AAA

baby_budda

If you want a bit more juice for the squeeze there's JAAA, a AAA CLO ETF. it pays 5.3%. A little more income but a little more risk.

AlbertiApop2029

Whatever you do, don't research the private and corporate credit markets. Don't research the credit spreads. CCC vs AAA is just transitory. Don't wonder if the Japanese Yen has anything to do with the markets on Monday. Nothing to see here.

PassionLong5538

I’ve gotten more than my money’s worth this year already considering the yearly cost. Lots of solid indie games on there, as well as AAA titles.

SharkSapphire

Full text: July 26, 2026 Oil prices fell and stocks wavered on Monday as [fighting](https://www.nytimes.com/2026/07/26/world/middleeast/us-iran-war-pause.html) between the United States and Iran paused. The relative calm left investors hopeful that more energy might soon start flowing from the region, even though ships still faced dangerous conditions. Energy prices had surged throughout most of July as the cease-fire between the countries fell apart. Then, last week, oil [topped $100 a barrel](https://www.nytimes.com/2026/07/23/business/oil-price-100-dollars.html) after the Houthis, an Iran-backed group, broadened the conflict by [threatening a blockade](https://www.nytimes.com/2026/07/23/world/middleeast/what-to-know-iran-houthis.html) against Saudi Arabia in the Red Sea. But President Trump’s [decision to hold off](https://www.nytimes.com/2026/07/25/us/politics/trump-iran-military.html), at least temporarily, on a major escalation of the war brought renewed optimism among traders about a resolution. **Oil prices drop.** The price of Brent crude, the global benchmark for oil, fell 8.7 percent, to $88.36 a barrel. That is for oil to be delivered in September. West Texas Intermediate crude, the U.S. benchmark, fell 7.5 percent to $82.61 a barrel for September delivery. Investors and analysts are focused on the continued disruption to shipping in the [Strait of Hormuz](https://www.nytimes.com/2026/04/09/business/iran-strait-of-hormuz-what-to-know.html), the narrow waterway between Iran and Oman, as well as threats to another strait, [the Bab al-Mandab](https://www.nytimes.com/2026/07/22/business/energy-environment/red-sea-saudi-arabia-houthis.html), at the mouth of the Red Sea. **Price of Brent crude oil** How much the international benchmark costs Jan. March May July 0 20 40 60 80 $100 per barrel **Shipping traffic reflects continued caution.** The number of ships that went through the Strait of Hormuz on Sunday remained near its lowest levels in over two months. According to data from the maritime data firm Kpler, 11 vessels used the strait on Sunday, up from six the day before and about the same as on Friday. Before the war, more than 130 ships on average used the strait daily. The situation in the Red Sea remains fragile. The Houthi blockade of Saudi ports in the Red Sea led several Saudi vessels that were heading to Bab al-Mandab — a waterway that Saudi Arabia has turned to because of the disruptions in the Strait of Hormuz — to reverse course and head toward the Suez Canal. Still, some of those ships ended up turned around again and transited via Bab al-Mandab, suggesting that ship operators “are not uniformly avoiding the route,” according to Kpler. Most Saudi crude is destined for Asia. Traveling to Asia via the Suez Canal, the Mediterranean and around the Cape of Good Hope adds an extra four weeks to the journey. It was too soon to determine the full impact of the Houthi threats on traffic in the Red Sea. The amount of oil and other products moving through the Bab al-Mandab strait fell about 50 percent compared with April through June, according to Clarksons, a ship broker. The number of supertankers crossing the strait also declined, averaging one a day over the past week, down from an average of three per day in the second quarter. Overall, a daily average of 31 vessels of all types passed through the Bab al-Mandab strait over the weekend. Any wide-scale movement away from Bab al-Mandab is likely to further tighten global energy supplies. **Global stocks rise modestly.** The S&P 500 wobbled on Monday as an initial optimism in response to easing Iran concerns tumbled amid persistent worries about spending among the big technology companies leading the build out of artificial intelligence. The index ended the day flat. Stocks in Asia mostly closed higher on Monday. The Chinese stock indexes all rose more than 1 percent. Japan’s Nikkei 225 index closed up 0.5 percent. In Europe, the Stoxx 600, a broad index that tracks the region’s largest companies, ended the day flat. **Gasoline prices hover above $4 a gallon.** The national average for a gallon of gas stayed at $4.11 on Monday, the same as the previous two days, according to the AAA motor club. The price, which had been coming down, [rose back above $4](https://www.nytimes.com/2026/07/20/business/four-dollar-gas-iran-war.html) last week after fighting restarted between Iran and the United States. Gas prices don’t move in lock step with crude, usually trailing increases or declines by a few days. The average price of diesel remained at $5.30 a gallon on Monday, up roughly 41 percent since the start of the war. [](https://www.nytimes.com/interactive/2026/business/energy-environment/gas-prices-map-iran-war-oil.html) [**How High Are Gas Prices Where You Live?**](https://www.nytimes.com/interactive/2026/business/energy-environment/gas-prices-map-iran-war-oil.html) [Here is a county-level look at where drivers are facing the highest costs.](https://www.nytimes.com/interactive/2026/business/energy-environment/gas-prices-map-iran-war-oil.html) **What they are saying: Despite the lull, ’the situation remains highly fluid.’** The markets are treating the pause in the fighting between the United States and Iran as a positive development, but “the situation remains highly fluid,” analysts at Deutsche Bank wrote in a research note. The broadening conflict “raises the prospect of simultaneous disruption to both Gulf and Red Sea export routes,” they added. Still, traders are welcoming the lull and are looking ahead to a busy week, “with central bank decisions, major economic releases and a heavy slate of corporate earnings all competing for investors’ attention,” the analysts wrote.

