RiskReversal Pod The Longest ‘Late Cycle’ in Market History with Liz Thomas
Oct 21, 2025
Liz Thomas, an executive at SoFi, shares her insights on the current financial landscape, focusing on the troubling performance of regional banks compared to larger institutions. She highlights systemic risks from non-bank lenders and the implications of rising leverage in the market. Thomas explains gold's remarkable rise, driven by central bank demand and investor sentiment. The discussion also touches on liquidity changes, bond market stability, and the anticipated impact of upcoming CPI data on market conditions.
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Regulation Pushed Risk Into Non-Bank Lenders
- Regulation after 2008 pushed risky lending into less-regulated non-bank financial institutions.
- Private credit growth created hidden risks because valuations aren't marked daily and exposure is opaque.
Private Credit's Opacity Raises Contagion Risk
- Private credit and democratization of private markets hide leverage because positions aren't marked to market.
- If similar headline events accumulate, contagion risk rises and exposures must be mapped to assess systemic threat.
K-Shaped Split Within Financials
- Financials now show a K-shaped divergence: investment banks outperform while regional banks lag.
- Regional banks must confirm cyclical strength for the bull market to remain broad-based.