Masters in Business BONUS: Muddy Waters Capital Founder Carson Block
43 snips
Apr 1, 2026 
Carson Block, founder and CEO of Muddy Waters Capital and famed for forensic short-selling, shares his path from uncovering fraud to building a long/short research shop. He discusses low-rate market distortions, risks in private credit and securitization, AI’s labor impact and its use both by investigators and fraudsters. He also covers tech valuation dynamics, passive-flow bubbles, and Muddy Waters’ hedged positioning.
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Low Rates Inflate Dishonesty Across Markets
- Carson sees an inverse relationship between interest rates and societal dishonesty: lower rates and easy money increase dishonest behavior.
- Emergency monetary policy outliving the emergency anesthetizes investors and spreads microcap fraud behaviors into mid-cap and larger companies.
Account For Technical Flows Before Shorting Mega Caps
- Consider technical market value, not just fundamentals, before shorting mega-cap winners like Nvidia because passive flows and squeezed floats create parabolic price moves.
- Analyze who is buying (passive/flows) and the technical squeeze before betting against large winners.
Opaque Paperwork Raises Private Credit Risks
- Carson is skeptical of private credit and ABS transparency because paperwork and public filings are often missing and market practice relies on private letters.
- He worries sponsors could double-pledge loans since lien releases often aren't publicly filed, echoing pre-GFC fragility.