Foremole_of_redwall

Imma start a hedge fund. Send me your money and I’ll invest in only the wisest, most conservative AAA hedges, shrubberies, and topiary financial institutions. 

Weak_Emu3659

the remake? There's a AAA MGS1 remake also coming in the not too distant future btw.

Reggio_Calabria

Why short the BB and BBB (Oracle, Datadog, Sandisk) with insane fees when you can short the AAA (Apple)?

thelegendJimmy27

You still think MSFT is issuing shares over the next 2 years? They have over $75B in cash, and can gain an extra $15B from stopping share repurchases. Confirmed they will be FCF positive for all of FY27 after deducting capex. Also one of 2 US companies with a AAA credit rating. So let me get this straight, not only does MSFT print free cash flow after deducting capex, they also have over $75B in cash to deploy and $15B in savings by pausing share buybacks. On top of that, it's one of the most credit worth companies in the US which can easily tap the debt markets. You truly are the greatest regard with the hubris to match. You absolute moronic dimwit. I will keep you updated after every quarterly earnings to remind you how confidently moronic you are. You absolute imbecile.

Beneficial-Age-9293

Look at analogous and mature software industries like video games, 70% of China AAA games built using Unreal Engine.  

UncleKarlito

I agree that if we 'could' we probably 'would' but  I don't think we have the tech to make this virtual reality society real anytime soon . We've seen technological advancements beginning to slow. It takes 7 years to make a AAA video game, that often looks or plays worse than one made years ago. 

FireNexus

Dude, I’m not jealous. What is it about your psychology that makes it impossible for you to imagine that not everyone is obsessed with their personal investments to the exclusion of anything else? That most people aren’t obsessed to the point of derangement so to their own net worth and incapable of observing the world through any other lens? Oh, you’re that fucking guy. That makes it worse, because you ring the most true in terms of your claims about what you do for a living. Usually these guys got caught up in crypto or whatever other scam and this is just more of that. But you, I kinda believe. If you’re not lying about what you do, then that really explains why this shit keeps happening. And it squares with how thee minds of scammy bubble situations managed to do what they did. You should know better. So there are two possibilities if you are what you say: 1. You don’t. Therefore, the fact that companies keep getting AAA+++ ratings is because the experts are, sometimes at least, completely full of shit. That would not surprise me, because the people deciding who are the experts are just more senior you. 2. You do. And, well, that is arguably darker. It also squares with how investment analysts were calling dogshit gold in public and and catshit in private in past bubbles. Fuck dude, you won’t even fucking learn from this. Because if you know better you’re already actively dumping whatever positions you have and maneuvering to make money on the crash. If not, you’re either too insulated to ever truly suffer a consequence from a failure or too stupid to understand that’s what’s happened. Either way… (redacted automod removed statement). Whatever the truth, your projection is tiresome. It’s what narcissists and sociopaths do when their lies are called out. It’s also what garden variety dumb motherfuckers do, but the Venn diagram between total dipshit and pathological liar overlaps very strongly when self-interest is in play. (Cooled and tried again, automod)

PenguinOfB00m

Horizon was good but arguably not AAA

Samjabr

Again, fully imbecilic take on reality: \- No valid argument exists that EVs have a cheaper cost of ownership = Less maintenance, less Gas. \- Rural Canada = Again going full retard and taking an applying anecdotal evidence to the majority. It might blow your mind to know that most people don't live in rural Canada. Also, FK Canada. I was very clear, a VAST MAJORITY of people do not drive more than 300 miles a day, live in rural areas, need capacity for more than 7 passengers, or need towing capacity. But retards will be retards. Good luck out there. **Sources:** \- According to data from the [AAA Foundation for Traffic Safety](https://aaafoundation.org/research/american-driving-survey-2024/), the average American driver travels roughly 31 miles per day, and total annual mileage averages about 11,500 to 13,500 \- automotive industry data shows that roughly **25%** pickup truck owners tow more than **once a year**. This means about **75% of truck owners tow once a year or less—or never at all** \- Electric vehicles typically experience a 20% to 40% reduction in driving range in freezing temperatures - So, an average driver living in cold climates only gets 200 miles to a full charge... Still, enough for approximately 5 days of driving. \- The United States has over 80,000 public EV charging station locations providing more than 250,000 individual charging ports nationwide. Urban and suburban regions have dense coverage, while rural areas feature sparse "charging deserts". Most major corridors and cities feature active Level 2 and DC fast-charging options. And this ignores the fact that your fking house is literally a charging station, dipshit.

visionarymind

Meh, I’ll visit 🎮🛑 after the gym today Is it priced as a AAA❓ not sure I wanna drop $80

DaIubhasa

Hahhaa. Good morning from NZ. This is fckng AAA cheers mate

RatGodFatherDeath

And you don’t even mention the several game studios they now own. First AAA game Exodus is slated for q1 2027

Sufficient_Habit5091

>Without leverage, however, Mr Buffett’s returns would have been unspectacular. The researchers estimate that Berkshire, on average, leveraged its capital by 60%, significantly boosting the company’s return. Better still, the firm has been able to borrow at a low cost; its debt was AAA-rated from 1989 to 2009. >″[Investor] Cliff Asness and the team at AQR did some great research and showed that what you accounted for the leverage Buffett applied through his reinsurance company. If you bought an index of stocks that had these same characteristics, you would have matched Buffett’s returns virtually,” said Swedroe. “Now today, every investor can own through ETFs or mutual funds the same types of stocks that Buffett has bought through companies that apply this academic research — companies like Dimensional, AQR, Bridgeway, BlackRock, Alpha Architect and a few others.”

squiercat

Ok if you want to get that technical, but probably 95% of the gaming community would agree that Larian is not a AAA studio. Other than that, even if it was AAA, it's not publicly traded. Most of the recent success stories have come from private companies, Steam being the best example of them all. That's where the wind is blowing in gaming.

didyouseetheecho

That just means they’re not shitty. “A **AAA (Triple-A) game** is a video game developed with a **large budget, a large development team, and high production values**. It’s similar to the concept of a blockbuster movie”

squiercat

They're not AAA for sure, they don't employ scummy AAA monetization techniques, and they don't adhere to any other AAA philosophies either.

didyouseetheecho

AAA games are not dead, they’ve been turned into a commodity by MBAs. CDprojek and larian have shown that they work. Some companies are doing poorly, but the TAM is huge and growing worldwide. It now includes both genders, which is fairly new over the last ten years. Indie studios are outcompeting a lot of big names right now but it’s because they have a better product. The big names are just going to have to improve AND increase production. Microsoft really missed the point aiming to be family friendly. Fallout games need a dark option. Call of duty rooms should be vile. The Witcher 3 leaned into what people want and they loved it, stardew valley did too. If they want old games to go away, the new games have to offer something new. Eventually these indie studios will eat their lunch and they’ll get bought out, or go public themselves. The market will continue to grow. Apple killed Motorola, we didn’t stop using cell phones.

squiercat

I agree with most of what you are saying, except video games. The whole AAA gaming sector is in shambles right now, including the likes of Ubisoft, Bethesda and Xbox by extension, and Sony. There's no happy path for consoles right now, and the future seems to be indie developers, but then again those are not public companies.

didyouseetheecho

I disagree almost completely. Space -going to be such a “total addressable market” and cost issue. Things like starlink and cell service are only valuable to rural areas and developing countries. Where’s the money gonna come from? Drones- I’m in. Nice mix of military, typical commercial and industrial uses. Quantum- 30 years, billions of dollars, 0 use cases. Unproven. Robots- agree and disagree. Humanoid robots are pointless. Smart factory robots specifically designed will absolutely take off even more. Energy- yep Wendy’s- obviously The next ten years companies are going to focus on vertical integration, and smart factories. They’re going to use BYD on how to function. Other winners: Logistics: completely self driving cars (go anywhere, no steering wheel) are more than 10 years away. Semis running predetermined routes delivering to nearly completely autonomous warehouses is coming quick. Video games: the industry has matured and is booming with revenue. Almost doubling streaming. When CD Project Red releases 5 AAA in 8 years or whatever the market is going to lose their mind. Microsoft will drop the hammer on their studios and the industry will balloon. Phone games will improve beyond all recognition in that time frame. Energy: world’s getting warmer and people will want ac. Data centers won’t go away. Electric cars are better than ice by every metric. We’re gonna have to make more power. Geothermal systems will be popular. I can see thorium or nuclear resurgence. The sector as a whole will do well. Desalination: more and more of the population lives where it’s dry. Eventually people will move or we will have to make water. Iran is dry dry. Saudi growing like crazy.

_D0MiNiX_

the only AAA investment grade advice

Okok28

You are stupid though. You are basically saying historical gains represent future gains. Yeah sure MSFT is up 800% last 10 years, you really think that will happen again? Enshitification is a real thing in the year of lord 2026. All of the biggest companies are trying to get blood out of every stone they can find. Have you seen the gaming industry? AAA developers and publishers are laying off everywhere since they are getting crushed by indie devs releasing actual good shit. MSFT is losing ground with Windows to Linux. People are getting tired of big tech and their enshitification of every product possible. People aren't saying blue chip investing is stupid, it's just not smart. Investing 101 is past performance doesn't represent the future and people are always looking to the future.

Fluffy-Discussion166

What other bull case for memory now? If the AAA earnings report still tanked the sector

FlyingDutch1988

It's comparable. Some smaller games start at a lower price, let's say 30 and I could sell them for 25. Here in the Netherlands we have a website called marketplace (marktplaats) which is fine for this type of buying and selling. There is always a small audience to find for it. I love to support indie game studios, those games come digital only. They are creative and are value for money. But these big AAA, only a few studio's like fromsoft get my money. Edit: I don't keep my games after finishing them, so I sell them 1 or 2 months after I bought them. I'm not the type to replay a game ever. So the buying isn’t owning isn’t a big deal to me, but it's unfair nonetheless btw.

kinetic_honda

Did that type of resale value stick for all games or just certain AAA titles?

TennesseeTennessee

They’re sold by the 100 because they’re supposed to be used to hedge long positions of large numbers actual shares. IE: I own 10000 shares of AAA stock that’s got some risky outlook I’m worried about, I spend the premium to buy put options that give me the right but not the obligation to sell at the strike price (below the current price) to limit my losses without having to actually sell my shares. Regards here pay the premium as a gamble without owning shares because of their volatility and that they allow them to collect the increases or decreases associated with large amounts of shares. The gamble is that shares don’t expire and very rarely go to zero in an afternoon. If you don’t sell or otherwise unwind your option position before the expiration date it’s worthless, they can also expose you to risk 1000x what you put in, if you sell naked options you may be obligated to buy 100+ shares of whatever you were gambling on.

