WSJ What’s News – PM Edition

Episode Title: Money Is Flying Out of Private Credit. That’s Bad News for Wall Street.
Date: March 13, 2026
Host: Alex Osulla (The Wall Street Journal)

Overview

This episode explores the sudden rush of redemptions from private credit funds, what’s driving investor panic, and what it means for Wall Street’s booming private credit industry. The Wall Street Journal’s Matt Wirtz joins Alex Osulla to explain the mechanics and implications of this unprecedented squeeze. In addition, the episode dives into how the war between Iran and the U.S. is stirring economic uncertainty, the latest on a federal probe into Fed Chair Jerome Powell, and the explosion of Oscars betting on new prediction markets.

Private Credit Panic: What’s Happening and Why (04:00–06:40)

What is Private Credit?

• Private credit refers to loans made by private fund managers—usually to corporations, financial institutions, and sometimes consumers—that banks once dominated.
• These investment products are mostly sold to individuals via funds that restrict the speed and size of withdrawals, unlike mutual funds.
• “The assets in the funds are these private loans that are actually kind of hard to sell. So it’s a structure that makes sense.”
  — Matt Wirtz, 04:30

The Rush to Withdraw

• Recently, more and more investors have rushed to redeem their money from these funds, sparking concern across Wall Street.
• Investors’ fears snowballed as they realized redemptions weren't always possible on demand, prompting a “get out first” mentality.
• “Redemption started to go up, and then all of a sudden investors, at least some of them, woke up to the fact that, oh wait, I might not be able to get all my money out when I want it. I better put in for it now. And then it just kind of built and built.”
  — Matt Wirtz, 00:37 (reiterated at 05:25)

Catalysts for Panic

• The tipping point was a series of “strange little frauds” in companies like First Brands and Tree Color, which sparked investor fears throughout the credit markets.
• Behavioral economics—herd mentality—has driven the sell-off, as investors want out before the crowd.
• “This seems to be a lot about investor psychology. There’s this belief I need to get out before everyone else gets out.”
  — Matt Wirtz, 05:25

Outlook

• Analysts predict Q2 2026 redemptions will be even worse than Q1, possibly peaking then.
• This crisis highlights the risks of expanding private credit funds into retail channels, such as 401(k)s, without proper investor education.
• “This, what we're seeing now, shows the dangers of doing that without having the right structure and the right education in place.”
  — Matt Wirtz, 06:17

Economic Pressure from the Iran War (01:52–03:04)

Updated Economic Data

• U.S. GDP for late 2025 revised down to 0.7% growth.
• January’s PCE Price Index (Fed’s preferred inflation gauge) was 2.8%—down slightly but still over target.
• “As everyone who's driven in the last couple of weeks knows, gas prices are already a lot higher.”
  — Matt Grossman, 01:52

War’s Impact on Policy

• The Iran war has driven a sharp rise in oil prices—Brent crude soaring over 40% in two weeks.
• Inflation data may become less relevant as war-fueled cost increases ripple through the economy.
• “The fear would be that not only does that translate into higher gas prices, but higher prices for everything else too, because so much of what we buy has to get shipped.”
  — Matt Grossman, 02:17

Stock Market Response

• The Nasdaq down 0.9%; all major U.S. indexes end the week lower.
• The Dow sees the sharpest weekly decline (-0.2%).

Federal Probe and Policy Developments (08:04–09:04)

Justice Department vs. Fed Chair Powell

• A federal judge quashed DOJ subpoenas to the Fed, calling them “improper” and meant to pressure Powell.
• DOJ opened a criminal investigation into alleged false testimony to Congress.
• The judge’s conclusion:
  “The purpose of the subpoenas was, quote, to harass and pressure Powell either to yield to the president or to resign.”
  — Judge’s decision, summarized at 09:04

Global Policy Tensions

• Pentagon sends more Marines and warships to the Middle East in response to Iran’s actions in the Strait of Hormuz.
• U.S. and European allies split over easing Russia sanctions: “Six out of seven [G7 leaders] were clearly the opinion that we should not release the sanctions against Russia. And we were a little bit surprised that we heard this morning that the American government decided differently.”
  — German Chancellor Friedrich Merz, 08:37

Prediction Markets & Oscars Betting Explosion (09:04–11:37)

The Rise of Prediction Markets

• New platforms like Kalshi and Polymarket have brought Oscars betting—once a party game—into serious financial territory; over $100 million has been wagered.
• People bet not only on official Oscar categories (24 total) but also on side bets (celebrity moments, speeches, etc.).
• “Pretty much anything you can imagine that might be at the Oscars, people are betting on it.”
  — John Jurgensen, 10:19

Who is Betting, and On What?

• Most users are casual—small bets ($5-$20)—though volume is large.
• The Best Picture race sees the heaviest action:
  “The trading and betting is really circulating around the two front runners, Sinners and One Battle after Another.”
  — John Jurgensen, 11:08

Market Favorites

• Jurgensen’s pick:
  “I do think it's gonna be One Battle. Paul Thomas Anderson's a really respected filmmaker and people think it's kind of like, quote, unquote, his time. But Sinners has made a really strong showing and it really could pull someone out.”
  — John Jurgensen, 11:25

Notable Quotes & Memorable Moments

• On private credit psychology:
  “There’s this belief I need to get out before everyone else gets out.”
  — Matt Wirtz, 05:25

• On the impact of war on Fed policy:
  “As everyone who's driven in the last couple of weeks knows, gas prices are already a lot higher.”
  — Matt Grossman, 01:52

• On global sanctions split:
  “We were a little bit surprised that we heard this morning that the American government decided differently.”
  — German Chancellor Friedrich Merz, 08:37

• On the Oscars betting surge:
  “Pretty much anything you can imagine that might be at the Oscars, people are betting on it.”
  — John Jurgensen, 10:19

Timestamps for Key Segments

• Private Credit Meltdown: 00:37–06:41
• Economic Data & Iran War: 00:50–03:04
• Pentagon and DOJ/Fed News: 07:43–09:04
• Oscars Prediction Markets: 09:04–11:37

Conclusion

This episode underscores the fragility and risks inherent in today’s booming private credit industry, particularly for individual investors enticed by high yields. War in the Middle East adds further uncertainty to both markets and Fed policy. Meanwhile, the democratization of prediction markets is reshaping how people interact with events like the Oscars, with real money on the line. The episode stays tightly focused on major business and global headlines, offering a succinct wrap-up for listeners seeking the high points that move markets.