The word “subprime” has started appearing in the news again in the U.S.
Subprime auto loan companies are going bankrupt, private loan (private credit) markets are seeing rising defaults,
and the CEO of JPMorgan is talking about cockroaches.

To be honest, when I first saw those headlines, my reaction was something like this:

> “Yeah, yeah, Wall Street again.
Meanwhile I’m just trying to keep up with electricity bills, groceries, and my own loans.”



But in the 10+ years since I became severely disabled,
I’ve watched “some fire far away in the world” eventually show up as:

Exchange rate changes

Interest rate shocks

Rising prices

Poor performance of pensions and insurance products


— a slow, creeping shadow that eventually reaches our daily lives.

The Lehman Shock

The European debt crisis

The COVID shock

Inflation and a weak yen


All of these were, at first, “distant events” in other countries.
And yet somehow, they ended up directly hitting the household budgets and future anxiety
of people living in the Japanese countryside, like you and me.

That’s why this current combination of
“subprime × private loans × high interest rates”
is something I feel is worth calmly unpacking:

> What exactly is happening?

How worried do we really need to be?

What kind of distance and attitude should we keep toward this?




This post is not:

a technical report for financial professionals, nor

a “crash coming now!” doomsday prediction.


I am a mid-career person with a severe disability, with no huge income or physical capacity.
Precisely because of that, I want to think about:

> How to read global events,
what to fear,
and how not to overreact,



in order to protect my life and my family’s life —
and to put that into words from a regular person’s point of view.


—

TL;DR (In 3 Lines)

1. What’s happening now is a crack spreading through the “bottom side of the U.S. economy” — a mix of subprime, private loans, and high interest rates. It has structural similarities to the 2008 Lehman crisis, but it is not a simple replay with the same size and shape.


2. The scariest scenario is not an instant global depression, but rather this: the collapse of low-income lives in the U.S., and that pain and stress being imported into Japan through pensions, insurance, investment funds, exchange rates, and prices.


3. What we can do is limited, but real: take one step back from “high yield” temptations, avoid products we don’t understand, and keep doing small “disaster drills” in how we manage our household finances, assets, and information.




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Table of Contents

1. What’s Actually Happening | A Simple Overview of the Subprime Private Loan Chain Defaults


2. What Are “Private Loans”? | The “Invisible Banking System” Outside Traditional Banks


3. Why “One Cockroach Means More” | Four Structural Weaknesses in the Market


4. Similarities and Differences with the 2008 Subprime Crisis | Is Lehman Really Coming Back?


5. What’s Happening in the “Bottom Side” of the U.S. Economy | Auto Loans as Life Infrastructure


6. The Risks for People Living in Japan | Silent Spillover into Pensions, Insurance, Funds, and Households


7. What I Learned as a Severely Disabled Person | How to Live with Uncomfortable Reality


8. Three “Disaster Drills” You Can Start Today for Household Finance and Investing


9. Conclusion | Drawing Everyday Hope from Global Fires




—

1 | What’s Actually Happening

A Simple Overview of the Subprime Private Loan Chain Defaults

Let’s first整理 the situation in simple language from a non-professional viewpoint.

1.1 A Chain of Bankruptcies: Subprime Auto Loans and Small/Mid-Sized Companies

Over the past few months in the U.S., we’ve seen a series of bankruptcies and trouble involving:

Subprime auto loan companies

Auto parts manufacturers

Small and mid-sized companies heavily reliant on private loans


They share a common pattern:

Borrowers are subprime (low credit scores) individuals or companies

Instead of borrowing from traditional banks,

They borrowed from private funds (private credit)


1.2 The Squeeze of High Interest Rates and Rising Living Costs

Behind this is a macro environment that looks like this:

The Federal Reserve (FRB) has raised interest rates → high interest environment

Prices are rising: living costs, healthcare, rent

Yet wages for low-income earners are not keeping up


In such an environment, if you carry:

> “High-interest auto loans”
and
“High-interest corporate private loans,”



then it’s almost inevitable that repayment capacity will hit a wall sooner or later.

1.3 What JPMorgan’s “Cockroach” Comment Really Means

JPMorgan CEO Jamie Dimon commented on this string of failures:

> “If you see one cockroach, you know there’s more.”



In other words:

The bankruptcies we see now are just “the first few cases,” and

Similar problems may be lurking throughout the private loan market.


