Original subtitles

Ever since Trickleor Holdings failed and

First Brands Group went bankrupt and a

bunch of regional banks in the US were

forced to book 100% losses on a bunch of

their private loans, the private credit

industry has been in the limelight. It's

been exposed as being fraught with fraud

and danger and lies and criminality and

having reporting practices that almost

seem purposely designed to disguise the

truth and trick the world into thinking

everything is okay. But the real risk

here is that the legacy media has been

actively trying to disguise the true

scale of the problem to try and convince

you that it's just a few bad apples. The

trickle and first brands aren't

representative of wider problems in the

shadow banking sector and that all is

well. But unfortunately that just is not

the case and there have been a number of

increasingly worrying failures in the

private credit market that are going

almost completely ignored that I think

you have a right to know about. So today

we're going to cover the most recent

updates in the private credit world,

shedding some light onto the truth of

what we're actually seeing and establish

why no, this cannot be excused as just a

few bad apples.

Hedge funds with a stake in Bright

Line's 1.1 billion US of corporate debt

are crafting a plan to elevate their

claims over other similar creditors by

offering new financing and concessions.

A group of holders of Bright Line's

corporate bonds due 2030 is proposing a

debt deal that could see them extend

more capital to the company and permit

new equity investments from outside

investments. Bright Line is a private

commuter rail project that's been

falling short of projections and they

recently said it's working to issue a

substantial amount of equity and has a

global process underway to engage

potential strategic partners. Such a

move would require creditor consent from

a group of corporate bond holders who

control a majority of the debt. So, what

is Bright Line? It's a private passenger

rail company in Florida. It's not

state-owned or state-run. It's a

completely private company, and it's the

only entirely private rail passenger

company in the US. And currently, it has

a lot of debt, $5.5 billion worth of

debt, and it's losing about $70 million

every six months at the moment. It's

been struggling to pay off its debt for

already six months. They delayed an

interest payment on a $1.2 2 billion

bond back in July of 2025. And the

fundamental problem here is the company

isn't even profitable, let alone

profitable enough to pay off its debt.

And the solution proposed by the company

is to take out more debt to pay off the

old debt to kick the can down the road,

which is not an unusual thing to hear

these days. Now, the numbers are a

little bit clouded and we aren't

entirely sure what's going on under the

surface as this is all of course within

the private credit space. So, we really

don't know too much about the details,

but just one of the bonds is already

essentially in default in all but name.

Bright line has enough cash in reserve

to make payments on $2.2 billion of

senior municipal debt and about 1.1

billion of junior corporate notes

through 2026, but it's unclear whether

the railroad has the roughly $160

million to make a January 15th interest

payment on $1.2 billion of unrated

junior municipal bonds. Bright Line

deferred interest on the bonds in July

already and can defer two more times

before defaulting on the debt

officially. So currently it seems like

they don't have the cash to pay the

interest payment on that bond that they

already didn't have the cash to pay the

interest payment on back in July. And in

reality that's already a default in

literal terms. But according to the law

it doesn't count yet. They can in fact

delay another two interest payments. So,

they've got another 7 months of leeway

on that bond before it's counted as an

official default. That basically gives

them another 7 months before they

actually start making the headlines and

you start hearing about them here on

YouTube for going bankrupt. Their bonds

are already trading at 30 cents on the

dollar, showing just how poor their

outlook is. And the current proposals

for, say, a rescue amount to then

kicking the can down the road further.

They're raising more debt with a

priority to be repaid ahead of the old

debt and then using that new debt to pay

off the old debt so they don't

officially fall into default. But the

simple fact is the company is down on

revenue from where they expected to be.

And their growth is far too slow as

well. They just don't have a real chance

to become profitable to pay off all this

debt. But the cloudy nature of the

private industry allows them to just lie

and hide things and raise more debt for

a couple of years until they finally

fully collapse. This is also literally

exactly what happened with the more

famous private credit blowups like we

saw with First Brands Group or Trickleor

Holdings. And new evidence has been

exposed showing that First Brands Group,

they resorted to falsifying invoices and

committing fraud to keep the company

alive all the way back in 2022. It just

took three years for that fraud to

become public, showing just how long

these companies can hide and obuscate

and disguise their collapse and just

keep on kicking the can down the road.

Next, we have another under the radar

problem surrounding a company called

Newf Fold Digital. Newf Fold or web

services provider backed by Clear Lake

Capital and Sirius Capital will receive

a hund00 million in fresh money through

a new first outterm loan giving some

lenders top priority to be paid back in

case of a default. Black Rockck are also

in that upper echelon. The deal also

includes a below par exchange where

creditors can be repaid or swap into a

mix of senior and junior ranking paper.

