Keep pulling the thread on Jeffrey Gundlach.
Jeffrey Gundlach stated in early April on the social media platform X that the private credit market is in a state comparable to 2007, prior to the global financial crisis.
Jeffrey Gundlach predicts that redemption requests for private credit funds in June will be higher than they were in March.
Jeffrey Gundlach believes a US government bailout of the private credit market is highly unlikely due to the political difficulty of justifying support for wealthy investors.
The interest expense on US government debt is now higher than the national defense budget.
Jeffrey Gundlach predicts that long-term interest rates will continue to rise, and will accelerate their rise in the event of a recession.
To hedge against a potential government debt restructuring, DoubleLine has swapped its Treasury holdings for the lowest-coupon bonds in each maturity cohort, reducing its portfolio's average coupon from 4.75% to 1.5%.
Jeffrey Gundlach predicts that the Federal Reserve will not cut interest rates in the current year and may even implement a rate hike.
A large, reputable private credit fund experienced a 19% overnight markdown, with its value dropping from 100 to 81.
The non-guaranteed mortgage market grew to approximately $2 trillion before the global financial crisis, a size Jeffrey Gundlach compares to the private credit market today.
Private credit firms have paid billions of dollars in commissions to intermediaries for selling their products to investors.
Jeffrey Gundlach refutes the theory that private credit investors are selling public assets to meet redemptions, pointing out that stock, loan, and high-yield markets are all near their highs.
Jeffrey Gundlach predicts that private credit funds will increasingly opt for smaller, incremental NAV markdowns, such as 5% over several periods, rather than large, single-day drops to make them more defensible.