‘Bond King’ Jeffrey Gundlach warns of the next financial crisis: ‘It has the same trappings as subprime mortgage repackaging in 2006’

Jeffrey Gundlach, the billionaire founder and CEO of DoubleLine Capital, warned on Monday of an area he’s concerned about, and it’s not a bubble related to artificial intelligence. “The next big crisis in the financial markets, it’s going to be private credit,” the so-called “Bond King” said on Bloomberg’s Odd Lots podcast. Gundlach said the sector “has the same trappings as subprime mortgage repackaging had back in 2006,” arguing the issues underpinning private credit are severe.

Gundlach explained that, in recent years, the “garbage lending” that plagued public markets before the Great Recession has shifted into private markets. Private credit has become increasingly popular and is now over-allocated to by large asset pools. The core problem, according to Gundlach, lies in the fundament