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Out now - my interview w/ world's largest in CLO equity (Collateralized Loan Obligations), Thomas Majewski, on: - "Private credit" is assuming some of the CLO world's riskiest loans - "Phone was lighting up" in September as banks rushed to offload credit risk to non-bank credit funds to meet... capital requirements (this "regulatory capital relief market" is similar to credit default swap but employs a different instrument, the credit-linked note) - Private credit could be part golden age, part "biggest bubble in world" (I prompted him, not his original words). - CLOs are a "better bank" because there has "never been a run on them", and because "corporate America pays its bills," the senior corporate loans that make up CLOs are very unlike the subprime mortgages that made up CLO's problem cousin, the CDO, the structure that led to 2008. - He is quite clear that, in his personal opinion CLO equity offers the best risk/reward compared to other tranches. However, when it comes to private credit and BDCs (business development companies), there's a compelling case for being senior (i.e. lending to BDCs, rather than being an owner/equityholder) - The credit reality is worse than news, at least when it comes to senior loans. There were a grand total of 0 defaults in September. If the most predicted recession in history actually comes, he believes that with due time, CLO equity tranches will perform well because of they will be able to use par dollars to buy up discounted loans, as they did during 2008 Great Financial Crisis All of the above is my own paraphrasing of the interview, for exact quotes see the interview. It also comes with this official disclaimer: "any past performance discussed in this presentation is not indicative of, or a guarantee of, future performance." Enjoy 🔥show more

Jack Farley

89,448 subscribers

172,341 次观看 • 2 年前 •via X (Twitter)

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Our Credit Score system in America is a scam This woman has hundreds of thousands of dollars in student debt. She makes payments and managed to pay one of the loans off Her credit score dropped because she paid off one of the loans “I’ll you guys something that just continues to unmotivate me to not pay these off, and it shows you how backwards the system is. My credit score went down a point because I paid off one of my loans. Why, why would I pay off my loans when you're penalized when you do pay it off” Your credit score can actually drop by 20-50+ points because you pay off a loan depending on the size of the account This is absolutely a scam The reason for this is, is because the credit score system is a statistical model that takes in a bunch of things. When you pay off a loan it drops the active installment loan metric, so your score drops It eventually corrects after months but it’s still a scam

Our Credit Score system in America is a scam This woman has hundreds of thousands of dollars in student debt. She makes payments and managed to pay one of the loans off Her credit score dropped because she paid off one of the loans “I’ll you guys something that just continues to unmotivate me to not pay these off, and it shows you how backwards the system is. My credit score went down a point because I paid off one of my loans. Why, why would I pay off my loans when you're penalized when you do pay it off” Your credit score can actually drop by 20-50+ points because you pay off a loan depending on the size of the account This is absolutely a scam The reason for this is, is because the credit score system is a statistical model that takes in a bunch of things. When you pay off a loan it drops the active installment loan metric, so your score drops It eventually corrects after months but it’s still a scam

Wall Street Apes

83,349 次观看 • 1 个月前

"Constipated." That is the word now being used for the private credit market. And it is exactly what this looks like. The private credit story is changing. For months it was framed as a liquidity problem. Investors trying to pull their money out. That is still a huge problem. BlackRock just had a couple of funds suffering big runs. But there is a bigger one. It is no longer just the investors who want out. It is the investors outside who no longer want in. And that is the much bigger story. Because the private credit boom was built on flows. Constant inflows from wealth managers, pensions, insurance companies, and the general public. That is how big it got. The machine has to keep moving. Money comes in. Loans get made. Funds grow. Redemptions get handled. Managers collect their fees. Everyone pretends it is calm because the marks are smooth and the exits are limited. Now the machine is reversing. Reuters reported US direct lending issuance in the three months ending May was down roughly 40% from the first quarter. Issuance to private-equity-backed borrowers dropped nearly 37%. Volume tied to leveraged buyouts fell about 34%. So this is no longer just a redemption story. The exits are clogged. New money is hesitant. Sellers will not cut prices, and buyers will not pay yesterday's valuations. Credit funds are handling redemptions. Leveraged loans are showing strain. And publicly traded BDCs are not rebounding, even as the broader market soars. So the question is no longer whether investors are still withdrawing. They are, and it is accelerating. It is not about the people inside who want out. It is about the people outside who no longer want in. That is the bigger problem. It pushes us deeper into stage two, and the odds of stage three go up from here.

"Constipated." That is the word now being used for the private credit market. And it is exactly what this looks like. The private credit story is changing. For months it was framed as a liquidity problem. Investors trying to pull their money out. That is still a huge problem. BlackRock just had a couple of funds suffering big runs. But there is a bigger one. It is no longer just the investors who want out. It is the investors outside who no longer want in. And that is the much bigger story. Because the private credit boom was built on flows. Constant inflows from wealth managers, pensions, insurance companies, and the general public. That is how big it got. The machine has to keep moving. Money comes in. Loans get made. Funds grow. Redemptions get handled. Managers collect their fees. Everyone pretends it is calm because the marks are smooth and the exits are limited. Now the machine is reversing. Reuters reported US direct lending issuance in the three months ending May was down roughly 40% from the first quarter. Issuance to private-equity-backed borrowers dropped nearly 37%. Volume tied to leveraged buyouts fell about 34%. So this is no longer just a redemption story. The exits are clogged. New money is hesitant. Sellers will not cut prices, and buyers will not pay yesterday's valuations. Credit funds are handling redemptions. Leveraged loans are showing strain. And publicly traded BDCs are not rebounding, even as the broader market soars. So the question is no longer whether investors are still withdrawing. They are, and it is accelerating. It is not about the people inside who want out. It is about the people outside who no longer want in. That is the bigger problem. It pushes us deeper into stage two, and the odds of stage three go up from here.

Jeffrey P. Snider

24,551 次观看 • 1 个月前

Lowering credit card interest rates sounds like a good idea, but often times it ends up hurting the very people who policymakers were seeking to help. If interest rates are capped, the people who need it the most — high-risk borrowers who have low credit scores — will lose access to credit. Interest rates are largely dependent on the person who is doing the borrowing. The riskier a person is to lend to, the higher their interest rate is because the bank is taking on risk by extending them credit. People who are in desperate need of credit who will no longer be able to get a credit card then may turn to more expensive types of credit. This would also impact people who earn lots of rewards on their credit cards, have excellent credit scores, and payoff their balance every month so they don't pay interest. Credit card companies may cut back or cancel rewards and could start implementing annual fees on credit cards that never had them in the past or increase annual fees on existing cards.

