One guy has twice as much money as that. Can't be a big deal.
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US private credit defaults hit record 9.2% in 2025, Fitch says
171–180 of 483 posts
Re: US private credit defaults hit record 9.2% in 2025, Fitch says
#172Earlier quoted context omitted.
That's not the likely definition most will reach for here automatically (especially amidst the constant financial blackpilling).
> not the likely definition most will reach for here A lot of the datacenter buildout has been financed with private credit [1]. > financial blackpilling ? [1] https://www.bloomberg.com/news/articles/2026-02-02/the-3-tri...
"Blackpilling" is apparently an incel term for fatalism/nihilism. Sounds like they're trying to read financial news through that lens.
Re: US private credit defaults hit record 9.2% in 2025, Fitch says
#173Earlier quoted context omitted.
> this isn't that big of a number in the larger scale of US banking It's not. It's just that we're seeing potentially 10% losses on the portfolio level [1], which could imply up to–up to!–5% losses to the banks' loans to those lenders. Again, tens of billions of dollars of losses are totally absorbable. But Morgan Stanley's stock price took a hit when it gated one of these funds [2]. And some banks (Deutsche Bank, so…
good explanation, thanks
You're welcome! Also, bank credit is like $20tn in the U.S. [1].
Re: US private credit defaults hit record 9.2% in 2025, Fitch says
#174There is so much misinformed fear-mongering about private credit right now.
Important Facts:
1) The majority of private credit funds are classed as "permanent capital". When you put money into these vehicles, you give the Asset Manager discretion over when to give the money back. Redemptions are often gated at ~5% per quarter.
(So there cannot, by definition, be a run on the bank)
2) Credit is senior to equity, so if you expect mass defaults in private credit, it means the majority of private equity is effectively wiped out. Private equity has to be effectively a 0 before private credit takes any losses.
3) The average "recovery rate" for senior secured loans is 80%. Even if private equity gets wiped to 0, the loss that private credit incurs is cushioned significantly by the collateral backing the loan. These are not unsecured loans the borrower can just walk away from.
(The price of senior secured loans dropped by ~30% in 2008, as a worst case datapoint)
4) Default rates on many of the major private credit managers is ~5) Finally, it's true that NAVs are likely overstated, but generally it's by a modest amount. Every Asset Manager today could go out tomorrow, mark NAVs down by 20% and suddenly there is no crisis.
(The stocks of Asset Managers have already traded down such that this seems expected and priced in anyway)
Re: US private credit defaults hit record 9.2% in 2025, Fitch says
#175Earlier quoted context omitted.
> not the likely definition most will reach for here A lot of the datacenter buildout has been financed with private credit [1]. > financial blackpilling ? [1] https://www.bloomberg.com/news/articles/2026-02-02/the-3-tri...
"Blackpilling" is apparently an incel term for fatalism/nihilism. Sounds like they're trying to read financial news through that lens.
> "Blackpilling" is apparently an incel term for fatalism/nihilism
Any idea as to the etymology? What was the black pill? Is it a Matrix reference?
Meta: why are incel neologisms so catchy?
Re: US private credit defaults hit record 9.2% in 2025, Fitch says
#176> the top five lenders in the private credit market include Wells Fargo, which leads the way with $59.7bn (£44.8bn) in lending anything Wells Fargo leads in must be bad
Actually I believe they're just actually complying with new laws to disclose their balance sheets for these types of loans. Many other banks like JP Morgan have much higher amounts of these loans on their balance sheets, but refuse to report and are exploiting certain loopholes.
The requirement to disclose has only existed for a year I believe, but many are kicking the can or claiming that it would cause them issues.
Re: US private credit defaults hit record 9.2% in 2025, Fitch says
#177Unless I'm misunderstanding something, this isn't that big of a number in the larger scale of US banking; According to the numbers in the article that's only about 2.5% of all bank lending (300B/1.2T, with the 1.2T being ~10%)
Update: original comment should be. 300B/1.2T*(10% of bank funds) = 2.5%. If I'm reading comment correct. Also I believe the whole private credit ecosystem is about 1T. In a catastrophic scenario: if the whole asset class went to 0 (on the banks asset sheet they would lose 2.5% - absorbable pain assuming its not leveraged through creative financial mechanisms). I would wager that risk is more concentrated on certain…
That's only loans to non bank financial institutions.
Total bank balance sheets are about $25T.
Re: US private credit defaults hit record 9.2% in 2025, Fitch says
#178Highly recommend listening to past episodes on The Real Eisman Playbook podcast for more info on this topic & banking in general. https://podcasts.apple.com/bz/podcast/the-real-eisman-playbo... He's one of the "Big Short" guys but more importantly he has great guests on. Everyone is trying to teach & inform, not sell. He's been calling this risk out for over a year, especially once the White House started trying to a…
> He's been calling this risk out for over a year Any figures or lenders he's focussed on?
I can't remember the names. Best bet if you don't want to listen is to just get summaries or transcriptions of the episodes you can an LMM questions on.
The info on his podcasts isn't telling you who to short. It's more who has gone under & general knowledge.
Re: US private credit defaults hit record 9.2% in 2025, Fitch says
#179Re: US private credit defaults hit record 9.2% in 2025, Fitch says
#180Earlier quoted context omitted.
And to make matters worse, those who remove regulations then get voted out, but show up on infotainment "opinion" shows disguised as news broadcasts....and whine that those who were voted in to fix the mess aren't fixing the problem fast enough , so those who caused the problem should be voted back in. And lo and behold, they get voted back in, to cause more damage.
Its un-fixable. The situation cant be explained simply enough for the majority of americans. Even if some of them do mange to understand, it will be quickly forgotten amid the flood of trump sewage we are sprayed with every day.
I think we'll get there (to explanation), but it'll be through the lizard-brain-level pain of poverty instead of rational understanding unless we get much better at communicating to the least willing to listen among us.