Tay_Tay86

There are no earnings from AI and Datacenters All the companies making money off of chips and power... It's all debt. It's a giant bubble of debt on AAA company balance sheets

gotdome

TLDR: $2000 or less I give the below info for insight in case anyone is serious like I was about leaving. I knew I was for a while like the commenter… I really did NOT want to be living at my parents house in my 30s, I did see the financial advantage but it doesn’t outweigh the baggage I gotta deal with. US given my preference and resources was no longer a desired place to live, I have nothing really tying me down and everything was telling me to go. This is my 3rd time just traveling the globe since early 2025, and I have watched places like Japan and Thailand specifically get a little more expensive in certain areas—these are two countries I frequent, have friends in both immigrants and locals, and Japan I plan to move to/been self teaching language. I already got offered a job via networking in person, I’ll figure out something else when I need to work since right now I don’t. I’m in my 30s That said: my quality of life — I am low maintenance as I said I sold some of my prized materials like my car which I dumped money into working on for nearly a decade & everything else I owned—put stuff up on fb market place, grailed, you name it, just shooting photo and now video which is my hobby—that’s where all my money goes and that’s all I kept except sentimentals. If I need comfortable travel I’ll pay for it, I have a crap ton of miles and points from my previous career which took me many places so any tickets are usually paid for via $5-50 for the taxes and the rest is points and I can go anywhere. Went to like 13 countries last year for less than $1200 in taxes and idk how many points. Accommodations are private and usually have everything I need. I can eat pretty much whatever I want out or take out (no tipping is required in this part of the world but I still do it and it’s nothing compared to US). My medical care is outstanding, fast, convenient, and incredibly low, I hold a travelers policy that has everything I need for $70ish a month that’s extra with electronics usually it’s $50-60 for someone my age. All of this equates to maybe $2k a month max, and that’s a high month. I’m spending like $35ish on avg a night sometimes because low season in an area or it’s just cheap like in southern Thailand rn it’s maybe $18 a night and I have an entire bungalow in the middle of the rainforest comes with breakfast. Never spending more than $50/60 a night unless I’m in Tokyo depending on where sure. Mind you, all these prices are tourist pricing because I’m just traveling, not working, and can afford to offset those differences now. Living, Thailand like $500 a month in rent for a 1b1b in a high rise, Japan I have a friend there 10 years $500 a month never increased rent living well—you can still find steals, maybe not central Tokyo. I’m taking grabs (their uber or scooter) or I rent a scooter with AAA international permit $30 and ur driving anywhere pretty much or riding like in SEA that’s like $5-10 for gas for the week/$7-10 for the scooter. In Japan it’s train and it’s nothing/gets you everywhere. I only uber if it’s like 12-3 am and I don’t want to wait for the train. Vietnam is cheaper than all this. So is Indonesia. And Malaysia is also cheap in some areas — all weaker to USD in daily living and I can’t speak on Indonesia since I haven’t been there or The Philippines yet, but Malaysia / Vietnam also outstanding. That’s if you aren’t luxury accustomed in some regards, most can be accommodated though. Theres so much money in some of these places yet you can still have a decent quality of life on a below avg US salary. I have friends making like 50-70k in yen and that would be cutting it close in places like NY/LA, in TYO $70k is phenomenal living. So yeah, there’s no way I’m going back to US unless like my family desperately needed me. I’m building a life outside of it and can still invest to get back to topic — I learned to trade literally while traveling because it afforded me the time. I made mistakes, I love and hate WSB, but I achieved this short term financial freedom and I can potentially keep it going for a really long time. This is all personal and depends on how much money is enough for you I know what is enough for me.

NabotaMessUpMyFace

Then again, Kaylee Goncalves (sp?), one of the Idaho 4 victims of that murderous psychopath, Bryan Kohberger, just graduated and bought a Range Rover right before her death, with plans of starting her first post-college job in Austin, TX. I think at least part of why she was there in Idaho that weekend was to show off her new car, which obviously sucks, but I hope that she was at least over the moon happy and excited to drive that car for the short time she had it. When you think about it, life is so short that even a week of pure joy being the proud owner of a Ferrari or a Range Rover is worth something! Same thing with my dad…like, he died with some consumer debts that fortunately for me as his daughter, died with him. I’m GLAD he charged that expensive dental work, that top-tier AAA membership, and brand new Purple Mattress and sheets instead of paying cash, bc it’s not like he got to take it with him in the end. If it brought him just a little bit more peace and joy, it was worth it.

drtranmd

I hope they both go away. Between sony not supporting physical media and Microsoft going all in on the subscription model, "AAA" gaming is changing for the worse.

geekguy

Okay. I’m going to say it. It’s because the shows are too formulaic now. Excessive dialog. Episodes designed for binging instead of a story arc. Everything is a mini series. Over produced content with lack of substantive story telling. They need to invest more in independent media instead of buying rehashed content from studios. And well. If they want to get back to grass roots, maybe instead of feeding a bunch of garbage content get back to a rental type model. Give us credits each month to choose one of those more expensive AAA movies to watch or rent. Let us browse the catalog. Right now- there is not much market differentiators from other streaming platforms.

AliStarr182

You'd be surprised how many modern AAA games don't support unicode. I have a unicode star (☆) in my steam name which rendered as a box for the first few months of battlefield 6. I've seen it cause text rendering issues too.