Lowering credit card interest rates sounds like a good idea, but often times it ends up hurting the very people who policymakers were seeking to help. If interest rates are capped, the people who need it the most — high-risk borrowers who have low credit scores — will lose access to credit. Interest rates are largely dependent on the person who is doing the borrowing. The riskier a person is to lend to, the higher their interest rate is because the bank is taking on risk by extending them credit. People who are in desperate need of credit who will no longer be able to get a credit card then may turn to more expensive types of credit. This would also impact people who earn lots of rewards on their credit cards, have excellent credit scores, and payoff their balance every month so they don't pay interest. Credit card companies may cut back or cancel rewards and could start implementing annual fees on credit cards that never had them in the past or increase annual fees on existing cards.

Ryan Saavedra

38,079 次观看 • 7 个月前

ASWATH DAMODARAN: PRIVATE CREDIT IS THE NEXT CRISIS. His framing starts with a question that nobody in the boom is asking. Who exactly are the lenders writing the checks to fund all these AI data centers? Shale oil companies borrowed heavily when oil was at $120 a barrel and got crushed when prices fell to $60. The same pattern is forming today in compute infrastructure, and the people putting up the capital are getting almost no scrutiny. Damodaran does not see private credit as the sophisticated, intelligent alternative the marketing has positioned it as. He sees it as sheep. Every fund is chasing the same deals, the same sectors, and the same yield premiums that allegedly justify the structure. Intelligence in his view has been confused with confidence, and confidence in this corner of finance has compounded into something far more dangerous than the participants realize. His broader point is that hedge funds, private equity, and private credit have all followed the same destructive arc. Each one began as a genuinely good niche business solving a real problem. Hedge funds 30 years ago produced positive alpha, beating passive investing by 3 to 5 percent annually. Today they look like expensive mutual funds, underperforming passive by roughly 1.5 percent. Private equity started as a focused, disciplined strategy for a small set of operators and has grown into a sprawling category that now struggles to deliver the returns that justified its emergence. Private credit had a legitimate original purpose, which was lending to borrowers that banks structurally could not serve. What killed each of these businesses was the same disease. Overreach. A $200 billion niche business gets sold as a $20 trillion opportunity. When that scaling happens, sloppiness follows, bad actors enter the space, and the average quality of every participant deteriorates. The original alpha disappears not because the strategy stopped working, but because too much money chased too few good deals. The danger with private credit is far more severe than the parallel problems in private equity and hedge funds. Equity investors take their losses and move on. Lending businesses, when they overreach, take others down with them. Banks. Pensions. Insurance companies. Sovereign wealth funds. The systemic linkages run far deeper than most participants understand, and the social costs of a real default cycle in private credit would extend well beyond the funds themselves. Damodaran's warning is essentially that the industry is repeating the exact mistake that produced every previous credit crisis. Take a good idea, scale it past its natural capacity, attract bad actors with the promise of easy returns, and wait for the inevitable cycle that exposes how much of the underwriting was never serious in the first place. Aswath Damodaran Fixed + Floating - The Credit Podcast

ASWATH DAMODARAN: PRIVATE CREDIT IS THE NEXT CRISIS. His framing starts with a question that nobody in the boom is asking. Who exactly are the lenders writing the checks to fund all these AI data centers? Shale oil companies borrowed heavily when oil was at $120 a barrel and got crushed when prices fell to $60. The same pattern is forming today in compute infrastructure, and the people putting up the capital are getting almost no scrutiny. Damodaran does not see private credit as the sophisticated, intelligent alternative the marketing has positioned it as. He sees it as sheep. Every fund is chasing the same deals, the same sectors, and the same yield premiums that allegedly justify the structure. Intelligence in his view has been confused with confidence, and confidence in this corner of finance has compounded into something far more dangerous than the participants realize. His broader point is that hedge funds, private equity, and private credit have all followed the same destructive arc. Each one began as a genuinely good niche business solving a real problem. Hedge funds 30 years ago produced positive alpha, beating passive investing by 3 to 5 percent annually. Today they look like expensive mutual funds, underperforming passive by roughly 1.5 percent. Private equity started as a focused, disciplined strategy for a small set of operators and has grown into a sprawling category that now struggles to deliver the returns that justified its emergence. Private credit had a legitimate original purpose, which was lending to borrowers that banks structurally could not serve. What killed each of these businesses was the same disease. Overreach. A $200 billion niche business gets sold as a $20 trillion opportunity. When that scaling happens, sloppiness follows, bad actors enter the space, and the average quality of every participant deteriorates. The original alpha disappears not because the strategy stopped working, but because too much money chased too few good deals. The danger with private credit is far more severe than the parallel problems in private equity and hedge funds. Equity investors take their losses and move on. Lending businesses, when they overreach, take others down with them. Banks. Pensions. Insurance companies. Sovereign wealth funds. The systemic linkages run far deeper than most participants understand, and the social costs of a real default cycle in private credit would extend well beyond the funds themselves. Damodaran's warning is essentially that the industry is repeating the exact mistake that produced every previous credit crisis. Take a good idea, scale it past its natural capacity, attract bad actors with the promise of easy returns, and wait for the inevitable cycle that exposes how much of the underwriting was never serious in the first place. Aswath Damodaran Fixed + Floating - The Credit Podcast

Lumida Wealth Management

109,256 次观看 • 1 个月前

Private credit just hit the brakes, and the numbers are not subtle. New US direct lending issuance fell from about $74.6 billion in the first quarter to about $44.8 billion in the three months ending May, according to PitchBook. That is a massive slowdown in a single quarter. Private equity-backed borrowing dropped to about $28.5 billion. Lending tied to leveraged buyouts fell to about $15.2 billion. This is the private credit engine losing speed at the exact moment it needs confidence. And the reasons are not a mystery. Fundraising is still well below its peak. Redemption requests are elevated and still climbing. Investors are scrutinizing loan quality. And borrowers are stuck in a flat, gone-bad economy. For years private credit took market share because it was fast and certain. It could finance deals when the banks and the syndicated markets could not, because everyone assumed the economy would be good forever. That assumption is breaking. Now these funds are preserving liquidity and stretching to get deals done. So they have far less appetite to finance private equity at aggressive valuations. And that is where private equity gets pulled in. It ran on the leverage that private credit provided, and that engine is reversing. Here is the standoff. Private equity firms will not sell assets at lower prices, because that means admitting yesterday's marks were too high. Buyers will not pay peak multiples in a higher-rate, slower-growth world. Lenders will not underwrite the old assumptions. Investors do not want more money locked up. So the whole machine slows, grinds to a halt, and starts to reverse. One guy called it constipation.

