The U.S. economy is bifurcated, with large public companies thriving due to pricing power while the middle market suffers from shrinking margins, declining profits, and an inability to service debt.
The private credit market is significantly riskier than it appears, characterized by a high concentration of low-quality debt and artificially suppressed default rates that mask underlying distress.
The current wave of business bankruptcies is not a temporary spike but a persistent and likely growing trend rooted in the fundamental financial weakness of the middle market.
Government regulations and fiscal policies are primary drivers of market structure and outcomes, as evidenced by lending guidelines that created the private credit boom and the potential for tariffs to devastate middle-market firms.
Significant investment opportunities exist in acquiring and restructuring distressed assets, like NYC taxi medallions, that have been fundamentally disrupted by market or technological shifts.
2011
Milgram claims the U.S. government's 'Guidelines on Leveraged Lending' pushed high-leverage credit out of the traditional banking system, directly enabling the rapid growth of the private credit market.
Pre-Uber
Cites the peak valuation of New York City taxi medallions at $1.2 million each, setting the stage for the asset's subsequent collapse and MarbleGate's investment.
Post-2019
Identifies this period as one of significant decline for the U.S. middle market, with EBITDA falling 20-25% and net profits turning consistently negative.
2023
States that data from MarbleGate's portfolio showed nearly 25% of U.S. middle market companies were unable to meet their debt service coverage requirements.
2024
Notes that U.S. business bankruptcies reached a 14-year high.
Recent (implied 2024)
States that his firm, MarbleGate, took its entire New York City taxi operation public after acquiring over 4,000 medallions.
▶The Squeezed Middle MarketApr 2026
Milgram argues that the U.S. middle market, which constitutes a third of the economy, is financially deteriorating. He cites a 20-25% decline in EBITDA since 2019, consistently negative net profits for the past two years, and pressure from larger public companies that use their pricing power to suppress supplier margins.
For investors, this theme suggests that the systemic risk concentrated in the middle market may be underappreciated, with widespread debt service failures and bankruptcies signaling a structural, not just cyclical, problem.
▶Hidden Risks in Private CreditApr 2026
Milgram paints a cautionary picture of the private credit market, which he claims was enabled by post-2011 regulations. He highlights that 82% of the market is rated single B- or lower and that reported default rates below 1.5% likely conceal the true risk by deferring or disguising defaults.
This analysis implies that the perceived safety and yield in private credit may be illusory, and a market correction could expose widespread issues that are currently obscured by manager reporting practices.
▶Government Policy as a Market DriverApr 2026
Milgram emphasizes the direct and often dramatic impact of government actions on market structure and corporate health. He points to the 2011 'Guidelines on Leveraged Lending' as the direct cause of the private credit boom and warns that a potential new tariff regime above 5-6% would be 'devastating' to the already fragile middle market.
This perspective positions regulatory and fiscal policy not as background noise but as a primary variable that analysts must model when assessing sector-specific risks and opportunities.
▶The Anatomy of a Distressed Asset InvestmentApr 2026
Through the example of NYC taxi medallions, Milgram illustrates his firm's strategy of investing in distressed assets. MarbleGate deployed over $600 million to acquire over 4,000 medallions after their value collapsed from a peak of $1.2 million, eventually taking the entire operation public.
This theme showcases a contrarian investment approach focused on acquiring assets at a deep discount after a major market disruption (e.g., the entry of Uber) and restructuring them for a public market exit.