he products have different names, but the pitch is the same: They let everyday investors put money into things like private equity or real estate, while promising at least some ability to sell.

Every great panic in modern finance has started the same way: too much borrowed money. In 1929, it was margin loans — everyone got swept up in buying equities with borrowed money, and they couldn’t fathom a downturn. In 2008, it was subprime mortgages. Millions of families around the country were underwater on their mortgage payments, and their... See more