DISCLAIMERS: I am not a financial advisor and this is not a financial advice channel. All information is provided strictly for educational purposes. It does not take into account anybody's specific circumstances or situation. If you are making investment or other financial management decisions and require advice, please consult a suitably qualified licensed professional.
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Transcript
There's a serious problem with credit
markets right now. US American
bankruptcies have just soared to their
highest level since the global financial
crisis. REITs are falling apart. Shadow
banking has now reared its ugly head.
And now the cherry on top is that even
BlackRock are feeling the pain, being
forced to write off millions of dollars
of debt as completely worthless because
the companies they're lending to are
going bankrupt. Now there's plenty of
reporting on each of these individual
topics like the bad loan the black rock
has been forced to expose but no one is
tying together everything al together
explaining how all these impact each
other and what it's going to lead to
next. So that's exactly what I'm going
to cover in this video. Now let's start
off just by covering the basic news that
is driving these headlines and it's all
about Black Rockck to kick us off. About
a month ago, Black Rockck deemed the
private debt it had extended to Renovo
Home Partners, a struggling home
improvement company, to be worth 100
cents of the dollar, its full value.
They hadn't taken a single penny of
discount on that debt. As of last week,
however, the firm had a new assessment,
zero. The drastic revision comes as
Dallas-based Renovo, a rollup of
regional kitchen and bathroom remodeling
businesses created by a private equity
firm in 2022 abruptly filed for
bankruptcy last week, indicating it
plans to shut down. Black Rockck held
the majority of Renovo's roughly $150
million of private debt, whilst Apollo
Global Management and Oak Tree Capital
Management held smaller trunks. Now,
Apollo and Oak Tree there are basically
just smaller versions of Black Rockck.
They are asset managers with about $1
trillion in assets under their
management combined. They're fund
managers for investors, right? You give
them your money, they invest it into
what you ask them to. In this case, they
invested it into giving out loans to
this private company. And they have
countless of competitors in this space.
There are literally hundreds of these
asset managers in the United States
alone. But the details of what's gone
wrong here does seem a little bit crazy
even just on the surface. Black Rockck
lent out roughly $150 million to this
private company. And just one month ago,
Black Rockck deemed the debt on that
deal to be very safe and secure. And
they 100% expected every penny of that
$150 million to be repaid. Then just 30
days later, just one month, and suddenly
the debt is worth literally nothing. a
$150 million loss on their next
quarterly report is now inevitable
because of this little bankruptcy. Now,
on its own, this isn't actually
impossible, right? Sometimes a company
really does collapse overnight. It was
healthy a month ago and then suddenly it
isn't this month. It could be from, you
know, price shocks from the war in
Ukraine if you're massively exposed to
natural gas or maybe there's some
massive litigation from a fraud or a
crime that's been committed. But that
didn't really happen with Renovo Home
Partners. They were a company which just
went bankrupt slowly and out of the blue
cost black rockck $150 million according
to their reporting. It was no mystery
Renovo was in a tough spot. In April,
lenders had agreed to take losses and
convert some of their loans into equity
as part of a recapitalization that was
supposed to give the company a chance to
turn its business around. So, it needed
to turn its business around. Why wasn't
Black Rockck admitting that their debt
was at risk before last week? In the
third quarter, they also allowed for
deferred cash payments on its
restructured debt, an arrangement known
as payment in kind. Basically, they
weren't even able to pay the interest on
their debt, let alone the principal. And
again, Black Rockck claimed nothing was
wrong. And then at the end of September,
funds managed by Black Rockck and Midcap
Financial were still marking the new
Renovo debt at par, at full value, which
indicates investors expect to be paid
back fully. It took only a few weeks for
the situation to quickly unravel. Early
in the fourth quarter, company specific
performance and liquidity issues led the
Renovo board to determine that the best
available path forward was a liquidation
process. We fully expect to write down
this position in the fourth quarter of
2025. That's coming from BlackRock.
While the Renovo debt represents a
sliver of total assets for the three
lenders, its sudden collapse strikes at
the heart of what critics see as a major
vulnerability in the private credit
market. the disconnect between the
valuation of illquid loans and the
performance of the underlying companies.
