> BlackRock slashed the value of a private loan to Infinite Commerce Holdings (Fuqed Company) to zero, just three months after assessing it at 100 cents on the dollar

I assume this is private capital and not a bank so this is all OK.

If it was a fed chartered bank, someone would be going to FPMITAP.

wrote:

Things are fine.

Preach it, muh nigruh
       \

SamplesBoi wrote:

Well, this is what private capital does.  Swing for the fences and miss a lot of balls.  This is true even in good times.

the problem is they're now trying to sucker the lowest retail investors into private equity who will get mowed over like sheep. They were clever also to get big names with lots of money (athletes, actors etc.) to invest in pie-in-the-sky ideas or dead business that they'd "take over and fix"

BlackRock writing a loan from 100 cents to zero in 3 months is not a red flag, it is a fire alarm. You do not go from full value to worthless unless somebody was lying about the credit quality the entire time.

The real story is not this one loan. It is that BlackRock gated a 26 billion dollar private credit fund last week. Gating means they are blocking withdrawals because they do not have the liquidity to pay people out. That is a bank run in slow motion, just wearing a designer suit.

Private credit expanded 2x in the last 3 years specifically because it operates outside bank regulation. No mark-to-market requirements, no public disclosure. They were originating loans that traditional banks would not touch and selling them as 'alternative yield.' Now the alternatives are showing their true character.