It Could Happen Here - Private Credit: It's 2008's All The Way Down

Episode Date: April 20, 2026

Mia is once again joined by Molly to discuss a bank run on another type of shadow banks caused by subprime car loans! Sources: https://businessjournalism.org/2026/01/tricolor-investigation/ https://sg.finance.yahoo.com/news/deutsche-bank-signals-30b-risk-020300965.html https://www.wsj.com/livecoverage/stock-market-today-dow-sp-500-nasdaq-03-12-2026/card/morgan-stanley-private-credit-fund-hit-with-redemption-requests-IS8PSZh497HC5aF4CkGN https://europeanbusinessmagazine.com/business/private-credit-defaults-have-just-passed-their-2008-peak/ https://finance.yahoo.com/markets/stocks/articles/morgan-stanley-tests-private-credit-110634713.html https://www.cnn.com/2026/02/23/business/what-is-blue-owl-private-credit https://finance.yahoo.com/markets/stocks/articles/barclays-weighs-mfs-fallout-private-080551362.html https://www.cnbc.com/2026/04/16/apollo-global-marc-rowan-private-credit-funds-redemptions.html https://www.reuters.com/markets/europe/apollos-private-credit-fund-limits-investor-withdrawals-after-redemption-2026-03-23/ https://www.reuters.com/legal/transactional/wall-street-banks-trade-derivatives-bet-pain-private-credit-ft-reports-2026-04-17/ https://www.cnbc.com/2026/03/23/apollo-private-credit-fund-gives-investors-only-45percent-of-requested-withdrawals.html https://www.jdsupra.com/legalnews/shadow-banking-and-private-credit-what-7018536/ https://www.privatedebtinvestor.com/insight-the-challenges-for-pd-arms-of-pe-firms/ https://archive.vn/f9UdP https://archive.vn/HUxEo#selection-1637.0-1650.0 https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr1111.pdf?sc_lang=en https://www.deloitte.com/us/en/insights/industry/financial-services/banks-private-credit-partnerships.htmlSee omnystudio.com/listener for privacy information.

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Listen to Eating While Broke from the Black Effect Podcast Network on the iHeart. radio app, Apple Podcasts, or wherever you get your podcast. All Zone Media. Welcome to It Could A Here, a podcast where I explain fake money things that are actually real to Molly. Molly, thank you so much for coming back on. I am your host, Mia Wong. I am excited to learn. Now, long ago in a galaxy far, far away, and I'm saying this because I legitimately

do not remember how many weeks ago we released the original one of this. But back in that episode where we experienced, explained shadow banking. I said that I had had to cut off the part of the episode that was the reason why I wrote it in the first place. It happens to me every week. Yes. So, comma, I've also kind of had to split some of this episode off. That will probably, that will be another episode, probably with Ed Zitron, whenever I have enough seconds in my life to pull all of that together. But today we are here to talk about the actual sort of shadow bank run, I guess you would call it, financial problems that caused me to write the shadow banking episode in the

first place. Oh, right. Why I originally asked you what shadow banking is because there was some kind of economy problem and there was like a fake run on the fake banks. Yes. And Molly, you will be extremely unhappy to note that a big part of the reason why there was the fake run on the fake banks was that the shadow banks loaned a bunch of money to a different type of shadow bank. I don't think they should have done that. And that shadow bank went under. Great things are happening here.

But they're not FDIC insured, Mia. Nope, nope, nope, nope. So, okay, this gets us back to our original definition of a shadow bank, which is that it's a bank that does banking things. That's not a bank. So it's not insured by the FDIC. They don't have to have money on hand to make sure that they can't be a bank. run on them. Right. So they just said, no more transactions, please. Yes. So what Molly is referring to is a few

weeks ago, I guess maybe like a month ago at this point, there was actually a breakthrough into the kind of mainstream-ish of some stuff that had been brewing in the financial news for a while. And that was that a bunch of companies, Morgan Stanley and BlackRock, I think, were kind of the two biggest ones that stopped this. Although a bunch of these sort of smaller, what are called private credit firms also sort of did things like this. And so because they're not really banks, there's no regulation that says they have to serve their customers, right?