So, the issue here isn't that this
relatively midsize home improvement
company went bankrupt and that they're
not going to repay their $150 million
worth of debt. The issue is that Black
Rockck and these other asset managers,
they pretended that the company was fine
and that the debt was still worth 100%
of its face value for months on end so
that when they do their quarterly
reports, there's no problem. The truth
though was that the debt was already
almost worthless because the company was
in the process of collapsing. There were
loads of early warning signs for Black
Rockck and with this company in
particular that things were not going
right. Some of the lenders had already
agreed to take losses on their books
from the debt from Renovo and to convert
their debt into equity, which is a very
bad sign because it means Renovo can't
pay back some of its debt. That happened
6 months ago. Then 3 months ago, Renovo
again couldn't pay its debt. So, it
renegotiated with some of its lenders
again to defer their interest payments
again. They couldn't afford to make the
repayments for their debt. And this was
incredibly public. It was in regulatory
filings. And Black Rockck knew about
both of these things. But still on their
reports, they claimed that their loan to
Renovo was perfectly safe and that it
would be repaid in full, which was
obviously a lie that's now been exposed.
Now, the issue here isn't that this one
company went bankrupt. The issue is that
Black Rockck deliberately hid this loss
for as long as possible, making everyone
and everything seem better than it
really was. And the even bigger issue
here is that this isn't the only time
it's happened, and this isn't only Black
Rockck doing this. Now, the media is
basically saying that look, $150 million
loss for Black Rockck is nothing. This
really doesn't matter. That is true, but
what about the billions and billions of
dollars worth of other debt and other
investments that are in the exact same
situation? They're just still being
hidden away. And to show you how
prevalent this is, I'm going to give you
a couple more examples. This time, we're
talking about another private company
called Zip's Car Wash. On paper, private
credit firms appeared optimistic about
$654
million loan that they had provided to
Zip's car wash. Those valuations at the
end of September implied a strong chance
the debt would be repaid in full because
the funds which had given out that debt
were marking up at 93 cents on the
dollar 94 cents and 95 cents. So they
had a 95% certainty that they were going
to be repaid in full. As it turns out,
the auto wash operator was in deep
trouble. Between March and September,
ZIPS had already obtained a 10-month
extension on the maturity of the loan,
tried and failed to secure viable
refinancing proposals, appointed an
independent manager, and hired
restructuring advisers. And ZIPS is only
the most recent example of the lag that
exists between the disclosures that
private credit funds make to their
investors and the performance of the
underlying loans, which critics say can
create a false perception of safety in
the $1.6 trillion market. And another
example here, this time once again
involving BlackRock. A leading Black
Rockck private equity fund has lost more
than $600 million on an investment in an
insurance outsourcing company after the
business struggled with its debt load. A
group of private credit funds have
agreed to take control of the business
elacrity as the business has fallen
apart. Now, Black Rockck bought a
controlling stake in the business in
February 2023 through its $4.3 billion
long-term private capital strategy from
a private equity firm. Their more than
$600 million in equity investment in the
firm has now been wiped out entirely as
that restructuring. The company had $1
billion worth of senior debt outstanding
at the time of Black Rockck's investment
and it had $500 million worth of junior
debt lent out by Goldman Sachs as well.
So, Black Rockck, one of the biggest
players, is losing in aggregate across
all of these different deals that are
falling apart, literally billions of
dollars on these private investments or
these private credit loans that they're
giving out that they're being forced to
mark down as zero. And in that latter
case of elacrity, that was actually a
private equity deal, not a private
credit deal, but it's the exact same
problem. There are no requirements for
BlackRock to be honest about their
investments or their real losses. They
get to choose if they're going to mark
down the value of a bond or an
investment, a private investment. And
surprise, surprise, they never do until
the collapse is public and spectacular,
and they can't really hide it any
longer. Private credit firms are not
required to mark up or down the value of
the debt they own on a daily basis, like
investors in the broadly syndicated loan
and bond market do. Managers generally
tout this as a key feature for the asset
class. So, that's something they
actually like because it allows them to
smooth out volatility and provide
steadier returns to investments. As you
get into more distressed, different
lenders may get different information
and there will be differences in
perception of a company's value. It is
not uncommon for lender A to say this
company is garbage whilst the other
lender says the firm will come back.
