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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

#51

Post by JumpCrisscross »

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://corporatefinanceinstitute.com/resources/capital_mark...

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

#53

Post by airstrike »

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://…

Outside of finance, people associate "private" with "individual"

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

#54

Post by coldpie »

alecco wrote: post #39
coldpie wrote: post #10

Earlier quoted context omitted.

> If you’re running a business that relies on external cash (VCs, loans/bonds, etc) to keep things going things will get very ugly. Honestly thrilled to hear it. The AI bubble needs to burst so we can find out what's actually useful, start requiring real business models again, and get rid of all the noise and waste.

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.

> The problem is all these over-leveraged sectors will drag everybody else

Well, the good news is that's what good public policy is for, to blunt the impact of the damage with strong anti-trust enforcement and careful cash injections to weak-but-critical areas of the economy to help stabilize in rough times.

Now, hang on for just one moment while I crawl out from under this rock and take a look at who we have entrusted to set our public policy.

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

#55

Post by bluGill »

bittercynic wrote: post #30
bluGill wrote: post #26

Earlier quoted context omitted.

Even if this was a reliable signal for most of us it shouldn't change anyway. Timing the market is hard, so if you have a job keep investing in your retirement accounts and let dollar cost averaging work it out - odds are you are buying at fire sale prices. If you are one of those who lose your job - it doesn't matter much if the economy is good or bad, you need to adjust a lot of things (even in the best of times so…

You may not be able to properly let dollar cost averaging do its thing if you rely on your job to invest, since there's a high correlation between periods where people are out of work and periods where asset prices are lower.

Even in the worst part of the great depression 75% of the people had a job. Most years where much better.

Don't get me wrong, if you don't have a job things are bad. If you have a job but it isn't giving good raises, or it is a worse job than you are qualified for things are bad. However things are not hopeless for the majority of people even when things are really bad, and you can get through it.

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

#56

Post by mothballed »

bad_haircut72 wrote: post #48
bee_rider wrote: post #36

Earlier quoted context omitted.

It would cause inflation, isn’t that sort of a tax on people who have more wealth than income? (Which includes people like retirees, so, I’m not saying this is a universally good thing).

No because assets hold their worth. Poor people have no assets

Poor people are hit a lot harder, but rich still have to pay capital gains on inflation even despite having no real change in value. So the rich pay inflation at the rate * 0.2. Poor pay it at the rate * 1.0 (5x the rate of the rich).

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

#57

Post by rglover »

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://…

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

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

#58

Post by wussboy »

SoftTalker wrote: post #35
lenerdenator wrote: post #27

Earlier quoted context omitted.

We didn't recover from the 2008 crash properly because we didn't introduce consequences for those who created it.

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

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

#59

Post by JumpCrisscross »

bee_rider wrote: post #36
tartoran wrote: post #29

Earlier quoted context omitted.

That’s a tax on the poor

It would cause inflation, isn’t that sort of a tax on people who have more wealth than income? (Which includes people like retirees, so, I’m not saying this is a universally good thing).

> isn’t that sort of a tax on people who have more wealth

Classically, yes, particularly when that wealth is closer to productive capital. In modern economies, the rich also hold a lot of debt, which lets them benefit from inflation.

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

#60

Post by kryogen1c »

JumpCrisscross wrote: post #14
floatrock wrote: post #8

Earlier quoted context omitted.

I thought it was by the layers upon layers of interconnected unregulated derivatives valued at a few orders of magnitude above the underlying subprime mortgages given to anyone with a pulse.

> it was by the layers upon layers of interconnected unregulated derivatives valued at a few orders of magnitude above the underlying subprime mortgages given to anyone with a pulse It was interconnected derivatives and structured products linked to banks that caused a liquidity crisis in the former to cause a crisis of confidence in the latter. Meanwhile: "In the letter, Morgan Stanley said the fund wasn’t designed…

> liquidity crisis in the former to cause a crisis of confidence in the latter

Wait what? Your thesis is the GFC was caused by a liquidity crunch/bank run? Isn't that... not true?

Isn't the proximal to distal chain of events government encouraged subprime loans -> inaacurately valued MBS -> exponential, unregulated derivative instruments -> leveraged contagion. What does market confidence have to do with any of that?

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