A veteran trader is drawing a direct line between the early days of the subprime crisis and a sudden freeze in private credit, warning that what just happened may be the first domino.
In a new post on X, legendary investor George Noble invokes a scene from The Big Short, recalling how the 2007 bankruptcy of New Century Financial signaled the beginning of something far larger.
“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.”
According to Noble, the scenario appears to be playing out again today, but this time the stage is the private credit market after Blue Owl Capital abruptly announced it is banning redemptions in a debt fund.
“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.”
Noble says the halt followed months of withdrawal pressure and public reassurances from executives that conditions were stable.
“Through the first nine 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.”
According to Noble, the company has now abandoned temporary measures 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.”
He broadens the warning beyond a single firm, framing the episode as a stress test for a multitrillion-dollar asset class.
“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.”
Noble concludes with a chilling warning of what may lie ahead.
“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…”
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