VegetableResource204

Saying Microsoft can casually absorb a $100B capex hike without equity dilution misses the point. Forcing $100B onto the balance sheet completely destroys their AAA credit rating, halts their massive share buybacks, and the resulting rapid depreciation of short-lived GPUs directly craters their EPS. You can't just handwave away a massive hit to profitability by saying 'they won't dilute shares. I guess you didn't see what happened to ORCL. Regard

demaraje

Dumb example. There are verical LLM integratioms with a relatively thing layer on top. It's reselling repackaged LLM access. Let's see if those business models hold up with non-subsidized token costs. But in any case, these are not SaaS killers. They ARE SaaS, nust with stochastic instead of deterministic code. Give me the companies that built another MS office, Slack, Zoom, Youtube, Photoshop, Whatsapp. The ones that are rolling out AAA games every 2 months. Where are they? It's been 2 years

demaraje

That's not replacing, that is personalization. Not the same product. Which you will have to maintain. Which you will be bad at. Incidents will happen. Yo7 will pay for them. The theshold to make good software is still there. Only incompetent people think otherwise. That's why there are no vibecoded AAA games. No vibecoded Office suites. No vibcoded security software. I am holding 0 bags, I'm just compentent. I'm a ML engineer for a known company. I know what LLMs are good at and what they're not. This SaaS pocalipse is pure bullshit and the use case you mentioned doesn't apply. Most companies won't cheap out

Fluffy-Discussion166

Why Korean memories tanking..... MU earning is AAA. These Koreans are paper hand regards

Weak_Emu3659

That game is garbage but you heard about that development studio making a AAA RPG in the lord of the rings universe? they're the developer behind it, probably see the game in couple of years.

Bravadette

Baldurs Gate 3, Arc Raiders, and GTA6 (to be determined) are something beyond AAA

deepakfialok

My view: the post identifies real vulnerabilities in private credit, but it overstates the probability of a 2008-style systemic collapse and mixes strong points with shaky or unsupported claims. The better investor takeaway is not “panic,” but “assume stress is rising, underwriting dispersion is widening, and liquidity risk is real.” � What looks credible Several core themes are consistent with recent official and industry sources. The FSB says private credit has grown to roughly $1.5–$2 trillion by end-2024, that valuation can be discretionary, that leverage exists at multiple layers, that liquidity mismatches are a concern, and that retail participation is increasing in some structures. � The IMF also highlighted private credit as a rising risk area and the FSB notes that the market remains untested in a prolonged downturn. � What seems overstated The post blurs the line between “stress” and “systemic collapse.” The FSB explicitly says direct bank exposure to private credit funds is relatively small and that the main risk channels are opacity, interconnections, and spillovers rather than an immediate bank-failure cascade. � So the more likely base case is a painful credit-cycle unwind, not necessarily a 2008 replay. � Claims that need caution Some of the post’s numbers and labels are presented too confidently, especially around the true default rate, “synthetic PIKs,” frozen withdrawals, and exact maturity-wall figures. The FSB confirms that payment-in-kind structures and valuation opacity can mask stress, but it does not validate the more dramatic claims about hidden AAA packaging or a universal retail wipeout scenario. � Also, the post cites specific fund-level redemption events and indefinite gates as if they prove a system-wide freeze, but those are manager-specific issues unless corroborated across a broad set of vehicles. � Investor read on the setup For investors, the important distinction is between good private credit and the weaker parts of the market. Strong managers with disciplined underwriting, conservative leverage, low covenant-lite exposure, and limited liquidity promises can still be attractive; weak vintages, stretched borrowers, and retail-facing evergreen structures deserve much more skepticism. � The stress is real enough to justify caution, but not so uniform that all private credit should be treated as toxic. � Practical recommendations Reduce exposure to funds that promise daily or quarterly liquidity while holding illiquid underlying loans. � Favor managers that disclose vintage mix, leverage, covenant quality, PIK usage, and workout history. � Prefer senior secured, diversified, short-duration structures over aggressive, sponsor-heavy, or highly levered vehicles. � Avoid chasing headline yield without understanding how marks, side pockets, and gates work in stress. � Treat private credit as a diversification tool, not a substitute for liquid core fixed income. � My bottom line If I were advising an investor, I would say: keep private credit on the radar, but demand much higher diligence and lower expectations than the marketing suggests. The setup looks more like a late-cycle credit tightening with pockets of hidden fragility than an inevitable global crash.