That feeling of dread you get when you see one cockroach in your kitchen—
the world’s largest bank CEO is basically saying,
“I have that exact same feeling about this market.”

When you think about it that way, the weight of that metaphor hits differently.


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2 | What Are “Private Loans”?

The “Invisible Banking System” That Grew Outside Traditional Banks

Now let’s unpack the key term “private loans (private credit)”
in simple terms for readers who don’t follow finance closely.

2.1 Private Loans = “Another Bank” Outside the Banks

In one sentence, a private loan market is:

> A market where investment funds, not banks, lend directly to companies and individuals.



Money providers:

Pension funds

Insurance companies

Funds for wealthy investors


Borrowers:

Non-listed small and mid-sized companies

High-risk players like subprime auto loan companies



After the 2008 Lehman Shock, bank regulations were tightened.
Banks were pushed to avoid riskier lending.
The “gap” left behind was quickly filled by a booming private loan market.

You could call it:

> “A shadow banking system built outside traditional banks.”



Globally, the private loan market is said to be around
2 trillion USD, with the U.S. accounting for 70–80%.
In about 10 years, it has more than tripled —
turning into a huge “invisible bank.”

2.2 Why It’s a Dangerous Partner for Subprime

The private loan market isn’t all bad.

On the positive side, it:

Provides money to borrowers who can’t get bank loans,

Supports economically meaningful projects that banks avoid.


But when combined with subprime borrowers,
its weaknesses become painfully obvious:

Deals are mostly non-public and over-the-counter
→ Contract terms and collateral details are invisible from the outside

Credit rating agencies play a limited role
→ Funds rely heavily on their internal risk models

Investors hungry for high yield put pressure on managers
→ Temptation to lower standards and accept riskier borrowers


As a result:

> We get a flood of “high-yield products that look safer than they really are.”



If you then add inflation, high interest rates, and a slowing economy on top,
the chain defaults we’re now seeing on the news are, in a sense,
structurally inevitable.


—

3 | Why “Seeing One Cockroach Is Scary”

Four Structural Weaknesses in the Market

Let’s dig a bit deeper into why the private loan market
is such fertile ground for “cockroaches.”

3.1 Weakness ①: Double-Pledging and Opaque Collateral Tricks

In subprime-type businesses, we’ve seen things like:

Using the same car or receivable as collateral for multiple lenders

Overstating the value of collateral

Hiding default and delinquency data


In public bond or securitized markets,
audits and disclosure offer some protection against such practices.
But in the non-public private loan space,
it’s extremely costly to detect such behavior in advance.

3.2 Weakness ②: Blind Faith in Credit Models

Another major trap is overconfidence in credit models.

Recently, lenders have used:

AI

Machine learning

Alternative data (SNS activity, purchase history, etc.)


to score subprime borrowers.

That’s not necessarily bad—
in fact, it can help reduce historical financial exclusion.

But when you:

Train these models on data from good economic times, and

Deploy them unchanged in a high-rate downturn,


then when conditions shift,
everyone’s models fail in the same direction at the same time.

> “When models fail, they often fail in the same way everywhere.”



That’s how systemic risk gets amplified.

3.3 Weakness ③: A Regulatory Grey Area

Traditional banks are heavily regulated:

Capital adequacy ratios

Liquidity requirements

Stress tests


By contrast, much of the private loan world is treated as:

> “A realm where professional investors take responsibility for themselves.”



Macro-level oversight is relatively weak.

When the Bank for International Settlements (BIS)
warns that private loan exposures held by insurers may be overrated,
it’s a sign of concern about this lack of integrated supervision.

3.4 Weakness ④: Problems Show Up Late

For public bonds and stocks,
corporate problems show up relatively early via:

Stock prices

Rating downgrades

Earnings reports


But in private loans:

Terms get reset,

Covenants are relaxed,

Deadlines are quietly extended—


often with almost no visibility to outsiders.

In other words:

> It can take a long time for problems to show up
as “bankruptcy” headlines.



Dimon’s “cockroach” comment reflects an understanding of this exact risk—
the invisible period during which trouble can multiply.


—

4 | Similarities and Differences with the 2008 Subprime Crisis

Is This Really Lehman All Over Again?

Let’s face the big question directly:

> Is this the return of the Lehman Shock?



