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.
My company invited a guest speaker this week, an economist from Bloomberg I think. I didn’t really listen to most of it but I did catch the tail end Q&A when people were asking very insightful questions and he gave a few non-answers like regarding private credit he said it wasn’t as big of a problem as it’s made out to be. Another answer he gave was to a question about AI and he basically said that quantum computing and small modular reactors will solve everything.
I swear to god these people don’t read books only trade publications and financial statements
quantum computing and small modular reactors will solve everything.
So that’s the next grift that the techbros will jump on.
They’re just dunning-Krugering
Or your company hired a Jim Cramer to persuade workers to hold the bag
In some ways the global economy isn’t as interconnected (read: dominated by financial imperialism) as it was in 2008. The US’s overuse of sanctions has created a large non-dollar bloc of trade, and at the same time China’s development was put them almost on par with the US as an economic power, and on top of all of that the energy crisis spells doom for oil’s future as a commodity.
Maybe instead of a global financial meltdown, the world just stops trading in USD and using US financial instruments.
Even in 2008 China didn’t face a recession, just reduced growth. This time round China will basically not be affected at all, and so will most of Asia.
Meanwhile our political economy in Mexico has been completely captured and it’s probably going down with the great Satan. It’d still be a net good and I hope it happens ASAP but it’s kind of scary to imagine the ramifications when you’re this close economically and territorially.
Oh cool, another fucking Great Depression! Almost like it’s PORKY who can’t do anything right!
Turns out misanthropic epsteinites are the LAST people who should be trusted to choose what to have for breakfast let alone make choices that impact an entire country.
“capitalism is the best economic system”
Whole thing collapses requiring a trillion of direct state investment that also produces zero value
“Oh yeah it just does that sometimes”
15% compounded inflation for 5 years will do that
I paid 45 bucks for a large pizza and 12 wings the other day
I’ve been posting about private credits companies in the NewsMegathread for months now. Find someone who loves you as much as I hate the private credit shitbags.
If they’re openly talking about it they’ve already secured their portfolios in preparation for the crash
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”
Someone will be hearing from cory doctorow’s lawyers
I have a friend who works at an investment bank. He was crystal clear on this: private credit is an overleveraged black box Ponzi scheme and everyone knows it will implode. His advice? Buy the dip lol
I found a YouTube link in your post. Here are links to the same video on alternative frontends that protect your privacy:
