The Next Financial Time Bomb: CLOs, the New CDOs in Disguise

 September 10, 2025

The financial world is sleepwalking into another disaster. Policymakers, investors, and the public are being lulled into a false sense of security by slick presentations and reassuring jargon. But make no mistake: Collateralized Loan Obligations (CLOs) are shaping up to be the next great financial implosion — echoing the toxic cocktail of Collateralized Debt Obligations (CDOs), Credit Default Swaps (CDSs), and Mortgage-Backed Securities (MBSs) that brought the global economy to its knees in 2008.

Wall Street is at it again. With a straight face, bankers and asset managers are peddling Collateralized Loan Obligations (CLOs) as if they’re safe, sophisticated investments. In reality, they are the spiritual heirs of the toxic Collateralized Debt Obligations (CDOs), Credit Default Swaps (CDSs), and Mortgage-Backed Securities (MBSs) that detonated the global economy in 2008.

The story is the same: bundle risky loans, slice them into tranches, slap on investment-grade ratings, and sell them as “diversified.” Back then, it was subprime mortgages. Today, it’s leveraged loans to shaky corporations. Different asset, same con.

CLOs: A $1.4 Trillion Monster

CLOs are already a $1.4 trillion asset class, dominating the leveraged loan market. They package risky, non-investment grade corporate loans — often fueling private equity takeovers and buyouts — into shiny “structured products” that are sold as safe, diversified, and sophisticated.

Sound familiar? That’s the same playbook used to sell subprime mortgage securities two decades ago. Back then, it was “safe, diversified home loans.” Today it’s “safe, diversified corporate loans.” Different words, same scam.

The Illusion of Safety

Wall Street and asset managers insist that CLOs are safer than CDOs because they are backed by “senior secured loans” and have stronger structural protections. That’s what they said about mortgage tranches before defaults spiked and AAA paper became worthless overnight.

Here’s the truth:

1. Overexposure – CLOs now hold 64% of all leveraged loans. If corporate defaults rise, the entire system cracks.
2. Weaker Borrowers – Private equity and middle-market CLOs are stuffed with highly leveraged companies one downturn away from default.
3. Liquidity Mirage – CLO ETFs and funds promise daily liquidity, but the underlying loans are thinly traded. In a crisis, investors rushing to exit will find there are no buyers — just like 2008.

A System Built for Collapse

CLOs rely on waterfall structures and “coverage tests” that are supposed to protect senior tranches. But these protections only work at the margins. If defaults surge, losses cascade up the structure and wipe out investors. The equity tranches are just casino chips, but even supposedly safe AAA tranches could be rattled.

Meanwhile, middle-market CLOs — a fast-growing segment of this market — are built on private loans with limited transparency, less stringent oversight, and higher concentrations of subprime assets. It’s the same dangerous opacity that let CDOs spiral out of control before regulators even realized what was happening.

The Government Bailout Playbook, Reloaded

Here’s what will happen when the CLO machine cracks:

• Billions in losses for investors, pensions, and insurance companies.
• Contagion across the credit markets as leveraged loans tank.
• Governments and central banks are forced to step in, again, with taxpayer bailouts to rescue “too-big-to-fail” institutions.

We’ve seen this movie before. In 2008, the bailout of banks and AIG left taxpayers holding the bag. This time, it may be even bigger — because CLOs are more concentrated, larger in size, and deeply entwined with private credit markets.

A Call to Wake Up

The warning signs are flashing. Rising interest rates, shaky corporate earnings, and ballooning private credit make a CLO crack-up not a matter of “if,” but “when.” And when it comes, the fallout will be global.

We need:

• Regulators are willing to shine light on CLO structures before it’s too late.
• Investors who stop blindly trusting the same institutions that sold toxic CDOs.
• Politicians who refuse to once again socialize Wall Street’s greed while privatizing the profits.

Conclusion

CLOs are not the safe, clever products they’re marketed as. They are Wall Street’s next great weapon of mass financial destruction. The parallels to CDOs, CDSs, and MBSs are undeniable — and unless the alarm is sounded loudly and action is taken quickly, history will repeat itself in another avalanche of defaults, panic, and bailouts.

