TRASHFUTURE Bill Ackman Exclusion Zone feat. Rob Smith
Nov 4, 2025
Rob Smith, a Financial Times journalist known for his expertise in corporate finance, delves into the $4.5 trillion private credit bubble. He explains how a seemingly mundane Ohio auto parts distributor highlights deep systemic risks in non-bank lending. The discussion reveals the shift of lending to off-balance-sheet structures and how this impacts investors. Smith also uncovers alarming practices in private credit involving opaque financing and community investment networks, painting a picture of financial fragility.
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Small Firms Can Pose Big Systemic Risk
- Massive hidden exposures can hide in the most mundane firms like an Ohio car-parts company.
- Small, opaque businesses can become systemically important when non-bank credit scales up.
Regulation Pushed Risk Into The Shadows
- Post-crisis rules pushed risky lending into non-bank vehicles and shadow structures.
- Banks remain exposed indirectly because they fund or buy securities issued by those non-bank lenders.
The First Brands Collapse
- First Brands was a holding of small auto parts makers that amassed nearly $12bn of opaque debt.
- Its collapse triggered alarm among lenders, CLO managers and even the IMF.