Private credit just hit the brakes, and the numbers are not subtle. New US direct lending issuance fell from about $74.6 billion in the first quarter to about $44.8 billion in the three months ending May, according to PitchBook. That is a massive slowdown in a single quarter. Private equity-backed borrowing dropped to about $28.5 billion. Lending tied to leveraged buyouts fell to about $15.2 billion. This is the private credit engine losing speed at the exact moment it needs confidence. And the reasons are not a mystery. Fundraising is still well below its peak. Redemption requests are elevated and still climbing. Investors are scrutinizing loan quality. And borrowers are stuck in a flat, gone-bad economy. For years private credit took market share because it was fast and certain. It could finance deals when the banks and the syndicated markets could not, because everyone assumed the economy would be good forever. That assumption is breaking. Now these funds are preserving liquidity and stretching to get deals done. So they have far less appetite to finance private equity at aggressive valuations. And that is where private equity gets pulled in. It ran on the leverage that private credit provided, and that engine is reversing. Here is the standoff. Private equity firms will not sell assets at lower prices, because that means admitting yesterday's marks were too high. Buyers will not pay peak multiples in a higher-rate, slower-growth world. Lenders will not underwrite the old assumptions. Investors do not want more money locked up. So the whole machine slows, grinds to a halt, and starts to reverse. One guy called it constipation.

Jeffrey P. Snider

18,021 次观看 • 1 个月前

The financial system is creating the same risk patterns that caused the 2008 crisis—just in a different market. Private credit is that market. It's grown to $1 trillion in loans made by hedge funds and asset managers instead of regulated banks. Here's how it works: → Banks lend money to hedge funds. → Hedge funds use that capital to make risky loans. → Banks claim they have no direct exposure to the borrowers. But the risk doesn't disappear. The loans bypass traditional banking oversight, but the funding still originates from the regulated banking system. When private credit deals go bad, the losses flow back to banks through their hedge fund lending relationships. We're already seeing cracks. BlackRock lost 19% of their private credit fund in one quarter. Subprime auto loans are defaulting at accelerating rates. Overleveraged companies are filing bankruptcy. Nobody's watching the full picture. No transparency requirements mean regulators can't see the scope of interconnected exposures. No one knows which banks are most exposed through which hedge fund relationships. When private credit markets seize up, the connected banks will face losses just like they did with subprime mortgages. The legal framework for "bail-ins" already exists—allowing governments to access depositor funds to recapitalize banks rather than using taxpayer bailouts. This explains why diversification matters. When credit markets experience stress, assets outside the banking system—like precious metals—historically maintain value independent of financial institution health. The pattern repeats: Risk transfer, regulatory gaps, interconnected exposures, and inevitable systemic stress when the cycle reverses. -- This is just scratching the surface of the brewing financial crisis. In a 45-minute video, I also covered: • Why mining stocks give 3-5x leverage to gold price moves (costs stay fixed, profits multiply) • How CME margin hikes force leveraged traders to sell and crash prices •The US has legal framework for bail-ins (Orderly Liquidation Authority) Just comment "CRISIS" and I'll DM you the full video.

The financial system is creating the same risk patterns that caused the 2008 crisis—just in a different market. Private credit is that market. It's grown to $1 trillion in loans made by hedge funds and asset managers instead of regulated banks. Here's how it works: → Banks lend money to hedge funds. → Hedge funds use that capital to make risky loans. → Banks claim they have no direct exposure to the borrowers. But the risk doesn't disappear. The loans bypass traditional banking oversight, but the funding still originates from the regulated banking system. When private credit deals go bad, the losses flow back to banks through their hedge fund lending relationships. We're already seeing cracks. BlackRock lost 19% of their private credit fund in one quarter. Subprime auto loans are defaulting at accelerating rates. Overleveraged companies are filing bankruptcy. Nobody's watching the full picture. No transparency requirements mean regulators can't see the scope of interconnected exposures. No one knows which banks are most exposed through which hedge fund relationships. When private credit markets seize up, the connected banks will face losses just like they did with subprime mortgages. The legal framework for "bail-ins" already exists—allowing governments to access depositor funds to recapitalize banks rather than using taxpayer bailouts. This explains why diversification matters. When credit markets experience stress, assets outside the banking system—like precious metals—historically maintain value independent of financial institution health. The pattern repeats: Risk transfer, regulatory gaps, interconnected exposures, and inevitable systemic stress when the cycle reverses. -- This is just scratching the surface of the brewing financial crisis. In a 45-minute video, I also covered: • Why mining stocks give 3-5x leverage to gold price moves (costs stay fixed, profits multiply) • How CME margin hikes force leveraged traders to sell and crash prices •The US has legal framework for bail-ins (Orderly Liquidation Authority) Just comment "CRISIS" and I'll DM you the full video.

Felix Prehn 🐶

19,085 次观看 • 6 个月前

If you are going to read one thing today, make it this one "What the fuck is going on private credit?" Private credit is getting sassy People are lining up to get their money back Big changes came out around lev-fin after the GFC The new guidelines meant banks could not lend to LBO above 6.0x Private credit stepped in to fill the gap Pre-GFC, deals were small, and docs were tight Private credit has outgrown levered loans Why? Fees Private credits make ~6-7x fees vs levered loans The race is off, if you don't own a private credit business, you own it How do you deploy so much capital? Focus on large deals Which sectors? Software, business service = AI exposed sectors Those billions deals look like levered loans, much worse docs Many new deals were done lending against revenue, not against cash flow. Private credit guys were so confident because multiples kept expanding Then ChatGPT shows up AI Exposed companies are down 50% And to make things worse, the covid LBOs are maturing now Private credit is saying LTM figures are fine, but public credit recoveries are down, especially in tech Sponsors have misaligned interests, if they think the company will be disrupted, they pay themselves dividends People now want to get out

If you are going to read one thing today, make it this one "What the fuck is going on private credit?" Private credit is getting sassy People are lining up to get their money back Big changes came out around lev-fin after the GFC The new guidelines meant banks could not lend to LBO above 6.0x Private credit stepped in to fill the gap Pre-GFC, deals were small, and docs were tight Private credit has outgrown levered loans Why? Fees Private credits make ~6-7x fees vs levered loans The race is off, if you don't own a private credit business, you own it How do you deploy so much capital? Focus on large deals Which sectors? Software, business service = AI exposed sectors Those billions deals look like levered loans, much worse docs Many new deals were done lending against revenue, not against cash flow. Private credit guys were so confident because multiples kept expanding Then ChatGPT shows up AI Exposed companies are down 50% And to make things worse, the covid LBOs are maturing now Private credit is saying LTM figures are fine, but public credit recoveries are down, especially in tech Sponsors have misaligned interests, if they think the company will be disrupted, they pay themselves dividends People now want to get out

Restructuring__

28,238 次观看 • 2 个月前

Lyn Alden: Everyone's scared of private credit blowing up the financial system... US banks have $1.9T in loans to shadow banks - out of $25T in total bank assets. That's 7-8%. "What people are really asking is, can this tank the whole economy or can this contagion into the banking system?" "Those are the parts where my view is 'not that much'." The Fed can't print oil. But it can absolutely absorb a private credit blowup. FT Lyn Alden Danny Knowles.

