Business Development Companies BDC’s Private Credit - the slime show is oozing to the surface. Borrower “First Brands” used a Lehman like Repo 105 move to hide leverage and screw investors. Two size frauds in the last 10 days, stay tuned! https://youtu.be/EPl4v_PjqhA?s...
First Brands was; “selling inventory at quarter end with a promise to buy it back higher after to hide in an effort to show better cash flow and inventory mgmt and hide the fact that there was that much more debt" "Larry, Lehman Repo 105 is alive and well. This time in private
The loss to “private credit’ investors could be as high as $40B. “First Brands” balance sheet looks like so many of the mortgage CDO structures from 2007-2008. They want to “hide the salami,” - hide the leverage to produce returns.
What kind of morons lend into this kind of capital structure - only in "private credit" - so pathetic, OTHER people's money!
This is the end result. We believe there are $500B more out there like this. Please - pay attention!
Private credit - Other people's money. Pay attention to the next Lehman. $ 1.5 T lending, $500B of bad loans.
Over the Weekend - A few friends sent us this gem. Never, ever forget "Repo 105." They removed $50B from the balance sheet through a repo transaction. The great bamboozle. Analysts like this guy were fooled into believing Lehman was far less leveraged than it was in reality.
After filing the 10-Q w/ the SEC and reporting earnings, they moved the $50B back onto the balance sheet. When central bankers do NOT allow the cleansing process of the business cycle to function over longer and longer periods of time, they lay the foundation for this behavior.
First Brands excelled at the art of "factoring" - that's borrowing against current cash flows. Over the last 24 months in private credit -- investors have been forced to put their money to work; sitting on cash is a sin. Buying into convoluted / opaque capital structures.
Multiply this by 500 companies across the USA. Lending standards are toxic.
@Convertbond 2008 all over again… the same greed, the same fraud, the same playbook. They hide leverage, fleece investors, and when the system cracks, the American taxpayer is forced to bail them out. The swamp isn’t just in Washington..it’s on Wall Street too.
@Convertbond No bailouts this time without jail time and clawbacks - take everything these morons own
@Convertbond Don't forget $RILY criminal fraud news ahead
@Convertbond Private credit is an exercise in separating people from their money under an umbrella of “exclusivity”.
@Convertbond @grok please explain
@Convertbond I believe this to hlbe true. Been a FA for 20+ years. The macro setup is the same. Regional bank failures to be expected. Consumer Confidence downward spiral. Housing starts down. Job layoffs not being recorded except by Co's will hit next year. 2/3 of GDP consumer. See
@Convertbond Seeing these repo maneuvers play out feels like déjà vu. Creative leverage moves keep resurfacing-investors really need to peel back the layers before calling anything 'transparent.'
@Convertbond This is fucking nonsense Larry. You are entitled to your own opinion, but not your own facts. There's no such bankruptcies going on in the financial system right now. You're making stuff up. A guy called Lar