15 lines
2.0 KiB
JSON
15 lines
2.0 KiB
JSON
{
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"HubID": "4667",
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"Date": "8/23/2024",
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"HubTags": [
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"External Platform Posts",
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"Future Map Forward Guidance",
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"Future Map"
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],
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"Contacts": "",
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"Companies": "",
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"File": "",
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"Image": "4667__Image_URL.png",
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"Summary": "<p>I always like to find charts showing dramatic changes that cause me to take notice. Here's a few from a recent report I read on the private equity/credit market that mirrors the overvaluation we find in all assets markets (stocks, bonds, real estate, collectibles, etc). </p><p>This market's growth has turned parabolic, which is always a bad sign because it signifies irrational exuberance and FOMO, while the profits from the sector have plunged, which means valuations are completely unsupported. <br /></p><p>This market is just like housing before the 2008 GFC - way overvalued with tremendous systemic risk to the rest of the financial system. Housing before the 2008 GFC crisis was valued at $25 trillion, while private equity/credit is valued currently at 8$ trillion, so its clearly not as big, but certainly not insignificant. The problem is the systemic risk from a collapse, hitting not just sophisticated investors who lose capital, but thousands of companies going bankrupt (leading to layoffs), and pension funds loosing significant amounts and at risk of meeting cash needs for their retirees. <br /></p><p>This sector is another time bomb that will go off like housing did in 2008. Hard to say when, but I think inside 5-years. The problem is that this may coincide with other economic collapses that hit is all at once, which includes government (federal and state debt crises) and stock, bond and real estate meltdowns. Scary stuff ahead for all of us. <span></span><br /></p>",
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"Notes": "<p>The broader concern is what will happen between now and 2028, as $3.2 trillion in debt across 28,000 private equity-owned companies will need refinancing when five of the largest creditors can't agree on a single loan restructuring.</p><p>US public pension average of 13%.<br /></p>"
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} |