Warren Stephens

What percent of movie theaters if they burned down would be rebuilt today? How many are making a return on investment that makes sense versus high sunk capital costs?

Everything suggests that at least ~4 million barrels of crude exited the Strait of Hormuz today. Largest outflow since the 1st day of the Third Gulf War. (... And yes, that's a fraction of the 20 million barrels a day that typically left the SoH on any given day pre-war...)

Socialism dies the moment you understand basic economics. Every socialist experiment—from the Soviet Union's 66 million deaths to Venezuela's 2,000% inflation—fails because central planners cannot calculate prices without markets. Ludwig von Mises proved this in 1920: without private property and voluntary exchange, rational economic calculation becomes impossible. You cannot allocate scarce resources efficiently when bureaucrats replace market signals. Cuba's average monthly wage remains $30 while North Koreans starve. Meanwhile, Hong Kong transformed from fishing village to financial powerhouse through free markets. Property rights create prosperity. Central planning creates poverty. The choice stays yours.

I feel their pain. 40% redemptions is beyond breaking point for a private credit firm. But gating your investors? In the long run, probably even worse. Private credit funds lend to middle-market companies (in Blue Owl's case, mostly software and SaaS). These are illiquid, multi-year term loans. They can't be sold overnight on an exchange. There is no bid. Now imagine 40% of your investors want out. You have two options: A) Honor the redemptions. To raise cash, you have to sell loans at a steep discount, or worse, call them in early. But your borrowers don't have the cash sitting around either. They took term debt because they needed time. Force-selling a multi-billion loan book at 70-80c on the $ doesn't just hurt your returning investors - it destroys value for everyone who stays. B) Gate redemptions. Which is exactly what Blue Owl did. Cap withdrawals at 5% per quarter. Protect the remaining LPs. Protect the borrowers. But now you've confirmed every investor's worst fear: your money is locked and you can't get it back when you need it. This is the fundamental tension in private credit: you're offering quarterly liquidity on assets that have none. It works beautifully in calm markets. In stress, the math breaks. And here's the part nobody talks about - the borrowers. If a fund were forced to liquidate, those SaaS companies with 3-5 year term loans would face early repayment demands, covenant pressure, or their debt getting transferred to a distressed buyer at punitive terms. The very companies the fund was supposed to support become collateral damage. Blue Owl is in survival mode, so they chose the second option. Which doesn't mean they won't have to go with option A as well, and very soon. But the real question for the industry: should interval fund structures be used for assets this illiquid in the first place?