Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

marketscreener.com

Post reply on HN
Print view View original

101–110 of 483 posts

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

#101

Post by piva00 »

SoftTalker wrote: post #77
wussboy wrote: post #58

Earlier quoted context omitted.

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.

It was inflationary but would spread out the pain over the recovery period after the crisis, the other option was to allow 100% of the pain to be felt immediately: economy shutting down, people losing their jobs, diminished household spending, less money circulating in the economy, businesses still running having fewer orders/customers, more people being laid off, all the way until the crisis passed.

Between the latter and the former I believe the former was a much smarter choice in the medium to long term.

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

#102

Post by lizknope »

I've never heard the term private credit so I googled it.

> Private credit refers to loans provided to businesses by non-bank institutions—such as private equity firms, hedge funds, and alternative asset managers—rather than traditional banks .

Is that correct?

So if these companies go under does anyone care? If they go under are they a systemic risk to the economy like the banks in 2008 that got a taxpayer bailout?

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

#103

Post by alecco »

franktankbank wrote: post #69
alecco wrote: post #39

Earlier quoted context omitted.

The problem is all these over-leveraged sectors will drag everybody else. And guess who will be bailed out? Heads they win, tails everybody but them loses.

Assets don't disappear they get bidded.

And who buys those troubled assets at deep discount? Where do they get the cash to pay for them?

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

#105

Post by derwiki »

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…

This is not my field of expertise, but I modeled keeping cash reserves to buy distressed assets. Unless I was able to perfectly predict the crash, the outcome was still better to not time the market.

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

#106

Post by pragmatic »

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

Exact opposite. We are in the midst of the COVID hangover.

So that govt money went to the wealthy to buy up houses (Californians bought real estate in the Midwest as investments and it drove up housing prices along with small immigration to these states)

Farmers etc benefited from bailouts when they were doing very well. It was a large blunder.

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

#107

Post by npilk »

JumpCrisscross wrote: post #99

Reason this number caught my eye: last year the Fed's stress tests found "loss rates from [non-bank financial institution] exposures (i.e., the percentage of loans that are uncollectible) were estimated at 7%, under a severe recession in scenario one" [1]. That's the scenario in which unemployment goes to 10%, home prices crash by 33%, the stock market halves and Treasuries trade at zero percent yield [2]. [1] https:…

What's odd is according to the article, this index estimated an ~8% default rate in 2024. So maybe the stress test was measuring something different? It's weird to think the stress test would find a lower loss rate during a severe recession than in the most recent year with data available.

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

#108

Post by Ekaros »

lizknope wrote: post #102

I've never heard the term private credit so I googled it. > Private credit refers to loans provided to businesses by non-bank institutions—such as private equity firms, hedge funds, and alternative asset managers—rather than traditional banks . Is that correct? So if these companies go under does anyone care? If they go under are they a systemic risk to the economy like the banks in 2008 that got a taxpayer bailout?

Two funny things:

Banks have lend to these institutions as they couldn't lend themselves. Might be systematic risk.

Lot of pension capital is tied to these vehicles. So they go under. Many people won't be getting their pensions in short or long term...

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

#109

Post by bandrami »

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://…

With the caveats that banks can originate private credit as long as it is separate from their reserve system credit (and consequently does not increase the money supply when originated)

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

#110

Post by Centigonal »

jasode wrote: post #76
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://…

>, 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 employe…

In other words, "private credit" is private the way "private equity" is private, not how "private insurance" is private.
Post reply on HN