Kahn said that his firm takes all of
that into account when helping managers
determine fair value for their
investments. Even in a bankruptcy, it's
possible for lenders to avoid taking a
hit if the residual value of the company
is enough to cover for their claim.
Critics argue the current setup gives
managers too much discretion and makes
it too easy to sweep problems under the
rug. Private credit is a black box. I
don't have a lot of confidence that the
marks are going to be accurate simply
because there is no active trading.
That's really how you get prices. And
this here is coming from the CEO of a
ratings agency themselves. Now, it's
incredibly likely that this is going to
go in the same direction as the global
financial crisis and the COVID crash
itself. Either we end up with outright
open bailouts like we saw back in 2008,
or we end up with infinite levels of
money printing again like we saw during
COVID, which then lead to massive
inflation that cost you in the end
anyway. So, you will be the one paying
for all of these failures. And I
genuinely see no outcome where any
Western country isn't in dire trouble
after this and literally incapable of
just not stealing from ordinary citizens
to pay off this private credit financial
disaster. Which is why I'm personally so
cautious with how I protect my assets.
And in fact, I've spent the last 5 years
making money and then swiftly and
silently protecting those assets and my
future from the inevitable hand of the
government which is going to come and
try and take it all off me. Now, if you
want to protect yourself from the
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Now back to this private credit collapse
and BlackRock in particular suffering.
And obviously this is all happening in
the wake of the first brand's collapse
and the trickle holdings collapse and
loads of other private credit blowups in
recent months and news. But again, many
keep sweeping this under the rug, right?
They're claiming that this is just
confirmation bias, that we're looking
for these private credit blowups, so we
find them. But in the past, they would
have just gone unnoticed. And there
actually isn't any more bankruptcies or
anything like that. This is all just
confirmation bias. I'm afraid that
simply isn't true either. It isn't just
the private credit collapse that's
getting more visible. The data shows it
is actually getting worse as well. The
US is now on track for the most amount
of corporate bankruptcies since 2010
throughout 2025. The fast pace of
monthly US corporate bankruptcies
extended into June and put 2025 on track
to be one of the busiest years for
filings in more than a decade. S&P
Global recorded 63 new bankruptcy
filings from certain public and private
companies in June, down from a revised
64 in May. The data includes companies
with public debt and assets or
liabilities of at least 2 million or
private companies with assets or
liabilities of at least 10 million at
that filing. 371 bankruptcy filings have
been recorded throughout 2025 at the
point of this report. The highest total
for the first half of the year since
2010. Corporate liquidity has largely
worsened in 2025 as debt levels for many
companies have risen and the Fed is
poised to hold benchmark interest rates
at their current level through the
summer. Consumer spending, meanwhile, is
straining under the weight of a cooling
job market. Inflation still above
monetary policy makers targets and the
Trump administration's tariffs. And here
you can see the actual data. This blue
bar here for each year is the first half
of the year when that data came out. And
you can see it's higher than literally
everything all the way going back to
2010 with distinct spikes over the last
couple of years in 2023 and 2024 as
well. And for some more up-to-date data,
because that report came out at the
halfway point of 2025, and we haven't
had an equivalent report come out for
the second, third quarter, or the whole
of 2025, obviously. Here's the data on a
monthly basis. Overall, US CNBS or
commercial mortgage bank securities, so
just debt on commercial property,
delinquency rate increased by 16 basis
points. In this report, S&P Global
provides their observations and analysis
of the US private label commercial
mortgage back security market, which
rose $300 million month overmonth. So,
it's now worth $662 billion. Just these
commercial mortgage back securities. The
overall delinquency rate for them
increased by 16 basis points to 6.1% in
October, which is almost a full 1% rise
over the last year. By dollar amount,
the total delinquencies are now at $40
billion, representing a net
month-over-month increase of another
billion dollars and a net year-over-year
increase of $6.3 billion. Now, this here
is the actual graph that shows that
data, and you can see just how
consistent the increase in delinquency
rates for commercial mortgage back
securities are here. They have been
skyrocketing over the last couple of
years. They are now worse than they have
been all the way back through to 2013.