Lyn Alden: Everyone's scared of private credit blowing up the financial system... US banks have $1.9T in loans to shadow banks - out of $25T in total bank assets. That's 7-8%. "What people are really asking is, can this tank the whole economy or can this contagion into the banking system?" "Those are the parts where my view is 'not that much'." The Fed can't print oil. But it can absolutely absorb a private credit blowup. FT Lyn Alden Danny Knowles.

Milk Road

164,498 次观看 • 1 个月前

In August, President Trump signed an executive order titled "Democratizing Access to Alternative Assets for 401(k) Investors." The order directs regulators to make it easier for your retirement savings to flow into private credit, private equity, and other "alternative" assets. The Department of Labor quickly rescinded Biden-era guidance that had discouraged these investments in retirement plans. Apollo. Blackstone. Goldman Sachs. State Street. They're all racing to launch private credit products for your 401(k). But here's the problem: Private credit is showing cracks at the exact moment they want to open it up to retail investors. Just this week, BlackRock TCP Capital - one of the largest publicly traded private credit funds - plunged 17% after disclosing a 19% writedown on its net asset value. The biggest drop in almost six years. This is BlackRock. The world's largest asset manager. $14T in assets. If they're taking hits like this, what chance does your 401k have? Let me walk you through what's actually happening in this market... Private credit has ballooned to over $2T in assets. For years, it was the domain of sophisticated institutional investors - pension funds, endowments, insurance companies. These investors have teams of analysts, lawyers, and risk managers to evaluate complex deals. Your average 401k participant doesn't have any of that. And the timing couldn't be worse. The IMF's 2025 Financial Stability Report found that 40% of private credit borrowers now have NEGATIVE free cash flow. That's up from 25% in 2021. Goldman Sachs data shows 15% of borrowers can no longer generate enough cash to fully cover their interest payments. UBS forecasts that private credit defaults could climb by 3 percentage points in 2026 - outpacing leveraged loans and high-yield bonds. Meanwhile, payment-in-kind loans - where struggling borrowers defer interest by adding it to their debt balance - have surged from 7.4% in 2021 to over 11% today. When a company can't pay interest in cash, that's not a sign of health. It's a sign of stress being disguised. Then came September's wake-up call: Auto parts maker First Brands collapsed with $8B in off-balance-sheet financing that wasn't properly disclosed to lenders. Subprime auto lender Tricolor imploded amid allegations it pledged the same loans as collateral to multiple creditors. Both received clean audits shortly before they cratered. First Brands' term loans went from 90 cents on the dollar to under 15 cents in weeks. JPMorgan's Jamie Dimon put it bluntly: "When you see one cockroach, there are probably more." Here's what makes this dangerous: Private credit is lightly regulated, less transparent, and difficult to value accurately. The managers making the loans are often the same ones valuing them. They have every incentive to delay recognizing problems. The DOJ has already issued warnings about "creative" marks and questionable valuation practices. Banks aren't insulated either. They've lent over $2.2T to non-bank financial institutions. When problems surface in private credit, banks feel it too. And now they want to put this in YOUR retirement account. The pitch is that private credit offers "higher returns" and "diversification." But the data doesn't support the sales pitch: Recent research shows pension funds increasing exposure to private markets have actually seen depressed returns compared to simple stock and bond portfolios. The 50 largest US pension funds averaged just 7.4% returns over the past decade. A basic 60/40 portfolio beat many of them. The real beneficiaries are fund managers charging 2% fees on assets that can't be easily valued or sold. My view really hasn't changed: AVOID PRIVATE CREDIT When sophisticated institutional investors start pulling back - and they are - the last thing you want to do is rush in. Stay in liquid, transparent, low-cost investments for your retirement. Don't be the exit liquidity.

In August, President Trump signed an executive order titled "Democratizing Access to Alternative Assets for 401(k) Investors." The order directs regulators to make it easier for your retirement savings to flow into private credit, private equity, and other "alternative" assets. The Department of Labor quickly rescinded Biden-era guidance that had discouraged these investments in retirement plans. Apollo. Blackstone. Goldman Sachs. State Street. They're all racing to launch private credit products for your 401(k). But here's the problem: Private credit is showing cracks at the exact moment they want to open it up to retail investors. Just this week, BlackRock TCP Capital - one of the largest publicly traded private credit funds - plunged 17% after disclosing a 19% writedown on its net asset value. The biggest drop in almost six years. This is BlackRock. The world's largest asset manager. $14T in assets. If they're taking hits like this, what chance does your 401k have? Let me walk you through what's actually happening in this market... Private credit has ballooned to over $2T in assets. For years, it was the domain of sophisticated institutional investors - pension funds, endowments, insurance companies. These investors have teams of analysts, lawyers, and risk managers to evaluate complex deals. Your average 401k participant doesn't have any of that. And the timing couldn't be worse. The IMF's 2025 Financial Stability Report found that 40% of private credit borrowers now have NEGATIVE free cash flow. That's up from 25% in 2021. Goldman Sachs data shows 15% of borrowers can no longer generate enough cash to fully cover their interest payments. UBS forecasts that private credit defaults could climb by 3 percentage points in 2026 - outpacing leveraged loans and high-yield bonds. Meanwhile, payment-in-kind loans - where struggling borrowers defer interest by adding it to their debt balance - have surged from 7.4% in 2021 to over 11% today. When a company can't pay interest in cash, that's not a sign of health. It's a sign of stress being disguised. Then came September's wake-up call: Auto parts maker First Brands collapsed with $8B in off-balance-sheet financing that wasn't properly disclosed to lenders. Subprime auto lender Tricolor imploded amid allegations it pledged the same loans as collateral to multiple creditors. Both received clean audits shortly before they cratered. First Brands' term loans went from 90 cents on the dollar to under 15 cents in weeks. JPMorgan's Jamie Dimon put it bluntly: "When you see one cockroach, there are probably more." Here's what makes this dangerous: Private credit is lightly regulated, less transparent, and difficult to value accurately. The managers making the loans are often the same ones valuing them. They have every incentive to delay recognizing problems. The DOJ has already issued warnings about "creative" marks and questionable valuation practices. Banks aren't insulated either. They've lent over $2.2T to non-bank financial institutions. When problems surface in private credit, banks feel it too. And now they want to put this in YOUR retirement account. The pitch is that private credit offers "higher returns" and "diversification." But the data doesn't support the sales pitch: Recent research shows pension funds increasing exposure to private markets have actually seen depressed returns compared to simple stock and bond portfolios. The 50 largest US pension funds averaged just 7.4% returns over the past decade. A basic 60/40 portfolio beat many of them. The real beneficiaries are fund managers charging 2% fees on assets that can't be easily valued or sold. My view really hasn't changed: AVOID PRIVATE CREDIT When sophisticated institutional investors start pulling back - and they are - the last thing you want to do is rush in. Stay in liquid, transparent, low-cost investments for your retirement. Don't be the exit liquidity.

