$36 Billion Insurance Firm Bankrupted By Private Credit Collapse

The private credit collapse and general widespread fraud and market manipulation within financial markets has spread beyond just normal banks or investment funds or even private credit itself and it's now spread into insurance companies as well. With an $11 billion investment fund and a $25 billion insurance company being sued for likely going into insolvency, again with ordinary people being the ones to pay the price for this private credit nightmare. Germany is pressuring the European Union to stop its insane spending plans and is demanding they dial back their fiscal responsibility and as the single largest contributor to the EU as a whole, this represents a critical departure for the direction the EU has been heading in for decades. And finally, some more bad news from the UK once again as bond yields jumped up once more and markets are seriously starting to panic about the left-wing Labour government and the fact they don't seem to grasp the severity of the financial crisis they're steamrolling towards. All that's to be covered today on Stoic Finance with me your host Max and if you want to stay up to date on the financial news that Legacy Media won't show you, well like and comment under this video so the algorithm shows you my future videos and of course subscribe to the channel as well. Policyholders of a struggling life insurer sued its private equity owner accusing GoldenGate Capital of self-dealing and mismanaging PHL Variable Insurance to the point that it now faces possible liquidation. A lawsuit filed in Connecticut on Friday also accuses GoldenGate and its subsidiary Nassau Financial Group, the big insurance group of that organization, of concealing PHL's financial problems through re-insurance deals with affiliated companies, including a Cayman Islands entity. The suit follows a decision by state regulators to scrap plans to rehabilitate the insurer which was acquired by Nassau in 2016. Whilst PHL's troubles predate the purchase, state authorities said investments under its new ownership didn't perform as well as anticipated and that deals with captive re-insurers failed to safeguard enough capital. PHL policyholders are alleging the business didn't fail on its own but rather because of a series of related party payments that included investing assets into Nassau's own products like CLOs, CFOs, and a private credit fund. Defendants systematically and callously pillaged their assets by using PHL's money to finance their own ventures, buy back roughly $1 billion of PHL-issued stranger-originated life insurance policies through shell companies, collect hundreds of millions of dollars in fees and dividends, and transfer more than $2 billion through captive re-insurance arrangements, including offshore entities that they controlled. GoldenGate and Nassau also allegedly put hundreds of millions of policyholder payments into credit products that significantly decreased in value each year, according to the complaints, but the firms continued to make the investments because they generated millions of dollars of fees for themselves. So, insurance companies, for those who don't really know, they're basically just investment companies. They take premiums today, the money that their customers pay to be insured, and they invest it for months, years, or decades so that when it comes time to pay out to those who have a legal right to it, well they've multiplied that money and they walk away with the profit. Well the problem here is incredibly simple. Insurance funds have been desperately diving into increasingly speculative, risky, and frankly idiotic investments in attempts to boost their returns and make even more money, and in particular here we're talking about, of course, private credit. Now GoldenGate Capital are basically the parent company of Nassau and they've also got a subsidiary called PHL, which is the one actually looking at insolvency here, but if these things were happening to PHL, it's almost certain they were happening within other parts of the business as well. Now GoldenGate, they manage about $11 billion. Nassau, they manage about $25 billion. So these are big firms and they are not at all inconsequential, and they've been sitting basically on the brink of insolvency here after investing billions into private credit, losing those billions they invested while still investing billions more, and they're now incapable of meeting their debts and obligations, so they're going into liquidation. Now they're obviously being sued for doing this because the business didn't fail as a result of a bad investment environment or a recession or anything outside of their control. It's failed because the insurance firm invested into the investment firm's risky debt instruments like CLOs, CFOs, and private credit funds, and they were just juicing their own income by investing into their own funds despite knowing full well that they shouldn't be doing that, and they did it before anyone really had a chance to realize what was going on because they get to double dip their fees, take twice the fees, and double their profits. Now it's good news here that they're being sued and hopefully they lose because they really deserve to, but it's unlikely anyone in charge will face any prison time for this even though it's clearly warranted, so that is a shame. And this is also a problem for all of us because it shows just how far contagion can spread. If the AI bubble collapses in a violent way and all of that trillions in AI debt becomes worthless, or if the private credit collapse continues as is likely to happen, insurance companies all around the world will lose billions upon billions of dollars because they've been investing into this risky debt, and ultimately it won't really be them who pay the price and pay the bill for all of this, it will be their premium holders. Moving over to Europe then, and the EU is not looking too safe or stable right now. German Chancellor Merz and five other EU leaders have threatened to withhold agreement on the bloc's next seven-year budget unless hundreds of billions of euros in spending cuts are secured. The ultimatum underscores divisions over the EU's new spending priorities, including defense and efforts to shore up ailing industries against China and US competition, whilst continuing to support farmers and poorer regions that have traditionally absorbed the bulk of its budget. The EU budget must be fundamentally reformed, we must make choices according to the letter signed by Germany, Netherlands, Sweden, Denmark, Austria and Finland, all very wealthy contributors to the EU project. Unless the budget is cut by hundreds of billions there won't be an agreement this year and there will then be no money. The six leaders want to shift resources towards defense and innovative companies to reflect growing economic and security challenges whilst reducing