Holy Sh*t! The Credit Losses Are WAY Bigger Than You Think
Source: YouTube · Eurodollar University · published Nov 12, 2025 · 20:57
Published Date: Recent
Major financial firms like BlackRock, Apollo, and Oak Tree are experiencing "100 to zero" losses in their private credit portfolios [0:15], revealing deeper issues of information asymmetry and mistrust in shadow banking that could threaten broader markets [1:00].
Key Takeaways:
• Major institutions carried loan exposures at 100% value only to later admit they were worth nothing [3:28]
• Private credit firms use "payment in kind" (PIK) tactics to hide the true state of troubled loans [13:00]
• S&P reports show selective defaults outpace conventional defaults by a 5:1 ratio in 2024 [13:43]
• Shadow default rates have climbed to 6% compared to just 2% in 2021 [15:02]
As these "cockroach" cases continue to surface, they erode foundational trust in the credit system, potentially leading to widespread redemptions and contagion beyond affected firms [19:00].
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First 800 characters of the transcript
The collapse and bankruptcy of yet another private credit supported firm has generated significant unexpected losses this week. As I said last week when UBS shut down those hedge funds, it's not really about the amount of money that's being burned right now. Instead, it's what these cockroaches reveal, how they add to the growing mistrust over private credit and the entire shadow banking space. That's the real danger that could threaten to unravel a lot more than just a few troubled firms. So, while you may think it's some of these smaller unheard of firms that are getting caught up exclusively in these shadow banking and private credit messes, in this latest case and a lot of these cases, it's actually the Black Rocks and Apollo and Oak Tree. But what's more important, all these huge firm…