The cause of the next global market crash is hiding in plain sight

If financial markets can survive the United States’ war on Iran and Russia’s war against Ukraine, does this mean that financial crashes have become a thing of the past? Or have markets just not grasped the true nature of the current threats to the financial system?The latter is almost certainly the case, as former Goldman Sachs CEO Lloyd Blankfein suggested when he said in a recent Financial Times interview that people had “got more complacent” about financial risks since the 2008 crisis.It is true that equity markets around the world have shown resilience so far through both US President Donald Trump’s trade wars and kinetic wars. But Blankfein’s observations reveal to those with sufficient experience and perception that one must simply look in the right place.Financial crises rarely, if ever, recur in the same segment of the market as the last shock.The Trump administration’s triumphalist pronouncements regarding its invasion of Iran could be undercut not only by the backlash from energy prices and transport logistics but also by a brewing crisis in financial markets as debt vulnerabilities erupt on uncertainty, rising inflation and crystallising systemic threats.Blankfein told Bloomberg on the Big Take podcast that he is worried about problems brewing in the private credit sector. This segment of the market could be the flashpoint for a bigger crisis in markets, he suggested.