Private Credit Risks Explained, Oil Surges Above $100 | The Weekly Wrap

Private Credit Risks Explained, Oil Surges Above $100 | The Weekly Wrap On this episode of The Weekly Wrap, Steve Eisman discusses the latest with the war in Iran, with oil prices now above $100 amid the Strait of Hormuz remaining closed. Steve also breaks down... Here we are with a war on and oil prices are above $100. Oil has an outsized impact on prices. There is now a fear that if the war lasts a long time, inflation and inflationary expectations will climb. There is no doubt in my mind that a credit cycle is emerging. The U.S. has not had any kind of credit cycle at all since the great financial crisis, which is why many commentators think we are on the cusp of one. We are overdue. Hi, this is Steve Eisman, and this is another edition of the Weekly Wrap. This is for the week ending March 20th, but recorded Thursday night, March 19th. Like last week, the war in Iran dwarfs all investment considerations. As of the end of this week, the Straits of Hormuz remain closed. The Trump team is promising to open up the straits soon, as China is backchanneling to allow passage for Chinese flagged ships and other countries are aligning transponders as Chinese adjacent, hoping for safe passage. Oil prices remain well above $100 and the S&P 500 index is down 4% for the year now and NASDAQ is down 5%. Here we are with a war on and oil prices are above $100. So, of course, there are rumors that the federal government is about to intervene in oil markets to drive the price down. On Monday, Treasury Secretary Besson responded to those rumors. He said that the administration had no plans to intervene in oil markets and probably does not have the authority to do so, even if it wanted to. In times of uncertainty and market volatility, conspiracy theories gain prominence. I remember that during the great financial crisis, there were days where the market would rally back and I would hear from many friends I know that they had heard that the federal government was intervening in the equity markets and that was the reason for the rally. Now, I like a good conspiracy theory, too, but the federal government intervening in equity markets never impressed me as being true. Not because it could not happen, because if it did, it would leak and no leaks ever occurred. Normally, in times of uncertainty, investors will seek safety and buy U.S. Treasuries, thereby causing interest rates to go down. Not this time. Since the war began, the yield on the 10-year Treasury has climbed from 4.0% to 4.3%. Not terrible, but still in the wrong direction. Investors have been selling stocks and Treasuries. Now, why have interest rates gone up? It's all about oil prices climbing above $100. There is now a fear that if the war lasts a long time, inflation and inflationary expectations will climb. Oil has an outsized impact on prices. It affects the price of plastics. It also impacts the price of food via the cost of fertilizer. The green market's North American fertilizer price index has climbed from $700 per short ton before the war to $1,000, a 43% increase. Also, to offset the increased cost of jet fuel, airlines will be raising prices soon, which would impact summer travel. Bottom line, if the war ends quickly, the long-term impact on inflation will be negligible. If, however, the war lasts months, the U.S. will develop inflationary pressures. In uncertain times like these, it's a good time to review major investment themes. So leaving aside the war, in my view, the major risks in the market are, one, will AI investments generate sufficient returns to justify the hundreds of billions being spent on AI infrastructure? And two, is a credit cycle emerging? Will it impact private credit? And if it does impact private credit, what type of loans will display problems? We've discussed the issues involving AI many times before, and we'll continue to do so. Briefly, the major long-term issue is whether all this AI infrastructure spending will produce returns that justify the hundreds of billions being spent. Critics like Gary Marcus, who we interviewed in January, argue that it does not. However, those criticisms are not stopping AI spending. This week at NVIDIA's annual developer conference on Monday, CEO Jensen Wong said he expects purchase orders between the Blackwell and Vera Rubin chips to reach $1 trillion through 2027. So despite all the criticisms, AI spending continues at a torrid pace. And I know there are critics out there who believe that AI spending will just stop, just like internet infrastructure spending stopped during the recession of 2001. Yet, at this point, there are just no signs of AI spending slowing down. Now let's take some time to review the private credit issues and what has happened so far this year. What is private credit? And why is it so top of mind and suddenly being discussed constantly on CNBC? First off, private credit operates largely in private. Hence the name. Information flow is almost non-existent until problems develop. And this is why it has not been the focus of attention until now. Problems now are developing. Traditionally, private credit has been a business-to-business model. In other words, large institutions are lending money and taking measured risks to fund business

Podcast episode (The Real Eisman Playbook Ep 55) featuring retired U.S. Army officer John Spencer discussing what is actually happening in the Iran war and how headlines may mischaracterize it. The source text provides no concrete new operational details, policy actions, sanctions, or timeline—so it’s more context-setting than a discrete tradable catalyst.