George Noble

932,848 次观看 • 6 个月前

Hope you’re ready to be pissed off “I was today years old when I found out that a non citizen of America can purchase a home and they don't need a credit score” “They don't have to have build credit, active credit, anything to prove that they would be faithful to their payments. But you know who does have to have that? Americans. So basically the system is loyal to the outsiders as usual. I'm 47 years old, I'm further away from being able to purchase a home than I ever have been. And I've made some decent money throughout my life as a single mom. It's not been easy to save money and I'm not gonna lie, I have a high utilization when it comes to my credit cards and I have been trying my damnedest to pay them off and I'm even further away from that. And that's because of past 4 years regardless of what anybody says. Prior to the last administration I had a savings and now I don't.” “I just thought that there were some people out there that might want to know that anybody can come in from another country, purchase a home or property or land a business and when they go to the bank, the bank will not require them to have a credit score. Just Americans.” Illegals can use the loophole of ITIN Loans as an alternative to credit scores: Illegals can use an Individual Taxpayer Identification Number (ITIN) issued by the IRS instead of an SSN They can qualify with Consistent rent payments and utility or phone bill payment history There are also additional programs that let them qualify as well without credit scores

Hope you’re ready to be pissed off “I was today years old when I found out that a non citizen of America can purchase a home and they don't need a credit score” “They don't have to have build credit, active credit, anything to prove that they would be faithful to their payments. But you know who does have to have that? Americans. So basically the system is loyal to the outsiders as usual. I'm 47 years old, I'm further away from being able to purchase a home than I ever have been. And I've made some decent money throughout my life as a single mom. It's not been easy to save money and I'm not gonna lie, I have a high utilization when it comes to my credit cards and I have been trying my damnedest to pay them off and I'm even further away from that. And that's because of past 4 years regardless of what anybody says. Prior to the last administration I had a savings and now I don't.” “I just thought that there were some people out there that might want to know that anybody can come in from another country, purchase a home or property or land a business and when they go to the bank, the bank will not require them to have a credit score. Just Americans.” Illegals can use the loophole of ITIN Loans as an alternative to credit scores: Illegals can use an Individual Taxpayer Identification Number (ITIN) issued by the IRS instead of an SSN They can qualify with Consistent rent payments and utility or phone bill payment history There are also additional programs that let them qualify as well without credit scores

Wall Street Apes

458,741 次观看 • 11 个月前

Is easy to get discouraged after defi exploits HOWEVER its worth noting that they pale in comparison to the private credit crisis in tradfi-land... I've been wanting to highlight my good bro Martin de Rijke's recent appearance on The Rollup and he actually touched on this exact topic in it... Martin is Head Of Growth at Maple, and he spoke with Andy and Robbie Klages all about everything Maple is doing 💪 As he explains in the interview, Martin's been involved with crypto since 2015 and has been a part of the Maple team since 2022, so he has been instrumental in the project's massive success, and had a ton of interesting stuff to say regarding both Maple and defi as a whole... Below clip is- again- on the private credit crisis in macro and whether it can be an opportunity for defi and for Maple, and then it also touches on Maple's overall business model and some other interesting stuff toward the end. As noted above, the private credit crisis is far larger in scope than these defi exploits, and it is also quite representative of the problems in tradfi that defi solves - the fact that it is opaque and corrupt and is based on giant webs of counterparties where there is no way to confirm where your money is and no blockchain to check... In this regard it is an apt reminder of the inherent superiority of blockchain-based financial rails, and the value in what we are all doing here... But yeah, as always, I own a ton of $SYRUP and work with the Maple team, so will flip the 'partner' tag on this 💪 And then will also include a couple more interesting clips from the interview below, and link to the full discussion :) Massive respect to Martin for the great interview!!! 💪🥞 He's been a wonderful friend of mine for as long as I've known him and I HIGHLY, HIGHLY recommend giving him a follow on here if you aren't already doing so! :)

Is easy to get discouraged after defi exploits HOWEVER its worth noting that they pale in comparison to the private credit crisis in tradfi-land... I've been wanting to highlight my good bro Martin de Rijke's recent appearance on The Rollup and he actually touched on this exact topic in it... Martin is Head Of Growth at Maple, and he spoke with Andy and Robbie Klages all about everything Maple is doing 💪 As he explains in the interview, Martin's been involved with crypto since 2015 and has been a part of the Maple team since 2022, so he has been instrumental in the project's massive success, and had a ton of interesting stuff to say regarding both Maple and defi as a whole... Below clip is- again- on the private credit crisis in macro and whether it can be an opportunity for defi and for Maple, and then it also touches on Maple's overall business model and some other interesting stuff toward the end. As noted above, the private credit crisis is far larger in scope than these defi exploits, and it is also quite representative of the problems in tradfi that defi solves - the fact that it is opaque and corrupt and is based on giant webs of counterparties where there is no way to confirm where your money is and no blockchain to check... In this regard it is an apt reminder of the inherent superiority of blockchain-based financial rails, and the value in what we are all doing here... But yeah, as always, I own a ton of $SYRUP and work with the Maple team, so will flip the 'partner' tag on this 💪 And then will also include a couple more interesting clips from the interview below, and link to the full discussion :) Massive respect to Martin for the great interview!!! 💪🥞 He's been a wonderful friend of mine for as long as I've known him and I HIGHLY, HIGHLY recommend giving him a follow on here if you aren't already doing so! :)

rektdiomedes

12,195 次观看 • 3 个月前

Chamath's CDS Bet: Outlining Major Corporate Debt Default Risks "With all of the tariffs, the one thing that we haven't sufficiently talked about is there is a tremendous amount of corporate debt that supports these businesses today." "And you would say, 'Well, if long-term rates go down, there's no real risk.'" "But the tariff picture actually impacts revenues." "And the problem with that is that there's a lot of companies that have debt covenants tied to revenue and EBITDA." "And so this is what I spoke about at the beginning of January, which is, the one risk that is uncontrollable, is what happens to corporate debt and could we see a wave of defaults and a wave of action?" On our 2025 predictions show in January, Chamath Palihapitiya picked credit default swaps as his best-performing asset this year, calling it a long-shot with major upside: " I would be long CDS. I'm buying insurance using credit default swaps. I think that there is a small chance of some volatility next year. I hope it doesn't happen. I hope that this trade loses money. But if it hits, it will be the best-performing asset of 2025." Fast-forward to April: " It has hit. For every billion dollars of risk you would've put on, would have cost you ~$1M, and that million dollars would've made you ~$7M in about three months." "Why is this important? The CDS actually represents the structural risk in the United States corporate economy." "So when you see these spreads blowing out, this is actually a very important warning sign." "This is what was the canary in the coal mine for the Great Financial Crisis." "The tariff picture and the recession picture will get played out in this chart." "And I think it's something that folks can and should probably pay tremendous attention to."

