Episode summary
"Big Short" Legend Danny Moses on Dimon, Private Credit, Prediction Markets | Bloomberg Businessweek
Bloomberg Businessweek Daily
· · 21 min · Hosts: Carol Massar, Tim Stenovec · Guests: Danny Moses, Alexandra Semenova
Summary
The guest argued that private credit and private equity are starting to rhyme with the years before the subprime crisis, not because the system is identical but because the same funding pattern is repeating. In his view, banks and Wall Street now play a similar role to the warehouse lenders and securitizers of 2004 to 2006: credit can be pulled back quickly, liquidity dries up, and leverage is exposed when assets can no longer be sold easily. He said the danger is not an immediate banking-system collapse, but a later problem if retail money is drawn into hard-to-exit private credit products.
He was more constructive on prediction markets, saying they are useful both as a trading tool and as a way to read the news, with examples tied to elections, rates, and macro outcomes. He also said he trades markets such as the S&P, gold, and Fed expectations there, but sees them as a small allocation and more of a signal than a core portfolio holding.
The guest’s broader macro worry was employment, especially if AI drives white-collar job cuts faster than the economy can absorb them. He said that if the Fed cuts rates while inflation stops falling, the policy mix could become more dangerous, while U.S. debt and refinancing risk remain his biggest long-term concern.
Key takeaways
- The guest said private credit resembles pre-crisis subprime lending because liquidity can vanish fast once Wall Street pulls back.
- He said retail investors should own liquid parent firms like Blackstone, KKR, and Apollo rather than private credit funds directly.
- He sees prediction markets as a useful macro signal and trades them for rates, stocks, gold, and sports outcomes.
- He said employment, not inflation alone, is the key market risk if AI accelerates white-collar job losses.
- He warned that U.S. debt and refinancing risk matter more if the government keeps shifting issuance toward T-bills.
Notable quotes
“private credit and private equity firms push into retail products reminds him of the years preceding the subprime mortgage crisis”
“whenever liquidity dries up in any asset class, it exposes leverage and no good asset goes unlevered is basically how it goes”
“If I were a retail investor right now looking to get myself exposure, I would be buying Blackstone, KKR, and Apollo”
“I think it's self-fulfilling. I think that even through the tariff crisis of last year, ongoing tariff crisis of last year, ETF flows remain positive”
How the episode opens
Bloomberg Audio Studios podcasts, radio, news. — You're listening to Bloomberg Business Week with Carol Masser and Tim Stenc on Bloomberg Radio. — We should note Jamie Diamond uh that interview with Lisa Bramitz covering a lot of ground. Some headlines include that right now the US economy is doing fine but at the same time and this came you know before he made some comments about AI he said there's more exuberance than there should be
He did he did he did also note when it comes to private credit he said not in the systemic area uh yet that we are late in the credit cycle in general so that reminds us of some recent reporting by our own Bloomberg team it was about money manager Danny Moses you know the Danny Moses immortalized in the big short who made some comments probably lives with you forever.
He's here. He's here. He made some comments um last week during panel at the I Connections Global Alts Conference.
It was in Miami Beach, Florida. Uh what he said was that private credit and private equity firms push into retail products reminds him of the years preceding the subprime mortgage crisis. So, we are kind of hearing a chorus uh akin to reminding us all about the GFC and what happened then.
Danny Moses is founder of Moses Ventures. He joins us right now here in studio along with Bloomberg News equities reporter Alexandra Semanova. Danny also host of the weekly podcast on the tape and co-authors of Substack.
What are we doing? Contrarians at the gate with his fellow big short partners. Um so delighted to have you here with us.
How are you?
Great to be here. Who knew what I would say one thing in Miami then I'm sitting here four days later.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- private credit
- private equity
- prediction markets
- lending standards
- market outlook
Companies and tickers mentioned
- JPM
- JPMorgan
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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