| DAILY ISSUE Why June 30 Could Trigger a Private Credit Reckoning VIEW IN BROWSER
It was an experience that scarred me for life. Early in my career, I worked as a banking analyst. It was the 1980s, and the savings and loan crisis was in full swing At the time, we were restructuring failing institutions – merging balance sheets, reworking loan portfolios, and doing everything we could to make them appear stable. Simply put, it was my job to “put lipstick on a pig.” It didn’t fix the underlying problem. It just delayed it. That’s part of the reason I very rarely recommend financial-sector stocks – especially banks. There’s just too much funny business that goes on. Here is another one of the most important lessons I learned during my time as a banking analyst: Financial crises do not start when the headlines hit. They start months earlier. Sometimes years. The first cracks show up quietly. Loans stop performing the way they should. Cash flows weaken. Institutions start adjusting their exposure. And most investors do not notice until the story is already much bigger. I saw that during the savings and loan crisis. I saw it again ahead of the 2008 financial collapse. And I saw the same pattern emerge before the regional banking failures in 2023. This time around, the risk has been building for years in private credit. In fact, I’ve been warning my followers about this since mid-2024. If you want the full story on what is happening inside private credit, and what I believe investors should do before this gets more obvious, you can learn more in my full presentation here. But what matters today is that the pressure inside that system is getting harder to hide. Tricolor, a subprime auto lender, collapsed last year amid fraud allegations. First Brands, an auto-parts company backed by private credit, filed for bankruptcy after struggling under its debt load. And more recently, large private-credit funds have started limiting withdrawals as investors ask for their money back faster than these illiquid portfolios can provide it… - The Ares Strategic Income Fund capped redemptions after investors sought to withdraw about 11.6% of fund shares.
- Apollo’s private-credit fund also enforced a 5% withdrawal cap amid heavy redemption requests.
- Blackstone’s $48 billion BCRED posted its first monthly loss since 2022 in February 2026, driven in part by markdowns on certain loans, while first-quarter redemptions reached 7.9% of assets.
It seems like every morning we see a new headline about troubles in the private credit world. Frankly, if it weren’t for the conflict in Iran, I think this would be a much bigger story right now. That is why I recently sat down with InvestorPlace Editor-in-Chief Luis Hernandez for another part of my special interview series. In this conversation, we discuss why the first warning signs in private credit matter so much, what I believe they are telling us now, and why investors should not wait until the broader market fully catches on. Click here or the play button on the image below to watch my conversation with Luis. 
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Why You Need to Prepare Now Now, here’s what you really need to understand. All of this is building toward a single moment: June 30, 2026. That’s when BDCs (Business Development Companies) and private credit funds are required to file their semiannual reports and mark their holdings to fair value. That will give us a crystal clear picture of just how ugly this mess is, folks. No internal estimates, no rosy outlooks, no vague assurances. And when that happens, the losses that have been building beneath the surface may finally be exposed. If history is any guide, this could unravel pretty quickly. In March 2023, concerns around banks involved in lending in the cryptocurrency industry escalated into a full-scale regional bank crisis within just days. But this time, the risk is spread across thousands of companies tied to the $3 trillion private credit system. That’s why, in my latest presentation, I call these vulnerable businesses “zombie companies” – firms that appear stable on the surface but rely on constant access to credit to survive. Many are already showing signs of strain – weakening cash flow, rising debt burdens, and increased sensitivity to even small changes in credit availability. That’s why identifying these companies now – before the broader market fully reacts – is so important. And I’ve generated a full-blown research report dedicated to 10 stocks I think you should avoid. It’s called The Shadow Banking Blacklist. Some are directly involved with lending in the private credit industry. Others are simply companies that my system is flagging for their weak fundamentals. If you own any of them, I recommend taking a closer look now before it’s too late. Go here to learn more about this report now. Sincerely, | 
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