The house of cards is being built. The question is: will we stop it before it falls?

The Homeless Industrial Complex: Built to Manage Misery, Not End It

Billions are spent, but the streets get worse. Bureaucracy, dependency, and perverse incentives keep homelessness alive—and taxpayers fooled.

Systemic Barriers Masquerading as Help

“Success is measured in filled beds, not in people leaving homelessness behind.”

1. Bureaucratic Maze: To get basic shelter or food, the unhoused must navigate endless forms, eligibility tests, and waitlists. For those without phones, internet, or transportation, it’s nearly impossible. This isn’t help—it’s punishment for being poor.
2. Blame the Victim: Programs often demand that individuals “fix themselves” to qualify—prove sobriety, get job-ready, show compliance. Meanwhile, the real drivers of homelessness—soaring rents, lack of psychiatric care, poverty wages—go untouched.
3. Perverse Incentives: Shelters are funded to keep beds full, not to empty them. Agencies compete for grants instead of solving problems. Dependency becomes the business model.
4. Money Burned on Paperwork: Billions are swallowed by overhead, consultants, and administrative bloat. Flashy “pilot projects” house a handful while thousands rot in tents.

The Forgotten Mentally Ill

The Mentally Ill Don’t Belong on Sidewalks Decades of failed policy turned streets into psychiatric wards and jails into treatment centers. It’s time to rebuild humane institutions and stop pretending shelters can cope.

The streets are littered with people who should never have been abandoned there. Schizophrenia, bipolar disorder, and severe trauma are left untreated in the name of “community care.”

Decades ago, governments shuttered mental institutions, promising humane alternatives. Those alternatives never came. Now, sidewalks are psychiatric wards, and jails are treatment centers. It’s barbaric, expensive, and a stain on any claim to a “caring society.”

These individuals need modern, well-funded institutions—not the abusive asylums of the past, but facilities where they are safe, treated, and housed long-term. Pretending shelters or street outreach can handle this level of illness is a cruel fantasy.

The Drop-Out Class

“Most refuse rules and structure, yet take every handout—fueling chaos while others are left behind.”

There is also a smaller but very visible group who choose to reject structure. They refuse rules, reject treatment, and resist accountability—yet take every handout.

This group feeds the public image of chaos: encampments overflowing with drugs, trash, and violence. They distort the narrative, eroding public sympathy for those who do want a way out. And the system enables it, because turning people away risks lawsuits, headlines, or loss of funding.

The Human Cost

For the unhoused, this system doesn’t offer dignity—it grinds it out of them:

• Forced to “prove” poverty through humiliating paperwork.
• Cycled endlessly through shelters, ERs, and jails.
• Traumatized daily by instability, stigma, and exclusion.
• Dehumanized into statistics that keep the funding wheel turning.

“This isn’t compassion. It’s degradation disguised as charity.”

Correcting Course: What Must Change

Billions Burned, Nothing Fixed: The Business of Homelessness Public money fuels a complex that manages misery for profit. Success must mean exits from homelessness, not paperwork and filled beds.

1. Rebuild Institutions for the Severely Ill: Stop outsourcing psychiatry to sidewalks and prisons. Develop modern, humane psychiatric hospitals and supervised housing facilities.
2. Tie Aid to Accountability: Provide support, but require engagement in treatment, work, or structured programs to prevent permanent dependency.
3. Distinguish the Groups: Temporary homelessness, mental illness, and willful drop-out are different problems. Treat them differently.
4. Measure Success by Exits, Not Entrants: Fund programs that actually get people into permanent housing, not those that just keep the revolving door spinning.
5. Put Lived Experience in Power: Let those who have escaped homelessness design policy—not career bureaucrats who benefit from keeping it alive.

Conclusion

Compassion Hijacked: How the Homeless Industrial Complex Betrayed Us All What was meant to help has become an empire of dependency, inefficiency, and neglect.

