I find the money stuff newsletter by Matt Levine (bloomberg) great for this, the link is behind a paywal, but the newsletter is free. strong rec. todays newseltter https://www.bloomberg.com/opinion/newsletters/2026-03-11/pri...

From that newseltter:

> At the Financial Times, Jill Shah and Eric Platt report:

>JPMorgan Chase ... informed private credit lenders that it had marked down the value of certain loans in their portfolios, which serve as the collateral the funds use to borrow from the bank, according to people familiar with the matter. >...

>The loans that have been devalued are to software companies, which are seen as particularly vulnerable to the onset of AI. ...

From what i can tell the problem isn't that an individual who had cash to invest in a private (tech in this case) company goes down

the problem is that a company "private credit firms run retail-focused funds (“business development companies” or BDCs)" which took out a bunch of loans to invest in private tech companies is now having the underlying assets that they got those loans against (long term investments in private tech companies) valued lower.

the link im missing is what happens when people who also invested in BDCs want their money back, where their actual money is locked up in long term investments made to private tech companies, and their ability to get loans is now valued lower. I think this is called a "run" where if someone starts pulling money out, and ultimately you cant, then its a race to get your money out before others do, which applies to both the individuals and the institutional loans.

Note: my quotes are from the bloomberg newsletter i mention, which helped me, not the OP article. And i am writing as much to clarify my own thinking as from a place of understanding. I welcome clarification.

> So if these companies go under does anyone care? If they go under are they a systemic risk to the economy like the banks in 2008 that got a taxpayer bailout?

Mostly, no, which is exactly why private credit has become so big in recent years: they are making the loans the banks can't or don't want to make, because the banks are subject to a bunch of additional regulations, which are designed to reduce the probability of banks going bust and having to be bailed out.

But it can be difficult to judge second order effects in finance. It's possible that a lot of private credit houses going bust would indirectly and perhaps unexpectedly hurt the broader economy. An obvious one being companies that are reliant on private credit going bust because their financing needs can no longer be met.

Also, with this administration in the US I wouldn't entirely rule out bailouts for some of the more politically connected private lenders.

It is a systemic risk because its size and credit risk is opaque, like mortgage-backed securities were in 2008.

Banks needs to disclose the % of non-performing home, auto, business loans to rating agencies and regulatory bodies so their credit risk is known, and so regulators they can set rules on how loose or tight lending criteria should be in the industry. With 'financial innovation' like tranched mortgage bonds rolling up thousands of mortgages at various levels of credit risk into one, they can be traded without anyone actually knowing what the default risk is.

With private credit, there is no disclosure requirement because the lenders are not banks. PC is financing the entire AI datacenter boom, without which GDP growth in the US is effectively zero. If PC defaults rise, the bottom could rapidly fall out of the S&P 500, which is already being hit by the oil price crisis, and affect people's 401Ks and retirement savings.

Two funny things:

Banks have lend to these institutions as they couldn't lend themselves. Might be systematic risk.

Lot of pension capital is tied to these vehicles. So they go under. Many people won't be getting their pensions in short or long term...

> So if these companies go under does anyone care?

This is nowhere near as bad as the 2008 crisis, no. The banks don't really use the checking/savings account money for this. If you've invested in something that either invests in Private Credit or is reliant on Private Credit, then it'll suck for you personally.

...

One teeny tiny extremely important detail: Private Credit is bankrolling the AI industry's datacenter construction. If anything happens to significantly increase interest rates, several datacenter companies and Oracle go bankrupt. The other big tech firms have taken on lots of debt as well so expect spending cuts there too, even if they survive.

The systemic risk isn't in "bankers fucked it up again", it's in the AI bubble.

Well, yes, as the article mentions. If this increases a bank's losses, then the bank could become insolovent.