Back in the summer of 2008 — or just before the great financial crisis — two unsettling financial trends collided: oil prices surged to almost $150 a barrel and private funds holding subprime mortgages reported mounting losses.
Investors might now feel some déjà vu. This month, the US-Israeli attack on Iran has caused the oil price to see-saw violently. And while it remains well below that 2008 peak — especially in inflation-adjusted terms — it could still climb, given the record scale of disruption.
Meanwhile, bad news is also tumbling out from the non-banking world, this time from private credit funds. Never mind that regulators have repeatedly warned that the private credit sector seems overheated; or that banks like JPMorgan are reducing exposures to this sphere, which contains “cockroaches” (ie troubled loans) to cite Jamie Dimon, head of JPMorgan.