Overview
- Speaking on Bloomberg's Odd Lots, Gundlach said private credit is likely to ignite the next financial crisis.
- He urged investors to hold about 20% of portfolios in cash and trimmed his suggested gold allocation to roughly 15%.
- He argued that private loans are low quality and thinly traded, with values that can lurch from “100 to zero.”
- He pointed to stress signals including failures at Tricolor and First Brands and Renovo’s bankruptcy that wiped out a $150 million BlackRock loan.
- He warned that selling private‑credit funds to retail investors creates a withdrawal‑liquidity mismatch, as the market spans roughly $1.7 trillion to multi‑trillion size while some banks say direct systemic exposure remains limited.