European Banks Just Sounded The RED ALARM On Global BANK RUNS

The markets are rife with worry about private credit right now, and for good reason. Monstrous asset managers like Blackstone have seen their share prices drop by as much as 40% so far this year, all over fears that private credit is going to take them down with it. But of course, as you might expect, all of the banks are saying there's nothing to worry about. Sure, they've invested into private credit. Sure, their loans keep mysteriously getting written down to 0% of their value overnight. And sure, the private credit market was worth $2.1 trillion a few months ago, and it's already lost $300 billion in market cap over the last couple of months. But the banks insist all is well anyway. Well, that was until a few days ago when Deutsche Bank came out and told the truth. They started sounding the alarm on private credit and on the contagion it is surely going to cause across the global economy. So today, we're going to take a look at what Deutsche Bank actually said, why it's so important, and cover all of the other recent updates with private credit over the last few days. And of course, if you want to stay up to date on the financial news the legacy media don't want you to see, and to get the full truth with videos like this, like and comment under this video so the algorithm shows you my future videos. And of course, subscribe to the channel as well. And let's get right into this. When people are prevented from withdrawing funds from an investment, that should sound an alarm, says Deutsche Bank, pushing back against heavyweight voices within private credit who have sought to downplay headlines pointing to growing strains within the $2.6 trillion market. Apollo president Jim Seltzer told a conference in Melbourne on Thursday that negative media headlines pointed to systemic risk in the private credit sector couldn't be further from the truth, joining the likes of BlackRock, Blackstone, Blue Owl, and State Street in trying to hose down concerns. However, Deutsche Bank's vice chair of global macro, Tarman, told Bloomberg's Popular Old Lots podcast in an episode released on Thursday that if it wasn't for the ongoing war in the Middle East, it would be the top issue weighing on investors' minds alongside artificial intelligence. Quote, headlines are not going away. And if anything, they are definitely hiding behind Iran at the moment. It would be almost all we would be talking about, especially in the United States, if it wasn't for Iran. He, of course, talking about private credit here. If people cannot take their own money away from private credit and have to sell something liquid, then watch out for public credit. And of course, watch out for public equities. So I'm watching that space very carefully. So that is the vice chairman of global macro for Deutsche Bank. He literally runs on a podcast and just told the truth that the private credit crisis is actually real and that it's actually not getting enough attention. And then if it weren't for the war in Iran and all of the Arab states being bombed and the Strait of Hormuz being closed, it would be the single biggest issue facing the markets right now. And the media would be forced to realize that as well. He literally said, quote, headlines are not going away and that it's just largely being ignored. And this is even more so of a problem considering how the world is actually starting to hurt from the war in Iran. Americans support for the war is waning. And all the signs point towards America and Trump looking for an off ramp and wanting to end this conflict to get oil flowing back through the Strait of Hormuz and to bring gas prices down. Now, despite Iran's pretty crazy sporadic claims going back and forth about there being negotiations and then there being no negotiations or that they would never negotiate. Well, there are now confirmed talks taking place. And we have confirmation as well that countries like Pakistan are acting as intermediaries. And we are almost certainly towards the end of this conflict. Now, as the straits open up and oil prices drop and the markets no longer have to watch every single word that Trump says during his press conferences to try and guess what's going to happen next with the oil markets, the media and the markets will start paying closer attention to private credit instead, which is almost certainly going to cause a huge problem for that entire sector. Now, there are some serious concerns within the stock markets right now, but there's also a lot of opportunity if you know where to look for it. 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Of course, do your own due diligence, and I'll leave a link down below in the description box with more information on Resolve for you to take a look at. That's Resolve trading on the Nasdaq under the ticker symbol RZLV. We may not see Northern Rock scenes of 2007 and 8, all these queues and stuff, he said, referring to the lines which famously formed outside the UK bank after it was forced to go to the Bank of England to request emergency support, causing what was known as the run on the rock as the bank's customers tried urgently to empty their accounts. But what if it spreads and spreads and some of the big US banks start lending less? What if insurance companies get hit more and more? Watch this space. It's a bit superficial to say, quote, it's not systemic, it's going to be okay. I'm more worried than that. So Deutsche Bank, they're not even saying that there definitively won't be runs on the banks at this point, which sounds a little bit worrying on its own, to be perfectly honest, but at least they aren't expecting literal bank runs tomorrow. And they are very, very specifically looking at what really amounts to another global financial crisis, or at the very least, a credit crisis. If banks start lending less, if they make it much harder for people to get car loans and credit cards and everything, if insurance companies get hit, that leads to a credit freeze, which completely blocks apart our debt based societies. And it will be a massive problem. Again, his quote here, it's a bit too superficial to say it's not systemic, and it's going to be okay. So Deutsche Bank are very, very clear, clear in their expectation that actually, this is a huge problem. It could well go systemic and global. And they aren't just going to bury their heads in the sand and pretend that all is okay. Now, why are Deutsche Bank so willing to tell the truth about