Most financial crises start with something that doesn’t look like the start of a financial crisis. It’s the snowflake that triggers an avalanche. From Tyler Durden at zerohedge.com:
In a 2020 Lunch with the FT interview, Jim Chanos said financial markets were in “the golden age of fraud”.
On Thursday he said this phenomenon had “done nothing but gallop even higher” since he made the remark.
And now, as we have been highlighting recently, the dominoes may have started falling…
Beneath the surface of what’s been a remarkably resilient US economy, a series of small shocks in the world of consumer credit have combined to rock companies that service financially-vulnerable Americans, raising major questions about the true strength of the supposedly omniscient consumer’s health.
Following the collapse of Tricolor Holdings (a subprime auto lender), and weak second-quarter results from CarMax; we have seen car parts supplier First Brands Group…
…wrongfooting investors further with payments company Klarna and buy-now, pay-later firm Sezzle also suffering declines alongside the ‘Alts’ market and private credit…
And as alternative asset managers tumble, The FT reports that 67 year old Chanos likened the near $2tn private credit apparatus fuelling Wall Street’s lending boom to the packaging up of subprime mortgages that preceded the 2008 financial crisis, due to the “layers of people in between the source of the money and the use of the money”.
I thought it said chaos joins at first.
No one said ordo ab chao would be easy.
Nimrod we have it all wrapped up for the next 1000 years is nothing new under the sun.
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