Gundlach Warns About the Risks Facing Private Credit

Jeffrey Gundlach warns that private credit resembles 2007, with risks of trust erosion and rising redemptions. He recommends holding 20% cash, allocating 20% to commodities via the Bloomberg Commodity Index, and buying gold on dips to 3500-4200. He also discusses treasury issuance skew and potential yield curve control. - Gundlach compares private credit to 2007 subprime, citing markdowns and gating risks. - He warns that redemption requests will rise in June as investors try to exit. - He recommends a 20% cash position to deploy during market dislocations. - He favors a 20% allocation to real assets via the Bloomberg Commodity Index. - He is bullish on gold, suggesting buying at 3500-4200. - He discusses treasury issuance heavily skewed to short end and potential yield curve control. - He notes that long-term yields may rise even in a recession due to fiscal concerns. - He has executed a trade swapping to low-coupon Treasuries to hedge against restructuring.