funding for farmers and poorer regions which traditionally absorb almost two-thirds of the EU budget. Now the EU has for decades embarked on this trend of an ever closer union, essentially the explicit target that they don't hide, they say it out loud, of no longer being just a collection of countries but essentially becoming one single country in all but name. Now even though this is overwhelmingly unpopular for the largest and most important countries, those who actually contribute like Germany and their citizens, they've been pushing for it anyway. And a huge part of this ever closer union is the wealthiest countries like Germany, the Netherlands, Austria as examples, paying huge amounts to subsidize and support poorer regions like Romania and Portugal. Now this has always been unpopular amongst those who actually pay for this policy, the taxpayers in those wealthier countries, and what we're seeing here represents a democratic revolution almost whereby the ruling elite, the establishment, the globalists, the EUists and the centrist parties who run these wealthy EU countries, they're seeing their popular support crater with left and right-wing parties taking their voters and putting them on notice. So now the establishments in these countries like Germany, like Mertz, they're panicking and they're rolling back their plans to try and save the electoral prospects of their parties and the EU's plan of an ever closer union, an ever larger fund, ever more regulations, ever more laws imposed on constituent countries, all that suffering. Now I don't think we're actually at the point of the EU collapsing or fundamentally changing for many years yet, but with the AFD taking control of German states, with Marine Le Pen expected to be the next French presidential victor and become the next French president, with mass migration being increasingly unpopular in all of these countries, and then internal border fights and spats between right-wing governments like Italy and left-wing governments like Spain, it really does look like the EU is on borrowed time, especially as more and more right-wing parties are taking control, winning elections and they basically oppose everything the EU has pushed for for decades and it cost them a hell of a lot of money at the same time as well. Inflation has been out of control ever since Covid hit all over the world, the UK, US, Canada, Europe, it's the same story. Our currencies are dropping in value and our governments seem more than happy to print away regardless of how much it damages us, which is exactly why I've been personally investing into gold ever since I started on YouTube five years ago as it's the world's oldest protection against inflation. No matter what our governments try to do, they can't just print more gold out of thin air and even more importantly for many people like myself, gold and silver currency is 100% exempt from capital gains and income taxes, making precious metals more important than ever for protecting yourself from this nightmare. That's why I've partnered up with Gold Bullion Partners, they help you protect yourself with gold investments, coin storage and most importantly they can even help you invest in gold in your pension, making sure your retirement is safe from the next tax rate. They're based right here in London about five minutes away from where I live and I can't recommend them strongly enough with inflation running rampant and our government's dead set on bleeding us all dry, this is 100% something you need to be paying attention to and you can click the link down below in the description to get a free information pack from Gold Bullion Partners, so click that link down below in the description now and make sure your future is protected. Finally then for today let's have a quick look at the UK once again as our bond crisis just keeps on escalating. The UK's long-term borrowing costs hit 6% for the first time in almost three decades, making it the first G7 economy to pay a rate that high since the euro crisis was raging in 2012. The moves that took 30-year gilt yields to their highest since March coincide since 1998, the year I was born actually, coincided with a fresh slump in global bond markets driven by concern spiking oil prices will reignite inflation. The rate on 30-year gilts rose as much as 7 bps to 6.02% on Thursday before powering the increase. The US treasury initially traded weaker too at one point lifting the yield on the benchmark 10-year to the highest sorry since 2002. French debt was hit amid worries that the government will struggle to rein in its wide budget deficit too. The UK's reliance on imported energy and fragile public finances make its bond markets particularly vulnerable to fears that central banks will have to hike more aggressively to keep inflation under control. That's intensifying pressure just as Prime Minister Andy Burnham and the new Chancellor John Healey prepared to deliver their first budget on October the 28th, which is almost certainly going to have massive tax rises and spending increases announced. Now, while yes, our bond yields are rising around the world, the problem is particularly pronounced in the UK as this new left-wing Prime Minister is embarking on these huge spending programs with no idea how he's going to pay for them. But for once, I don't just want to complain about our pitiful economy here in the UK. I know that's surprising for my regular viewers. I want to bring attention to the fact that cheap interest rates are gone from the UK, from America, from Europe, from everywhere, and they are not coming back for decades. Our governments have been grossly irresponsible, funding our lives today paid for by the children who aren't even working yet, and the scale of these national debts have become ridiculously unsustainable, and bond investors are punishing our governments for this. That's why yields are rising. They don't trust us to repay our debt, so they demand higher premiums. So far, the political situations in most countries hasn't caught up to this reality at all, which is why the free money and the welfare taps remain on, but all of the charts point to the exact same thing. A complete overhaul of essentially how civilization is going to work, the erasure of the welfare state, probably the end of state pensions within a couple of decades across the world, because if we don't see that, all our countries are going to go bankrupt, and we will end up in hyperinflationary spirals just to pay off our national debts. Now, if there's a specific topic you'd like me to cover tomorrow, then leave a comment down below in the description, or if you just want to stay up to date on the financial news the legacy media won't show you, then subscribe to this channel and like and comment under this video so my next video shows up for you on the algorithm, or you can watch some of my other videos by clicking the buttons on screen right now.