The homeless industrial complex is not broken—it’s working exactly as designed: to sustain itself. But sustaining homelessness is not solving it.

We face a choice. Keep writing cheques to an industry that manages human misery, or start demanding solutions that end it. Build institutions for the sick. Demand accountability from the drop-outs. Stop funding bureaucrats to shuffle paper while our sidewalks and public parks decay into garbage dumps, open-air toilets, drug markets, panhandling zones, and, often, open morgues.

“Enough. Correction isn’t optional. It’s overdue.”

 

Privacy vs. Public Safety in Kingston’s Drone Enforcement

Balancing Privacy and Public Safety: A Rebuttal to the Canadian Constitution Foundation

1. Introduction: Manufactured Outrage

The Canadian Constitution Foundation (CCF) has accused Kingston Police of infringing on privacy rights by using drones in a distracted driving blitz. While civil liberties groups are vital to democracy, this criticism is misplaced. In this case, the CCF is sounding alarms over a lawful, measured public safety initiative. Let’s separate fear from fact.

2. What Kingston Police Actually Did

On May 7, 2025, Kingston Police deployed drones at three major intersections to detect distracted drivers — particularly those using handheld phones. The drones, operated with NAV Canada approval, used zoom cameras to observe infractions. When violations were spotted, ground officers intercepted the offenders.

This was not mass surveillance. It was targeted enforcement of existing laws in high-risk zones, with oversight and transparency built in.

3. Privacy vs. Public Safety: The Legal Reality

A. No Expectation of Privacy on Public Roads
The Supreme Court of Canada has consistently ruled that privacy expectations are limited in public. Cases like R. v. Wise (1992) and R. v. Tessling (2004) affirm that observation of public conduct — especially on roadways — does not equate to unlawful search. A driver texting in plain view is breaking the law, and zoom lenses don’t alter that legal reality.

B. Technology as a Tool, Not a Threat
A drone camera is no different in principle than binoculars or a traffic helicopter. What matters is purpose and use. Here, drones were employed in a narrow, time-limited, and specific context. That’s enforcement, not surveillance creep.

4. The Real Public Menace: Distracted Driving

Transport Canada reports distracted driving contributes to more collisions than impaired driving. In Ontario, it is the leading cause of fatal collisions — surpassing speeding and alcohol-related crashes. A phone behind the wheel is not just a personal risk; it endangers everyone on the road.

By opposing drone enforcement, the CCF risks prioritizing the “right” to break the law over the right of Canadians to travel safely.

5. False Equivalence: Drones Are Not Domestic Spying

Conflating this blitz with invasive surveillance is misleading. The operation did not involve mass data collection, facial recognition, or license plate tracking. It was real-time visual confirmation of visible offences, not covert monitoring or data harvesting.

6. The CCF’s Missed Opportunity

The CCF plays an important role in holding the government accountable. But overstretching the definition of “privacy violation” dilutes legitimate civil liberties debates. Canadians deserve robust oversight of police powers — not reflexive resistance to every modern enforcement tool.

7. Conclusion: Common Sense First

There’s a difference between being watched and being caught. If you’re not breaking the law, you have nothing to fear from drones ensuring safety at busy intersections.

Protecting rights should not come at the expense of public safety — especially when no genuine rights are being violated. As the saying goes:

“Liberty does not mean lawlessness — and freedom should not mean the freedom to crash.”

Data Box: Distracted Driving in Canada

• Distracted driving is responsible for 21% of fatal collisions and 27% of serious injury collisions in Canada (Transport Canada, 2023).

• In Ontario alone, distracted driving has surpassed impaired driving as the leading cause of road deaths since 2017.

• A driver using a phone is 4–6 times more likely to be involved in a collision.

• Fines in Ontario for distracted driving start at $615 and escalate with repeat offences, alongside license suspensions.

Legal Sidebar: Privacy and Public Roads

• Charter of Rights and Freedoms, Section 8: Protects against unreasonable search and seizure — not against being observed in public.

