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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

#371

Post by timacles »

JumpCrisscross wrote: post #157
lumost wrote: post #120

Earlier quoted context omitted.

With the current concentration of wealth and banking, it almost seems like there is an incentive for banks to ruin themselves when they end up in a little trouble. If the bank has trouble, shareholders/executives lose - if the banking system has trouble... then QE will solve the bank trouble.

> If the bank has trouble, shareholders/executives lose - if the banking system has trouble... then QE will solve the bank trouble It's a game of chicken, though. The folks at Lehman and SVB didn't cash out. JPMorgan did. (Both times. Actually, all of the times since 1907.)

Jamie pull up the JP Morgan titanic conspiracy theory

https://www.history.com/articles/titanic-sinking-conspiracy-...

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

#372

Post by ambicapter »

paganel wrote: post #339
harmmonica wrote: post #267

Earlier quoted context omitted.

I don't think you're wrong if the following holds true: Before the housing bubble burst, banks lent funds to countless borrowers who couldn't, ultimately, afford their mortgage payments (because the banks didn't do their due diligence when underwriting the loans). This was widespread across pretty much every bank and mortgage banker. Not sure of the actual percentage of borrowers who, when all was said and done, had…

Even the best due diligence can't do anything if a crisis (not necessarily banking-related, a Middle East might just do the trick) starts manifesting itself and now many of those businesses have issues in paying down the debt they owe.

"I did my due diligence but didn't anticipate these risks". Doesn't sound like due diligence to me. Not having a plan to unwind your position if SHTF doesn't sound like due diligence to me. You can argue it any way you like but it boils down to "The money was good and I didn't think the worst was gonna happen".

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

#373

Post by etempleton »

goldylochness wrote: post #360

is this not the subprime mortgage problem all over again?

Same basic issue, but not exactly the same thing in terms of sector or potential impact. The sub prime mortgage delinquency rate remains low as home loans became much more strict after 2008. So that portion of the economy is relatively safe right now. PE is a much smaller market and so the fallout from a private equity collapse, while significant, would theoretically be less likely to negatively disrupt the total market to the same extent as the 2008 housing crisis.

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

#374

Post by jellyroll42 »

ambicapter wrote: post #369
ehnto wrote: post #366

Earlier quoted context omitted.

I think the free market response is that another vet with fair prices will show up, but A) that's a waste of everyones time and very inefficient and B) a real grass roots business takes time and passion, somebody to start it, buy in from the community etc. That work had already been done. To throw it all away for VC or PE to squeeze the life out of it and by extension the community, that's just sad, and a net negativ…

There's only one way to combat this, which is to make it unprofitable.

...by regulating the practice to extinction

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

#375

Post by temp8830 »

kortilla wrote: post #368
crystal_revenge wrote: post #361

Earlier quoted context omitted.

That all relies on the assumption of petro-dollar, something that could have been taken for granted during the last 50 years but could easily change within weeks now.

No it doesn’t, the petro-dollar isn’t a real thing. Forcing USD denomination for a transaction doesn’t help USD because there is a buyer of USD and an equally sized seller of USD.

However, there does seem to be an outsized effort applied to defending this not-real thing. A leader who defies the petrodollar has a good chance of getting killed or kidnapped. In a way, the same principle makes any god real: he doesn't have to exist, as long as people who will beat up non-believers do.

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

#376

Post by sarchertech »

rootusrootus wrote: post #331
yoyohello13 wrote: post #327

Earlier quoted context omitted.

This completely discounts the work involved to find service providers you trust. I spent a long time finding a Doctor I trust, finding a Vet I trust, etc. I don't want a "free market" solution where I need to switch providers every 6 months because some rich dude is being a dick. This is the problem with so many market focused solutions. They discount the burden put on the consumer.

If the market is healthy, there will already be two or three providers in town instead of one that has any sort of monopoly, and the LBO won't be lucrative to begin with.

Unless the PE firm comes in and buys up all of the vet practices in town (or enough of them), which is a tactic they like to employ.

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

#377

Post by alex43578 »

kdheiwns wrote: post #364
alex43578 wrote: post #337

Earlier quoted context omitted.