The lenders that brokered the debt

overhaul got the best treatment whilst

others were dealt steep losses. But the

finer details of the exchange will

likely remain a mystery to debt holders

as the terms of these agreements aren't

disclosed. Individual lenders had to

sign packs that restricted their ability

to compare notes with their peers and

then fight collectively for better

terms. The non-disclosure agreements

also restricted their litigation rights

for a certain period of time. Now,

that's all a little bit complicated. So,

what does that actually mean? Well,

Newfold Digital are basically a company

that just sell domains and other

incredibly saturated products to small

businesses online. Their revenue is

actively declining every year. Not their

revenue growth reducing, but their

revenue is actively going down every

year and they don't have any real

serious prospect of growing as a

business anymore. They also have a huge

amount of debt, at least $1.2 billion

worth, but we don't know for sure and

there is likely to be even more. and

they've just done something really

sneaky whereby they essentially

destroyed a load of the value of their

old debt and released new debt with the

priority to be repaid by for everyone

else. Now, how did they do this? Well,

through some incredibly aggressive

negotiations, blocking different

creditors from communicating with each

other from valuing their assets fairly.

And in the end, all that Newfold Digital

actually needed to devalue this old debt

and to raise new debt was to get a

majority of their bond holders to agree.

So companies like Black Rockck who owned

most of the debt, they were essentially

bribed by Newfold to agree with their

proposals to destroy their old debt to

bankrupt those smaller lenders in

exchange for Black Rockck and others

being given in exchange for this

priority new debt. The old debt from the

smaller creditors who don't control say

$13 trillion worth of assets. Well,

they're left in the lurch able to trade

in their old bonds for new bonds after

taking a 35% hit on their assets.

Essentially, Newfold told their

creditors that they're going to default,

but they're willing to screw over the

smaller players and make sure that Black

Rockck get their money repaid if they

collude with them to screw over the

smaller players. That is not exactly

confidence inspiring behavior. If this

kind of borderline fraudulent and what

should be criminal behavior is necessary

to keep the company solvent and alive

and is certainly not a good sign for the

future of this company as well. Now,

unfortunately, we are now getting

evidence that it isn't even just America

suffering from this private credit

crisis, but that it's prevalent all over

the world. And the second biggest market

ready to tank, well, it's now China.

Now, China Vanker is basically the last

big legacy house builder in China.

Country Garden, Everrand, all the other

big players you've heard of before, they

went bankrupt over the course of the

last few years, and Vanker is the only

one left. But unfortunately, things have

not been going well for them despite the

fact they haven't officially defaulted

yet. China Vancer wants the country's

biggest developer before it succumb to

an unprecedented property crisis won

lastminute support from creditors to

extend a bond grace period in reprieve

that it helps avoid a default at least

for now. Holders of Vanker's $2 billion

yuan worth about $284 million US voted

in favor of a proposal to extend the

grace period to the end of January

according to a filing on Monday. The

company didn't pay the security by its

December 15th maturity, which left it in

a grace period that otherwise would have

expired on Monday. But the challenges

aren't over. Banker's proposal to defer

principal payment for 12 months failed

to pass with creditors representing only

20% of the outstanding amount voting in

favor short of the more than 90% that's

required. The builder is also trying to

persuade investors to accept delayed

payment on a 3.7 billion one bond that

matures at the end of December. Vanker

is the last major Chinese real estate

firm so far to have avoided reneging on

its debts amid the multi-year real

estate crisis. Any eventual default of

the company, which has $50 billion of

interestbearing liabilities, would mark

a new phase in the country's real estate

wos that have already prompted $130

billion worth of defaults. So the

official line here is that banker still

not in default yet, but they're not

paying their debts. They're saying that

they're not going to be able to pay

their debts in the future. So really,

the the default is just a surface level

headline that hasn't been pushed out

yet. The reality of the business is it

has failed and being crushed under $50

billion US worth of debt that it can't

pay off with interest continuing to grow

on that date, making the problem worse.

Now, finally, we have Marathon Asset

Management who gave $1.1 billion as a

loan to First Brands Group after their

very public collapse a few months ago.

Now, that loan was supposed to be safe.

It had priority repayment terms so it

would get paid off before the $10

billion and other liabilities the first

brands had. Then this loan was given

after the collapse. So, Marathon Asset

Management knew full well the state of

the company and the problems that it was

facing. And now that brand new loan has

lost 70% of its value with the prospect

of it being repaid looking incredibly

unlikely. And what we're being told by

everyone here over and over again is

that the private credit crisis is really

a fraud crisis and a criminality crisis

and not representative of wider issues

within the market. Trickoraw and Western

Alliance and Zyron Bankorp. Yes, they

all had problems with the private credit

loans they gave out. Yes, they've lost

hundreds of millions or even billions of

dollars, but none of it was because the

companies were struggling. No, it was

all related to fraud and to criminal

activity. So, the legacy media is

telling us that we shouldn't be drawing

any conclusions about the state of the

private credit market from these

headlines because they aren't

representative of the market as a whole.