Chamath's CDS Bet: Outlining Major Corporate Debt Default Risks "With all of the tariffs, the one thing that we haven't sufficiently talked about is there is a tremendous amount of corporate debt that supports these businesses today." "And you would say, 'Well, if long-term rates go down, there's no real risk.'" "But the tariff picture actually impacts revenues." "And the problem with that is that there's a lot of companies that have debt covenants tied to revenue and EBITDA." "And so this is what I spoke about at the beginning of January, which is, the one risk that is uncontrollable, is what happens to corporate debt and could we see a wave of defaults and a wave of action?" On our 2025 predictions show in January, Chamath Palihapitiya picked credit default swaps as his best-performing asset this year, calling it a long-shot with major upside: " I would be long CDS. I'm buying insurance using credit default swaps. I think that there is a small chance of some volatility next year. I hope it doesn't happen. I hope that this trade loses money. But if it hits, it will be the best-performing asset of 2025." Fast-forward to April: " It has hit. For every billion dollars of risk you would've put on, would have cost you ~$1M, and that million dollars would've made you ~$7M in about three months." "Why is this important? The CDS actually represents the structural risk in the United States corporate economy." "So when you see these spreads blowing out, this is actually a very important warning sign." "This is what was the canary in the coal mine for the Great Financial Crisis." "The tariff picture and the recession picture will get played out in this chart." "And I think it's something that folks can and should probably pay tremendous attention to."

The All-In Podcast

1,102,601 次观看 • 1 年前

I bumped into this video from Songezo on tiktok about SA's recent World Bank Loan. A couple of things need to be clarified here. The loan is not about direct investment on the said infrastructure (not a single watt will be added to the grid, not a single km of rail will be added), is it a loan to support PSP policies around the future of SOE's and forced energy transition. He says the loans, provide cheaper interest than local loans, this is not correct WB loans are foreign currency loans with interest normally higher than in the market where the loan is sourced. Compared to local interest they may look cheap but they are not because you can't control $ movements and access. Lastly World Bank loans come with conditionalities that strips the country of fiscal and monetary sovereignity. Any serious country won't allow that.

I bumped into this video from Songezo on tiktok about SA's recent World Bank Loan. A couple of things need to be clarified here. The loan is not about direct investment on the said infrastructure (not a single watt will be added to the grid, not a single km of rail will be added), is it a loan to support PSP policies around the future of SOE's and forced energy transition. He says the loans, provide cheaper interest than local loans, this is not correct WB loans are foreign currency loans with interest normally higher than in the market where the loan is sourced. Compared to local interest they may look cheap but they are not because you can't control $ movements and access. Lastly World Bank loans come with conditionalities that strips the country of fiscal and monetary sovereignity. Any serious country won't allow that.

T

85,974 次观看 • 1 年前

For months, everyone called this a liquidity problem. It is not a liquidity problem anymore. It is not just investors pulling money out. It is investors who no longer want in. That is the bigger problem. The whole boom was built on flows. Wealth managers, pensions, insurance, the public. The machine had to keep moving. Now it is reversing. New direct lending issuance fell from 74.6 billion to 44.8 billion in one quarter, per Reuters and PitchBook. A drop of roughly 40%. And the redemptions keep coming. BlackRock's HLend capped requests after investors tried to pull 13%. Up from 9% the quarter before. The run is accelerating. It is not one fund. Blackstone hit its limits. Cliff Water's requests grew. Partners Group capped a private equity fund near 10% of NAV. The pressure is not staying in one lane. Now the public tell. Publicly traded BDCs are not bouncing, even as the market soars. They are the liquid version of the same trade. The bargain hunters are not showing up. That is a buyer strike. And the real fear is the dividends. If you expected 9% and get 4%, why take the risk on the rest? You do not hold the fund hoping Blue Owl turns out right. The stress is spreading. Software loans are down 4.7% this year while the index is up 1.2%. And software sits across both leveraged loans and private credit. Defaults just matched a 2023 high in a 300 billion dollar private credit index. And defaults lag. The amendments, the extensions, the PIK come first. Here is the mechanism. New money slows, old money wants out, so managers protect liquidity. They lend less. Deals slow. Exits disappear. Distributions shrink. Fundraising weakens. The loop closes on itself. It does not need a Lehman blowup to feed on itself. It is not one explosion. It is a system that can no longer clear. The argument from inside is that investors do not know what they are talking about. That this is all nothing. But this many people wanting out, and this many refusing to come in, is not nothing. Private credit can survive bad headlines. Problem loans. Even redemptions. What it cannot survive is a buyer strike, because the whole boom assumed capital would keep arriving. So this is not 2021 anymore. The credit cycle has changed. And the people who asked for their money back were never confused. They were just early.

For months, everyone called this a liquidity problem. It is not a liquidity problem anymore. It is not just investors pulling money out. It is investors who no longer want in. That is the bigger problem. The whole boom was built on flows. Wealth managers, pensions, insurance, the public. The machine had to keep moving. Now it is reversing. New direct lending issuance fell from 74.6 billion to 44.8 billion in one quarter, per Reuters and PitchBook. A drop of roughly 40%. And the redemptions keep coming. BlackRock's HLend capped requests after investors tried to pull 13%. Up from 9% the quarter before. The run is accelerating. It is not one fund. Blackstone hit its limits. Cliff Water's requests grew. Partners Group capped a private equity fund near 10% of NAV. The pressure is not staying in one lane. Now the public tell. Publicly traded BDCs are not bouncing, even as the market soars. They are the liquid version of the same trade. The bargain hunters are not showing up. That is a buyer strike. And the real fear is the dividends. If you expected 9% and get 4%, why take the risk on the rest? You do not hold the fund hoping Blue Owl turns out right. The stress is spreading. Software loans are down 4.7% this year while the index is up 1.2%. And software sits across both leveraged loans and private credit. Defaults just matched a 2023 high in a 300 billion dollar private credit index. And defaults lag. The amendments, the extensions, the PIK come first. Here is the mechanism. New money slows, old money wants out, so managers protect liquidity. They lend less. Deals slow. Exits disappear. Distributions shrink. Fundraising weakens. The loop closes on itself. It does not need a Lehman blowup to feed on itself. It is not one explosion. It is a system that can no longer clear. The argument from inside is that investors do not know what they are talking about. That this is all nothing. But this many people wanting out, and this many refusing to come in, is not nothing. Private credit can survive bad headlines. Problem loans. Even redemptions. What it cannot survive is a buyer strike, because the whole boom assumed capital would keep arriving. So this is not 2021 anymore. The credit cycle has changed. And the people who asked for their money back were never confused. They were just early.