The only reason it doesn't really look
that bad is because obviously we're
talking about 2020 in this graph as
well. Back when lockdowns literally
forced offices and all sorts of
different commercial real estates to
shut down, to stop accepting rent, to
stop taking in customers or allow their
people to use the space that they were
actually renting. But what happens maybe
when you take a look at just the office
commercial real estate market? The
delinquency rate on commercial mortgage
back securities for offices jumped 49
basis points in June to a record 11.1%.
This has now officially surpassed the
post 2008 high of 10.7% and the December
2024 peak as well. Since the start of
2023, the delinquency rate for CNBS's
for offices has skyrocketed by almost
10%.
The office sector is beyond bare market
territory. And obviously here you can
see the graph which shows you just how
ridiculous this level truly is. The
office sector is literally in full-on
collapse at this point. It's worse than
it ever was during the COVID crash and
worse than it ever was during the global
financial crash as well. Now, why is
this such a big problem? Well, because
offices obviously a massive asset class
and a massive form of assets to back up
a massive amount of debt. There is about
$3.6 6 trillion in commercial mortgage
debt around the world with another half
a trillion in construction loans for
commercial mortgage debt. And all of
that is excluding residential property.
That's more than $4 trillion worth of
debt that is backed up against
commercial office space and light
industrial that is seeing delinquency
rates sore. And of course, it is not
just Black Rockck that this is isolated
to because we're seeing a marketwide
drop. And as an example, we can actually
take a look at Blackstone instead of
Black Rockck. Now, Blackstone is
basically just a private equity version
of Black Rockck. They're still an asset
manager, but Black Rockck mostly focuses
on publicly traded stocks and ETFs and
index funds and the like, whereas
Blackstone mostly focus on private
companies. And they have a huge amount
of commercial real estate as well. And
we go back a couple of years actually in
Blackstone. They found themselves in
crisis with their commercial real estate
fund that's now worth about $150
billion. They defaulted on a $560
million bond that was backed up by a
portfolio of offices in Finland.
Blackstone had to seek an extension from
the bond holders to repay that debt. But
the bond holders themselves, they voted
against it and they basically called
Blackstone's loss. They were forced to
take a $500 million loss because they
couldn't afford the interest on the debt
that they used to buy a load of office
space in Finland. And it got worse for
them in the wake of this as well. They
then saw basically a bank run on this
real estate investment trust that they
built for an entire year following this
uh collapse. Blackstone's real estate
trust limited investor redemptions for
the 12th straight month in October of
2023. Their investors sought to pull out
$2 billion compared with a little bit
less in that month prior, but the real
estate investment trust was not able to
pay them out and could only give them
out 56% of actually what was requested,
which was the highest percentage they
had managed over the entirety of that
year. The real estate trust is a
colossus in US property markets with its
reach spanning from apartments to data
centers. In late 2022, they started
curbing withdrawals after redemption
requests picked up and its wealthy
clients became jittery about having
money locked into commercial real estate
with property values that were falling.
So, for 12 months in a row, Blackstone,
their investors, asked for their money
back, and Blackstone didn't have enough
cash to give it all to them. So, they
literally just said no. Now, this wasn't
technically a bank run because
Blackstone isn't technically a bank, but
this lasted for an entire year, and it
was all because Blackstone's real estate
investments were exposed as pretty
fraudulent. They did the same thing that
we're seeing in the private credit
markets now. They claimed their real
estate assets were rising in value and
that all was well when in reality the
values were falling, but Blackstone
being in private equity meant they
didn't have to listen to the markets and
they could decide how much their assets
were worth regardless of what anyone was
willing to pay for them right up until
they failed to repay their bond. Now,
it's not just Black Rock and Black Stone
who are caught up in this. It's Credit
Swiss and Deutschbank and JP Morgan
Chase and UBS and everyone else as well.
It's the entire financial system with
the exact same problem. assets are
losing values, but they're able to hide
those losses from their balance sheets
right up until the collapse becomes
public and then they're suddenly forced
to mark down their assets as losses.
Now, why are all these financial titans
seeing the problem at the exact same
time? Well, it's really all a hangover
from the last 15 years of loose monetary
policy. Easy money during the pandemic
helped many companies survive, but it
also led to dangerous borrowing habits.