despite the fact that actually all of

the fraud that we are seeing within

firms like first brands seems to have

been committed purely to keep the

company solvent and alive. But anyway,

these new developments or rather these

crises within private credit that we

just covered, say Bright Line and New

Fault Digital and Vanker and Marathon,

none of those issues come from fraud or

mismanagement. And these aren't even all

the new developments. We also just saw a

pension fund in Germany lose $1 billion

due to its investments, bad investments

I should say, in the private credit

space. Black Rockck bought a company for

$12 billion only to find out shortly

after that it had lost billions of

dollars due to private credit. And what

this all really amounts to is just dodgy

debt given out to companies that really

couldn't afford to repay it and

shouldn't have been given the debt in

the first place. And the problems have

been hidden for years because it's

private credit. So, it isn't under the

same scrutiny as debt in the banking or

traditional finance sector, which is

exactly what the legacy media and the

establishment want us to think isn't

happening. But, it's getting harder and

harder for them to push that line with

all the new private credit crises that

we keep seeing. Now, I really don't

think most people are giving this

manipulation of the markets enough

attention, especially when considering

how prevalent shadow banking and private

credit is within the markets and our

economies right now. Now, this all

relates perfectly to say the AI bubble

and the circular deal fraud that we're

seeing with companies like OpenAI.

They're using the exact same tricks.

Private companies making private deals,

revealing just small random bits of

information seemingly with no logic or

transparency, inflating the values of

themselves and each other and the stock

market as a whole by a ridiculous

degree. to the point where right now

about 35% of the S&P 500 is made up of

AI hype stocks that could collapse in an

instant if the value in this AI bubble

is exposed as vaporware or a fraud. And

because these deals are all private

coming from private companies like Open

AI and the other AI companies don't have

to tell the truth until it's too late,

just like First Brands Group, a quieter

trend was unfolding across global

markets in 2025. Diversified strategies

posted some of their strongest returns

in years. It's an achievement that has

largely flown under the radar.

Multi-asset quant cocktails blending

commodities, bonds, and global equities

outperformed the S&P 500. An ETF fund

holding 29 separate ETFs spanning across

global markets posted its best year on

record. What we're seeing right now is

that the old financial paradigm is

changing. Funds that invest into

commodities and reduce their exposure to

the AI hype and overvalued markets

actually outperformed the S&P 500 this

year. And it all comes down to a few

fundamental changes in the global

economy. There is no more free debt. No

more 0% interest rate debt, meaning that

zombie companies like First Brands

Group, they're doomed to fail. We're

seeing delobalization mount, meaning

that international supply chains are

riskier and harder to make work than

ever before. Again, just like what we're

seeing with First Brams Group, and of

course, we've had the passive investing

bubble that inflated the S&P 500 and

these passive ideas for investing for

years and years that's finally starting

to unwind as valuations are just too

insane. And all of this is just being

outright ignored by the legacy media and

the establishment because they have a

vested interest in keeping you as exit

liquidity in selling their overvalued

assets to you whilst they get out and

save their skin and leave you holding

the wrong assets as the new financial

paradigm emerges. Now, this is a topic

far too long and complicated and

important for this YouTube video alone.

So, what I've actually been doing over

the last few weeks, the reason I've been

posting many videos is I've been putting

together and I'll now be running a free

online masterass explaining the new

financial paradigm and how to invest in

it. Very shortly, you can register for

that free master class and save your

spot by clicking the link down below in

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we'll cover the three key changes that

we need to be tracking and why they are

changing the investment environment

right now and how you should be looking

at your investments as a result of these

changes. But I have to warn you, I'll

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days as we finish up 2025. So make sure

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and follow the steps on the next page.

Now, back to private credit. And what

we're seeing distinctly is the market

and the legacy media establishment

trying to suggest that all of this

problem within the private credit space,

it's just due to fraud and criminality.

Do the recent bankruptcies of first

brands and trickle suggest trouble ahead

in private credit coming from a senior

investment director in credit

investments? No. The recent bankruptcies

of first brands and trickle do not

signal systemic problems in private

credit. Both cases are idiosyncratic

driven by fraud and unique business

practices rather than broad market

weakness. The entire establishment are

all colluding together and trying to

astroturf the truth so that everyone

thinks this private credit issue is

really just an issue with a few bad

actors, some naughty people committing

fraud. But for example, take First

Brands and one of the frauds that we've

just found out they started committing

in 2022. They were creating fake

invoices to try and inflate their assets

on their books so that they could take

out more debt, not to grow the company,

but to pay off their old debt. Yes, that

is fraud and criminality. But it's fraud

and criminality to keep the company

alive, not to try and profit off the

back of that fraud. That fraud exists

only because the company was failing. It

isn't the reason the company is failing.