They can just say no. Okay, so this is part of what's really a shit show. I guess let's start at the beginning. So what happened? Sorry, I got us derailed. Yeah, let's run back to the specific thing we're talking about, here is a thing called private credit. And so private credit, I'm just going to read this thing from the teller window, which is, I don't know, the teller window is actually a decently useful thing

where the teller window is, the Fed is like, I'm going to explain something to normal people. Now, the problem is that this is still the Federal Reserve. So their explanation for normal people, by normal people, they mean like, I don't know, like dipshit day traders, right? Normal people don't have questions about the Federal Reserve. Yeah, so it's like, this is like for people who are kind of know this stuff, but are running into this like arcane subfield for the first time. So I'm just going to quote from them because I think it's an interesting place to start. Although there is no universal definition, which you know things are going great when in our second episode in a row talking about. We can't all agree what this even is.

Yes, it's so good. It's so good. Although there is no universal definition, private credit, generally refers to a loan that is negotiated between a borrower and a small group of non-bank lenders. These non-bank financial institution lenders are typically alternative asset managers, such as private equity firms, who package loans in different investment vehicles. Other non-bank financial institutions like pension funds, insurance companies, and sovereign wealth funds, then invest in those vehicles. So this is the stuff that we talked about from last episode where, okay, so you have multiple layers of shadow banks, right? You have, on the one hand,

the private credit firms are these, these sort of groups that go in and sometimes they're just their own things. There's a bunch of different kinds of them. Private equity firms tend to have, like, one arm of the private equity firm. That's their, like, this is our shiny private credit wing. there were also these things called business development corporations which do these. There are like other types of them too. But basically what those companies do is they go in and they negotiate a loan with usually a pretty long term for repayments on the loan with a company. Now, the thing about these loans is that the terms of those loans are secret. From everybody?

Yeah. Even the people involved? Well, when I say secret, I mean, the company that's taking out the loan and the bank know how they work. Okay. No one else does. And then what happens is these are usually fairly risky loans because if you weren't doing a risky loan, you would get your money through like a normal bank. Yeah, you would do it normal style, right? This is not normal style.

These are risky. And then they do the thing called securitization, which we talked about last episode, where you take a loan and do magic to it and turn it to something that someone else. can buy. Whatever happened to products and services, Mia? Whatever happened to

products and services? Well, because products and services make less money than betting on products and services.

This is also where this is all going. So there's some real issues here with private credit. So we're buying

and selling money that isn't real and add the absence of money that isn't real. And so what happened when there was the

run on the fake bank? Well, that's, that's kind of what Because how can you do a run on a bank if there's no money in, because you're not

asking to get your money back out of it because there was never any money. Well, so here's the thing. So a lot of the way that these things work, sometimes, like, they are obviously selling the loans and packages, but a lot of the way that it works is that it does kind of work like a normal bank, which is, I mean, instead of being a lender, you're like an investor, but you give them a bunch of your money and they give it to these loan things. So it is just literally a normal bank, except it's not subject to banking regulations and it's risk here. Right. So like, like Apollo Capital Management or whatever. It's like you give it. a bunch of money to Apollo Capital Management, just like Global Capital, whatever, is like

Apollo Global Capital is one of the big firms in this thing, and then they give that money out in loans, and then you're basically just supposed to wait. Because, you know, remember the last episode we talked about how, in the way that normal bank works, right, there's like a fundamental kind of gap, right, where you are putting your money in as like a short-term thing that you can take out immediately. And then the bank is turning the short-term money in. to a long-term loan. Right. It takes time for the money to grow up. Yes. And the reason we have financial regulations is to force the banks to have money on hand so that if you need your money back, you can take it out. Now, these banks don't have this because these are shadow banks.