OracleOmaha

One of the first lessons many SPAC investors learn is that partnerships can be announced easily. Actual institutional adoption is much harder. That's why the most compelling part of the Securitize story isn't tokenization itself. It's who has already chosen to work with them. When some of the largest financial institutions in the world evaluate infrastructure providers, they aren't making decisions based on marketing presentations or social media excitement. They perform extensive due diligence covering technology, compliance, operations, cybersecurity, regulatory frameworks, legal risk, and scalability. That is what makes Securitize's customer and partner list worth paying attention to. The most notable example is BlackRock. BlackRock selected Securitize as the infrastructure provider for BUIDL, its tokenized money market fund. BUIDL has grown into one of the largest tokenized funds in the market, with approximately $2.5B assets under management as of June 2026. Think about that for a moment. BlackRock is the largest asset manager in the world. It had countless options available when deciding how to bring one of its first major tokenized products to market. The company chose Securitize. More importantly, BlackRock has since filed for a second tokenized fund using the same infrastructure. That is often a stronger signal than the original selection itself. Beyond BlackRock, the institutional ecosystem surrounding Securitize is significant. Names associated with the platform include: * Apollo * BNY Mellon * KKR * Hamilton Lane * VanEck * Morgan Stanley * Coinbase Ventures * Circle * Ripple These are organizations managing hundreds of billions, and in some cases trillions, of dollars in assets. Another development that caught my attention was New York Stock Exchange selectingSecuritize as its design partner and first broker-dealer connection for its tokenized equities initiative. The vision includes: * Tokenized securities * Near-instant settlement * Extended trading availability * More efficient market infrastructure Thisdemonstrates that tokenization is increasingly being discussed by institutions that traditionally define how capital markets operate. There's also another signal that deserves attention. Moody's assigned a AAA-mf rating to BlackRock's tokenized money market fund. That may sound technical, but it's important. Credit rating agencies are among the most conservative participants in finance. The fact that institutional-grade risk frameworks are now being applied to tokenized products suggests this market is moving beyond experimentation and into broader institutional evaluation. To me, the key takeaway isn't that tokenization is guaranteed to succeed. It's that some of the largest institutions in global finance are investing real resources, real capital, and real reputational risk into exploring it. And when those institutions needed infrastructure, many of them chose Securitize. *\*This post is for educational and informational purposes only. Some promotional materials and publicly available company information are discussed. This is not investment advice. Always conduct your own due diligence before making any investment decisions.*

Castlenock

I find this thread fascinating. Some people coming in here and saying that investing in Take Two is 'niche coverage'. GTA 6 which this stock currently hangs on, is estimated to have spent over 2 billion dollars to make. Piper Sandler released a report that they believe it will receive '46 million' sales on day one. Over the past year we have seen the stock spike or dip strictly based on delay fears or rumors of a trailer getting announced. The past 4 months have been crazy with this stock - during the 'when are they going to release a trailer' hype, the stock would jump at 9 a.m., 10 a.m. and 11 a.m., a.k.a. the times that Rockstar (company developing GTA6) traditionally would release links to their new trailer. Every time. Every time a rumor has happened this year with a date attached, the stock swings on those dates on those times. I've made some day trades even though they aren't my thing, based on these patterns. The price set for this game will absolutely set the price for AAA games going forward. If it's 80 USD, major games will retail at 80 USD. If it's 100 USD, major games will release at 100 USD. There is no other single entity that I know of in the entertainment space that will directly effect the gaming market. So what I find fascinating is that no people have mentioned the 3+ day rally is because after over a year of anticipation Rockstar announced that pre-orders will start on June 25th. It makes sense that the third trailer will come with that announcement. So it's one of the safest bets I've ever seen that the stock will go up leading to that announcement. How much of it is baked in with the current rally I don't know, how much the stock will continue to climb after the pop or dip after that announcement I have no idea... ... but to see all this talk about the stock and no one mentioning the start of presales with some investors estimating at 46 million sales on day one and a trailer that has dictated TTWO stock prices for a while now... all of that landing in two days.... but no mention on these facts in TTWO at this time? I would have thought that was all we would be talking about. Again, not saying the stock is going to hit 300+ on the 25th, but it is highly unlikely it'll be in the red by the time the trailer and pre-orders start in two days, and that is a very rare opportunity IMO.

qwembly

Just keep in mind that investors already know all of this. They've been waiting years and years for this release. The world expects this game to do insane numbers. Despite that, traditional games are in a downward trend since younger players are much more focused on roblox, meaning that the typical console gamer is older. So the player base is flat, and AAA games are considered a mature market, not a growing market. All that said, I personally expect retail to buy into ttwo, but I also expect it could fade after, as hype fades over the following months. Can GTA convince investors that gaming has returned to growth? I don't know about that. I think we'd need to see a shift in movement away from roblox in the teen demographic.

Mr60SPX

>Because private credit funds are using synthetic Payment-in-Kinds (PIKs), which simply means opening new Delayed Draw Term Loans ("DDTLs") to pay interest on the previous loan to make it seem like a good loan, so that it can be packaged into an AAA-rated CLOs and sold to pension funds as guaranteed income, when in reality the borrowers are missing their payments and defaulting if not for the DDTLs. Confidently incorrect lol. Ive never heard anyone in the industry use the term “synthetic Payment-in-Kinds.” Additionally, delayed draws are cash facilities. When you draw on a delayed draw, the borrower receives cash from the lender. PIKs are cashless. When a paydown or interest payment is PIKed it’s added to the existing loan balance. The lender does not give the borrower cash. You could borrow from your delayed draw to make your interest payment, but that is not a PIK, that is the delayed draw functioning like a delayed draw.

KimberlyK031

The fact that they are literally using Delayed-Draw Term Loans (DDTLs) to issue new debt just to pay off existing interest is peak 2007 behavior. It’s unironically the corporate version of taking out a new Mastercard to pay off your Visa bill, all while the internal 'mark-to-model' spreadsheet stamps it 'AAA'. When that $500B+ 'Maturity Wall' hits in 2027–2029 and these zombie SaaS companies can't refinance at 7%+, it’s going to be absolute chaos. Excellent write-up, OP. Can't wait for *The Big Short 2* where instead of housing, the main character is just staring at a dashboard of synthetic PIKs and depreciating GPUs. I'm ready to buy puts 3 years too early.

