Lest We Forget, Private Credit Is Still Imploding

Ignore it at your own risk.

For months I’ve been arguing that investors are ignoring a growing list of warning signs across the economy and financial markets.

The reasons keep piling up. Michael Saylor is selling bitcoin to make 11.5% dividend payments on preferred stock. SpaceX’s long-awaited IPO is already generating the kind of buzz that historically shows up near market tops. The Federal Reserve remains trapped between stubborn inflation and an equity market that still looks significantly overvalued. Consumers are exhausted, buried under debt, and increasingly unable to fuel another leg of speculative excess.

Meanwhile, the bond market continues calling bullshit on the whole narrative. The 10-year and 30-year Treasury markets have become some of the most important charts in finance. Long-term yields continue pressing higher, and every Treasury auction deserves investors’ attention. Bond investors are demanding compensation for risks that stock investors appear willing to ignore.

Against that fairy tale backdrop, I’ve also spent the better part of the past year documenting what I believe is the implosion of the private credit market. And two major developments that broke last night suggest the stress is not only continuing, but may now be spreading across private markets more broadly.