They are the credit arms of private equity. They're fucking, I don't know, they're like capital management firms. They're like, do, do, do, do. Right. So like a normal, a normal run on the bank is like, obviously the bank doesn't have 100% of all. Like I put cash in the bank, we all put cash in the bank, and everyone wants all their cash back. The bank doesn't have 100% of that cash. You get that, right? It's like they haven't invested. And those loans haven't matured yet and things like that.

But theoretically, if all those loans matured, that bank does have all of those dollars. But the shadow bank, they're selling these same loans to multiple people. So even if everything matured properly, they don't have all of those dollars anymore. Yeah. Those dollars don't all exist. I mean, to be fair, the bank's dollars also work like that because the banks are also selling their loans off. But you're saying that they were using like the same mortgage to secure a bunch of different. Yeah, right.

So that's like, yeah, that's like a classic shadow banking thing. We're actually going to get back to that because they're doing an even dumber version of that now. I would just say it seems like a run on the bank would be kind of inevitable even in a minor crisis because they do not have most of the money they're pretending exists. Yeah, well, but okay, so I think what I would say about that is that this is also a problem for regular banks. Right. Like, I don't think this is actually a structurally different crisis. Like, because like the crisis here is just that the money is out in loans and they don't have it on hand. And this is the structural crisis that the private credit people are doing is that their money is also out on loans so they don't have it.

And a lot of these loans are like seven year loans in like very risky companies. so the money is like really isn't there. Right, because that venture capital like whatever is, that's an inflated valuation. So you're talking about like, oh, it's $10 billion, but it isn't and it never will be and it never was. Yeah, well, and the other thing that's going on too, right, is like these are supposed to be risky loans.

So they have a high rate of return. If they return. But yes, and this is where this gets not good. Because so the U.S. private credit market is $1.3 trillion. like under management. The global market is like $3.5 trillion dollars of assets. I'm not really going to go into the Chinese private credit market here because that's its own episode. But the way that these companies deal with this is that they have these funds, right?

And then the fund gives out like the loans. And they have a limit to the total amount of like the percent of the value of the fund that can be taken out at one time. And that's what's been being hit. The industry standard is supposed to be about 5% of the fund can be withdrawn per quarter. And then after that, they just shut down redemptions. And that's what you saw in the news. Because a bunch of companies, and some of these companies have higher limits. They're almost like eight or nine, like 10%.

They'll stop it at like nine roughly. So more than anything, shutting down redemptions is an indicator that the market has panicked, right? The investors are spooked and they want their money back because this risky investment is now looking like a very bad choice. Yes, but this is a real structural problem because... Right, but like as a measurement of something, it's just like what we're measuring is how many investors are shitting their pants. And there's a reason they're shitting their pants. And the reason they're shitting their pants is that basically all of these firms have been eating a colossal amount of shit. And the reason they're eating a colossal amount of shit, I mean, some of it is very stupid. Some of them are eating shit because they gave money to like normal tech firms, but then now they're all scared.

They're going to get out competed by AI firms. Some of them have given a bunch of money. Blue Owl particularly, and this is what we're going to get into in the episode with Ed, has given a lot of money to AI firms, which is a fucking nightmare. Great investment. Yeah, incredible stuff going on. I'm sure. I'm sure that's what Ed will say.

