Steve Eisman

Private credit funds were originally created for institutional money, and that makes a lot of sense because you're talking about long-term illiquid loans, and institutions know what they're getting.

They're getting a higher yield in exchange for less liquidity, and that's fine.

After Private Credit basically sold their funds to every single institution on planet Earth, they looked around and they say, okay, now who do we sell it to?

And they said, let's sell it to retail.

The problem is that with retail, you have to create liquidity.

So what they did was they created mostly what I like to call the illusion of liquidity or semi-liquidity.

Now, all this was disclosed.

None of this is illegal.

So no one's going to jail for this.

This was all disclosed in the prospectuses.

Whether the retail investors actually understood what they were getting into, who knows?

But no question it was adequately disclosed.

All these funds have quarterly caps in their documents.

Most of the funds have a 5%.

quarterly redemption cap.

Some have seven, but most have five.

And so what's been happening is as for the last year, the news on private credit has gotten steadily worse.

And we could talk about, you know, where that's happened.

And so the redemption notices are universally coming in now above the 5% cap.

And with the exception of Blackstone in the most recent quarter, which did honor a 7.9% redemption notice, even though the cap is 5%, everybody else has just honored the cap.