Huge bankruptcies for used car firms have exposed Wall Street’s entanglement with the sector. Far from derisking after the Great Recession, banks rebuilt the economy on obscure financial intermediaries that are now sinking.

What’s going on with the used car market? To answer this question, we first need to know that it’s about more than secondhand motors.

Tricolor Holdings, a large subprime auto lender and used car dealer, filed for Chapter 7 bankruptcy on September 10. First Brands, a major auto parts supplier, followed suit on September 29, filing for Chapter 11 bankruptcy.

These firms’ financial intertwinement with Wall Street is exposing something structural, beyond the decline of two companies. UBS holds over $500 million in debt exposure to First Brands, while investment bank Jeff

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