Two Hedge Funds Down, a Dozen to Go

The Ghost of Bear Stearns Is Back

Written by Rebel Capitalist AI | Supervision and Topic Selection by George Gammon | November 13, 2025

In case you were too busy panic-selling CarMax or checking your 401(k), here’s the news: two subprime hedge funds just blew up, and the similarities to 2007 are beyond eerie.

They’re terrifying.

We always say, “History doesn’t repeat, it rhymes.” But what we’re seeing right now isn’t rhyming...it’s a direct sequel.

Replace Bear Stearns with UBS. Replace subprime mortgages with subprime autos. Replace the financial crisis with… well, something that looks a hell of a lot like it.

Welcome back to 2007, folks. Buckle up.

And if this opening feels like déjà vu, that’s because the rhyme is giving way to the same melody.

But before we talk about what’s breaking, we need to talk about who’s breaking it...and why UBS is now standing where Bear Stearns once stood, staring into the same abyss.

UBS, Cockroaches, and the Ghost of Bear Stearns

UBS, the Swiss bank that absorbed Credit Suisse after its 2023 implosion, is now shutting down two hedge funds...the O’Connor funds.

One of them was loaded with exposure to First Brands, a subprime auto lender, while the other had no exposure… and still got shut down.

Why? Massive redemptions. Investors are stampeding for the exits like it’s a burning theater. They don’t care what’s in the fund anymore...they just want out. And fast.

This echoes Bear Stearns in 2007. One fund collapses, redemptions hit the others, and before you know it, the entire house of cards is swaying.

And the marketing gimmick? Both Bear Stearns and UBS pitched these toxic funds as “high-grade”. You can’t make this up. High-grade, right up until the moment they go completely tits up.

If the collapse of “high-grade” funds sounds familiar, wait until you see what’s driving it. Because this isn’t about returns or strategy. It’s about fear...pure, systemic, accelerating fear...and that brings us to the real killer in today’s market.

Liquidity Isn’t Drying Up...It’s Being Evaporated by Fear

The financial media will tell you that “liquidity is tight” or that “QT is biting.” Nope. What’s really happening is counterparty risk is skyrocketing.

Banks aren’t lending, not because they don’t have the money, but because they don’t trust each other. And when banks don’t trust each other, the entire monetary system...built on a web of balance sheets...starts to freeze.

This isn’t about QE or QT. It’s about trust. And that trust is disappearing faster than your favorite meme stock.

How Quantitative Easing (QE) and Quantitative Tightening (QT) Really Work

Just like in the pre-2008 days, the financial system is flashing red on all the internal dashboards, while the talking heads are still screaming “buy the dip.”

And when trust disappears, the weakest links snap first. That’s why the next chapter of this crisis isn’t about banking at all...it’s about the ugliest corner of consumer credit suddenly becoming the market’s new Ground Zero.

Subprime Auto: This Decade’s Subprime Mortgage

Subprime auto isn’t as big as the mortgage market was in 2008. But that’s not the point.

The point is that it reveals the rot. Subprime is the first cockroach. But when you see one, there are always more. CarMax, First Brands, Primalend, Zion, Western Alliance...the list keeps growing.

And now, UBS is dealing with direct fallout. These aren’t random events. They’re dominoes.

We’re watching a slow-motion replay of 2007. The names have changed. The narrative hasn’t.
But rot doesn’t stay contained. It spreads through funding markets, securitizations, and balance sheets. And once the cycle turns, you get a vicious feedback loop that nobody can stop...not the banks, not the Fed, not the politicians.

The Doom Loop Is Back

• Liquidity dries up.

• That reveals more fraud.

• Fraud increases counterparty risk.

• Counterparty risk dries up more liquidity.

That’s your doom loop. We saw it in 2007. We’re seeing it again now.

Oh, and if you think this isn’t systemic, think again. The shadow banking system, private credit markets, and derivative structures are all more bloated than ever. The system doesn’t need a Bear Stearns-level event to freeze...it just needs fear.