My own answer:

There are clear similarities

But it’s unlikely to be a perfect copy of 2008


4.1 Similarities: Greed, Overconfidence, and Hidden Leverage

The recurring pattern looks like this:

1. Low interest rates and excess liquidity


2. Investors saying, “We want more yield!”


3. Financial engineering that makes high-risk products look safe


4. Overconfidence in models, ratings, and product design


5. A shift in interest rates or the economy suddenly revealing the true risk



In 2008, the main stage was housing loans.
Now, in the 2020s, the stage is:

Private loans

Auto loans

Small and mid-sized companies


with essentially the same script being performed.

4.2 Differences: Size, Type of Assets, and Banking System Exposure

But there are critical differences as well:

In 2008

The asset at the center was housing — the largest household asset

The scale of securitized products and direct impact on bank balance sheets was massive


Now

The main assets are auto loans and private loans to SMEs

The scale and direct hit to the system core are, so far, smaller



Also, since the Lehman Shock:

Big banks have higher capital buffers

Stress tests are institutionalized

Regulations on housing‐related products have tightened


Of course:

Banks may still provide leverage to private loan funds

Insurers and pensions may hold private loan products


So there are indirect connections.

But as of now, it’s more reasonable to say:

> This is not the same kind of center-of-the-system explosion we saw in 2008.




—

5 | What’s Happening in the “Bottom Side” of the U.S. Economy

Auto Loans as Life Infrastructure

For me personally, the most unsettling part
of this subprime private loan problem isn’t:

> “A possible global market crash,”



but rather:

> The quiet breakdown of everyday life among people at the bottom of the U.S. economy.



5.1 Cars Are Not a Luxury, but a Way to Get to Work

In many parts of the U.S., a car is not a luxury. It’s:

> A pair of legs you need to get to work — basic life infrastructure.



In suburbs and rural areas, you simply can’t commute without a car

Public transportation is often nearly nonexistent

So, even if they know the loan is tough, people feel they must buy a car


Subprime auto loan companies have been selling cars plus loans
to exactly these people:

Low credit scores

Past delinquencies or bankruptcies

Immigrants, non-regular workers, low-income families


Add high interest rates, inflation, rising healthcare and rent costs—
and auto loans become one of the first things to scream.

If delinquencies rise and lenders start going bankrupt,
that’s a sign that:

> Cash flows in the “bottom side” of daily life are hitting their limit.



5.2 One Country, Two Economies Running at Different Speeds

At the same time, in the very same U.S., we see headlines like:

Stock indices at or near all-time highs

Spending among wealthy and high-income households still solid

Continuous capital inflows into alternative investments and private credit


So right now the U.S. seems to have:

> A “top-side economy” (high earners, asset owners)
and a
“bottom-side economy” (low income, unstable work, subprime households),



running on two different tracks at different speeds.

The cracks we’re seeing are clearly on the bottom track.

And the scrap metal from that bottom track—
those distressed assets—
has been bought as high-yield investment products by the top-side capital
(pensions, insurers, funds, wealthy investors).

There’s something deeply distorted and sad about that picture.


—

6 | The Risks for People Living in Japan

Silent Spillover into Pensions, Insurance, Funds, and Households

So what does all this mean for people living in Japan?

6.1 The World Is Too Connected for This to Be “None of Our Business”

The money we put into:

Japan’s public pension system

Private life insurance and foreign currency-denominated insurance

Investment funds via NISA or iDeCo


— some portion of that money is invested in:

Overseas bonds

Alternative investments


Among these are:

Private credit

High-yield bonds

Leveraged loans


— assets with higher risk profiles.

Of course, we’re not all-in on these.
They are usually just one part of a diversified portfolio.

Still, I think it’s worth saying out loud at least once:

> “The money we put away for retirement and emergencies
may be directly linked to someone’s ‘barely surviving life’ somewhere in the world.”



6.2 How Individual Investors Can Take One Step Back

As individuals, our ability to control global events is very limited.

We can’t decide FRB policy.
We can’t raise wages in the U.S.

But we can change our attitude when choosing financial products.

For example, when someone pitches a high-yield product, we can ask:

> Three Questions to Ask When Offered a High-Yield Product

1. Who exactly is this product lending money to?


2. Are those borrowers particularly vulnerable to recessions or rising rates?
(subprime households, small/mid companies, emerging markets, etc.)


3. If something goes wrong, when and how will the damage reach me?
(price drops, redemption suspension, delayed recognition of losses, etc.)





