On Thursday he said this phenomenon had "done nothing but gallop even higher" since he made the remark.

And now, as we have been highlighting recently, the dominoes may have started falling...

Beneath the surface of what's been a remarkably resilient US economy, a series of small shocks in the world of consumer credit have combined to rock companies that service financially-vulnerable Americans, raising major questions about the true strength of the supposedly omniscient consumer's health.

Following the collapse of Tricolor Holdings (a subprime auto lender), and weak second-quarter results from CarMax; we have seen car parts supplier First Brands Group...

...wrongfooting investors further with payments company Klarna and buy-now, pay-later firm Sezzle also suffering declines alongside the 'Alts' market and private credit...

And as alternative asset managers tumble, The FT reports that 67 year old Chanos likened the near $2tn private credit apparatus fuelling Wall Street's lending boom to the packaging up of subprime mortgages that preceded the 2008 financial crisis, due to the "layers of people in between the source of the money and the use of the money".

"With the advent of private credit . . . institutions [are] putting money into this magical machine that gives you equity rates of return for senior debt exposure," he said, adding that these high yields for seemingly safe investments "should be the first red flag".

In the case of Tricolor and First Brands, questions (though no official allegations) have been raised about the substantial use of off-balance sheet financing and the possibility of rehypothecation of invoices (pledging collateral multiples times).