Ex-Goldman MD: "Credit Markets Move in Step Functions"

Credit markets stay calm for years then "blow out" in sudden step functions, and populism plus AI disruption are the next candidate triggers.

• 2008 vivid memories: In Goldman's mortgage department, Jeff recalls Berkshire's preferred equity/warrant investment and a senior trader telling staff to check where their personal cash sat as money-market funds became risky.
• ABX tranches collapsed fast: The Valentine's Day 2007-launched super-senior ABS-CDO tranches traded from ~10bps to 500bps and eventually recovered between 10-30 points, exposing how "never supposed to take a loss" AAA risk unraveled.

Themes, sentiment and reasons are AI-written paraphrases, checked so they never quote an episode. They may contain errors. Not investment advice. Episodes remain the property of their creators.