Mark Zandi @Markzandi Mar 31 Here’s one more reason to be worried about the economy’s prospects: subprime borrowers are having an increasingly tough time making good on their loan payments. And this even before the hostilities with Iran. As of February, more than 10% of the debt outstanding to borrowers with a credit score below 660 at origination was delinquent. This is the highest delinquency rate in more than a decade, and the direction of travel is disconcerting.

Yeah, the banks will be hit last but that's worse. The debt deflation death spiral starts slowly but give it little bit of time (and the biggest energy supply shock of all time). Remember? Over 40% of the revenue of the S&P500 companies is from the rest of the […]

[Original post on norden.social]

Wall St Engine@wallstengine 4h $GM 1Q US DELIVERIES 626,429 UNITS, DOWN 9.7% Y/Y

I dont think such a company will raise the prices of their products. It's possible but I don't think so.
#debtdeflation

Nick Gerli @nickgerli1 1h With each passing day, the mortgage rate lock-in effect fades. Nearly 22% of mortgage holders now have a rate above 6%. Which is more than the share with a rate below 3%. Ultra-low-rate owners are slowly getting replaced with 6%+ owners. Meaning downward pressure on prices is coming.

That's maybe the biggest reason for why we're gonna see debt deflation. No way out.
#debtdeflation

Jim Cramer @jimcramer Mar 29 Unlike the housing/mortgage crisis in 2007-8, there is a solution to the private credit situation: take the hit. The vast majority of companies are solvent so sell them, take some losses. Don't get Dead!

Beautifully put. That's a nice explanation why it's so difficult to get out of a debt deflation death spiral.
#debtdeflation

About those rate hikes: 5Y5Y inflation swap forwards plunging to 1 year low

Das war der Trend bis zur Schließung. Langfristig wird das die Richtung bleiben mit einem kurzfristigen Preisanstieg wegen Hormuz. Die Preiserhöhung werden nicht das größte Problem sein, sondern das, was danach kommen wird.
#debtdeflation

China's industrial sector is under heavy pressure: 23.8% of Chinese industrial firms were unprofitable in 2025, the highest since 2000 and doubling since 2017. This marks the 4th consecutive annual increase, their worst streak on record. Profit margins for private industrial firms are down to just 4.5%, the lowest since at least 2014 and down for 4 straight years. This comes as China continues to battle the longest deflation streak on record, weak domestic demand, and now uncertainty about energy costs due to the Iran War. China's industrial recovery remains nowhere in sight.

Deflation is still dominating in China. Even for such a economic beast like China it's difficult to get out of it.

That's the reason the next debt deflation in Western countries will be so devastating. Probably a decade of misery, potentially even more years.
#debtdeflation

NEW: Record number of Americans now carry credit card debt and can’t pay monthly bills. -CBS

We're still early. Debt defaults and bankruptcies will rise next.
#debtdeflation

Barclays is scaling back its asset-based lending to smaller borrowers, according to people with knowledge of the matter, after the collapses of MFS and Tricolor left the firm facing losses

Credit crunch on the way. Fewer new loans to smaller creditors means more pressure on existing debt. It's called death spiral for a reason..
#debtdeflation
#irvingfisher

Portland Office Sales U.S. Bancorp Tower $45M ↓88% vs $372.5M in 2015 Montgomery Park $33M ↓87% vs $255M in 2019 Commonwealth Building $6.5M ↓91% vs $69M in 2016 PacWest Building $55.7M ↓67% vs $170M in 2007 J.K. Gill Building $3.25M ↓67% vs $9.85M in 2018 Five Oak $10.5M ↓67% vs $31.7M in 2014 The Morgan Building $6M ↓78% vs $27.5M in 2008 Hamilton and Loyalty $2.8M ↓78% vs $12.5M in 2013 American Bank Building $13.6M ↓70% vs $45.1M in 2014

Commercial real estate numbers from Portland. Just hard to believe. Down Town America is dead in most cities.
#debtdeflation

Amit Noam Tal@amital13 A Liquidity crunch SOFR volume has declined sharply to $500 billion from its peak - the lowest level since last October. Meanwhile, TGCR volume has fallen by less than $100 billion from its peak. The implication: The majority of the decline stems from bilateral transactions, where borrowers are typically hedge funds. And this is just the beginning § * an increasing number of assets are becoming NON-ELIGIBLE for transactions under current conditions #sofr #liquidity #repo + Chart

Liquidity crunch is ongoing...
#debtdeflation

H.8 ASSETS AND LIABILITIES OF COMMERCIAL BANKS IN THE UNITED Loans and leases in bank credit is still growing

Loans and leases in bank credit is still growing. We're gonna see the real crisis when this numbers will decrease.
#debtdeflation

Tracy Shuchart (C44) @ @chigrl 2h More troubles in private credit Blackstone Private Credit Fund Has First Monthly Loss Since 2022 Blackstone Inc.’s flagship private credit fund posted its first monthly loss in ore than three years, one of the clearest signs yet of weakening performance in the $1.8 trillion market. The $83 billion fund, known as BCRED, lost 0.4% in February, according to its website. It was the first monthly decline since September 2022. Performance was flat for the first two months of the year after an 8% gain in 2025, the website shows. Blackstone told investors its February loss reflected wider spreads across ublic and private markets, as well as unrealized marks on individual names including Medallia, according to a message to financial advisers seen by Bloomberg. (BBG)

Private credit crisis:
#privatecredit
#debtdeflation

Just insane numbers. Commercial real estate collapse going on.
#debtdeflation

Housing prices are about to go negative.

