Financial markets are experiencing echoes of 2008 as oil prices swing wildly following US-Israeli strikes on Iran, while private credit funds face mounting investor redemptions. Morgan Stanley, BlackRock, and Blue Owl report clients fleeing their funds amid fears that AI will undermine software company valuations. The $2 trillion private credit sector faces a $40 billion redemption wall in 2028.

Unlike 2008, today's financial system appears more resilient with banks' tier one capital ratios at 14.3% versus less than 10% in 2011. Banks have also increased high-quality liquid assets by 55% and stable funding by 40%. However, the private credit sector's opacity and interconnections with traditional banks create potential systemic risks that regulators struggle to monitor.

While immediate collapse seems unlikely given redemption gates and slow asset revaluation, medium-term risks are rising. The combination of Middle East turmoil and private credit vulnerabilities could spark financial tremors even without causing a global recession. As one Goldman Sachs executive noted, financiers are relieved to discuss Iran rather than private credit exposures.