Trump is Running Us Off a Cliff | CLOs Echo the Global Financial Crisis

The New York Fed released a troubling report detailing the risk of Collateralized Loan Obligation (CLO) exposure in the insurance industry. Over the past several years, private equity has taken larger and larger stakes in insurers who are historically risk averse. But now they’re acting more like hedge funds in their investment strategies and have more than $2 trillion in corporate debt exposure and nearly $300 billion of it is in mezzanine financing packaged much in the way mortgage backed securities were in the run up to the Global Financial Crisis. Against the backdrop of persistent inflation, a renewed round of tariffs, elevated oil prices, the war in Iran and historic consumer debt, the economy is like a tinderbox. The jelly bean theory holds that you can only reach into the jar so many times before you eventually pick the black jelly bean. Apologies in advance to all those who like black licorice flavored jelly beans.

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CHAPTERS
00:00 – Introduction
01:28 – Confluence of Negative Indicators
08:09 – Long Bonds Signal Trouble
14:15 – Is Insurance the Black Jelly Bean?
22:10 – What Happens Next
23:19 – Outro and Credits

EPISODE RESOURCES
New York Fed Report on Insurance and CLOs
https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr975.pdf
Sourced Articles
https://www.bloomberg.com/news/articles/2026-07-22/latest-oil-market-news-and-analysis-for-july-23
https://www.bloomberg.com/news/newsletters/2026-07-22/long-bonds-ring-the-2008-alarm-bell-evening-briefing-americas
https://www.nytimes.com/2026/07/22/world/canada/canada-trump-tariffs-trade.html
https://www.reuters.com/world/us/trump-impose-forced-labor-duties-friday-temporary-10-us-tariffs-expire-2026-07-23/

Macroeconomic implications of immigration flows in 2025 and 2026: January 2026 update

https://www.bloomberg.com/news/articles/2026-01-30/trump-immigration-crackdown-could-shrink-us-population-for-first-time
https://www.nytimes.com/2026/07/22/technology/alphabet-google-earnings-profit.html
https://www.cnbc.com/2025/12/18/cumulative-inflation-since-2020.html
https://www.investopedia.com/terms/n/nationally-recognized-statistical-ratings-organization.asp

Rules & Ratings: Ratings agencies spar in private ratings legitimacy debacle

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Unf*cking the Republic (UNFTR for short) is progressive media organization that produces a longform podcast, YouTube videos, newsletters and original essays on U.S. politics, socio economics and civil liberties. Our features attempt to explain how we arrived in Bizarro America, the funhouse mirror version of what was originally intended. You can access all of our work at www.UNFTR.com

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