Podcast episode description only (no specific tickers mentioned): Steve Eisman and Baird software analyst Rob Oliver discuss why software stocks have been heavily sold off over the past year and the risk of “catching a falling knife” in the sector. Likely themes include multiple compression, rate sensitivity/duration, growth deceleration, and how/when to re-enter the group.

Podcast discussion (Eisman with Strategas’ Jason Trennert) framing current market action as “risk-off”: stocks down, gold up, oil up, crypto down (more than NASDAQ). Key macro driver highlighted is renewed tariff rhetoric (Trump threatening tariffs vs Europe), with the view it may be negotiating leverage but still creates headline risk and potential repeat of prior tariff-driven corrections. Overall this is thematic macro commentary rather than a concrete, time-specific catalyst.

Commentary-style weekly wrap describing sharp risk-off moves: silver down ~26% and bitcoin down ~24% attributed to panic selling/forced liquidations; “software stocks” described as getting “obliterated.” Also frames AI/LLM competition as a CapEx arms race, implying mega-cap platforms (esp. Google) can outspend venture-backed challengers; suggests OpenAI would be vulnerable if VC funding tightens. The excerpt references “two stock recommendations,” but the specific tickers are not provided here.

Podcast discussion (Eisman w/ Lakshmi Ganapathi, Unicus Research) arguing that headline bank/credit metrics look fine but “under the hood” US consumers are increasingly stressed; the mismatch between soft data (very weak sentiment) and reported credit quality may foreshadow later-stage deterioration in delinquencies/charge-offs and weaker discretionary demand.

Steve Eisman argues the current selloff is being amplified by “AI panic,” with investors quick to dump software and broader risk assets on little provocation. He highlights Molina’s weak results as a symptom of deeper, structural issues in the health insurance/managed-care business (collapsed P/E multiples reflect deteriorating fundamentals, not just sentiment) and expects fixes to take longer than the market hopes. Consumer data is bifurcated: lower-end consumer is weakening while higher-end spending is still supporting aggregates.

Podcast discussion on AI/LLMs (including hallucinations and “agentic AI”) framed around hyperscalers materially increasing capex (cited ~$650B across top four) to build AI infrastructure. It’s more thematic than company-specific: near-term beneficiary narrative is AI compute/networking/power supply chain; key risk narrative is that LLM limitations (hallucinations, reliability) and uncertain ROI could slow enterprise adoption and capex intensity.

On this episode of The Weekly Wrap, Steve Eisman breaks down the market volatility driven by the War in Iran. He also dives into growing concerns around private credit and whether risks are... The big news of the week, of course, started over the weekend with the United States and Israel bombing Iran. Once again, Bitcoin in a crisis correlates with tech stocks and does not act as a hedge. The news keeps getting worse in private credit land. A fraud was uncovered. This is the third lending fraud that has been exposed during the last six months. Block is laying off 4,000 employees, which is 40% of its workforce. Is this the start of massive white-collar layoffs or is it company-specific? I don't know yet, but it is worrisome. Hi, this is Steve Eisman and welcome to another edition of The Weekly Wrap. This is for the week ending Friday, March 6, 2026, but recorded Thursday night, March 5th. Before we start, I want to point out that I am on Professor Scott Galloway's podcast called The Professor G Pod that drops today, this Friday. And now for the wrap. This week's wrap is about the power of a narrative in new and ongoing situations. In an odd way, despite a war, the rest of the week h