Ed will say that was a good investment. It's so fun. Canadian women are looking for more. More to themselves, their businesses, their elected leaders, and the world are out of them. And that's why we're thrilled to introduce the online. Honest Talk podcast. I'm Jennifer Stewart. And I'm Catherine Clark. And in this podcast, we interview Canada's most inspiring women. Entrepreneurs, artists, athletes, politicians, and newsmakers, all at different stages of their journey. So if you're looking to connect, then we hope you'll join

us. Listen to the Honest Talk podcast on IHeartRadio or wherever you listen to your podcasts. Hey Ontario, come on down to BenMGM Casino and check out our newest exclusive. The price is right, fortune pick. Don't miss out. Play exciting casino games based on the iconic game show only at BetMGM. Access to the Price is right fortune pick is only available at BedMGM Casino. BetMGM and GameSense remind you to play responsibly. 19 plus to wager, Ontario only. Please play responsibly. If you have questions or concerns about your gambling or someone close to you,

please contact Connix Ontario at 1866-531-2600 to speak to an advisor free of charge. BetMGM operates pursuant to an operating agreement with Eye Gaming Ontario. On a recent episode of the podcast Money and Wealth with John Hobriant, I sit down with Tiffany the Budgenista Aliche to talk. Talk about what it really takes to take control of your money. What would that look like in our families if everyone was able to pass on wealth to the people when they're no longer here? We break down budgeting, financial discipline, and how to build real wealth, starting with the mindset shifts. Too many of us were never, ever taught.

Financial education is not always about like, I'm going to get rich. That's great. It's about creating an atmosphere for you to be able to take care of yourself, and leave a strong financial legacy for your family. If you've ever felt you didn't get the memo on money, this conversation is for you to hear more. Listen to Money and Wealth with John O'Brien from the Black Effect Network on the I'd Heart Radio app, Apple Podcasts, or wherever you get your podcast.

Hello, gorgeous, it's Lala Kent. Host of Untraditionally Lala. My days of filling up cups at Sir may be over, but I'm still loving life in the valley. Live on the other side of the hill is giving grown-up vibes, but over here on my podcast, Untraditionally Lala, I'm still that Lala you either love or love to hate. I've been full on over sharing with fans, family,

and former frenemies like Tom Schwartz. I had a little bone to pick with Schwarzy when he came on the pod. You don't feel bad that you told me I was a bootleg housewife? I almost flipped a pizza in your lap. Oh my God, I literally forgot about that until just now. Sorry, I don't want to blame alcohol. I got to blame that one on the alcohol. This is about laughing and learning when life just keeps on life in.

Because I make mistakes so that you guys don't have to. We're growing, we're thriving, and yes, sometimes we're barely surviving. But we do it all with love. It's unruly, it's unafraid, it's untraditionally la la. Listen to Untraditionally Lala on the Iheart Radio app, Apple Podcasts, or wherever you get your podcast. The main thing that they've been eating shit on, and this is where this kind of hit the mainstream. because a whole bunch of normal banks also ate shit on this. J.P. Morgan ate shit on this loan.

So a huge amount of money was poured into this firm called Tri-Color, which we touched on briefly last episode, but then didn't really talk about much about what it did. So, okay, J.P. Morgan has lost $170 million. Oh, no big deal. Yeah, which, and it's funny, because the JP Morgan's CEO were like, yeah, we kind of ate shit on this and also their CEO gave this quote where he was like, where there's one cockroach, there's probably more, which is like an extremely normal thing for the finance guy. He's saying about the market. Does he mean we have an infestation of accidentally losing $170 million?

Yeah. I mean, it's not great, but like in the grand scheme of things, right, like J.P. Morgan does have four tributtion. or something dollars under management. Right, but if he's saying if there's one cockroach, there's more. Yeah, usually if you have one cockroach, you have a hundred cockroaches. So if you have a hundred and seventy million dollar fuckups. Yes, and that's not great, right? And like Barclays, which is the very sort of like prestigious British bank, which also ate shit for doing this kind of stuff, 2008, also lost like a hundred million pounds.

What's interesting about this specific one is this firm tricons. is a subprime auto loan company. Oh, that's a phenomenal business model. Molly, I think. So they're responsible for the Nissan Ultima. This is what is known as an idea that could not possibly have gone right. It's very funny because when you read the stuff from tricolor, they're all like, oh, we're trying to like help people who are like under-sure.

in markets who need cars. Oh. So, but here's the thing about a shitty auto loan is you know, right, you are serving an underserved community. You are serving people with bad credit who might not otherwise be able to get a car, but you're serving them by fawking them hard. And this is the thing like you can tell, yeah, they, they know that they're lying about this, right?