It’s not private equity’s fault, it’s the continued imposition of increasing taxes and government-mandated fees: “The wireless market has become increasingly competitive. The result has been steady declines in the average price for wireless services. Over the last decade, the average monthly revenue per wireless line has fallen from $47.00 per month to $34.56 per month. Unfortunately, this price reduction for consume…

Taxes coincidentally causing a 3x price change right when private equity buys a company is quite unlikely. Especially since I doubt every other company has tripled their prices.

Every other carrier hasn't tripled their prices - this one unnamed and unsourced company did. You can get a $10 or $15 cellphone plan right now, so his claim is false, or that PE company has magical powers to completely outprice the otherwise competitive mobile phone market.

However, "Taxes, fees, and government surcharges make up a record-high 27.60 percent of the average wireless services bill... Since 2012, the average charge from wireless providers decreased by 29 percent, from $47.00 per line per month to $33.36 per line. However, during this same time, wireless taxes, fees, and government surcharges increased from 17.18 percent to 27.60 percent of the average bill, resulting in consumer benefits from lower wireless prices being offset by higher taxes and fees".

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

#378

Post by mbrumlow »

infecto wrote: post #350
skeeter2020 wrote: post #347

Earlier quoted context omitted.

VC is most definitely a form of Private Equity, though it's not the limited-partnership deal model that we often see in SaaS, or Vet Clinics, or Housing, etc. Yes, they need to grow but PE firms don't invest directly. They have funds with relatively short time horizons that want 2 things: 1. cashflow during the fund lifetime and 2. equity growth so they can sell the assets in the fund prior to the end. PE firms will…

Did not read all of it. Yes, it is a form of private equity. Of course. You missed the context. The post kept saying VC is buying a vet shop. In that context they meant private equity. VC is not the same as what they meant to say, PE.

True.

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

#379

Post by sarchertech »

Buttons840 wrote: post #349
yoyohello13 wrote: post #327

Earlier quoted context omitted.

This completely discounts the work involved to find service providers you trust. I spent a long time finding a Doctor I trust, finding a Vet I trust, etc. I don't want a "free market" solution where I need to switch providers every 6 months because some rich dude is being a dick. This is the problem with so many market focused solutions. They discount the burden put on the consumer.

You're complaining about healthcare being tied to employment. That sucks. Yeah, we should get rid of that. Coupling healthcare and employment makes it harder for agents to move and trade "freely" in the "free market". So, I say again. The things that happen in a healthy free market are not happening in our society.

The original poster was talking about vets, which don’t have that issue.

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

#380

Post by ineedasername »

smallmancontrov wrote: post #336
ineedasername wrote: post #333

Last year Jamie Dimon said there were some going to be some “cockroaches” found lingering unattended to in lots of private credit portfolios— the implication at the time was not that it was systemic and deep, merely that various incentives and market forces have meant a shakeout of either the incremental as-it-happens variety or slightly larger ones of multiple happening at a time. Since then I’ve seen small things i…

> the implication at the time was not that it was systemic and deep How is that what you took away from this? > When you see one cockroach, there are probably more… Everyone should be forewarned on this. -Jamie Dimon

I took that to be what it was intended it convey, and what Dimon wanted people to feel about what he said. That maybe they should poke around their own books but he wasn’t telling people “well ‘08 all over again”

My own read of the subtext was something a bit different. Dimon saw something he really didn’t like and my guess would be that more than just a handful of people at JP Morgan were having their next few days or longer personal plans cancelled—- or that it had already settled from something like that— to find whatever they had in the way of cockroaches. And so Dimon’s public statement was a soft nudge to try and get others to do the same, cautiously and slowly without panicking.

It’s tea leaves but the time since then seems to bear that out, with right now’s world economic volatility being a good opportunity for many places to go a little more aggressively in reigning in whatever they have in cockroach’s with some cover from that volatility and distraction to not have to explain too much more or get too much scrutiny that would accelerate things beyond manageable.

Overall, my take was that Dimon is still probably pissed off about SV bank and trying to make sure whatever shape or size this private credit rot may have doesn’t go down quite that haphazardly.

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