AshleyC031

The fact that they are literally using Delayed-Draw Term Loans (DDTLs) to pay off existing interest is peak 2007 behavior. It’s unironically the corporate version of taking out a new Mastercard to pay off your Visa bill, all while the rating agencies smile and stamp it 'AAA'. When the 'Maturity Wall' hits in 2027-2029 and these zombie SaaS companies can't refinance their software/GPU-backed debt at 7%+ rates, it’s going to be glorious chaos. Excellent write-up, OP. Can't wait for the movie *The Big Short 2: Electric Boogaloo* where Michael Burry is just staring at a dashboard of synthetic PIKs. I’m ready to lose money on puts 3 years too early.

Retro21

I can't believe the sdd - you're charging 1k and *starting* at 500gb?! What is that, four AAA games? (I mean, most of us don't have steam accounts to play AAA games but still)

crypto_kt

There’s a real point buried in here, but it’s currently wearing a trench coat made of Reddit doomerism. Private credit does have problems. It’s grown fast, it’s opaque, PIKs can hide stress, and quarterly liquidity on illiquid loans is the kind of “trust me bro” structure that usually ages like gas station sushi. But jumping from “private credit has risk” to “this is 2008 but worse” is a pretty heroic Olympic-level leap. 2008 wasn’t just bad loans in a trench coat. It was bad collateral wired directly into major banks, broker-dealers, short-term funding markets, repo, ratings agencies, household leverage, housing prices, and the actual plumbing of the financial system. When that cracked, the whole machine seized up. Private credit is uglier, slower, and more opaque, but a lot of the pain sits in locked-up funds, BDCs, insurers, pensions, and private vehicles. That means losses can absolutely happen. Redemptions can get gated. Marks can get revised. Investors can get wrecked. But that is not automatically the same thing as a bank-run-style systemic collapse. Also, PIKs are not some newly discovered alien technology. They are a stress signal, yes. They can absolutely kick the can. But “borrower is using PIK” does not automatically mean “AAA tranche is fake and society ends Thursday.” The more sober take is: Private credit is likely heading into a nasty credit cycle. Weak borrowers, overvalued software companies, covenant-lite loans, sketchy marks, and retail investors who thought “quarterly liquidity” meant actual liquidity are all legitimate concerns. But “dot-com plus 2008 plus AI apocalypse” is not analysis. That’s a financial crisis fan fiction trailer with bass boosted. Good warning. Bad conclusion.

crypto_kt

Relax. Private credit absolutely has real issues: rapid growth, opaque marks, PIK usage, refinancing pressure, and redemption gates. That part is not fake. The leap to “worse than 2008” is where the argument gets sloppy. Size alone does not make something another subprime crisis. 2008 was not just “bad loans got packaged.” It was bad mortgage collateral embedded across highly levered banks, broker-dealers, repo funding, off-balance-sheet vehicles, ratings failures, and household leverage tied to collapsing home prices. Private credit has opacity and weak spots, but a lot of the risk sits in locked-up funds, BDCs, insurers, pensions, and private vehicles where losses are slower, less runnable, and less directly tied to the core banking system. PIKs and synthetic PIKs are warning signs, not proof of total fraud. They can hide stress and inflate debt balances, but they are also part of how private lenders restructure weak borrowers before formal default. That means headline defaults may understate stress. It does not mean every AAA CLO is automatically fake. Same with redemption limits. A fund capping withdrawals is bad for investors who thought quarterly liquidity was real liquidity. But it is not the same as a bank run. These vehicles were built with gates because the underlying loans are illiquid. That is a liquidity mismatch problem, not automatic evidence of a payments-system crisis. The better thesis is: private credit is entering a painful credit cycle. The highest-risk zones are weaker managers, smaller borrowers, software-heavy books, PIK-heavy portfolios, and retail investors who misunderstood liquidity. That can cause losses, frozen redemptions, markdowns, and years of ugly restructurings. But “2008 plus dot-com combined” is not analysis. It is vibes with footnotes. ✌🏼

masterbrees

I have no idea what you’re talking about but Claude’s response The fragility he’s describing is real. The conclusion outruns its own evidence in one specific, important way, and he buries his strongest point under his weakest metaphor. The core problem with “2008 again, but a bomb”: 2008 was a leverage-and-funding-run crisis inside the regulated banking system. Broker-dealers were levered 30:1, the assets sat on bank balance sheets, and the detonator was the overnight repo and commercial paper market seizing up, which froze the real economy in weeks. Private credit is structurally the near-opposite. It’s mostly funded by locked-up, closed-end capital with modest fund-level leverage (around 32% per AIMA), and the losses land on the end investor over years, not on bank capital overnight. The gates he’s pointing to as the catastrophe are actually the shock absorber. They exist precisely to prevent the fire-sale run that made 2008 fast. That is bad for the retail holder who’s trapped, but it’s what makes this a slow grind rather than a detonation. Which is why his two metaphors fight each other. A bomb goes off fast. A slow burn is the opposite. He’s right about the slow burn and wrong about the bomb, and he can’t have both. Three specific corrections to tighten the argument: The AAA tranches are rated by Moody’s/S&P/Fitch, not self-rated. The managers self-value the underlying loans; the CLO ratings come from agencies. You can argue the agencies are complicit again, fine, but “valuing it themselves as AAA” conflates loan marks with tranche ratings. Be precise or you lose the room. The real contagion channel is banks lending \~$500B+ to the funds, not retail holding CLOs. That’s the thing that could actually transmit a private credit blowup into the banking system. He undersells the channel that matters and oversells the one that doesn’t. Most private credit CLO buyers are still institutional. Retail’s exposure is mostly through BDCs and interval funds, the gated vehicles, not direct CLO tranches. Now the part he got right and then buried: who holds the bag is genuinely worse than 2008, and that’s the actual story. In 2008 the banking system got bailed out and a lot of end holders were institutions or got made partially whole. Here, after the 2025 executive order cracked open 401(k)s to private alts, the structurally-last-in-line holder is a pensioner or a retail 401(k) investor, and there is no bailout mechanism for a gated interval fund. That’s the real, novel, under-discussed risk. It’s a wealth-transfer-to-the-uninformed story, not a banking-collapse story. If he leads with that instead of the 2008 cosplay, the argument gets sharper and harder to dismiss. Last thing, as a discipline check: “from 2027 onward” is vague enough to be unfalsifiable, and the maturity wall has been called since Moody’s coined the term in 2010 and keeps getting amend-and-extended out. Any rate relief or open refi window lets the can get kicked again. The honest framing is “identifiable fragility with a plausible bad scenario,” not “bomb with a date.” The people who called 2008 and nailed the timing fit in a small room. Net: A- diagnosis, C conclusion. He sees the machinery clearly. He’s letting the punchline write a check the structure doesn’t cash.

