We might be closer to a major crash than most people realize. The former CEO of Goldman Sachs recently warned on Bloomberg that he can smell another financial crisis on the horizon. This time, the epicenter could be the private credit industry – a $3 trillion, largely unregulated market that exploded after 2008 because banks faced tighter rules.

The problem? Many private credit firms have been handing out bad loans to failing companies, and defaults are rising fast. Economist Michael Hudson describes this as a predatory system where private equity essentially loots companies (think Thames Water or bankrupt hospitals) and gets paid while draining the real economy. He calls it “enshitification” – slashing quality, working labor harder, and extracting every dollar.

Meanwhile, the bottom 40% of Americans have no savings, and the middle class is drowning in credit card, auto, and student debt. The whole system, Hudson argues, is a Ponzi scheme: lenders just keep advancing more money so debtors can stay current on old debts. But that math eventually breaks. With interest rates up, defaults are spreading from consumers to corporations. Hudson’s verdict? We’re looking at something equivalent to the Great Depression.

Wall Street is now trying to dump these toxic private credit assets onto ordinary people’s 401(k)s and pension funds – same playbook as the CDO crisis in 2008. Only this time, the casino is even bigger, and the house is desperate for suckers.