this? Well, because they have very little exposure to private credit in general. Now, let's have a little bit of a recap and take a look at who have actually been hit with these private credit bank run-esque hopes on redemption so far. There is of course, Blue Owl Capital and their $20 billion private credit hedge fund, essentially, which saw huge losses on some of their loans, most notably on their software clients who are losing out to AI. And after, first of all, just gating redemptions altogether and telling investors they can't have their money back, they're now shutting down their fund completely. We have Apollo's $25 billion US dollar private credit fund that saw 11.2% of their investors ask for their money back last quarter, which of course, they can't pay. So they gated redemptions and had their own little private credit bank run as well. And their investors are obviously worried. We have KKR's $14 billion fund that has seen more than 5% of all of their loans default and almost 15% of their income from private credit last year be in payment in kind, which really means that the person who owes you all this money, well, they can't afford to pay you back with cash as they were supposed to. So they're paying you back with equity or interest chucked on top of the principal. In a sense, it's a default in just not name. We have Oaktree with their $8 billion US dollar fund. They had 8.5% of their assets in redemption requests last quarter and their parent company had to bail them out with 10s of millions of dollars of cash to honor those redemptions. Morgan Stanley, Cliffwater, Blackrock and Blackstone, they're all seeing the exact same mass exodus of their clients as they beg for their money back. They do not want any exposure to private credit anymore because they know what's happening. And they're all being denied in what essentially amounts to a run on private banks. All in all, well over 200 billion US dollars of private credit debt is struggling and gated from these redemption requests. And we've barely even entered this credit cycle so far. And Deutsche Bank says we're only just getting started. But of course, it isn't just Deutsche Bank either. Hedge funds and smart investors who don't have exposure to private credit are certain the private credit market is a bubble. And they are literally begging investment banks to let them buy derivatives to bet against the entire industry. Goldman Sachs has told clients eager to short the leveraged loans that a product is developing to bet against the $1.4 trillion market isn't yet ready. The bank had been pitching hedge funds on a total return swap, a type of derivative that would allow their clients to profit from a loans price decline without ever owning the underlying debt. So it isn't a traditional short sell. Investors are increasingly looking to make money from the sell off in software debt sparked by fears of AI disruption. But Goldman Sachs has told clients that it's not ready to launch the effort as it works through additional considerations. Also worth noting there, note how earlier on in the video, we mentioned the Bloomberg reporting private credit as a market to be worth $1.8 trillion US dollars. That's where they were at last week. Now, according to this article, it's down to $1.4 trillion. And a couple of months ago, it was reportedly worth $2.1 trillion US dollars. Now, call me crazy, but that seems like a monstrously quick collapse for an industry that the banks are adamant isn't in any kind of crisis. Now, the final thing worth mentioning here is that every bank and every fund is seriously eager to convince their investors that even if there were problems in the private credit market, that it is exclusively linked to exposure to software firms that are struggling with the rise of AI. And obviously, they don't have much exposure to software firms. But it seems that even that is a grand lie as well. Here's a graph from the Wall Street Journal, who did some of their own due diligence and looked at how much these firms are claiming their exposure in the private credit funds is to software versus what the Wall Street Journal found out when they actually looked into their books. Blue Hour Credit Corp, they claim that only about 11.6% of their fund is in software related exposures. The truth, however, is above 20%. Blackstone, they claim that their exposure is about 26%. The truth is that it's 7.5% higher. Ares, they claim their exposure is 24%. The truth is that it's 5.5% higher. And Apollo have the exact same thing. They claim exposure to the software sector of 13.5%. But the truth is that it's 3% higher. So Blue Hour, Blackstone, Ares and Apollo, four of the absolute biggest players in the private credit world, the smallest one being Blue Hour with what 300 billion US dollars in assets under management. They're all literally lying to the world and their investors about their exposure to software. Blue Hour, the fund hit hardest by the crisis so far that has literally had to shut down its private credit fund altogether. They actually have far less exposure to the software sector than both Blackstone and Ares. Now, look, if this were just a few funds struggling on a few loans that they gave out, I would be inclined to agree with these people that this isn't worth worrying about because it wouldn't lead to a systemic risk. But when we see every single player in private credit see in their share price crash by 20% on the low end to 45% on the high end throughout 2026 so far, and we also see these funds actively lying about their exposure to software, which they know is a huge problem, then something clearly is not right. Of course, this story isn't going to end today or tomorrow. We're likely looking at a credit cycle that goes on for at least a couple more years. So if you want to stay up to date and to follow the financial news that legacy media don't want you to see, subscribe to this channel, like and comment under this video. So my next video show up for you on the algorithm. And if you just want to learn more about how BlackRock is being sued for running an illegal international credit cartel, click the video on the right hand side of the screen right here. BlackRock are running a global private credit cartel and they're currently being sued over it by their own investors. You heard correctly. BlackRock is colluding with its supposed competitors, other massive private credit and asset managers and private equity firms to screw over the smallest investors in companies.