• R. v. Wise (1992): The Court held that monitoring a vehicle on public roads using a tracking device raised privacy concerns, but emphasized the limited expectation of privacy in public driving.

• R. v. Tessling (2004): Thermal imaging of a private home was ruled not to breach privacy rights because it did not reveal intimate details, establishing that not all technological observation constitutes a search.

• Key Takeaway: Observing illegal conduct in plain view on public roads is not a Charter violation.

Ontario Premier Ford’s Ban on U.S. Booze: A Clear Violation of Trade Law

Doug Ford’s decision to strip American alcohol products from LCBO shelves and threaten global distiller Diageo is more than political theatre — it is a reckless abuse of provincial power that places Ontario, and by extension Canada, in breach of international law.

CUSMA: The Law of the Land

The Canada–United States–Mexico Agreement (CUSMA), which replaced NAFTA in 2020, is unambiguous.

• Article 2.3 (National Treatment): “Each Party shall accord national treatment to the goods of another Party in accordance with Article III of GATT 1994.” This means that U.S. goods cannot be treated worse than Canadian goods once they are admitted into the market.
• Article 2.4 (Market Access): “No Party shall adopt or maintain any prohibition or restriction on the importation of any good of another Party or on the exportation or sale for export of any good destined for the territory of another Party.” Banning U.S. alcohol from LCBO shelves squarely violates this obligation.
• Article 22.2 (State Enterprises): Even state-owned enterprises (like the LCBO) must operate on a commercial basis, not political whim, and cannot discriminate against goods from CUSMA partners.

There are exceptions in Article 32.1 for measures necessary to protect human, animal, or plant life or health — but Ford has not even pretended this ban is about safety. He openly admits it is political retaliation.

The Facts of Ford’s Move

• In March 2025, Ford ordered all American alcohol removed from LCBO’s wholesale catalogue. Because LCBO is the province’s exclusive wholesaler, this ban cut off restaurants, bars, and private retailers from restocking U.S. products.
• In September, he escalated the fight by threatening Diageo’s Canadian-made Crown Royal after the company announced a plant closure. Yet Crown Royal is distilled in Manitoba and Quebec, and 75% of it is exported to the U.S. — Ford’s threats target a Canadian success story.
• His justification? Pure politics. He cited Trump’s tariffs and claimed to defend Ontario jobs, even though the closures were part of a global restructuring affecting plants in the U.S., Europe, and elsewhere.

Why It’s Illegal

1. Discrimination (Art. 2.3): Singling out U.S.-origin goods and banning them is a textbook violation of CUSMA’s national treatment clause.
2. Import Restrictions (Art. 2.4): The LCBO ban is a prohibition on U.S. goods already meeting Canadian standards. That’s exactly what Article 2.4 forbids.
3. State Enterprise Abuse (Art. 22.2): The LCBO, as a Crown monopoly, cannot be used as a political weapon against foreign goods. Ford’s threats make clear it is being used precisely that way.
4. No Legal Exception (Art. 32.1): Health and safety exceptions don’t apply here — Ford has admitted this is political punishment.

The Consequences

Ford’s theatrics have real costs:

• For consumers and restaurants: Fewer choices, higher prices, and disruption in supply.
• For trade stability, Canada is now exposed to a CUSMA dispute. The United States could challenge Ontario’s ban and, if successful, impose retaliatory tariffs on Canadian exports — from whisky to lumber to autos.
• For Ontario’s reputation: Multinationals considering new facilities in Ontario will think twice if a premier can weaponize the LCBO against them on a whim.

The Bottom Line

Doug Ford accuses Donald Trump of being a bully. But what do you call a premier who uses state monopoly power to punish companies for business decisions he doesn’t like?

This is not “Ontario Open for Business.” It is Ontario Closed for Business. And it is almost certainly illegal under CUSMA’s Articles 2.3, 2.4, and 22.2.

Canada signed CUSMA to prevent exactly this kind of political vandalism. Ford’s stunt not only undermines the treaty — it invites retaliation that could devastate far more than Ontario’s liquor shelves.