For years, corporations enjoyed ultra-
low interest rates that made borrowing
money feel practically risk-f free. This
encouraged business, both big and small,
to pile on debt, often to fuel
expansion. But once the Fed began
raising interest rates to fight
inflation, those cheap loans became
expensive liabilities. Now in 2025,
companies are feeling the full weight of
their debt obligations, especially as
consumer spending softens and revenue
slows. Higher interest payments are
eating into profits. For some companies,
especially those with already weak
balance sheets, it's been enough to push
them over the edge. Legacy brands that
were already fighting to stay relevant,
have found themselves unable to
refinance or roll over debt, leading to
sudden collapse. Some companies mistook
debt for success, expanding too fast or
acquiring too many assets without having
the long-term cash flow to sustain them.
In a low rate environment, this strategy
worked. But in today's tighter credit
market, it's a death sentence.
Basically, debt levels are at all-time
highs after the insane money printing
and 0% interest rates that we saw after
not just the COVID crash, but actually
the global financial crisis as well.
Now, most of these companies and these
debtors, they're zombies. They should
have never survived in the first place,
but they could for years because there
was basically free money for them. Now,
that money is no longer free and they're
all collapsing and being exposed as
these zombies. We're now in a process
called extend and pretend. Banks are
being forced to renegotiate loans with
their clients in the hopes of riding out
a continued slump in the commercial real
estate market. Lenders in the UK and
across Europe are asking for building
owners to put up more equity to revise
the interest rates on loans and they're
striking refinancing deals as some
building owners start to breach the
covenants of their loans. Lenders are
cooperating and rolling over the loans
so that clients do not have to sell
buildings at cut prices and lead to fire
sales. a measure dubbed extend and
pretend or delay and prey. Rates have
only been high for about two years at
this point and most of these companies
with these supposedly high interest
rates are now sitting at something like
5 to 10%. Actually, that isn't a
crippling amount. It doesn't mean your
company's going to collapse overnight.
These companies can afford to keep
borrowing for a few years so they can
keep up this extend and pretend idea,
but they can't grow beyond that 5 to 10%
interest rate. So, this is all just
delaying the inevitable. And this goes
for the credit markets, the private
credit markets as well, not just the
corporate real estate markets. Now, this
has become such a big problem that now
even the Federal Reserve have published
a paper proving that banks were doing
this on purpose about a year ago and
lying about the true situations of not
only their own debts that they've given
out, but also the situations of their
clients as well, praying that things are
going to magically improve on their own.
Here's the paper. extend and pretend in
the US commercial real estate market. We
show that banks extended and pretended
their impaired CRA mortgages in the
post-pandemic period to avoid writing
off their capital leading to credit
misallocation and a buildup of financial
fragility. We detect this behavior using
loan level supervisory data on maturity
extensions, bank assessment of credit
risk and realized defaults for loans to
property owners and REITs. So yes, even
the Federal Reserve is trying to warn
people about the slight of hand that
these banks and private credit
institutions are putting together to try
and keep our minds off what's actually
going on. This is a serious problem.
We're talking losses potentially into
the trillions of dollars here. Certainly
around about 1.6 1.7 trillion on the low
end in my opinion when this entire
bubble comes to fruition and it finally
pops. Of course, make sure to take a
look down below in the description and
learn a little bit more about my
offshore freedom blueprint. In it, I'll
show you how I've been able to protect
myself completely legally from the
insanely overbearing and socialist UK
government and how you can do the same
thing no matter where you live in the
world. The pre-sale for this, it's going
to end this week when prices double,
they go up to full price. So, take a
look now before it's too late with the
link down below in the description. Of
course, if you want to tell me how right
or wrong I am about this uh video, about
what I'm talking about, tell me in the
comments down below. If you don't want
to miss out on my future videos, make
sure to subscribe. But if you really
want to help drive change and help me
and everyone else, send this video to
someone else. Click the share button,
send this video to a friend, a co-orker,
or a family member, and help them learn
more about this private credit collapse
as well. Michael Bur has basically been
missing in action for almost 3 years.
He's refused to comment on the
ridiculous AI speculation and bubble and
the insane economic data that we've been
seeing over the last couple of years.
That was until last week when he came
back out of the woodwork and launched a
huge attack on the AI bubble, on the
hype and the speculation.
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