Private Credit, Carry Trades, and Stablecoin Run Risk
Forced selling will hit private credit before the next set of regulated bank nouns
After Dodd-Frank, banks pulled back and loan origination migrated to hedge funds and private credit, which now sit in leverage the last rulebook did not map. Crises cluster around verbs such as margin, liquidate, and run, which connect venues that look safe in isolation. Position filings will not show who must sell what, to whom, and how fast when volatility spikes.
| Instrument | Side | Target | Reason |
|---|---|---|---|
| BIZD | Short | We believe post-crisis bank rules pushed origination into private credit, so the next forced-selling event is more likely to hit lightly regulated lending vehicles than the banks that were the last crisis's named institutions. |
A Sunday-night stablecoin or carry unwind cannot be coordinated like the Bank of Japan
Stress remains in Japan, private credit, the carry trade, the basis trade, and parts of insurance. A coordinated call to the Bank of Japan is not the same as hundreds of millions of stablecoin holders redeeming T-bill-backed tokens from phones across time zones on a Sunday night. Daily plumbing in repo and FX now dominates overnight risk even for long-horizon portfolios.
| Instrument | Side | Target | Reason |
|---|---|---|---|
| FXY | Long | We believe unresolved Japan, carry-trade, and basis-trade stress, together with repeated yen support, favors owning the yen as cheap-funding trades keep requiring official backstops. |
Themes
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