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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

#451

Post by lenerdenator »

sehansen wrote: post #425
keernan wrote: post #249

Earlier quoted context omitted.

>The shareholders in almost all of these companies lost all of their money How is that penalizing those responsible? Isn't it a pretty big leap to go from penalizing those selling packaged fraudulent loans to the public (whom, to my knowledge were never prosecuted) to the shareholders losing money as protection against it happening again?

The shareholders are responsible for the management of the company who are in turn responsible for their employees. By wiping out the shareholders in these companies hopefully other shareholders in other financial companies will demand more oversight. In the end people respond to incentives and the individual employees that sold the fraudulent loans were implicitly or explicitly incentivized to do so by management, w…

The problem is, shareholding is now so abstracted as to make actual corrective action incredibly unlikely.

If you have investments, go and look what your holdings are. There's a real chance you have some sort managed portfolio that will trade equities to maintain growth. It might be algorithmically-driven. Your holdings may very well temporarily include some companies that you don't approve of, but trading happens so fast and so often that you're not going to be able to keep up on what you actually own.

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

#452

Post by ses1984 »

Ntrails wrote: post #449
klodolph wrote: post #400

Earlier quoted context omitted.

“Shorting” a company does not just mean short selling stock. Instead, it means having a short position, which you can use without unlimited downside. The easy way is to buy puts. Maybe your next question is, “who is selling puts?” And that’s a good question, but you don’t really care, because you can buy your puts on the open market and when you do that, you get protection from credit risk. There are other reasons wh…

> “Shorting” a company does not just mean short selling stock. Instead, it means having a short position, which you can use without unlimited downside. If you are an equity index holder anyway, simply by not holding any exposure in an otherwise "market" portfolio is a "short" relative to benchmark . ie if I "buy" the SP500 constituents according to weight but with TSLA zero'd out my portfolio is essentially the same…

Normally you buy into something like SP500 via something like an ETF, something with a very low fee because it’s managed entirely automatically via simple algorithms.

How can you invest in SP500 minus TSLA without racking up exorbitant fees?

Unless such a fund already exists, you’d be managing it yourself and pretty much wiping out any gains any time you rebalanced.

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

#453

Post by spacecadet »

mikkupikku wrote: post #438
bigstrat2003 wrote: post #381

Earlier quoted context omitted.

They do not in fact do it just fine. That's why it's utterly laughable to suggest that they can lead to AGI. They can't even do the one thing they are supposed to be good at, even after years of effort.

I didn't say anything about AGI, nor will I except to say it's an incoherent quasi-religious topic that has next to no engineering relevance, at the very least until somebody can empirically test for it. Stop coping.

You and I have the same point of view... Try thinking instead of reacting...

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

#454

Post by spacecadet »

bigstrat2003 wrote: post #381
mikkupikku wrote: post #239

Earlier quoted context omitted.

You're coping. Two years ago they could barely write software. These days they do it just fine.

They do not in fact do it just fine. That's why it's utterly laughable to suggest that they can lead to AGI. They can't even do the one thing they are supposed to be good at, even after years of effort.

This.

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

#455

Post by giraffe_lady »

spamizbad wrote: post #246
fairity wrote: post #193

So, if I’m following: Banks are lending to private equity firms to fund purchases of businesses. Many of these businesses are SaaS which means their valuations are tumbling. It seems possible that valuations tumble so much that the private equity owner no longer has any incentive to operate the business, bc all future cash flows will belong to the bank. What happens in practice then? Will banks actually step in and t…

Banks have zero appetite for taking any operating responsibility for these firms and will work tirelessly to get them off their books ASAP.

In at least the US and EU but probably elsewhere, the asset categories of banks are tightly regulated as well. They can have transient ownership of anything but there are hard limits on what portion of their assets can be indefinitely tied up in nonbanking businesses that they are operating on their own behalf.

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

#456

Post by rlucas »

hedora wrote: post #318
rlucas wrote: post #245

Earlier quoted context omitted.

