James Kirby

And the issue is, if you want to sell your Commonwealth Bank shares, you just sell them, right?

You just go on your broker and you sell them because they're shares and they're liquid.

Now, Andy, could you explain what we call the liquidity crunch?

The issue, the real...

worry, I suppose, for investors here in relation to how private credit has liquidity constraints, as they say in the rather gentlemanly language of finance.

The sharks are circling.

They are, yes.

Anyway, seasoned listeners will be familiar with the term credit default swap, which generally sends a tremor through any investor, anyone who ever hears that word.

So credit default swaps were, well, they were the instrument of choice during the GFC and when all these investment banks around the world, and I add, by the way, Macquarie,

bank here people started playing credit default swaps and what they were doing was they were basically betting on whether financial organizations how they would survive it was like a distressed debt game and it is starting now in the us with the private credit people before this sounds like too severe i just want to make the point that as i said at the start we are not

suggesting i'm not suggesting for one moment you keep away from private credit what i'm trying to do is protect and inform all investors here about something that we have warned about consistently through the show but also we have highlighted it's at its best and if you want to listen to charlie viola on the show a few months ago supporting private credit and supporting what he thought was the best of private credit then that show is for you to hear all right we'll be back in one moment

Hello, welcome back to the Australian's Money Puzzle podcast.

James Kirby here with Andy Dorrock of Independent Financial Advice.

Andy is a financial advisor.

Of course, he's been on the show before.

We're talking about private credit and trying, I think, to translate for you, basically, what is happening.

And I suppose one of the things, Andy, we haven't quite done is connect what's going on in Australia, what might go on and what might happen next with these issues in the US.

Except to say, folks, there's sort of two lines of private credit, Andy, isn't there?

There's like Australians who got invested in the global scene through big funds.

And then there's also locally investors.