#417 Nick Nemeth: The Biggest Turn in My Lifetime, Why Credit Contagion Could Hit Everything

Is private credit the next 2008? Nick Nemeth, author and publisher of Mispriced Assets, joins Julia LaRoe to explain why he sees systemic risk building in private credit, and why the real danger may sit inside life insurers' $10 trillion balance sheets. Nick explains how Dodd-Frank pushed risk out of the banks and into asset-manager-owned insurers like Athene. He says defaults are already running above 2008 levels, AAA-rated CLOs may not be as safe as advertised, and opaque Level 3 marks and 20–30x leverage could hide big losses. He also covers what this means for annuity holders, why regulators are falling short, his public fight over Cliffwater, how contagion could spread through reinsurance, and whether the next bailout could be big enough without breaking the dollar. He ends with bold 12-month predictions, including AAA CLO defaults, an insurance industry shakeout, and Kevin Warsh's first real test at the Fed.
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Links:
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X: https://x.com/NickNemo17

Timestamps:
0:00 Credit stress before the Iran War
0:23 Welcome Nick Nemeth of Mispriced Assets
1:07 Macro view: a highly levered system
4:20 Money printing, inflation and the dollar
7:00 Private credit defaults are rising
10:23 Rising yields: defaults above 2008 levels
11:46 Why this is systemic, and how it compares to 2008
14:21 AAA CLOs "safer than the U.S. government"?
17:28 How we got here: Dodd-Frank pushed risk outside the banks
19:33 The insurance connection
26:30 Is your annuity safe?
27:18 Are regulators asleep?
29:25 Nick's biggest worry: bad marks and extreme leverage
34:42 Ratings agencies and the Cliffwater fight
39:33 The fix: mark-to-market and transparency
40:58 How credit contagion could spread
46:49 Why isn't the market down 20%?
50:52 12-month predictions: AAA CLO defaults and an insurance shakeout
53:09 Kevin Warsh's first test
55:23 Where to find Nick

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