Slate Money – "Credit Cockroaches" (October 18, 2025)

Main Theme and Purpose

This episode centers on the much-anticipated "private credit bubble"—are we in one, is it bursting, and what recent high-profile frauds (like First Brands and Tricolor) say about the state of credit markets? The hosts also dive into the car market’s surging prices, auto delinquencies, and the evolving shape of the EV sector. A lively segment unpacks the meteoric success (and bizarre quirks) of the QQQ ETF, and the Numbers Round highlights weird pizza economics and the rise of MrBeast in fintech.

1. Private Credit, First Brands, and the "Cockroach" Problem

[Starts ~01:57]

Key Topics:

• Is there a private credit bubble?

  • Felix Salmon: “There probably is a bubble and it probably isn’t bursting, at least not yet.” [01:57]
  • We’re in a “historically frothy moment” for credit — huge money is flowing into lending, with credit spreads extremely tight.
  • High-profile blowups (First Brands, Tricolor) have highlighted due diligence failures but haven’t tanked the broader market.

• Tricolor and First Brands: What Happened?

  • Both failures involved shady accounting—selling the same receivables to multiple lenders, a sign that “the credit market has failed to do its due diligence” [03:10].
  • Elizabeth Spiers: “There are some problems… that could extend to other companies.” [03:38]
  • Debate over whether banks or private credit firms are sloppier. Banks offload loans; private lenders are more opaque.

• The “Cockroach” Metaphor

  • Felix: “I don’t think Jamie Dimon was talking about private credit… But when the tide goes out, that's when you start learning who the frauds were.” [04:43]
  • Elizabeth: “If there’s a fraud here and a fraud there, there’s probably a bunch of other frauds somewhere else.” [05:10]

• Are These Isolated Incidents or Signs of Systemic Risk?

  • Most of the market is non-fraudulent; losses from fraud won’t create systemic risk barring a massive change in credit conditions.
  • Emily Peck: “Could there be a bigger risk now of some kind of bond repricing wave?” [07:14]
  • Felix: “If it’s a fraud, it’s a fraud and the bonds go to zero.” [08:00]
  • Elizabeth: “First Brands is much more straightforward… They had $2 billion of loans off-balance sheet.” [09:44]

• Wile E. Coyote moments:

  • When lenders look more closely, they may find problems that have been there from the start—sudden shocks, not gradual declines.

• Bank vs. Private Credit Risk

  • The post-2009 retreat of banks from lending led to a surge in private credit, but the ultimate risk still often trails back to banks.
  • Felix: “The banks have been, ‘yeah, we don’t want to take that much credit risk’... they lend to private credit, who lend to companies.” [12:51]

• Systemic Spillover?

  • The 2008-type scenario seems unlikely because private credit isn’t marketed as AAA-safety nor widely held as retirement savings (yet).
  • Some regulatory worries remain—private credit being allowed into 401(k)s could widen risk if the asset class stumbles. [15:52]

Notable Quotes:

• Felix Salmon: “A credit market, in general, is not going to get brought down by frauds.” [05:31]
• Elizabeth Spiers: “So basically, JP Morgan helped the private credit companies buy the cockroach-infested house and now is complaining about the cockroaches.” [14:05]

2. The Soaring Cost of Cars and Auto Market Stress

[Segment starts ~18:06]

Key Topics:

• Even ‘Fraudulent’ Car Companies Have Strong Sales

  • First Brands, despite its troubles, still makes $5bn revenue/year.
  • New car prices topped $50,000 on average—an “insane” figure. [18:06]

• Why Are Car Prices So High?

  • Pandemic, ongoing supply chain issues, and producers shifting toward higher-margin models.
  • Felix: “Automakers have stopped making the entry-level, smaller, cheaper vehicles.” [21:42]

• Auto Loan Delinquencies

  • Emily: “Auto loan delinquencies jump to new heights… at all-time highs since 2009.” [19:27]
  • Stress might be more acute among lower-income buyers who are pushed into buying used cars—now also expensive.

• Luxury Truck Explosion and Branding

  • Elizabeth: “The best-selling vehicle in the US is the Ford F150 and they're starting at $65,000 new… it was sort of the affordable vehicle.” [22:18]

• Why Entry-Level Cars Have Vanished

  • Carmakers have maximized profits by discontinuing cheaper models, shrinking choice even for used car buyers.

Notable Moments:

• Emily: “Thousand dollars monthly payments have become, if not the norm, I think more typical, more frequent.” [19:27]
• Felix: “When I bought my car [pre-pandemic], I paid $10,000… you just can’t do that anymore.” [20:24]

3. Cybertruck Mania, EVs, and Culture Wars

[Segment starts ~23:33]

Key Topics:

• Wired’s Cybertruck Safari

  • Outlandish stories from Cybertruck owners—including a participant in J6 and a divorcé opining, “Women do not like this vehicle.” [24:17]

• Design and Safety Issues

  • Elizabeth: “It is a fundamentally dickish design… very dangerous to people around it.” [25:19]
  • Emily: “A pretty basic requirement of [a] car—like, be able to see out of [it].” [25:34]

• Political and Social Symbolism

  • The Cybertruck as an overt culture-war statement: “It is kind of a political stance at this point to buy a Cybertruck.” [26:35]

• EV Trends and Subsidy Pullback

  • Buying rush before $7,000 tax credits phased out.
  • Debate over whether US policy has already moved the needle for long-term EV adoption.

