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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

#71

Post by hypeatei »

cmiles8 wrote: post #21
mothballed wrote: post #9

Earlier quoted context omitted.

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’…

Decent is fine if you're about to retire and want to avoid risk but I wouldn't recommend parking your wealth in CDs/bonds if your retirement is still 15+ years out, personally. The government has to print money to bail itself out which means things are going to inflate quite a bit, just look at what gold has done in anticipation of this.

Banks bailed out the hedge funds in '98, then the taxpayer bailed out the banks in '08, then the government bailed out the taxpayer in '20... now monetary policy from the fed has to prevent the government from defaulting.

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

#72

Post by NoboruWataya »

JumpCrisscross wrote: post #51
rglover wrote: post #31

Misleading title* > The default rate among U.S. corporate borrowers of private credit rose to a record 9.2% in 2025 Emphasis added. Headline makes it sound like retail credit, not corporate specifically. *Edit: Not misleading, just an unfamiliar term/usage from my perspective. I'm not a finance guy so didn't know the difference and assumed others wouldn't either. Mea culpa .

> Headline makes it sound like retail credit I’m coming at this loaded with jargon, so excuse my blind spot, but why would the term private credit bring to mind anything to do with retail specifically? (The term private credit in American—and, I believe, European—finance refers to “debt financing provided by non-bank lenders directly to companies or projects through privately negotiated agreements” [1].) [1] https://…

> and, I believe, European

Yes.

It surprises me that most people would read "private credit" to mean "retail credit" by default, but I also come to this loaded with jargon so I guess would defer to others on this. But to be clear, the title is not misleading to anyone who has any familiarity with the financial markets.

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

#73

Post by SpaceL10n »

I'm not surprised. Weren't we getting signals like 3 or 4 months ago that used car repossessions were ticking up? That's a breaking point for folks. The economic boulder keeps rolling and I'm not wearing any shoes. Spiking the price of oil is definitely going to help. This too shall pass?

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

#74

Post by hammock »

rglover wrote: post #57
JumpCrisscross wrote: post #51

Earlier quoted context omitted.

> Headline makes it sound like retail credit I’m coming at this loaded with jargon, so excuse my blind spot, but why would the term private credit bring to mind anything to do with retail specifically? (The term private credit in American—and, I believe, European—finance refers to “debt financing provided by non-bank lenders directly to companies or projects through privately negotiated agreements” [1].) [1] https://…

That's not the likely definition most will reach for here automatically (especially amidst the constant financial blackpilling).

I think you’re mistaken. We’ve been in a private credit bubble for a couple years at least, it’s in the finance/economic news every week and I’ve even started to hear regular NPR doing primers on it for normies. The term for “retail credit” is consumer debt or consumer debt. We don’t call it retail debt because the retailer is not actually a counterparty.

Out of curiosity where do you primarily get your news?

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

#75

Post by quentindanjou »

rglover wrote: post #31

Misleading title* > The default rate among U.S. corporate borrowers of private credit rose to a record 9.2% in 2025 Emphasis added. Headline makes it sound like retail credit, not corporate specifically. *Edit: Not misleading, just an unfamiliar term/usage from my perspective. I'm not a finance guy so didn't know the difference and assumed others wouldn't either. Mea culpa .

Thanks, I completely miss-read it thinking that it was about retail credit. facepalm. Time for coffee.

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

#76

Post by jasode »

JumpCrisscross wrote: post #51
rglover wrote: post #31

Misleading title* > The default rate among U.S. corporate borrowers of private credit rose to a record 9.2% in 2025 Emphasis added. Headline makes it sound like retail credit, not corporate specifically. *Edit: Not misleading, just an unfamiliar term/usage from my perspective. I'm not a finance guy so didn't know the difference and assumed others wouldn't either. Mea culpa .

> Headline makes it sound like retail credit I’m coming at this loaded with jargon, so excuse my blind spot, but why would the term private credit bring to mind anything to do with retail specifically? (The term private credit in American—and, I believe, European—finance refers to “debt financing provided by non-bank lenders directly to companies or projects through privately negotiated agreements” [1].) [1] https://…

>, by why would the term private credit bring to mind anything to do with retail specifically?

If a layman is unfamiliar that "private credit" is about business debts, and therefore only has intuition via previous exposure to "private X" to guess what it might mean, it's not unreasonable to assume it's about consumer loans.

"private insurance" can be about retail consumer purchased health insurance outside of employer-sponsored group health plans

"private banking" is retail banking (for UHNW individuals)

But "private credit" ... doesn't fit the pattern above because "private" is an overloaded word.

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

#77

Post by SoftTalker »

wussboy wrote: post #58
SoftTalker wrote: post #35

Earlier quoted context omitted.

In fact we rewarded them. We bailed them out by printing a lot of money. We then printed more money during the pandemic to pay people to stay home and watch Netflix. Probably a lot more examples. All that money flowing around that has no basis in actual productivity or value created. It's got to correct at some point. One of the corrections is how much more everything costs now, but I don't think that has fully absor…

I would argue the second instance (pandemic) was much more nearly what a good government should do than the first one

It may be what they should have done, but the effect was still inflationary. There is no free lunch.

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

#78

Post by JumpCrisscross »

hnfong wrote: post #49
cmiles8 wrote: post #21

Earlier quoted context omitted.

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’…

It's decent only if you believe inflation = CPI In actuality, the CPI is lower than inflation because technological advancement, automation, and economies of scale (due to globalization etc) are driving consumer prices low. In other words, if factories are still producing things like they were 20 years ago, the CPI would have been much higher, and that higher number is closer to what should have been the inflation nu…

> if factories are still producing things like they were 20 years ago, the CPI would have been much higher, and that higher number is closer to what should have been the inflation number

This is an impossible counterfactual to test. In reality, tracking value across time requires adjusting for immeasurable preferences. This is why inflation is really only a useful measure for personal purposes across periods of years. It’s only macro economically interesting across a generation and close to meaningless longer than a human lifespan.

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

#79

Post by [deleted] »

rglover wrote: post #31

Misleading title* > The default rate among U.S. corporate borrowers of private credit rose to a record 9.2% in 2025 Emphasis added. Headline makes it sound like retail credit, not corporate specifically. *Edit: Not misleading, just an unfamiliar term/usage from my perspective. I'm not a finance guy so didn't know the difference and assumed others wouldn't either. Mea culpa .

[deleted]

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

#80

Post by lxgr »

rglover wrote: post #31

Misleading title* > The default rate among U.S. corporate borrowers of private credit rose to a record 9.2% in 2025 Emphasis added. Headline makes it sound like retail credit, not corporate specifically. *Edit: Not misleading, just an unfamiliar term/usage from my perspective. I'm not a finance guy so didn't know the difference and assumed others wouldn't either. Mea culpa .

Private as in private (i.e. non-public) corporation, not as in individual/retail/natural person borrowers.
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