubtful the lenders would accept anything other than the “best” collateral. Think about it.

A leveraged fund says it has enough liquidity to meet 5% redemptions each quarter for the next year without selling a single position or asset. Is “liquidity” a euphemism for “borrowing capacity” here? If so, just more leverage. Whoopsie!

The New York Governor, who told hefty tax payers a while ago to “go to Florida where you belong” is now begging the same ex-taxpayers to come back to New York and pay taxes they left New York to not pay. Because it’s “the right thing to do”. Good luck with that one.

The 2 year U.S. Treasury yield has risen 50 basis points in less than three weeks. It now suggests one Fed HIKE may be coming.

Some private credit giants are talking about monthly or even daily NAVs. Juxtipose this against the foundational arguments for private credit. What entity would be the independent pricing service? Egan-Jones? Dewey, Cheatum and Howe?

On Wall Street: 2005-2006: “Hey! We found a way to turn BBB ratings into AAA ratings. And pocket the difference!!” 2024-2025: “Hey! We found a way put illiquid assets into liquid funds. And pocket the difference!!” Come home to DoubleLine.

Matt Levine’s “Money Stuff” column today on Bloomberg struggles mightily, and unwittingly makes a case to own nothing but real assets.

Financial Times: “Private Credit funds are mostly unlevered…” Clip and save.

Fed Day tomorrow! My post-Powell-presser “instant take” will be a webcast, with further CNBC interview with Scot Wapner planned for Monday. Sign up for the webcast at https://t.co/csW3aljONR.

Blue Owl…Blackstone…Blackrock…Cliffwater…Morgan Stanley…Deutsche Bank…. “Don’t worry, it’s idiosyncratic…” “Just don’t ask for your money back!” “Gotta go, Jamie Dimon is calling me.”

JP Morgan said it will likely (my interpretation) be demanding more collateral for their loans to Private Credit. That means JP Morgan believes the collateral values are down from the loan origination date.

“Our fund’s performance remains strong”, but we can’t meet the redemption requests. Wow.

If recent (and worsening) stress trends continue, maybe they’ll start calling it “Pirate Credit”.

I have never, in my entire life, had a problem selling a well performing asset.

Tired of risks you didn’t know you were taking? And no transparency? And no regulation? And no liquidity? And no faith in the reported NAV? Come home to DoubleLine.

Gundlach’s law of financial physics: The frequency of losses times the severity of losses equals a constant. Implication: do not invest in artificially “low volatility” strategies.

The Bloomberg Commodity Index is up 25% over the past 12 months.

If Private Credit portfolios are performing as well as their sponsors keep reporting they are, why are they limiting or eliminating withdrawals? What is hard about selling well performing assets?!

Bloomberg: “Blackrock Inc. slashed the value of a private loan to zero just three months after assessing it at 100 cents on the dollar, marking the second sudden wipeout to recently hit its private-credit division.” Maybe it’s a trend.

I’ve been encouraged for years to “cut down on the macro mumbo jumbo and tell me what to buy” in my webcasts. Launching an unfiltered webcast one week from today for exactly that. “Gundlach Unlocked”. Register now at https://t.co/csW3aljONR.

Early prediction: neither Newsom, Harris or Swalwell will be the Dem party nominee in 2028.

I feel sorry for the heavy favorite in today’s Men’s Free Skate. Have not seen a collapse that dramatic since Greg Norman’s at the Master’s Golf Tournament decades ago.

As expected, the DXY index has definitively broken down below the nearly 15 year trend line I spoke of in Just Markets. Fed Day tomorrow, so will be with Wapner right after the presser. And it’s free!

New Year, new bad developments in Private Credit. Bloomberg News today: “BDC BlackRock TCP Capital plunged the most since 2020 following write downs that cut its net asset value by 19%.”

Since progressive taxation is considered good and fair, shouldn’t any wealth tax rate on the y-axis monotonically increase versus the all-your-wealth-in-the-universe on the x-axis?

If California implements a “one time” wealth tax, shouldn’t there be a “deductible”: the cumulative income taxes already paid to the Franchise Tax Board? That would be at least a “progressive” wealth tax. Progressive taxation is good and fair, right?!

It gets worse. The HOA billing comes from some outfit named HODA, with the name First Service Residential, also, mysteriously on the bill. This outfit is a shakedown operation threatening to put a lien on property and foreclose if you don’t pay the 1K bogus bill/ransom. Shut this down!

Get this: I received an HOA annual billing today from the Huntington Palisades “association”. You would think there’d be zero HOA fees in a massive burn zone. Except maybe to fund fraudulent daycares, or the like.