• Where Now for EVs?

  • Elizabeth: “Automakers have already revised their projections down for EV adoption.” [31:27]
  • Felix: “Toyota… has done a more hybrid-first strategy.” [32:24]
  • Legacy carmakers struggle to profit from EVs, still dominated by Tesla.

Notable Quotes:

• Felix: “The Cybertruck is the one car that you can’t put that bumper sticker on saying ‘I bought this before Elon went crazy,’ because, like, that was the sign that Elon had gone crazy.” [24:24]

4. The QQQ ETF Money Machine

[Segment starts ~36:53]

Key Topics:

• QQQ’s Bizarre Fee Structure

  • Because of its “Unit Investment Trust” structure, QQQ must spend its profits on marketing — explaining the blitz of QQQ ads. [37:14]
  • Emily: “This ETF is enormous… but [Invesco doesn’t] benefit from it. It’s pretty wild.” [37:33]
  • The ETF’s revenue dwarfs its parent company’s; much of it goes to marketing, plus huge licensing fees to NASDAQ ($205 million/year) [40:20].

• Comparison with S&P 500 ETF (SPY)

  • SPY has the same structure, but State Street makes the money as both manager and trustee. Invesco does not.

• Why QQQ Is Expensive—but So Popular

  • High fees (20 bps vs. 3–6 for S&P 500 ETFs).
  • Used as a cash-parking vehicle for tech-oriented traders—“not really a buy-and-hold ETF.”

• Can Invesco Fix It?

  • Invesco wants to ditch its current fee structure for a more normal (and profitable) setup but needs a hard-to-achieve shareholder vote.

Notable Quotes:

• Felix: “The revenue from Invesco’s QQQ ETF is actually substantially bigger than Invesco’s entire revenues. It’s like the subsidiary is bigger than the Holdco.” [37:39]
• Elizabeth: “Can they use their marketing funds to market to the shareholders?” [38:37]

5. Numbers Round & Breezy Tangents

[Segment starts ~44:58]

Featured Numbers:

• Elizabeth: 445 million — MrBeast’s YouTube subscribers. He’s trademarking for a financial services company and launching a mobile phone company. “Expect MrBeast Healthcare next.” [45:03]
• Felix: 1.8 billion — S&P Global’s acquisition price for With Intelligence, a media company covering private markets (“$3 million per employee! Journalism can still be lucrative—if you’re in the right sector.”) [49:17]
• Emily: $5.44 — The price of what is allegedly the worst slice of pizza in NYC (at A Slice of New York! Pizza Cafe, Times Square). Backed up by a reader-led scrape of Google reviews. [49:30]

Fun Quotes & Moments:

• Felix, on pizza pricing: “The cost of a slice of pizza should always be the same as the cost of a subway fare.” [51:38]
• Emily, on pizza tourists: “Even the worst [slice in NYC] is probably better than most pizza you can get in most other places.” [52:00]
• Felix, on reading: “I read books on the subway, people!” [53:11]

6. Memorable Quotes and Soundbites

• “A credit market, in general, is not going to get brought down by frauds.” — Felix [05:31]
• “If there’s a fraud here and a fraud there, there’s probably a bunch of other frauds somewhere else.” — Elizabeth [05:10]
• “Auto loan delinquencies jump to new heights… at all-time highs since 2009.” — Emily [19:27]
• “The best-selling vehicle in the US is the Ford F150 and they're starting at $65,000 new… it was sort of the affordable vehicle.” — Elizabeth [22:18]
• “The Cybertruck is the one car that you can’t put that bumper sticker on saying ‘I bought this before Elon went crazy…’” — Felix [24:24]
• “Can they use their marketing funds to market to the shareholders?” — Elizabeth [38:37]
• “Mr. Beast Healthcare will come next.” — Elizabeth [45:24]

7. Timestamps for Major Segments

• Private credit/First Brands/Tricolor/Cockroaches: 01:57 – 17:37
• Auto market, car prices, EVs, Cybertruck: 18:06 – 33:23
• QQQ ETF segment: 36:53 – 44:58
• Numbers round/tangents: 44:58 – end

Tone and Style

The episode is sharp, irreverent, and banter-rich, fearlessly calling out industry quirks and follies. The panel’s skeptical take on frothy markets, car culture, and ETF marketing is matched by empathy for regular consumers (whether pizza buyers or car buyers). If you’re a finance nerd or just want to keep up with the shifting boundaries of money, fraud, and market hype, this Slate Money covers a LOT of ground.

Listen to Slate Money for…

• Nuanced takes on financial “bubbles”
• Smart ridicule of billionaire follies and product weirdness
• The why behind market headlines—minus hype.

Ad sections and intros/outros skipped; see full transcript for tangential sponsor content