Trump Fumbled It, Energy Crisis Is Just the Beginning, Global Asset Manager Faces Bank Run

Energy is the lifeblood of the global economy—after all, oil is the blood of industry, and no one can do without it. But for the United States today, finance is its core.

While everyone is watching the Middle East conflict to see if it spills over and wondering how high oil prices will go, unexpectedly, the biggest crisis facing the U.S. right now isn’t soaring oil prices but an emerging financial crisis. Even the world’s two largest private equity firms are beginning to face withdrawals. Is a U.S. financial crisis about to begin?

Is another financial crisis coming?

It’s truly a case of misfortune never coming alone. Just when everyone thought the energy crisis was the worst, a more severe situation has now emerged: the U.S. financial crisis may be on the horizon again.

Recently, according to media reports, as crude oil prices repeatedly hit new highs and even briefly surpassed $120 a barrel, a more dangerous signal is quietly emerging in a hidden corner.

That is, according to Wall Street reports, BlackRock’s flagship private credit fund, with $26 billion under management, has directly imposed redemption restrictions. In response, its HPS fund also issued a statement on Friday, setting a cap on redemption shares.

It’s important to note that BlackRock is the world’s largest asset management company. Previous media reports indicate that BlackRock’s assets are around $10 trillion. Not only BlackRock is facing redemptions, but even Blackstone’s funds are experiencing significant capital withdrawals.

Both of these giants are influential worldwide, yet they are now facing withdrawals. To be forced to set redemption limits indicates this isn’t just a simple capital outflow but the start of a rush to exit.

For a long time, BlackRock and Blackstone have played a supplementary role in personal credit—funding projects that U.S. banks cannot lend to or invest in. These private equity funds dare to invest in high-risk, high-reward projects that banks avoid.

During the Russia-Ukraine conflict, media reports even claimed BlackRock was acquiring Ukrainian assets.

This is quite bold, but the cost is that as the Middle East conflict spills over, a large amount of capital is rapidly losing confidence in U.S. investments and is accelerating withdrawals.

With the conflict spreading in the Middle East, everything denominated in dollars needs to be re-priced. More importantly, U.S. economic data, including non-farm payrolls and employment figures, are very bleak, indicating that the U.S. is at risk of stagflation.

This also means that instead of cutting interest rates, the U.S. might have to raise them. At this point, what are the profits and returns on assets invested by BlackRock and Blackstone?

And don’t forget, during the last rate hike cycle, many small and medium-sized U.S. banks faced a wave of closures. If another wave hits now, can the U.S. financial institutions hold up?

Moreover, Middle Eastern capital remains a major player in U.S. financial markets, especially in AI. But with Middle Eastern sources drying up and the U.S. facing stagflation risks, is the American financial market still safe?

It can only be said that risks are brewing now, and perhaps what follows is just the beginning of all dangers!

Author’s note: Personal opinions only, for reference.