I don't think that's a true etymology of "bucket shop," which per my recollection of Livermore was just an off-track-betting parlor for ticker symbols, but where nobody actually bought the shares (bundled or otherwise). Strictly a retail swindle, having nothing directly to do with the risk/maturity bundling work you are criticizing above.

We had them in the US before the SEC, which regulated them out of existence. It’s likely the term is a pejorative referring to the Liverpool setup you describe.

Sorry, I meant Jesse Livermore's "Confessions of a Stock Market Operator," worth a read to anyone interested in the history of this stuff.

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

#457

Post by jart »

retube wrote: post #430
jart wrote: post #424

Earlier quoted context omitted.

DB's fall has been glorious. I shorted them back in January when I learned they were delivering 1.3% of their market cap in gold to the COMEX. No bank gives up that much of a hard asset unless something is wrong. Things are also looking bleak for Scotia Capital, BofA, Barclays, and UBS. JPMorgan seems to be doing fine. However Citigroup appears to be making out like a bandit. https://www.cmegroup.com/delivery_reports…

What do their gold deliveries have anything to do with their financial situation? That'll just be settling GC contracts, and there will be clients on the other side.

https://justine.lol/tmp/CrazyGamblingOnFutures.mp4

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

#458

Post by Ntrails »

ses1984 wrote: post #452
Ntrails wrote: post #449

Earlier quoted context omitted.

> “Shorting” a company does not just mean short selling stock. Instead, it means having a short position, which you can use without unlimited downside. If you are an equity index holder anyway, simply by not holding any exposure in an otherwise "market" portfolio is a "short" relative to benchmark . ie if I "buy" the SP500 constituents according to weight but with TSLA zero'd out my portfolio is essentially the same…

Normally you buy into something like SP500 via something like an ETF, something with a very low fee because it’s managed entirely automatically via simple algorithms. How can you invest in SP500 minus TSLA without racking up exorbitant fees? Unless such a fund already exists, you’d be managing it yourself and pretty much wiping out any gains any time you rebalanced.

Oh for sure, not an actual proposal for how to invest

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

#459

Post by georgeecollins »

klodolph wrote: post #402
georgeecollins wrote: post #397

Earlier quoted context omitted.

This is sensible advice for most people. I see some thoughtful quibbles but I wish you weren't down voted. If you are a normal retail investor, please listen to pocksuppet.

pocksuppet’s advice is I think more of a reaction to a specific way that you could take a short position, and in 2026 I think you want to assume that people who know what “short” means, also know what options are. The advice is good in a kind of stopped clock sense.

I'm old, so I am a stopped clock. However, I have invested my whole life including good times and bad. I believe that for a retail trader -- someone who doesn't get paid to trade other people's money-- options are bad. OK yes there are special cases like when your job requires you to hold a lot of one stock etc. I'm not going to make the case why here I am sure it has been argued to death.

I do remember smart friends getting interested in options at different times in the last thirty years because they make higher returns. Then they have a period where make lower returns, or have a real problem. I don't think its worth the attention and the trading cost for most people, even people who understand what a short is. You can't argue with a person who has been doing really well with them for five years but it always seems like people stop.

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

#460

Post by keernan »

sehansen wrote: post #425
keernan wrote: post #249

Earlier quoted context omitted.

>The shareholders in almost all of these companies lost all of their money How is that penalizing those responsible? Isn't it a pretty big leap to go from penalizing those selling packaged fraudulent loans to the public (whom, to my knowledge were never prosecuted) to the shareholders losing money as protection against it happening again?

The shareholders are responsible for the management of the company who are in turn responsible for their employees. By wiping out the shareholders in these companies hopefully other shareholders in other financial companies will demand more oversight. In the end people respond to incentives and the individual employees that sold the fraudulent loans were implicitly or explicitly incentivized to do so by management, w…

That is a highly abstract theoretical view that is true of private corporations but does not reflect the real world of public traded corporations.
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