Merryn Talks Money: Markets Wrap – Private Credit, War & a Lack of Safe Havens

Episode Date: March 13, 2026
Host: Merryn Somerset Webb (Bloomberg UK Wealth Editor-at-Large)
Guest: John Stepek (Senior Reporter at Bloomberg, Author of the Money Distilled newsletter)

Episode Overview

This week's episode delves into the current uncertainty pervading global markets, shaped by geopolitical tensions, volatility in oil prices, a lack of traditional "safe haven" assets, and the looming question of how robust or vulnerable the burgeoning private credit market might be. Merryn and John candidly admit that much is unknown in today’s environment, making for a probing, grounded discussion on what investors can—and can’t—predict or depend on.

Key Discussion Points & Insights

1. A Time of Extreme Uncertainty

• Theme: The hosts open the conversation by reiterating that “I don’t know” is the fairest answer to most pressing market questions right now (interest rates, commodity prices, war duration, private credit risks, etc.).
• Quote:

  “There are things we don’t know. And now I've told you about even more things that I don't know about.”
  —Merryn Somerset Webb (02:13)

• The volatility is so high that traditional market frameworks fail; up for discussion is a new term, the "kangaroo market," referencing wild price swings.

2. Oil: A ‘Kangaroo Market’

• Key Events: Early week oil price spike to near $120/barrel, then rapid drop below $90—all in one day—driven by fluctuating war news and geopolitics.
• Quote:

  “There is such thing as a kangaroo market—one that goes up and down, up and down so fast... you never know if you're in a bull market or a bear market anymore.”
  —Merryn Somerset Webb (03:33)

• Implications:
  • Ongoing war and the blockade of the Strait of Hormuz threaten global supply.
  • Mortgage rates and housing sentiment are already affected by higher oil and gas prices.
  • The longer disruptions last, the more lasting economic "scarring" is expected.

3. Safe Havens: Elusive and Imperfect

• Theme: Traditional hedges—gold, sovereign bonds—don’t offer clear protection in stagflationary scenarios.

• Detail:

  • Gold has performed moderately but is already expensive.
  • Bonds are unappealing with prospects of persistent inflation.
  • Bitcoin dismissed for discussion as not fit for purpose in this context.

• Fresh Water as Geopolitical Risk:

  • Water security emerges as a potential new chokepoint—especially for Middle Eastern countries reliant on desalination.

  “You can cause an extraordinary amount of suffering by hitting Saudi Arabia's desalination plants... Iran already had a water shortage before we even got to this point.”
  —Merryn Somerset Webb (10:21)

4. A New Investment Mindset: “Just in Case” Not “Just in Time”

• Shift:

  • World is moving from globalization’s “just in time” ethos to “just in case,” with greater emphasis on supply security, resilience, and strategic control.
  • Stress on investing in hard assets, energy/food/industrial security, and away from hype-driven FOMO.

• Winners & Losers:

  • Asian markets reliant on Middle Eastern fossil fuels appear more vulnerable than Latin American economies.
  • London property might see a slight uptick from returning capital flight.

5. Private Credit: Systemic Risk or Not?

• Explainer:

  • Private credit = direct loans to companies, outside traditional banks—often via investment trusts or “BDC” funds.

• Concerns:

  • Sector has ballooned, opacity and lack of liquidity is troubling.
  • Recent stresses linked to weakness in US software firms—many of which were major loan recipients.

• Key Mechanisms:

  • Open-ended funds restrict withdrawals to once a quarter with limits, reducing risk of a classic “run.”
  • Banks, like JP Morgan, are now demanding funds mark down loans to software companies.

• Quote:

  “My gut feeling is this is more a recession amplifier than a financial crisis issue.”
  —John Stepek (13:26)

  • Default risk could mean a wave of “zombie” firm failures, making it tough for SMEs to get funding, but unlikely to result in 2008-style contagion.
  • Insurers are exposed to private credit, but banking system is not dangerously leveraged.

• Fire Sale Opportunities:

  • Some hedge fund managers (e.g., Boaz Weinstein) are reportedly buying private credit assets at large discounts, betting that risk is overestimated.

6. UK Housing: Glimmers of Resilience Amid Gloom

• Survey: Royal Institution of Chartered Surveyors shows UK property professionals are nervous, but there are small signs of positivity—e.g., London agents see capital returning from Dubai.
• Market tidbit: The FTSE 100 is up for the year, one of the few global markets able to say so.

Notable Quotes & Memorable Moments

• On the limits of forecasting:

  “It's a very difficult time, isn't it? Normally we can really come up with quite strong opinions on things. We're quite good at that. But this is hard because the moving parts are so many and so various.”
  —Merryn Somerset Webb (02:13)

• On old rules no longer applying:

  “We've been through a good few decades where you could hold equities or bonds and you would get decent returns from both. Unfortunately, we might be going into an era where whatever you hold, your returns are rubbish, or... it's much harder to get decent returns.”
  —John Stepek (11:26)

• On the perils of private credit:

  “I've watched this sector grow... worried about the lack of transparency... But we're never quite certain whether it's so embedded in the system that it creates any kind of systemic risk if and when it goes wrong. And we're kind of about to find the answer to that, aren't we?”
  —Merryn Somerset Webb (12:49)

Important Timestamps

| Time | Segment | Key Topic | |-------|--------------------------------------|------------------------------------------------------------| | 02:13 | Introduction to uncertainty | “I don’t know” as the new normal for markets | | 03:33 | Oil price volatility | "Kangaroo market" phenomenon | | 06:25 | Who wins and loses | No obvious safe havens; economies as “all losers” | | 08:42 | Supply chain risk | “Just in case” investment thinking; water security | | 12:49 | Private credit explainer | Transparency and systemic risk concerns | | 13:26 | Recession amplifier | Will private credit cause a crisis or just deeper slump? | | 15:54 | Fund liquidity vs. solvency | How fund structures limit “runs” on assets | | 21:11 | London housing, FTSE 100 | Small positives amid the gloom |

Takeaways for Investors

• Uncertainty dominates: Accepting what can’t be known is part of the current investing landscape.
• There may be no traditional safe haven: Diversification, hard assets, and thinking about resilience matter more.
• Private credit remains untested: Risk is likely to show up as an economic drag versus a systemic financial crisis—barring major surprises.
• Watch for structural change indicators: Keep an eye on supply chain weak points (like water), and shifts in capital flows.
• Stay flexible: The era of easy answers and predictable correlations is over (at least for now).

Final Thoughts

While this episode offered few definitive answers, it equipped listeners with the right questions and frameworks to muddle through turbulent waters. If you’re unsure about how to position your portfolio, you’re not alone—even the experts are in uncharted territory.

For more insights, follow Merryn Somerset Webb (@marionsw) and John Stepek (@jonstapek) on X/Twitter. Subscribe and review the show for future weekly “Markets Wrap” episodes.