Alan

Private Credit’s Exit Problem in One Sentence - New Money Is Paying Off the Old Money 
As one critic put it, it’s Hyman Minsky’s “Ponzi finance” in real time—while regulators talk rules but skip enforcement. “It works until it doesn’t, and it stops working precisely when investors most want out,” said Federico Basile, founder and managing partner of Capital-Hill Securities, a Luxembourg securitization issuer. “A quarterly cap on a portfolio of five-year private loans is not a liquidity feature. It is an acknowledgment that the asset has none.” Retail investors should not be anywhere close to anything that has to do with the private credit,” Ganapathi told Global Finance on a call. They are being sold quarterly exits, she said, on “an asset that does not trade.”…. In some cases, she explained, loan books run through multiple nested shell companies and the system is “so intertwined worldwide that nobody knows where anything ends. That should scare people.”…” - @GFmag

“The SEC has subpoenaed Bank of America, Citi, Goldman Sachs and JPMorgan Chase as part of an early-stage investigation into the near-collapse of Situational Awareness, the AI-focused hedge fund that saw roughly 67% of its portfolio value wiped out in July, the New York Times reported Monday, citing three people briefed on the outreach. The subpoenas seek details on the timing of Situational Awareness’s trades and its communications with lenders about borrowed money, or leverage, according to the Times…”