It's just so evil. Yeah. And like, this is all downstream of, you know, this is all downstream with the fact that we've built our cities around cars, right? And we built our cities around cars specifically. And this is a really fun thing. We built our cities around cars specifically because we had created so much manufacturing capacity after World War II that like Ford and General Motors had like humped into that they were like, we need a fucking way to make money off of all of this. And this is also, by the way, why we did the Marshall Plan. Like we rebuilt Europe to sell cars to them.

It's this terrible snowball of like induced demand. And they and dealing with that and then the fallout of that and trying to reorganize from that. Yeah, and we have destroyed the world with this. It rocks. Thank you, Henry Ford. It's so good. It's so good. We have literally, like, Earth is fucked because of this.

This is, like, one of the largest engines of global climate change is the fact that we had all these fucking factories after World War II and these companies didn't want to eat shit on them. So now everybody needs a car, but they can't afford one. So now we have a fake bank doing fake fucking auto loans. Yep, yep, yep. Who, by the way, and I kind of emphasize this enough. right. The whole that we are in here is that there is in theory, if you're going to be running a market economy, there is like room in it for, hey, this person has a long shot but good business idea and we need to get the money. Sure. Like, there's nothing wrong with the idea of loans. Yeah. But if your whole business model is exploiting people who need loans, that's what's good.

Yeah. But this is, you know, this is going one layer up from like this subpar model loan company, right? The problem that we're going to hit with all of these private credit firms is that they're giving loans to just this shit. Right. The things that they're giving high risk loans to aren't like interesting businesses. They're subprime auto loan companies. And they're like weird AI data center creation companies. Right. It's like that shit.

And this is where everything goes to shit. because, you know, and it's something that actually wasn't really reported on very much in a lot of the coverage on these companies eating shit. But like, what this company was doing was they were literally doing all of the 2008 stuff, right? They give out these

subprime loans, which they know, like, a bunch of them are going to fail. They pull them all together into these, like, trenches of loans, and then they sell them off, doing the securitization stuff we talked about last time. And again, this is literally exactly how,

the subprime mortgage crisis worked, except for doing it with auto loans. It seems a little bit more evil. Yeah. And they're doing this thing, right? They're doing the thing that we saw with the housing loans where the same car is collateral for multiple of these loans. And the reason they're doing this, right, is that this company, Tricolor, their entire business model is trying to borrow more money from banks so that they can send out more of

these shitty auto loans so they can then sell that stuff back. And so they're also, like, heavily leveraged, right? Because they're taking out, like, every single loan they can possibly do. They're doing instruments so that they're, the collateral on the loans that they are taking. So they take that money and give out more of these shitty auto loans. The collateral on that is multiple of the shitty auto loans. I mean, I would say it's a house of cards, but like, it's not even, it's not even that. It's imaginary.

It's just, it's like the bottom row on this house of cards is just your imagination. Yeah, it's, it's why a Lee Coyote running off. the cliff and he's just like standing there and as long as his feet are moving, no one realizes that like, wait, hold on, this is literally the fakesest thing I've ever seen. And then it goes under and this is a shit show. That's the only possible outcome. The only possible way it could go on under. It's like we've done this before. We all watched 2008. But there's not like an ideal version of this where it works. This can only not work. Yeah, it's insane. It's like, so why are we doing it? Well, because there was one year,

where it made a billion dollars. Right, my Ponzi schemes are really profitable the first year. Right, right? That's like, that's the thing. It works out really good for the first guy.

Yeah, and like part of what's going on here too is, you know, like, and this is some of the stuff that caused the original bubble, but like we have this era like the early 2020s and like late 2010s. That's like the zero fed interest rate era, right?