Jeffrey P. Snider

32,147 次观看 • 1 个月前

Something strange is happening in markets, and almost nobody is watching it. US stocks are surging. Tech is euphoric. Semiconductors are going vertical. The party is back on. Except in Hong Kong. The Hang Seng is falling hard, going the opposite direction. That matters, because Hong Kong is the money gateway into China and across Asia. Money flows through it when people believe in China, when trade is strong, when dollars are easy. So ask the uncomfortable question. What is Hong Kong seeing that everyone else is ignoring? The answer is in China's credit markets. For new credit, bonds have now passed bank loans for the first time. About 30% of the credit stock in May, a record. The official spin is modernization. China moving from property to a high-tech, capital-markets future. It sounds reassuring. It is not. Here is what they leave out. Bank lending creates money. A loan makes a new deposit, new purchasing power, on the spot. Bond issuance does not. Someone buys the bond with savings that already exist. It just moves money around. So bonds can only cushion the fall. They cannot replace the credit that banks are no longer creating. And the banks are pulling back for a reason. A slow-motion credit crisis. As many as 100 million consumers struggling to service their debt. Bad household loans up 21% to a record 2.2 trillion yuan. Nearly 11% of adults behind on payments. Now ask who is issuing all these bonds. Not companies expanding. The government, borrowing to paper over the gap. That is not modernization. Heavy government issuance means the private sector is too scared to borrow, so the state steps in. That is desperation. We have seen this movie. Post-2008 US and Europe. Banks retreated, bonds backstopped, and the economy got the silent depression anyway. That is what Hong Kong is pricing. Not a recovery. Bonds are not the sign China solved its problems. They are the sign the banks can no longer carry them.

Something strange is happening in markets, and almost nobody is watching it. US stocks are surging. Tech is euphoric. Semiconductors are going vertical. The party is back on. Except in Hong Kong. The Hang Seng is falling hard, going the opposite direction. That matters, because Hong Kong is the money gateway into China and across Asia. Money flows through it when people believe in China, when trade is strong, when dollars are easy. So ask the uncomfortable question. What is Hong Kong seeing that everyone else is ignoring? The answer is in China's credit markets. For new credit, bonds have now passed bank loans for the first time. About 30% of the credit stock in May, a record. The official spin is modernization. China moving from property to a high-tech, capital-markets future. It sounds reassuring. It is not. Here is what they leave out. Bank lending creates money. A loan makes a new deposit, new purchasing power, on the spot. Bond issuance does not. Someone buys the bond with savings that already exist. It just moves money around. So bonds can only cushion the fall. They cannot replace the credit that banks are no longer creating. And the banks are pulling back for a reason. A slow-motion credit crisis. As many as 100 million consumers struggling to service their debt. Bad household loans up 21% to a record 2.2 trillion yuan. Nearly 11% of adults behind on payments. Now ask who is issuing all these bonds. Not companies expanding. The government, borrowing to paper over the gap. That is not modernization. Heavy government issuance means the private sector is too scared to borrow, so the state steps in. That is desperation. We have seen this movie. Post-2008 US and Europe. Banks retreated, bonds backstopped, and the economy got the silent depression anyway. That is what Hong Kong is pricing. Not a recovery. Bonds are not the sign China solved its problems. They are the sign the banks can no longer carry them.

Jeffrey P. Snider

30,043 次观看 • 1 个月前

Former BlackRock fund manager Ed Dowd on Larry Fink saying people's pensions will fund AI companies: "it's already happened" "The money's already been used. Your pension funds have already funded this" "Larry Fink is basically telling you what's already happened" "That's what private credit is. Private credit is opaque" "[But] private credit is shut down right now. BlackRock's private credit fund today, [and another] one... they're gating withdrawals" "that's why I'm so negative on the US Economy, because once credit turns, everything turns eventually, [and] eventually everything goes the wrong way" "That comes at the end of an economic boom. So we're already rolling over" "Equity people are always late to the party to figure this out. The fixed-income people are already pulling in their horns" "[But] the insurance companies have a lot of this dreck on their balance sheets. The pension funds own it through private credit funds and private equity" Shannon Joy Edward Dowd

Former BlackRock fund manager Ed Dowd on Larry Fink saying people's pensions will fund AI companies: "it's already happened" "The money's already been used. Your pension funds have already funded this" "Larry Fink is basically telling you what's already happened" "That's what private credit is. Private credit is opaque" "[But] private credit is shut down right now. BlackRock's private credit fund today, [and another] one... they're gating withdrawals" "that's why I'm so negative on the US Economy, because once credit turns, everything turns eventually, [and] eventually everything goes the wrong way" "That comes at the end of an economic boom. So we're already rolling over" "Equity people are always late to the party to figure this out. The fixed-income people are already pulling in their horns" "[But] the insurance companies have a lot of this dreck on their balance sheets. The pension funds own it through private credit funds and private equity" Shannon Joy Edward Dowd

Sense Receptor

67,948 次观看 • 2 个月前

Plaid CEO Zachary Perret says AI agents will rely on credit cards, not stablecoins, for payments in the near term: "For as far as I can see, which in this environment is maybe a year or something like that, I think agents using credit cards is going to be by far the primary thing that happens." "The reason for that is merchants accept credit cards. Merchants don’t accept stablecoins, for the most part, for most of the things that a consumer wants to do." "Now, over time, certain types of merchants might start to accept stablecoins. The question is: will the companies that care about making credit cards really easy be able to make them sufficiently easy in the amount of time before merchants actually start thinking about accepting stablecoins?" "And my hunch is, you’ve seen, I think Ramp actually launched an agentic credit card... I know there’s a bunch of other agentic credit cards that are out there, and I can’t imagine that there will not be 5,000 YC companies launching agentic-focused credit cards soon." "So I think we will see more and more options pop up. That’s not to say I’m not a believer in stablecoins. I think it’d be super cool, but I just don’t think it’s realistic in a short time frame."

