😏 Wall Street is holding your money hostage
Morgan Stanley and Cliffwater decided to repeat BlackRock's trick — quietly banning investors from withdrawing their own cash.
Cliffwater: people requested to withdraw 14% from the fund of $33 billion. The men in suits scratched their heads and issued exactly half. The rest — 'internal rules', uh-huh.
Morgan Stanley is even funnier: from $8 billion, they approved $169 million. The limit — 5%. Thanks for giving anything at all 🙃
Why? All these billions are buried in long-term corporate loans that cannot be sold quickly without huge losses. And now AI has come along and started to collapse the business models of the companies these funds had lent to. Loans are melting away before our eyes.
JPMorgan is already cutting financing for such funds. The direct lending market of $1.8 trillion is shaking. If the outflow does not stop — corporations will start dumping debts for pennies, and then hello, wave of defaults.
Classic: profits are private, risks are for everyone 📉