Private credit is lending outside the banking system - direct lenders originate loans to mid-market companies that banks retreated from after 2008. It has grown to roughly $2.7T (the FSB sizes the core at $1.5-2T), and through 2026 the stress became a cluster rather than a slow drift:
- The Fitch US default rate stood at a record 6.1% for the twelve months to July 2026.
- Investors demanded money back - Blackstone faced $3.8B in redemption requests and several funds gated withdrawals; listed managers fell 30-50% from highs.
- Warnings from Jamie Dimon ("when you see one cockroach...") to ex-Goldman CEO Blankfein flagged 2008 echoes.
- Banks never left - they finance the funds (~$300B of US bank credit to private-credit funds, BDCs and CLOs), and US life insurers hold private credit at ~10% of assets (15%+ for PE-affiliated insurers).
TigZig tracks the whole body of work - 18+ analyses, live tools and the underlying regulator reports - on one hub: https://www.tigzig.com/private-credit. Overview analysis: https://www.tigzig.com/post/private-credit-shadow-lending-cracks-2026. Live macro/credit data: https://www.tigzig.com/tremor.
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