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US private credit defaults hit record 9.2% in 2025, Fitch says

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Re: US private credit defaults hit record 9.2% in 2025, Fitch says

#21

Post by cmiles8 »

mothballed wrote: post #9
cmiles8 wrote: post #5

Private credit is cracking and lending standards are tightening behind the scenes. If you’re not building cash reserves right now you’re going to wish you had. The distressed opportunities ahead go to whoever kept dry powder while everyone else was chasing growth. If your business is light on free cash flow (ie everyone in AI at the moment) buckle up as there are storm clouds ahead. If you’re running a business that…

Well it only took 5 years of destroying responsible savers with every policy imaginable to make sure they get crushed by those who availed themselves of the negative real rate loan inflation machine. How many people are left remaining that were dumb enough to take that strategy and are still standing? If you were operating on a cash basis for the last 5 years you were mostly wiped out by people leveraged to the 9s on…

Interest rates on things like CDs and low-risk bonds have been decent for a while now. It’s not been painful to sit on cash reserves provided you were smart about where the cash was parked.

It’s not an either/or, it’s just a question of who was participating in the boom while preparing for storms ahead vs those all in on the boom.

What implodes in the period ahead are things that are massively over leveraged and can’t absorb a hit without doubling down again with more funding/loans and such. These are the folks and companies that get wiped out.

Re: US private credit defaults hit record 9.2% in 2025, Fitch says

#22

Post by bargainbin »

Luckily debt will be solved by the power of AGI, right? Just one more data centre! One more GPU! It can nearly write a basic three tier application with only 10 critical security vulnerabilities all by itself!

Definitely think we’re in for a rough year financial prospects wise, and doesn’t even feel like we recovered from the 2008 crash properly.

Re: US private credit defaults hit record 9.2% in 2025, Fitch says

#23

Post by ToucanLoucan »

jacquesm wrote: post #16
FrustratedMonky wrote: post #2

The US Ponzi scheme coming to an end. It works great while everything is going up. 2008 Financial Crisis was triggered by Oil prices. There were lots of problematic structural elements that were fine if nobody looked close. Oil was just the sideway hit on the building to knock it over. Just takes a nudge to collapse. And here we go again.

This time it took ~35 blows with a sledgehammer. You have to be impressed with the degree of resilience here, even a chaos monkey like Trump has a hard time completely destroying the US economy even when all checks & balances utterly fail.

Trump is a symptom, not a cause. One of probably hundreds of mediocre failsons gifted unbelievable wealth in the birth lottery who’s greatest achievement in life was managing to not lose all of it to his awful business acumen and utter refusal to listen to a single living person.

Every industry’s leadership is full of trumps, many more palatable personally, many far better spoken, many even with better politics but none fundamentally are any actually better for society. They don’t understand their company, the products it makes, they have utterly no care for anything besides the quarterly stock price and their lack of care costs real people their jobs and ruins the products we use every day.

And, they are why every company is ripping the copper out of its own walls instead of actually building a business that will last.

Re: US private credit defaults hit record 9.2% in 2025, Fitch says

#24

Post by bArray »

https://web.archive.org/web/20260312130613/https://www.marke...

^ Encase the link also responds with this for you:

    Access Denied

    You don't have permission to access "http://www.marketscreener.com/news/us-private-credit-defaults-hit-record-9-2-in-2025-fitch-says-ce7e5fd8df8fff2d" on this server.

Re: US private credit defaults hit record 9.2% in 2025, Fitch says

#25

Post by m0llusk »

reliabilityguy wrote: post #3
FrustratedMonky wrote: post #2

The US Ponzi scheme coming to an end. It works great while everything is going up. 2008 Financial Crisis was triggered by Oil prices. There were lots of problematic structural elements that were fine if nobody looked close. Oil was just the sideway hit on the building to knock it over. Just takes a nudge to collapse. And here we go again.

> 2008 Financial Crisis was triggered by Oil prices. Not by the subprime mortgages given to anyone with a pulse?

There were many involved factors, but the 2008 financial crisis was started when Ben Bernanke raised interest rates.

Re: US private credit defaults hit record 9.2% in 2025, Fitch says

#26

Post by bluGill »

hnthrow0287345 wrote: post #19

People have cried wolf or been wrong about incoming crashes and bubble pops so many times that this signal -- whether it's a good signal or not -- simply won't change anything I do. I'm sure someone somewhere could make a trade off of this article and this signal is definitely for them.

Even if this was a reliable signal for most of us it shouldn't change anyway. Timing the market is hard, so if you have a job keep investing in your retirement accounts and let dollar cost averaging work it out - odds are you are buying at fire sale prices. If you are one of those who lose your job - it doesn't matter much if the economy is good or bad, you need to adjust a lot of things (even in the best of times sometimes by chance you can be out of work for a long time)

If you are the manager of a mutual fund you can take useful action on signals like this if you can figure out what they mean. Most people don't have enough money to be worth trying to take action.

Re: US private credit defaults hit record 9.2% in 2025, Fitch says

#27

Post by lenerdenator »

bargainbin wrote: post #22

Luckily debt will be solved by the power of AGI, right? Just one more data centre! One more GPU! It can nearly write a basic three tier application with only 10 critical security vulnerabilities all by itself! Definitely think we’re in for a rough year financial prospects wise, and doesn’t even feel like we recovered from the 2008 crash properly.

We didn't recover from the 2008 crash properly because we didn't introduce consequences for those who created it.

Re: US private credit defaults hit record 9.2% in 2025, Fitch says

#28

Post by rvnx »

Pretty sure the solution that US politicians will find will be to create new dollars out of thin air, so instead of increasing taxes they increase the money supply.

Of course this is going to increase prices, but then they can blame China / Russia / Iran whoever is the scapegoat at that time.

Re: US private credit defaults hit record 9.2% in 2025, Fitch says

#29

Post by tartoran »

rvnx wrote: post #28

Pretty sure the solution that US politicians will find will be to create new dollars out of thin air, so instead of increasing taxes they increase the money supply. Of course this is going to increase prices, but then they can blame China / Russia / Iran whoever is the scapegoat at that time.

That’s a tax on the poor

Re: US private credit defaults hit record 9.2% in 2025, Fitch says

#30

Post by bittercynic »

bluGill wrote: post #26
hnthrow0287345 wrote: post #19

People have cried wolf or been wrong about incoming crashes and bubble pops so many times that this signal -- whether it's a good signal or not -- simply won't change anything I do. I'm sure someone somewhere could make a trade off of this article and this signal is definitely for them.

Even if this was a reliable signal for most of us it shouldn't change anyway. Timing the market is hard, so if you have a job keep investing in your retirement accounts and let dollar cost averaging work it out - odds are you are buying at fire sale prices. If you are one of those who lose your job - it doesn't matter much if the economy is good or bad, you need to adjust a lot of things (even in the best of times so…

You may not be able to properly let dollar cost averaging do its thing if you rely on your job to invest, since there's a high correlation between periods where people are out of work and periods where asset prices are lower.
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