Sauron’s New Army: How Wall Street’s Private Equity Orcs Are Coming for Your 401(k)

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The dark forces of Wall Street are mobilizing again — and this time, they’re coming for your retirement savings. Blackstone, Apollo, and the rest of the private equity giants are pushing to stuff risky, illiquid assets into 401(k) plans under the guise of “retirement innovation.” But behind the corporate jargon lies desperation: a liquidity crunch, bad bets, and a plan to offload the pain onto ordinary investors. The orcs are gathering, and Washington’s helping them march straight into the Shire.

Episode Transcript

Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it will have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.

Speaker 2 (00:16):
So Sarron is rallying the orcs right now to uh,
you know, they're getting them all in gear to go
after people when it comes to private equity. Yeah. I
had to go to Lord of the Rings here on
this one. I really did. I can't. I can't call
them wolves. I can't call them sharks on Wolve Street.
It's a bad comparison. I mean, wolves do what wolves

(00:38):
are gonna do. Okay, they're part of the food chain.
Like I remember my kids asking me about that at
bush Gardens one time. Is that bird a good bird
or a bad bird? It was a massive vulture and
I was like, it's neither. It does what it does.
Sharks are not bad. They serve a purpose. Yeah, Saarron
and the orcs, they just do damage because they can
do damage. This is one of the things that people

(01:01):
fail to understand. I try to get this across. In
the whole good money versus bad money, you could do
really really well in this world by being a capitalist
and not destroying others. It's become a way of life,
a way of doing business, fast, easy, quick money, rip
people off to what Wall Street does. And that's in

(01:23):
essence what's happening when it comes to private equity right now.
Not all of it, but most of it. Here's an example,
and again they basically lay it out. This is a
Wall Street Journal article today. My jaw dropped for crying
out loud. They didn't comment on it, but if you
actually read what they're saying, they're saying, yeah, we're coming

(01:44):
for you Blackstone, Blackstone. Yeah, they're the ones that, you know,
the real estate guys out there that buy out all
the housing tracks and you know, jack the prices up.
We explained that several weeks ago here on the program,
Blackstone joins the race to bring private assets to four
oh one k market. Blackstone is officially entering the race

(02:08):
to get assets such as private equity and private credit
into four one case. Ah. Yes, they've all they've gotten
the calling it a business unit devoted to tapping the
market for what are called define contribution retirement plans. Yes,
this new unit is going to sit inside Blackstone's two

(02:30):
hundred and eighty billion dollar private wealth group.

Speaker 1 (02:35):
Hmmm.

Speaker 2 (02:36):
It's going to focus on creating products for the defined
contribution market and managing strategic partnerships such as the one
Blackstone announced in April with Vanguard and Wellington Management to
develop offerings that combine public and private assets. It's going
to also work on educating investors about private assets. I'm

(02:57):
going to basically translate for you. They're body looking to
put together products that they can sell to the investing
public in their retirement plans and get their investors out.
That's it. They have a massive liquidity crisis, huge liquidity crisis,

(03:21):
and they see a huge opportunity and average American investors. Yeah. Funny.
You look at the lineup they're putting together. You got
a Heather von Zubin, a Goldman Sachs Alum who has
been heading up Blackstones open ended credit funds aimed at
the private wealth market. It's going to lead the new

(03:43):
unit as global head of retirement Solutions. Not retirement solutions,
it's we are going to screw you solutions, because that's
what these people do. Tom Nine's a veteran banker and
diplomat who joined Blackstone will be the unit's chairman. Oh,
they're naming Paul Quinlan, a senior managing director in its

(04:06):
private wealth business, to lead the US Defined Contribution effort.
Meaning is we got to get ourselves organized, We got
to get our shit together asap before they figure out
we're going to screw everyone, because that make no bones
about it. That's what this is. Again. I am not

(04:28):
too happy about this, and quite frankly, I don't think
Trump knows. I really don't. I don't think he knows
when it comes to this. He signed an executive order
directing the Labor Department the Securities and Exchange Commission to
make it easier for employers to include non traditional assets

(04:49):
such as private equity and private credit in four oh
one case a disaster. Okay, why third Team trillion dollars
are in four on one case? Third Tree Again, they
want that money. They need to get out, they need

(05:12):
they need to personally get out. Okay, they put their money.
That's the thing with these private equity companies, all the
parts that they know. You want to be a partner
one of these things, you have to put up money too.
Banks made out loans to people so they could put
money into these funds and guess what, the interest rates

(05:33):
have changed and they're not making the money they used to.
They're tapped out. They need to get out, and they
want to do it on the backs of average American investors. Again,
they actually even call it in the journal card a
holy grail for Blackstone and its competitors. But again employers

(06:00):
being hesitant to introduce this to their their employees. Good good,
Right now, I'm telling you what they're gonna do. Part
of their plan is going to be is they're going
to be cold calling. They're going to be offering trips
and golf outings to HR human resource employees and people

(06:23):
manage these things at all sorts of businesses. Here, wine
them and dine them and tell them how awesome this
is going to be. This is what they're good at. Okay,
to all you HR people you might be happening and
listen to this that you're in charge of these things. Okay,
I want you to think of it as the little
devil on the shoulder from the film Animal House. Okay,

(06:43):
because that's what they're doing. That's what they're doing. They're
tempting you again. All the other ones. Apollo Global State
Street putting together alls target target date funds with private
Uh yes, Blue Owl Capital. They're working with a voya.

(07:06):
Be afraid people. I know who these people are. Okay,
I know who they are. It's sarn and the orcs.
You want to let them inside the shire? Uh no, no,
not a good idea watchdog on Wall street dot com