We're like, it is basically just free to borrow money. And so there's, just all of this money sloshing around that there's nothing to invest into. This fuels all sorts of just, like, heinous shit, right? Because there's suddenly just, like, all of these pools of capital with, like, nothing to invest in. And so they're investing it in, like, defense companies and, like, Palantir and shit

like that. Is this why we got stuff like the Jucero? Yeah, but that's, like, the other thing, right? I'm just kidding. No, but, like, like, like, the Jucero thing is, like, legitimately. Like, venture capital was just, like, hoaring money into stuff. It was just, like, not fucking real. Yeah.

You could juice fruit at home. And like, this is, you know, I talked about this on a different episode about venture capital and like the way that it's done tech fascism, right? It was eventually they started putting that money into, like, building the material basis for, like, a tech fascist state. And that's what they've been doing in sort of. I kind of wish they stuck to their cocaine ideas like Juicero. Yeah. That was a better period. That was more fun than fascism.

No, no. It's more fun than like turning every single door in every single car in San Francisco. into a surveillance machine and then like going in and like basically cooing governments. And yeah, but on the sort of like pure financial end of this, you get all of these companies that are just pouring all of this money into, there's layers of this too, right? We're like, you know, if you're like, like J.P. Morgan, which is like an actual bank, right? A real one, yeah. Yeah, the real one is like pouring money into these like shadow banks, right?

because they're chasing a high rate of return. And this is like what happened in 2008. Everyone was like, oh, these bonds have a really high rate of return, the mortgage-backed securities. And now we've reached the point where I think, oh, God, where

this is the most recent news from this. And Molly, I'm just going to read you the thing from Reuters. Quote, J.P. Morgan Chase, Barclays, and other Wall Street banks have started trading credit default swaps linked to flagship private credit funds run by Blackstone, Apollo Global Management, and Ares Management, the Financial Times reported on Friday. And that's a good idea for them to do?

Oh, this is, this is really fun because now what we're doing is they're now opening the markets to bet on these things to fail. Right. Canadian women are looking for more. more out of themselves, their businesses, their elected leaders, and the world around them. And that's why we're thrilled to introduce the Honest Talk podcast. I'm Jennifer Stewart. And I'm Catherine Clark. And in this podcast, we interview Canada's most inspiring women.

Entrepreneurs, artists, athletes, politicians, and newsmakers, all at different stages of their journey. So if you're looking to connect, then we hope you'll join us. Listen to the Honest Talk podcast on IHeartRadio or wherever you listen to your podcasts. Hey Ontario, come on down to Bed MGM Casino and check out our newest exclusive. The Price is Right Fortune Pick. Don't miss out. Play exciting casino games based on the iconic game show. Only at BetMGM. Access to the Price is right fortune pick is only available at BedMGM Casino. BetMGM and GameSense remind you to play responsibly. 19 plus to wager, Ontario only. Please play responsibly.

If you have questions or concerns about your gambling or someone close to you, please contact Connix Ontario at 1866-531-2600 to speak to an advisor free of charge. BenMGM operates pursuant to an operating agreement with Eye Gaming Ontario. On a recent episode of the podcast Money and Wealth with John Hope Bryant, I sit down with Tiffany the budgetista Aliche to talk about what it really takes to take control of your money. What would that look like in our families if everyone was able to pass on wealth to the people when they're no longer here? We break down budgeting, financial discipline, and how to build real wealth, starting with the mindset shifts.

Too many of us were never, ever taught. Financial education is not always about, like, I'm going to get rich. That's great. It's about creating an atmosphere for you to be able to take care of yourself and leave a strong financial legacy for your family. If you've ever felt you didn't get the memo on money, this conversation is for you to hear more. Listen to Money and Wealth with John O'Brien from the Black Effect Network

on the I'd Heart Radio. Apple Podcasts or wherever you get your podcast. Hello, gorgeous, it's Lala Kent, host of Untraditionally Lala. My days of filling up cups at sir may be over, but I'm still loving life in the valley. Life on the other side of the hill is giving grown-up vibes, but over here on my podcast, Untraditionally Lala, I'm still that Lala you either love or love to hate. I've been full on over sharing with fans, family, and former frenemies like Tom Schwartz.

