Former Goldman Sachs CEO during 2008 crash says markets are ‘due’ for a crisis:
Lloyd Blanchev you, CEO of Goldman Sachs between 2006 and 2018, said he had a feeling of guilt about economic crises.
In an interview with CNBC’s Squawk box On Thursday, some potential risks were included in the financial markets.
“I look at the credit differences very narrow, as a lot of money will go to private credit, and people trying to get their returns a little by taking advantage of individual roads at the portfolio level,” said Blanchev.
He added that many assets are placed in insurance companies as a means of these companies to generate higher returns on long -term obligations. However, he said if he is an insurance regulator, he might begin to question the true value of these assets.
“There are a lot of risks by 1 %, but not 1 % risk that something bad happens,” continued in the interview.
Planxvin warned of the existence of “the crisis of the century every four or five years.” This includes the debt crisis in Mexico for the year 1994, the failure of Russian debt, the long -term capital management in 1998, the Bubble Dotcom 2001, and the great financial crisis. Blancphine said basically, expecting what is unexpected.
“I say we are worthy, and it does not matter that you cannot see where you come.”
But at the present time, Blankfein is “100 % in stocks” as a result of the federal reserve preparing to reduce the emerging thunderbolt market rates.
Wall Street widely sees federal reserve reduction rates next week as job numbers fell in July and August. But as inflation increased on president Donald Trump’s policies, banks were divided into the health of the economy. Earlier this month, UBS predicted 93 % of the recession. However, Deutsche Bank was more up, raising his goal at the end of the year on Thursday from 6550 to 7000.
The risks of the private credit market in the United States
Blanchevive’s concerns about narrowing credit differences and enlargement of special credit talks about potential hidden risks.
Credit differences are in the harshest in about 20 years, which means that there is a great difference in the return between corporate bonds compared to government bonds. Although this usually indicates the health companies sector, some are concerned that this distress may lead to poor risk, especially since some industries collide with stomachs in an unconfirmed economic environment.
The credit for the same has flourished, as it became a 1.7 trillion dollar industry, as higher interest rates lead to increased revenue for investors.
Blankfein is not the first veteran banking to highlight a warning to the risks of private credit, which often lacks liquidity and clear indicators about credit quality. Jimmy Damon, CEO of JPMorgan in July, warned that private credit could become a “recipe for a financial crisis.”
The organizers of the International Monetary Fund also increased the audit in the private credit markets, and discovered in the financial stability report in April that more than 40 % of companies that use private credit have a negative cash flow from operations by the end of 2024, indicating an increase in pressure on financial systems.
2025-09-12 19:22:00
