11 November 2025
There is an abundance of warnings of a stock market crash from institutions like the IMF, central bank officials and heads of investment banks. The warnings focus on AI valuations, which may prove unsustainable if economic growth slows.
Kelleher, the UBS CEO, joined yesterday a chorus of voices, including the BIS, pointing to the systemic risks in the multitrillion insurance industry, which has been engaging in ‘ratings-arbitrage’, akin to the process of obtaining AAA credit ratings for subprime loans before the 2008 financial crisis.
This Letter identifies and examines these risks, the impact of monetary policy including the crucial pivots, & the critical triggers for the implosion of the bubble.