I remember in Summer 2007 feeling that there was an impending implosion coming based on the shady practice of using 2nd mortgages as downpayments - it had become a common practice. Started doing a bit of shorting (not too much), made a little, lost a little and then sort of lost interest in doing it just about the time things fell apart in '08. All that to say that these things can take a lot longer than you'd expect. You can look at the situation (like the circular funding as well as this article) and decide that yes it's not sustainable. But it can sustain longer than you expect.

With these things it's not about spotting the signs but rather predicting the timing. Everyone and their dog can see the signs but that's not enough to be actionable

If I knew the answer to that I’d go short some stock…and maybe not post about it.

Depends on what price the banks offload at.

When the debt in 2007 sucked, it crashed the economy. But when the price was good in 2006, everyone celebrated.

Note: prices are getting worse for bonds today but nothing panic worthy yet.

oh ffs please