Even this simple step can move us away from:

> “I don’t really get it, but the yield is high so I’ll just buy it,”



which is the most dangerous decision pattern.


—

7 | What I Learned as a Severely Disabled Person

How to Live with Uncomfortable Reality

Let me get personal for a moment.

I acquired my disability mid-life.
One day my body simply stopped doing what I wanted it to do,
and my career and income—which I had built up step by step—
were suddenly knocked almost back to zero.

From that experience, I came to deeply believe:

> “The realities you least want to face
are exactly the ones you should look at earlier —
that’s how your heart feels lighter in the long run.”



7.1 “Realities We Don’t Want to See” vs “Information We Don’t Need”

In financial news, we often encounter themes like:

Future pension prospects

Housing loans

Children’s education costs

Our own health risks and care needs


These are all things we’d rather not think about.

At the same time, there’s also:

Articles that exploit fear to sell products

Conspiracy theories and baseless crash predictions

Promises of “absolutely safe” or “no-risk high yield”


That kind of content is information we don’t need.

In the current subprime private loan story as well,
if we only consume extremes like:

“A new Great Depression is coming!” or

“There’s zero need to worry about anything,”


our hearts will just get worn down.

What we truly need is that middle ground:

> A clear, everyday-life-level sorting of
what we should worry about
and what we don’t need to panic over.



7.2 Living with Disability Means “Daily Kitchen Inspection”

Since becoming disabled, my life has, for better or worse,
turned into a daily “kitchen inspection.”

Changes in physical condition

How the meds are working

The balance between workload and fatigue

Income vs. expenses


If I ignore these, the backlash hits all at once and I end up unable to function.

That’s why I’ve developed a habit of:

> Looking at reality in small, frequent, manageable doses.



I think finances should be handled the same way.

For example:

Once a month, roughly check your household budget and asset allocation

Get at least a vague idea of what your insurance or funds are actually invested in

When you see “subprime” or “private loans” in the news,
take a step back and think, “Ah, looks like the bottom side of the U.S. economy is screaming again”


This kind of regular, low-pressure check‐in,
I believe, is what truly protects us and our families in the long run.


—

8 | Three “Disaster Drills” You Can Start Today

For Household Finance and Investing

To avoid ending on fear alone,
let me suggest three small actions you can start today.

8.1 Drill ①: Mark Up Financial Brochures with a Red Pen

Take the brochures you get from banks, insurance companies, and securities firms,
and simply go through them with a red pen. Your perspective will change.

1. Circle phrases like “high yield” or “stable income.”


2. Then look nearby for the “risk explanation” or “investment target” section.


3. If it doesn’t clearly say who the money is lent to and what the main risks are,
put a question mark there.



Doing this helps ingrain a simple rule:

> “If I don’t understand it, I won’t buy it (yet).”



8.2 Drill ②: Prepare a “3-Month Emergency Buffer” in Your Budget

Whatever happens in global finance,
the first things that get stressful are the monthly payments:

Rent or mortgage

Utilities

Food

Minimal communication and transport costs


Try calculating whether you have enough savings to cover these for three months.

If not, you can:

Gradually increase your cash reserves

Review and cut some fixed costs


Having this “3-month emergency buffer” makes a huge difference
in how emotionally shaken you are by scary headlines.

8.3 Drill ③: Add One-Line Personal Notes to News Articles

Whenever you see difficult words in the news—
subprime, private loans, inflation, rate hikes—
open your phone’s notes app and translate each term into your own words.

For example:

“Subprime auto loans = the U.S. version of ‘barely affordable car loans’”

“Private loans = an invisible parallel bank”

“Cockroach comment = a metaphor for hidden, multiplying risks”


Doing this helps you avoid being overwhelmed by jargon.
You start to understand the news at your own pace, in your own language.


—

9 | Conclusion

Drawing Everyday Hope from Global Fires

As a severely disabled person,
I can’t say I “love finance” at all.

If anything, money has always been:

Scary

Heavy

And a bitter topic for me.

Hospital and treatment costs

Daily living expenses

Anxiety about the future

Limitations imposed by my disability


On top of that, when global news keeps throwing words like
“crisis,” “crash,” and “panic” at me,
my emotional capacity fills up very quickly.

That’s why I’ve come to see news not as:

> “Something that just scares me,”



but as:

> “Material for slowly updating the operating system of my life.”



The chain defaults in subprime private loans
are a crack running betwee