I had a little bone to pick with Schwarzy when he came. on the pod. You don't feel bad that you told me I was a bootleg housewife? I almost flipped a pizza in your lap. I was so pissed. Oh my God, I literally forgot about that until just now. Sorry, I don't want to blame alcohol. I got to blame that one on the alcohol. This is about laughing and learning when life just keeps

on life in. Because I make mistakes so that you guys don't have to. We're growing, we're thriving, and yes, sometimes we're barely surviving, but we do it all with love. It's unruly, it's un-a-fraid, it's untraditionally la-la. Listen to Untraditionally Lala. Listen to Untraditionally Lala on the Iheart Radio app, Apple Podcasts, or wherever you get your podcast. I just, I don't understand why so much of the economy is based on these bets that bad things will happen.

Yeah. It's like if everything collapses, some guys are going to get so rich. If a thousand people get their cars repossessed, one guy gets so rich. Like, that's not a great way to run an economy. You know, John Mayer Cain's, a guy who is, I would argue, responsible for them. this. This is his fault for like stabilizing the capitalist economies in the middle of the Great Depression. But Keynes is like a welfare state guy, but he's also a capitalist. And he has this line about how like the economy shouldn't be run by a casino to which I would be like, okay, Keynes, but like the economy is a

casino. Yeah. It's like it's like this is your fault for not being willing to like not have a market economy, right? Like, like, we could, we could achieve the dream of not having your economy be run by a casino. This is a thing that you could do. It's just that you can't. That was a euphorism before. I don't think he realized that, like, we literally do have a casino for a time. He kind of did, right? Because, like, it's not a euphemism anymore. I'm going to necromanse him and tell him about polymarket. Oh, yeah. He, he would lose his mind about polymarket. But like, like, he's watching people just like betting on stocks, right? And he's watching a bunch of people. Grab the Ouija board and

tell that bitch about Kalshi. Why? This is like we're going back in time and showing him Kalshi and he's like, oh, fuck, okay, I'm like, I am now against the market as an idea. We cannot let this come to pass. But like, you know, this has been like a known issue with

the market as a system for a long time. But it's a problem because in theory you could try to go through and like regulate this stuff. But like investment is just gambling to some extent, right? And when you talk to the people who believe in this stuff, they're like, well, no, you can't have stock markets without sort of equities markets and you can't have these things without the ability to bet on it. And I would say, okay, well, don't have it

then. Like, I think this is a really simple solution. But, you know, these people are like, no, no, no, no, in order to maintain a capitalist economy, you must, it must be possible for a bunch of people to be placing bets on the companies that give money to subprime auto loan companies failing. I guess that's the point where I get off the train where you say, well, in order to maintain a capitalist economy, and I'm like, yeah, exactly, dog. I don't want to do that. And like, this is why this is a terrible idea. Like, it's a bad idea for first principles.

And we're all living in like the nightmare hellscape of this being a bad idea. Yeah. So maybe that's, maybe that's why I can't get it because this does make some kind of sense to like an either. guy who wants it to be this way, but I don't want it to be this way. Yeah. Well, and I, very deliberately, I went into when I was learning economics and I was learning political economy from the perspective of like, okay, how do you destroy this? Right. And this part, this part seems fragile. Yeah, but it's like one of these things where it's like, okay, this is going to break on its own. But I guess the problem is, is it does keep breaking on its own. It's just that we keep bailing it out

and reconstructing it and propping up the house built on sand. Yeah, and that's the part where, you know, like this is a thing where the intervention of masses of people onto the stage of history has to happen. Where if you want this to not be the way that the system works, when it breaks down, you have to be organized enough to be like, no, fuck this. We're not going to sacrifice all of our lives to reopen the casino. We are going to either tear the casino down or turn the casino into like housing or whatever. So when there was this run on the fake banks and they stopped it, what happened after that?

