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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

#61

Post by JumpCrisscross »

mothballed wrote: post #56
bad_haircut72 wrote: post #48

Earlier quoted context omitted.

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).

> rich still have to pay capital gains on inflation

“Pay” is doing a lot of work there. My house is half equity half debt. The debt gets to be paid off with inflated dollars. And I pay no capital gains on the appreciation. I can, however, tap it for liquidity if I need it.

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

#62

Post by JumpCrisscross »

rglover wrote: post #57
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://…

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...

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

#63

Post by omcnoe »

Mattwmaster58 wrote: post #50
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 .

That's exactly where my mind went as soon as I read the title. HN rules say to "use the original title, unless it is misleading". I think the original title meets the misleading bar but I can't speak for other readers.

"Private credit" is a finance term of art. It could be misleading if you don't have context for the correct definition, but that's true of many posts on this site.

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

#64

Post by john_strinlai »

rglover wrote: post #57
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://…

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

what on earth is "financial blackpilling"?

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

#65

Post by ziml77 »

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).

Theoretically yes, but in practice the wages of people already not making much have not tracked inflation and there's no reason to believe that they will now. That means any inflation is also a tax on them.

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

#66

Post by BikiniPrince »

omcnoe wrote: post #63
Mattwmaster58 wrote: post #50

Earlier quoted context omitted.

That's exactly where my mind went as soon as I read the title. HN rules say to "use the original title, unless it is misleading". I think the original title meets the misleading bar but I can't speak for other readers.

"Private credit" is a finance term of art. It could be misleading if you don't have context for the correct definition, but that's true of many posts on this site.

[dead]

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

#68

Post by john_strinlai »

Mattwmaster58 wrote: post #50
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 .

That's exactly where my mind went as soon as I read the title. HN rules say to "use the original title, unless it is misleading". I think the original title meets the misleading bar but I can't speak for other readers.

it is correct, though.

someone not knowing the definition != misleading title

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

#69

Post by franktankbank »

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.

Assets don't disappear they get bidded.

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

#70

Post by mothballed »

JumpCrisscross wrote: post #61
mothballed wrote: post #56

Earlier quoted context omitted.

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).

> rich still have to pay capital gains on inflation “Pay” is doing a lot of work there. My house is half equity half debt. The debt gets to be paid off with inflated dollars. And I pay no capital gains on the appreciation. I can , however, tap it for liquidity if I need it.

Rich people don't tend to have a sizeable portion of their worth tied up in their primary residence (and even then, IIRC there is a cap on capital gains exception), otherwise property tax would turn into a wealth tax for them which obviously they want to avoid. Non-primary residences still require paying capital gains. The inflated value you paid off with debt for a non-primary residence still gets captured as capital gain in the end when you actually want to sell the house for money.
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