The echoes of 2007 are starting to reverberate louder

Massive leveraged buyouts (LBO). An ever-growing pile of risky debt. Early signs that subprime consumers are falling behind. It may not be 2007 all over again, but history is at least rhyming here.

- ETHAN M STEINBERG

Then it was TXU Corporation's $44 billion LBO, now its Electronic Arts’s potential $50 billion buyout. Then it was subprime mortgage bonds, now it’s private credit, among other kinds of debt. ‘Then subprime consumers were missing mortgage payments, now they’re falling behind on auto loans.

There are some differences between now and 2007. Banks are more heavily regulated and have larger equity cushions. Consumers haven't borrowed as much this time around. LBO firms are using more equity for buyouts. And it’s unclear whether financial markets will ever see

widespread losses from private credit. But even if global financial crisis 2.0 doesn’t come, investors may well be in for a rough ride in the coming months as