Jim Chanos: "The fraud cycle follows the business and financial cycle with a lag"

The fraud cycle follows the business and financial cycle with a lag.  The longer an economic expansion goes on and the longer a bull market goes on, peoples' sense of disbelief is reduced.  And they begin to believe more things that are too good to be true.  Inevitably when the cycle turns down and people get stingier with their capital, since most frauds today are by and large Ponzi schemes or Ponzi schemes once or twice removed, it gets harder to keep the game going because cheap capital's not available and the business models collapse.

Jim Chanos, CNBC interview, April 2, 2020