"I look at credit spreads being so narrow, so much money going to private credit, people trying to goose their returns a little bit by leveraging up in kind of odd ways at the portfolio level,"
"There's a lot of 1% risk, but it's not a 1% risk that something bad will happen,"
"I'm saying we're due, and it doesn't matter that you can't see where it's coming from."
"100% in equities"
Credit spreads are unusually narrow while large flows into private credit increase leverage at the portfolio level as investors seek higher returns. Insurers are receiving assets to boost yields on long-term liabilities, creating valuation and regulatory questions. Low-probability, high-impact risks have recurred roughly every four to five years, implying another major crisis is likely even if its origin is not visible. Expectations of Federal Reserve rate cuts are supporting equities and contributing to a budding bull market. Market outlooks and recession probabilities vary across banks amid tariff-driven inflation and mixed economic signals.
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