It was always just a matter of time.
#debtdeflation

Private Credit Default Rates to Reach 8%, Morgan Stanley Says Bloomberg

#debtdeflation

Private credit has half the ingredients of a financial crisis

Well, just a half okay. But what if there are a few other halves? Half you all added up? Because..
#debtdeflation
#GlobalDepression

Is Hormuz a Black Swan? Doesn't matter. This matters.
#debtdeflation

image/webp

#debtdeflation

Energy Headline News @OilHeadlineNews 1h MORGAN STANLEY LIMITS REDEMPTIONS ON PRIVATE CREDIT FUND MORGAN STANLEY LETTER CITES REQUESTS TO REDEEM 10.9% Mar 11, 2026 - 10:05 PM UTC

Oh, it's looking great out there. Nothing to see. Everything is fine. 😬
#debtdeflation
#privatecredit

Bloomberg @ @business Cliffwater will likely face redemption requests in excess of 7% from its flagship private credit fund, according to people familiar with the matter. bloomberg.com/news/articles/... BE 4

And another one. The water is leaving the beaches. Now we'll see who's naked.
#debtdeflation

Nick Gerli @ @nickgerli1 K Home sales just dropped to the lowest level since 2009. Down 35% from pandemic peak, and by 25% from pre-pandemic norms. This was the 2nd-worst February reading in the last 30 years. Traditional news outlets tried to claim there was a "recovery" in demand in February 2026. But that's obviously false. Rather - buyers are on their biggest strike in U.S. history. The solution to bring them back? Lower prices.

Yes, of course, but this will bring other problems but someone has to give.
#debtdeflation

Nick Timiraos @ The core CPI rose 0.22% in Feb, in line with expectations. That lowered the 12-month rate to 2.46%. Core inflation was 2.3% annualized over the previous six months. Both are the lowest readings in five years. 3% annualized over the last 3 months, the highest since Sept

The inflation from tariffs that never came.
#debtdeflation

RE: https://toad.social/@KimPerales/116211313989132058

Whoopsie.
#debtdeflation

Don Johnson @ @DonMiami3 48m Regional banks down 4% today

Probably nothing. Line will go up!
#debtdeflation

Barchart ® @Barchart BREAKING 4: U.S. Housing Market Pending Home Sales fell to lowest level ever recorded i # Pending Home Sales Index, Seasonally Adjusted + chart

Ever? Forever, ever?

Someone has to give, that's the rule of the game.

#debtdeflation

« Barclays Plc and Atlas SP Partners helped arrange more than £2 billion of loans to a UK mortgage-finance company that has unraveled amid allegations of financial irregularities. « The company, Market Financial Solutions Ltd., collapsed into a UK form of insolvency with the judge citing accusations of fraud and double-pledging of assets. « Other lenders, including Jefferies Financial Group Inc., Banco Santander SA, Wells Fargo & Co., and Castlelake LP, are also involved, with exposures ranging from £100 million to £600 million.

A little billion here, a little billion there..
#debtdeflation
www.bloomberg.com/news/articles/2026-02-26...

Nightingale Associates ® @FCNightingale Meidinger Tower in Louisville, Kentucky is set to be sold for $4.5M amid foreclosure proceedings. The sale price is 14% of the $32M it was purchased for in 2017. Occupancy in the tower has dropped to 20% following the departure of major tenants. The new owner, KennMar, plans to keep some office space but is exploring redevelopment ideas for the building.

14%, crazy. This loss has to show up in someone's balance sheet. Property taxes will fall dramatically for US cities. Slowly but surely.

Commercial real estate collapse ongoing.
#debtdeflation

It’s thus not hard to imagine a scenario where credit markets “sour,” in Dimon’s words, prompting a rush for the exits from overweight funds as well as other holders wishing to avoid steep losses. With few price makers to stabilize any decline, a selloff could morph into a rout. The Federal Reserve unprecedentedly stood willing to buy high-yield corporate debt in 2020; it may have to do so again.

Liquidity is missing you say?
#KindlebergerSpiral

Who is the first to choke?
#debtdeflation

Activist investor Boaz Weinstein warned on Tuesday about “the wheels coming off” in private credit, which is reeling from worries about overspending on artificial intelligence, exposure to software investments threatened by Al and lending standards. A UBS Group AG report published on the same day said that private credit could see default rates surge as high as 15%. And Money manager Danny Moses, made famous in The Big Short, said private credit and private equity firms’ push into retail products reminds him of the years preceding the subprime mortgage crisis.

Well, well, well..
#debtdeflation

Holy moly. These are big global financial crisis-like — or at least dotcom-bust- like — numbers. While we haven't spotted a time horizon for the forecast, we've whacked them onto this chart of historic default rates to give you a sense as to where they sit versus the last couple of decades’ experience:

OK, we're going to call it. The UBS downside scenario would be a full-blown credit crunch. And while it’s primarily a nonbank financial institution credit crunch, nonbank financials are large. And these things have a habit of metastasising into financials. As a major bank, the point is not lost on UBS:

Oh oh, holy moly..
#debtdeflation