I guess because that was my original question, right? He's like, what does a run on a fake bank even look like or do? Yeah. So basically what happened is they just like stopped their redemptions and everyone got really, really pissed off, but there's not that much they can do about it because. Because I'm sure that was in the terms and conditions whenever they signed up to do financial crimes together. Yeah. And what's been happening now, though, is that this has been spreading kind of panic about just,

I don't know, they would call it like the, asset class in general. Oh, like maybe it wasn't a good idea to invest all your money into this fake product? No, it was, it was in fact a terrible idea. And this is, I think, why we're getting. Maybe you have mismanaged your client's funds. Yeah. And this is, I think, why we're starting to get the like black rock fucking credit default swaps, right? Because the market is being like, oh, hey, all these people are pissed off about the fact that we designed our unhinged private credit shadow banking system in such a way that you can't get your money out of it. What if we capitalized on that by letting people bet on it? And that's good. So right now we're in this kind of limbo world. And this is,

this is the entire global economy, right? Everyone is sitting here pretending like the apocalypse isn't happening. And that's the basis of the entire economy. I mean, what am I supposed to do about it? Yeah, but it's like, you know, but there's a difference between you and us doing this and the people who have all of the money in the world who are sitting there pretending that like there's like some very easy way out of this war that we're that we're waging against a brawn right and that it's not going just keep going even though there's no good way to get a ceasefire and you know like no one no one in charge of the U.S. is any idea what they're doing they're in some ways they're doing the strategy they did in like the lockdown phase of the pandemic where they're just waiting for it to

burn itself out yeah where they're like okay well we're going to ask for a bunch of money but when you do that with the global economy yeah Right. And like, I had a friend who described it as like the fundamental problems that these people are incentivized to just think that everything will keep going right for them because it has. Because eventually it will, right? They'll be fine. Yeah. But like eventually there's a point where that runs out. And when it hits, there's going to be this sort of chilling discovery that like, oh yeah, the entire last like 15 years of their sort of being an economy has been this like weird. tech capitalist mirage. And once that fails, we... I guess we're already in the time of monsters.

So... Woo! Oh, I don't have any other marketable skills. The economy can't collapse. I'm a podcaster. Yeah. Well, this has been it could happen here. Has it?

Did I learn anything? I don't know. Honestly, this is just... They're doing it all again, and it's even dumber this time. Oh, God. Yeah, at least there were houses last time. Now there's not even a product. No, now there's shitty auto loans.

Molly, where can people find your very, very lovely show? You can find me wherever you get your podcast. You can subscribe to my show, weird little guys. It's fun. You'll like it. Yeah. I'm in the middle of a series right now about a segregationist attorney who loved the Confederacy so much that he built a 25-foot-tall Confederate.

monument out of old bathtubs. It's fun. You'll love it. Does he blow up a school bus? This is why. No, but he did go to YMCA night. YMCA night law school, which is a night law school through the YMCA in Nashville so that he could get better at doing segregation.

Like, he wasn't a lawyer. And then in midlife, he was like, I want to go to law school at night. So he could do busing cases. So he could take busing cases. So he didn't blow any buses up, but he did blow up a lot of people's lives. How about that? Great. Anyway, check out weird little guys.

Yeah, and if you want to stop there from being both weird little guys and also having our economy be run on betting on funny money, go like organize a union or like join your local affinity group or start doing food not bombs or do whatever. Literally literally do anything because we do nothing. We will continue to live in the world of the segregation lawyer who builds satches out of bathtubs and also the subprime auto loan defaults. At least go outside and take a walk. Yeah.

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