Humanity has reached a level of financial masochism that would make the Marquis de Sade blush. In the latest installment of 'How to Set Your Future on Fire,' we find the global investor class gleefully ignoring the 'cockroach' warnings currently infesting the private credit market. For the uninitiated—meaning those of you who still believe the economy is governed by something resembling logic—the 'cockroach theory' suggests that for every visible default or borrower in distress, there are thousands more scurrying behind the drywall of the balance sheet. Ordinarily, such a realization would trigger a stampede toward the exits. But in our current era of terminal stupidity, the sight of a six-legged pest is apparently a 'buy' signal. Private credit funds, those artisanal debt-shacks that operate in the shadows of traditional banking, are currently vacuuming up billions of dollars from investors who have decided that reality is an optional DLC they simply cannot be bothered to purchase.

The allure of this infestation is, of course, 'yield.' Yield is that magical, shimmering number used to justify every catastrophic decision made by a pension fund manager who is three years away from a retirement he hasn't actually funded. We are watching a masterclass in collective delusion. The 'shadow banking' sector is a spooky name for banks that don't want to be called banks because they find oversight 'un-chic.' They provide loans to companies that are too toxic, too leveraged, or too fundamentally broken for traditional lenders to touch. And they do so with the kind of documentation that makes a cocktail napkin look like the Magna Carta. We used to have things called 'covenants'—the rules that protected lenders from being flagrantly robbed by their borrowers. Now, we have 'covenant-lite' agreements, which is the financial equivalent of leaving your front door wide open, putting up a sign that says 'Please Don’t Steal My TV,' and then being shocked when you’re left watching the static on a bare wall.

And yet, the billions keep flowing. Why? Because both sides of the political aisle have conspired to create a world where 'growth' is a mandatory hallucination. The Left will inevitably cry about the 'predatory nature' of these unregulated funds, conveniently ignoring that the public pension funds they oversee are the very ones supplying the capital. The Right will extol the 'innovation' and 'efficiency' of private markets, which is just code for 'finding a new way to hide debt from the peasants.' Both sides are equally complicit, driven by a desperate, mouth-breathing need to keep the numbers going up, even as the underlying assets begin to smell like a dumpster fire in a heatwave. It is a bipartisan suicide pact signed in gold-leaf ink.

There is something profoundly poetic about the 'cockroach' warning being ignored. It highlights the ultimate hubris of the modern investor: the belief that they are the only ones who can dance between the raindrops. They see the stress in the market, they see the rising defaults, and they think, 'Yes, but I’m special. My fund manager has a very expensive suit and an office in Greenwich. Surely, he can see through the drywall.' Newsflash: he can’t. He is just waiting for his management fee to clear before the house falls down. These funds are raising record amounts of capital to lend to companies that are already drowning in interest payments. It is like trying to cure a hangover by drinking a bottle of rubbing alcohol. It is technically liquid, and it might make you forget your problems for a second, but the end result is inevitable, messy, and medically fascinating.

When the inevitable collapse arrives—and let’s be clear, 'when' is the only variable remaining—the same people currently touting the 'robustness' of private credit will be the first to crawl toward the taxpayer-funded teat. They will argue that they are 'systemically important,' a phrase that translates to 'we held the world hostage with our own incompetence, and now you have to pay the ransom.' The hypocrisy is the only thing more abundant than the debt. We have built a system where the upside is private, the downside is socialized, and the intelligence is non-existent. I find myself wondering if there is any limit to the appetite for self-immolation. Probably not. As long as there is a spreadsheet that can be manipulated to show a 12% return, people will continue to march into the fire. The cockroaches aren't just in the credit funds; they're in the brains of every participant in this charade. The infestation is complete, the lights are off, and everyone is pretending they can’t hear the scuttling. A world that values the illusion of wealth over the reality of stability deserves exactly what it’s about to get: a face full of bugs and an empty wallet. Enjoy the buffet.