Masters in Business BONUS: Muddy Waters Capital Founder Carson Block
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Apr 1, 2026 
Carson Block, founder and CEO of Muddy Waters Capital and famed for forensic short-selling, shares his path from uncovering fraud to building a long/short research shop. He discusses low-rate market distortions, risks in private credit and securitization, AI’s labor impact and its use both by investigators and fraudsters. He also covers tech valuation dynamics, passive-flow bubbles, and Muddy Waters’ hedged positioning.
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How Muddy Waters Began With A Potemkin Factory
- Carson Block discovered Potemkin factories while researching reverse-merger Chinese microcaps and exposed Orient Paper with a 30-page report.
- He was running a stuck self-storage business in Shanghai and felt he had nothing to lose, which prompted the viral investigation that launched his career.
Low Rates Inflate Dishonesty Across Markets
- Carson sees an inverse relationship between interest rates and societal dishonesty: lower rates and easy money increase dishonest behavior.
- Emergency monetary policy outliving the emergency anesthetizes investors and spreads microcap fraud behaviors into mid-cap and larger companies.
Account For Technical Flows Before Shorting Mega Caps
- Consider technical market value, not just fundamentals, before shorting mega-cap winners like Nvidia because passive flows and squeezed floats create parabolic price moves.
- Analyze who is buying (passive/flows) and the technical squeeze before betting against large winners.