Plaid CEO Zachary Perret says AI agents will rely on credit cards, not stablecoins, for payments in the near term: "For as far as I can see, which in this environment is maybe a year or something like that, I think agents using credit cards is going to be by far the primary thing that happens." "The reason for that is merchants accept credit cards. Merchants don’t accept stablecoins, for the most part, for most of the things that a consumer wants to do." "Now, over time, certain types of merchants might start to accept stablecoins. The question is: will the companies that care about making credit cards really easy be able to make them sufficiently easy in the amount of time before merchants actually start thinking about accepting stablecoins?" "And my hunch is, you’ve seen, I think Ramp actually launched an agentic credit card... I know there’s a bunch of other agentic credit cards that are out there, and I can’t imagine that there will not be 5,000 YC companies launching agentic-focused credit cards soon." "So I think we will see more and more options pop up. That’s not to say I’m not a believer in stablecoins. I think it’d be super cool, but I just don’t think it’s realistic in a short time frame."

TBPN

52,930 次观看 • 4 个月前

Gavin Baker (Gavin Baker) says the disaggregation of inference can extend GPU useful lives from 3-4 years to 10-15. That may single-handedly save private credit and reduce the financing rates for GPUs, which will drive demand and help finance the build-out. "The disaggregation of prefill and inference is going to be amazing for the useful lives of GPU and may single-handedly save private credit. Private credit is in pain from these SaaS loans. But there's a lot of private credit in GPUs too. They were underwriting that to 3-4. The disaggregation of inference means that these GPUs are going to have 10 or 15-year lives. The AI skeptics are like, "Oh, these companies are all cooking their books. The useful life of a GPU is only a year or two. The useful life of a CPU is only four years because the rapid technological change." No. What rapid technological change has done with the disaggregation of prefill and inference is you can put a Cerebras system or Groq LPUs effectively in front of a Hopper or even an Ampere, use that Hopper and Ampere for prefill, and extend the useful life of that GPU until it melts. This is going to be really good for the whole private credit industry. It's gonna help finance the AI build-out. Because if you can start to finance GPUs at 5% or 6% instead of – I think CoreWeave's lowest financing was low sevens – that actually mathematically changes the cost to finance this build-out."

Gavin Baker (Gavin Baker) says the disaggregation of inference can extend GPU useful lives from 3-4 years to 10-15. That may single-handedly save private credit and reduce the financing rates for GPUs, which will drive demand and help finance the build-out. "The disaggregation of prefill and inference is going to be amazing for the useful lives of GPU and may single-handedly save private credit. Private credit is in pain from these SaaS loans. But there's a lot of private credit in GPUs too. They were underwriting that to 3-4. The disaggregation of inference means that these GPUs are going to have 10 or 15-year lives. The AI skeptics are like, "Oh, these companies are all cooking their books. The useful life of a GPU is only a year or two. The useful life of a CPU is only four years because the rapid technological change." No. What rapid technological change has done with the disaggregation of prefill and inference is you can put a Cerebras system or Groq LPUs effectively in front of a Hopper or even an Ampere, use that Hopper and Ampere for prefill, and extend the useful life of that GPU until it melts. This is going to be really good for the whole private credit industry. It's gonna help finance the AI build-out. Because if you can start to finance GPUs at 5% or 6% instead of – I think CoreWeave's lowest financing was low sevens – that actually mathematically changes the cost to finance this build-out."

Invest Like the Best

211,336 次观看 • 2 个月前

Chamath: “Private equity in general is totally hosed.” 🏢🚨 “I think the history of this is important.” “There was a long standing belief that the best way to generate the best risk adjusted return was to have what's called a 60/40 allocation. 60% to bonds and 40% to equities.” “Over many years, especially when we artificially suppressed rates at zero, a lot of people started to move their allocations away from 60/40 and they started to make more and more investments further out on the risk curve.” “The biggest beneficiaries of that were venture capital, private equity, and hedge funds.” “The thing with private equity is that because rates were zero, they had an infinite amount of borrowing capacity at very little downside to them, and so they were able to manufacture returns much faster than venture capital and hedge funds could.” “So as a result, you had an initial group of people that were defining the asset class, making a ton of money, and then you had all these fast followers that said, ‘Well, if they're doing it, I can do it too.’” “But then always what happens is then you have this flood of laggards that just flood the zone.” “And it's these laggards that make it very difficult to generate returns because they start overpaying for assets, they start mismanaging and under managing the assets that they do own.” “That created a lot of competition, and so that's why you see this hockey stick graph.” “And when you see that kind of graph, it doesn't matter what asset class it is. The returns go to zero.” “And so we've seen this in venture capital. We've seen this in hedge funds. And we're now going to see this in private equity.”

Chamath: “Private equity in general is totally hosed.” 🏢🚨 “I think the history of this is important.” “There was a long standing belief that the best way to generate the best risk adjusted return was to have what's called a 60/40 allocation. 60% to bonds and 40% to equities.” “Over many years, especially when we artificially suppressed rates at zero, a lot of people started to move their allocations away from 60/40 and they started to make more and more investments further out on the risk curve.” “The biggest beneficiaries of that were venture capital, private equity, and hedge funds.” “The thing with private equity is that because rates were zero, they had an infinite amount of borrowing capacity at very little downside to them, and so they were able to manufacture returns much faster than venture capital and hedge funds could.” “So as a result, you had an initial group of people that were defining the asset class, making a ton of money, and then you had all these fast followers that said, ‘Well, if they're doing it, I can do it too.’” “But then always what happens is then you have this flood of laggards that just flood the zone.” “And it's these laggards that make it very difficult to generate returns because they start overpaying for assets, they start mismanaging and under managing the assets that they do own.” “That created a lot of competition, and so that's why you see this hockey stick graph.” “And when you see that kind of graph, it doesn't matter what asset class it is. The returns go to zero.” “And so we've seen this in venture capital. We've seen this in hedge funds. And we're now going to see this in private equity.”

The All-In Podcast

800,205 次观看 • 10 个月前

🚨 THE NISSAN ALTIMA BECAME AMERICA’S “LOW CREDIT” CAR — AND WHAT NISSAN DID HAS PEOPLE STUNNED A breakdown going viral claims Nissan didn’t just sell cars… it built a system around high-risk loans. Not performance. Not reliability. Debt. • Easier approvals than competitors • Interest rates reportedly pushed past 20% • Loans stretched to 7 YEARS to keep monthly payments looking “normal” • The higher the interest rate… the MORE that loan could be sold for • Loans bundled and flipped to investors for $4,000+ profit per deal • The car becomes secondary… the loan becomes the real product Buyers with strong credit shop for the lowest rate. Buyers with weak credit take what they can get approved for. That gap? That’s where the money is. And over time, one car kept showing up in those deals with repossessions, missed payments, “last resort” financing... The Altima. But it didn’t come free. • Higher repossessions • Owners struggling to maintain the cars • A stigma that stuck • Sales and brand perception taking a hit The strangest part? The same company behind the Nissan GT-R went from performance icon… to being tied to one of the most controversial lending reputations in the market. Is this smart business… or a system that made more money the worse people did? 📹: rohrsteam

HustleBitch

39,615 次观看 • 3 个月前