Mrudul Chauhan

This story is actually insane: • dude drops $2000 on a DJI robot vacuum like a lunatic • refuses to use the normal app like a peasant • Sammy Azdoufal fires up Claude to crack the API so he can drive it with an xbox controller • Claude delivers the goods • pulls an auth token from their servers, connects successfully • except the system thinks he controls 7000 vacuums • checks again • yep, seven thousand • DJI built authentication with zero device ownership verification • any valid token works for any unit on the planet • Sammy now has eyes inside homes across 24 countries • live vacuum camera feeds everywhere • full floor plans from the mapping data • some guy in germany eating cereal at 3am, unaware his roomba is snitching • one API call away from being the most informed burglar in history • all he wanted was to steer his vacuum with a joystick • does the right thing and reports it • DJI fixes it in two days • back to normal life with his stupidly expensive floor cleaner • IoT companies stay undefeated at shipping garbage security

Remember this scene in The Big Short? Jamie Shipley and Charlie Geller have bet everything against the housing market. They've been bleeding for months, wondering if they're wrong. Then they flip on CNN and see it: New Century Financial - the second-largest subprime lender in America - has filed for bankruptcy. "It's starting." That was April 2, 2007. New Century wasn't the crisis. It was 1% of the problem. But it was the first domino. 4 months later, BNP Paribas froze 3 funds citing "complete evaporation of liquidity." 18 months after that, Lehman was dead. I'd encourage you to watch that scene today. Because we JUST got our New Century moment in private credit: Blue Owl Capital - $307 billion in assets under management - just permanently halted investor redemptions at its retail private credit fund, OBDC II. Investors will NEVER AGAIN redeem shares from this fund. On January 25th, I wrote that private credit was showing cracks at the exact moment Wall Street wanted to open it up to your 401(k). 3 weeks later, here we are. The timeline follows a pattern anyone who's been around markets long enough recognizes: Through the first 9 months of 2025, OBDC II investors withdrew $150 million - up 20% year over year. Meanwhile, Blue Owl execs publicly assured investors there was "no meaningful pressure" on their asset base. But there was. And they're now facing a federal class-action lawsuit for saying otherwise. In November, they attempted a merger that would have forced OBDC II investors into a publicly traded fund trading at a 20% discount to NAV. Effectively confiscating a fifth of their capital. Blue Owl's own CFO conceded investors "could take a potential haircut." The stock dropped 11% in 8 days. They killed the deal. Now they've abandoned the pretense entirely. PERMANENT halt. Fire-selling $1.4 billion in loans across three funds. Investors get roughly 30% of NAV back through quarterly distributions - on Blue Owl's schedule, not theirs. One delightful detail: Blue Owl's co-CEOs have pledged $1.9 billion of their OWN company shares as collateral for personal loans - proceeds used, in part, to acquire the Tampa Bay Lightning. The stock is down 33% this year. That collateral has literally shed $260 million since January. Founders leveraging company stock for hockey teams while retail investors queue up for their own money. Wall Street's version of noblesse oblige. But here's what matters: This isn't about Blue Owl. Blue Owl is a symptom. The disease is a $3.4 TRILLION private credit industry built on opacity, conflicts of interest, and the polite fiction that illiquid assets can offer liquid redemptions. Morningstar DBRS reports the trailing default rate has risen to 4%, up from 2.8% a year ago. Downgrades outpacing upgrades. Outlook negative. UBS warns defaults could reach 13% if AI disrupts the software companies making up 17% of BDC loan portfolios. Payment-in-kind loans (where borrowers can't pay cash interest and simply pile it onto the debt) have surged past 11% of BDC income. When your borrowers are paying you with IOUs, the word "income" deserves quotation marks. And the government's response? Open YOUR 401(k) to private credit. Trump's executive order directed regulators to do exactly that. They want to "democratize" an asset class whose flagship retail product just permanently locked investors out. The KKRs. The Blackstones. The Apollos. Everyone loaded up on private credit is exposed. When the tide goes out, you find out who's swimming naked. In April 2007, New Century went bankrupt. Most of the financial world shrugged. 17 months later, Lehman made the point impossible to ignore. And Blue Owl permanently halted redemptions TODAY. AVOID PRIVATE CREDIT AVOID PRIVATE EQUITY Because it's starting...

Another incredibly underwhelming launch today: Aztec They raised $157M and are now trading at $59M market cap, $215M FDV. Even that feels too expensive. Their public sale two months ago was at a $480M FDV, immediate losses of over -50%. Retail is down bad. a16z and other tOp TiEr investors are probably down even worse. This reflects everything that’s wrong with the industry: - Massively overfunded VCs bidding valuations to infinity - Founders with ego issues allowing bids to infinity - Too much focus on infra and academic experiments instead of real businesses with revenue - Blind public investors aping for quick flips without understanding what they’re buying Stop complaining, because as long as you won't show more discipline with your investments, nothing will change.