You can always tell when there is a problem. When things are fine the companies keep the profits to themselves. When things start to get dicey - foist it off onto retail investers.

Private equity (PE) is increasingly being introduced into 401(k) plans, driven by a 2025 executive order encouraging "democratization" of alternative assets. - Google AI

Funny enough Chinese State owned banks have been doing much the same for quite some time. No one ever defaults, loans are extended as long as it takes. Presumably the threat of being called into the next party meeting to explain yourself is sufficient motivation for the people running the business to pivot as many times as it takes until they find a way to make money. Worst case the state swaps someone else into leadership.

I say this to say... who knows? I guess if you shuffle deck chairs fast enough everything works out fine (?)

The only problem is allowing regulated US banks with an implicit gov guarantee to lend money to them.

There are limited ways to short these positions which would probably add some fuel to the fire.

But what will break the clock ?

What kind of trouble is brewing from the migration of partner capital committment to credit based on NAV?

What is the risk, probability of actualizing the risk, and the outcome of actualized risk?

The ticktock ticktock routine reads like baseless fearmongering to me.