And fear is already spilling into the real economy. If you want proof, look no further than the company that tells you exactly when households go from “stressed” to “broke.”

The CarMax Canary

Let’s talk CarMax. The used car giant is a bellwether for real economic activity. When people stop buying used cars, that’s not a soft landing...that’s a hard stall.

Just 20 days ago, CarMax was riding high off GM’s earnings. But those earnings were just front-loaded numbers, likely juiced by pre-tariff demand.

Then came reality: CarMax fired its CEO. The stock dropped 24% in a single day.

Let that sink in.

This isn’t just one company making a bad call. It’s the canary in the economic coal mine, collapsing under the weight of higher interest rates, falling demand, and consumer credit stress.

And if you think this is over, remember: the auto sector is where the mortgage sector was in 2006. The cracks are forming. The defaults are rising. The assets are garbage. The collateral is rehypothecated 45 times. The powder keg is lit.

And once the canaries die, the broader economy starts coughing. The boom that looked “resilient” suddenly reveals itself for what it was all along: a mirage built on government distortion.

Used Car Crash

From Fake Booms to Real Busts

Between 2021 and 2024, businesses were booming. Government distortions...rent freezes, stimmies, debt forbearance...created fake demand and inflated everything.

Then came the hangover:

• Millions of jobs revised away.

• Credit stress rising.

• Real wages flat or declining.

• Consumers tapped out.

And yet, politicians are now responding to this slowdown with... more distortions.
$2,000 “tariff dividend” checks. 50-year mortgages. UBI in red hats. Are we learning anything?

We’ve gone from Keynesianism to clown economics.

If that sounds unsustainable, wait until you see how Washington plans to “fix” the next leg down. Because the next chapter isn’t austerity...it’s stimulus on a scale we’ve never seen.

2007 Redux? Or 2008 with Steroids?

So the obvious question: Is this 2007 again? Yes. 100%.

The only unknown is: Does it lead to a 2008-style collapse? Probably not. And here’s why: the government will step in.

Just like in 2020, when lockdowns crushed the economy, the government rushed in with CARES Act stimulus. But this time, it won’t be $5 trillion...it’ll be $50 trillion.

Why not? Go big or go broke.

They’ll call up Grant Cardone and ask for his playbook. “10X it,” he’ll say.

Rates will drop. QE will come back. And the debt binge will continue.

But the result?

• More distortion.

• Higher inflation.

• Worse outcomes for the middle and lower class.

• More wealth funneled to the top.

Same game. New level.

And the kicker? Even if policymakers step in, the structural damage is already done. Which means the next phase will decide who gets crushed...and who walks away ahead.

What Comes Next

You don’t need a crystal ball. You need a calendar from 2007.

Watch for:

• More fund closures.

• More redemptions.

• More CarMax-style crashes.

• More government bailouts.

• More financial engineering disguised as “solutions”.

We’re in the early stages of a financial reckoning. Whether it ends in 2008-style collapse or a Japan-style zombie economy depends on how fast and how big the government intervenes.

Either way, the average investor will lose. The average consumer will lose.

The only ones who win? Those paying attention.

And those holding gold.

Stay Ahead of the Collapse

If you’re reading this, you already know something is deeply wrong in the financial system. You can feel it. You see the cracks. You sense the déjà vu. What keeps most investors up at night right now isn’t volatility...it’s uncertainty. It’s not knowing what breaks next. It’s not knowing what to trust. It’s not having a roadmap when everyone else is following headlines.

That’s exactly why the Rebel Capitalist News Desk exists.

Every day, George Gammon and the RCN team decode the signals the mainstream media ignores, track the plumbing of the financial system, and walk you through the moves real investors are making before the public catches on.

If you want to understand what’s coming...not a month late, not a week late, but in real time...now is the time to upgrade.

Join us and turn confusion into clarity, fear into preparation, and uncertainty into opportunity.

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Because in a world sleepwalking into another crisis, the edge goes to those who refuse to stay blind.