Experience shapes expectations. The private credit market $1.5 trillion

 


You’re Invited to Wall Street’s Private Party. Say You’re Busy.

Small-time investors may soon gain easier access to so-called private markets. That usually means higher fees, greater risk, more conflicts of interest and a harder time selling.

https://englundmacro.blogspot.com/2024/12/youre-invited-to-wall-streets-private.html

Plender - As the IMF has warned, the rise and rise of private credit brings systemic risks

https://englundmacro.blogspot.com/2025/01/plender-as-imf-has-warned-rise-and-rise.html


Private Credit’s Cracks

The companies that get private credit loans are looking increasingly wobbly and banks are among those that could eventually be on the hook for losses.

Many companies getting direct loans from private lenders are struggling to produce cash, by at least one key measure: At the end of 2024, more than 40% of borrowers had negative free cash flow from their businesses,

the International Monetary Fund warned in a report this past week

https://www.imf.org/-/media/Files/Publications/GFSR/2025/April/English/ch1.ashx

Any increase in defaults among direct lenders’ customer base could have a knock on impact for banks because they now have more than $500 billion of exposure to private credit, which the money managers use to lend more to customers.

Bloomberg 26 April 2025

https://www.bloomberg.com/news/articles/2025-04-26/private-credit-s-cracks-widened-before-turmoil-credit-weekly


The private credit market $1.5 trillion

https://englundmacro.blogspot.com/2023/05/the-private-credit-market-15-trillion.html

Experience shapes expectations.

If you’re young, you know stocks and bitcoin can lose money at lightning speed. Just think of March 2020 or 2022. But your experience also tells you they will bounce back even faster and go on to new highs.

If you’re a middle-aged bond investor, you lived through almost nothing but falling interest rates and bountiful returns from 1981 through early 2022. 

In an earlier generation, the stock-market crash of 1929 haunted many investors, who shunned stocks for decades after.

For most of the past two decades, international markets ate U.S. dust as the dollar strengthened and American technology companies boomed.

That was then, this is now.

Even after their recent run-up, international stocks are relatively cheap, trading at less than 16 times earnings over the past 12 months and under two times book value, or net worth

U.S. stocks are at roughly 24 times earnings and more than four times book value.

As you examine your beliefs, be sure to consult the longest-term data available, to capture periods you didn’t experience personally.

Jason Zweig Wall Street Journal 25 April 2025

https://www.wsj.com/finance/investing/the-mistake-youre-making-in-todays-stock-marketwithout-even-knowing-it-8549894e


Buy the dip

https://englundmacro.blogspot.com/2025/02/buy-dip.html


Tillbaka till Rolfs länktips 27 april 2025

https://englundmacro.blogspot.com/2025/04/rolfs-lanktips-27-april-2025.html






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