The Wrap: Blue Owl Craters Private Credit; Rahm Emanuel for President?

February 20, 2026 | The latest edition of “The Wrap” features our view of the key events in Washington and on Wall Street over the past week. Don’t forget to watch “The Wrap” on The Julia LaRoche Show every Saturday on YouTube to catch our discussion of what’s hot and what’s not in the world of finance and investing. 

Midterm Elections

The IRA was in Washington for a series of meetings this week. While the media is filled with predictions of impending disaster for the GOP in the upcoming midterm elections, the reality is closer to neutral according to some of our more trusted sources.

As one insider told us: There are only a handful of seats in the House that will actually be contested. The wildcard: If the US Supreme Court guts the progressive interpretation of the voting rights act, the Republicans will benefit in November.

The Supreme Court may soon decide whether to hear an appeal of an Eighth Circuit decision that held that Section 2 of the Voting Rights Act can only be enforced by the Department of Justice — not by individuals or private organizations.

The same source, who was inside inside the tent for ‘45, tells The IRA that Rahm Israel Emanuel is the odds on favorite to get the Democratic presidential nomination in 2028. Emanuel is an American politician, diplomat, and former investment banker who most recently served as United States ambassador to our most important ally, Japan, from 2022 to 2025. 

A senior member of the Democratic Party, Emanuel represented Illinois in the U.S. House of Representatives for three terms from 2003 to 2009. He properly kicked the ass of Republicans as chair of the Democratic Campaign Committee. Emanuel is an effective and relatively conservative politician who will be a viable contender against likely Republican candidate Secretary of State Marco Rubio.

Private Credit: Blue Owl Craters

Blue Owl Capital (OWL) shares tumbled this week after a decision to restrict withdrawals from one of its private credit funds raised fresh concern over the risks bubbling under the surface of the $1.8 trillion credit market. The OWL disaster took down the shares of other alternative asset managers. We think this is just the beginning of a major reset in private credit.

Blue Owl shares closed 5.9% lower yesterday, while peers Ares Management (ARES), Apollo Global Management (APO), Blackstone (BX), KKR & Co (KKR) and TPG (TPG). also plunged. “Blue Owl’s decision highlights a key risk for retail investors drawn to private credit: such funds offer less liquidity than public markets, and firms can block their investors from cashing in,” reports Bloomberg. 

Shares of the alternative asset manager fell about 10% on Thursday to the lowest level in two and a half years.  We previously warned our readers about problems in the credit sector. All of these private credit managers have told investors that private markets are superior to public markets, but clearly that is not the case.

APO CEO Marc Rowan has argued that private markets are superior to public markets due to consistent excess returns (1.5% higher annually), better diversification, and lower risk than traditionally assumed. The debacle around OWL and other examples suggests that Rowan is mistaken. We wrote previously about the busted commercial mortgage REIT sponsored by APO ("Zombie Equity | AI, Debt & Private Market Risk").

Rowan has asserted in numerous public comments that the traditional 60/40 model for prudent investing is broken, driven by concentrated, volatile public markets, and advocates for private credit and equity to serve as the new core portfolio for retirement and insurance. But the fact is that investors in private strategies would have done far better over the past five years by investing in public markets.

Silver: the Revenge of the Miners

Silver prices dropped dramatically the end of January, but have since moved sideways following gold. A lot of uninformed observers have predicted a collapse in silver and gold prices, but such views ignore the tightness of the commercial market for precious metals and also many other industrial metals. Miners are now price makers instead of price takers, a remarkable reversal of fortunes in less than a year.

Source: Google Finance

This past week, AuAg Funds published its 2026 outlook, and the analysts said they expect gold prices to push decisively above $6,000 an ounce this year, and see silver prices reaching $133 an ounce - which would put the gold/silver ratio back to last month’s multi-year low of 45. But echoing our earlier comments, the Swedish fund manager warned that investors should be prepared for double digit price swings along the way. 

AuAg Funds is a Swedish investment firm founded in 2019 by Eric Strand, specializing inUCITS-compliant funds focused on mining companies, precious metals (gold/silver), and electrification/green tech metals. They offer four active funds—Silver Bullet, Precious Green, Gold Rush, and Essential Metals—with over 100,000 investors across Europe.

But the big warning sign we want to highlight for our readers is that China, the largest buyer of physical silver in the world, has imposed draconian limits on futures traders in Shanghai.

“Starting February 27, all hedging positions in both the delivery month and the month prior will be forcibly reduced to zero—unless an entity has a pre-approved special hedging quota,” notes The Silver Academy. “Only bona fide industrial users — refiners, electronics producers, and solar manufacturers — will be allowed to maintain positions through physical delivery.” 

Meanwhile, the ability of the COMEX in Chicago to deliver physical silver is eroding. If the exchange is forced to impose cash settlement on hedgers, says one observer, the the COMEX is finished in precious metals.

Bottom line: We are maintaining our positions in silver and gold. Readers are strongly cautioned against naked shorting either metal since the fundamental demand for both gold and silver remains quite strong. One long-time observer tells The IRA that Chinese buyers are actually approaching artisanal producers of silver because of the extreme shortage in the global spot market.  

Mortgage Rates Down

US mortgage rates have been slowly, painfully moving lower, but but battle is more a function of lenders than anything happening in Washington. The big driver is prepayments of older mortgages as refinance transactions grow in volume.

“Conventional rates pushed down towards 6.00% Jan 9th-16th, and were similar to where we currently stand today,” writes Scott Buchta at Brean. “We expect to see pay-offs from this rally continue to flow through over the next 1-2 weeks, before backing off slightly until the latest round of refis begin to flow through in March.”

The key indicator to watch is the 10-year Treasury note, currently yielding around 4.1%. If yields move up, then mortgage rates will follow. If the 10-year Treasury moves down in yield, then lenders will be incentivized to drop rates on new loans. Thirty year fixed rate mortgages have been grinding lower each month, but have retreated with each new Treasury refunding.

Meanwhile, credit quality in the mortgage sector continues to slide as the rollback of COVID era forbearance programs exposes the true state of consumer defaults. We expect to see defaults in the FHA Ginnie Mae market to continue to rise in 2026.

“The delinquency rate on loans handled by large mortgage servicers increased significantly during the fourth quarter of 2025. According to Inside Mortgage Finance’s Large Servicer Delinquency Index, the overall delinquency rate increased by 46.6 basis points from the end of September, hitting 3.29% at the end of 2025.”

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