It's the reason it's grown to be such a,

you know, massive $12 billion failure

and not a $5 billion failure. But it is

not separate from the market weakness

within private credit. What the

establishment are trying to convince us

of is that all of these failures and

bankruptcies, they have nothing to do

with the underlying market conditions

like say a weak economy or high interest

rates or deglobalization. But as the

evidence continues to pile up, the fear

of another global financial crisis and

the criticisms of failed regulators and

corruption are finally starting to weigh

on the elitees minds. The private credit

industry is facing fresh scrutiny from

the top global regulators over some of

the ratings being assigned to debt in

the 1.7 trillion market. The Financial

Stability Board, which monitors global

risks, has high level concerns about the

potential for rating shopping in private

markets, where firms can seek grades on

transactions from multiple providers and

opt for the most favorable one.

Officials at the FSB are also concerned

that ratings in private credit are not

subject to the same rules as

securitization, where safeguards

introduced after the global financial

crisis typically mandate the use of

multiple independent credit ratings and

strict management of conflicts of

interests. So the financial stability

board is an international organization

covering the 20 largest economies in the

world. It was created in 2009 in the

wake of the global financial crisis as

an authority to track and to warn us all

about these massive problems that took

the global economy out back then. And it

is now sounding warning signals saying

that private credit is seeing ratings

shopping just like banks did in the

run-up to the financial crisis itself

with their mortgage back securities.

Now, does this have the potential to

cause contagion to spread out into the

rest of the economy and the markets and

to impact, say, the traditional banking

sector and the rest of the world? Well,

sadly, yes. After the implosion of first

brands and subprime car lender trickle

law, three private credit executives

appeared last month in front of a UK

House of Lords committee to hit back at

what they called misinformation. what is

happening in private credit is

fundamentally safer to happen in private

credit than on banks balance sheets.

This coming from a Blackstone executive

adding that leverage made the biggest

lenders vulnerable to a single point of

failure in any of the businesses. The

banks though disagree. JP Morgan boss

Jaimeie Diamond has described a huge

arbitrage taking place as lending moves

from the banking sector into more

lightly regulated rivals and recently

warned there were more cockroaches

waiting to scuttle out after the private

credit boom. The reality is lenders and

private credit funds are not so

distinct. The two have entwined their

fate with banks extending hundreds of

billions of dollars in financing that

boosts private credit funds returns. The

reality is that banks and shadow banks

or private credit today, they're really

one and the same. The shadow banks or

the private credit lenders, they don't

have to follow the same rules, but

they're funded almost entirely by the

banks themselves. So, the risk still

lies ultimately with those banks. This

chart here shows how a recent Blackstone

private credit fund that they did a

raise for was funded. And you can see

the biggest funders here. One and a half

billion from Bank of America, 600

million from Bank of America, one and a

half billion from British Bank Barclays.

We have City Bank, we have Deutsch Bank,

Goldman Sachs, HSBC, Mass Mutual, Morgan

Stanley, Society General, Wells Fargo.

Billions and billions of dollars being

flooded from these banks into

Blackstone's most recent private credit

raise. Almost all of that private credit

fund is funded by traditional finance,

by the banking sector, by the banks that

we all know that we hate, Bank of

America and Goldman and Morgan Stanley.

90% of private credit today exists

purely to allow banks to take the same

insanely risky bets that they did in

2008. Except this time they stick

another non-bank entity in between them

and the actual borrower to protect

themselves from the laws in place that

are supposed to stop them from taking on

too much risk. And the evidence behind

this is incredibly obvious when you look

for it. When a private creditor

announced that they lost $und00 million

for a commercial mortgage they had given

out nine years ago, Western Alliance

Bank, they saw their share price drop by

14% overnight. Why? Because Western

Alliance Bank had financed that private

credit lender and was on the hook for

the losses. When Trickor Holdings fell

into bankruptcy, JP Morgan had to come

out and say that they will be losing

$170 million in the process despite the

fact that JP Morgan hadn't lent any

money to Trickle, but they had funded a

private credit fund which had funded

TrickLaw, meaning that JP Morgan's books

were squeaky clean right up until the

bankruptcy couldn't be hidden anymore

and JP Morgan had to book a 100% loss on

what they claimed just a week later

earlier, sorry, was a safe and reliable,

stable asset. Now, if you want to better

understand the markets right now and see

why we're watching a private credit

collapse and how high interest rates and

the death of quantitative easing affects

all of this and what's likely to come

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educate them on the crisis within

private credit and shadow banking as

well. There's a nightmare brewing in the

private credit and the shadow banking

industry right now. And the

establishment is playing cover up. the

legacy media. They're trying to disguise

the true size of this problem and

convince us all that there is no problem

at all. But the truth is that the first

brand's collapse is far worse than they

previously had feared. We had been

assured that a rescue plan was on its