BagHoldersOfAmerica

Chatgpt response: 1. Private credit grew from ~$500B to over $2T and may exceed $4T by 2030 Score: TRUE 2. Private credit relies heavily on Level 3 assets and mark-to-model valuations Score: MOSTLY TRUE 3. Large amounts of debt from 2021-2022 mature in 2027-2029 Score: TRUE 4. High rates and the "maturity wall" could cause defaults and fire sales Score: TRUE, though the GPU/software collateral claim is exaggerated 5. The Fed canceled rate cuts and expects rate hikes Score: FALSE 6. About 40% of borrowers have negative free cash flow Score: MOSTLY TRUE 7. Real default rates are 5-6% despite reported rates of 1.5-2% Score: PLAUSIBLE BUT UNCERTAIN 8. PIKs are being used to delay recognition of defaults Score: TRUE 9. PIK usage doubled and accounts for roughly half of hidden defaults Score: PARTLY TRUE, exact percentages uncertain 10. Synthetic PIKs were invented to hide PIK exposure Score: OVERSTATED 11. Delayed-draw term loans are used to disguise missed interest payments Score: PARTLY TRUE, but "invented for concealment" is exaggerated 12. Private credit CLOs are packaging risky loans much like MBS Score: MOSTLY TRUE 13. Nobody knows the quality of AAA private credit CLOs Score: EXAGGERATED 14. Pension funds and insurance companies are major buyers Score: TRUE 15. The SEC knows disaster is coming and is protecting big banks Score: SPECULATION 16. Liquidity mismatches could force withdrawal freezes Score: TRUE 17. Withdrawal restrictions and redemption limits have already appeared Score: TRUE ──────────────────────────────────── OVERALL THESIS: "Private credit contains real risks and could produce years of losses." Score: TRUE "This will be worse than 2008." Score: UNSUPPORTED "Retail investors will be left holding the bag." Score: MISLEADING "2027 onward will be a slow-motion collapse combining the dot-com crash and 2008 crisis." Score: SPECULATION Overall post: ≈70% fact, 20% exaggeration, 10% outright falsehood.

infinitycurvature

This post has a lot of real ingredients but the conclusion is way overheated. Yes, private credit is a real risk. The market has grown massively, valuations are opaque, PIK usage is rising, some borrowers are weak, and redemption gates are already happening in some funds. Regulators are absolutely watching this. But “worse than 2008” is a huge leap. 2008 was a banking-system crisis built around residential mortgages, repo funding, money markets, extreme bank leverage, and assets sitting all over the global financial plumbing. Private credit is risky, but it’s mostly concentrated in private funds, BDCs, insurers, pensions, and wealth products. That can create losses, frozen withdrawals, and a nasty credit cycle, but that is not automatically the same as the global banking system freezing. A few specific issues with the post: 1. The size comparison to subprime is misleading. “$2T private credit” does not equal “$2T toxic subprime.” Not all private credit is garbage, and not all of it is levered into the banking system the same way. 2. “Level 3 assets” does not mean fake assets. It means they are illiquid and model-valued. That creates opacity and potential mispricing, but it doesn’t automatically mean fraud or zero recovery. 3. PIK and synthetic PIK are concerning, yes. They can hide stress and kick the can. But saying this means every AAA private-credit CLO is secretly dogshit is not proven. 4. Retail is not the main bagholder. Retail exposure is growing through BDCs, interval funds, and private wealth channels, but the biggest exposures are still institutional: pensions, insurers, asset managers, and private funds. 5. Redemption gates are a liquidity issue, not proof of insolvency. If a fund owns 5–7 year private loans but offers quarterly liquidity, of course it can’t meet mass withdrawals without gates. That’s bad product design/risk management, but not necessarily “2008 again.” 6. The Fed has not “cancelled cuts and guaranteed hikes.” Rates staying higher for longer definitely pressures borrowers, but the post phrases this like a certainty when it isn’t. The reasonable take is: private credit is one of the biggest hidden-risk areas in markets right now. There may be rising defaults, ugly marks, fund gates, losses for pensions/insurers/BDCs, and stress for overlevered middle-market companies. The unreasonable take is: this is definitely 2008 + dot-com combined and retail is about to hold the entire bag. Real risk? Yes. Guaranteed systemic collapse worse than 2008? Not supported.

Nyczboy22

Points 11-17 are just flat out false and incorrect. I’m not sure why I spent 15 mins on my train ride laying it out on WSB, but I’m bored and OP is not that smart 11. DDTLs can’t be used for anything outside of add-on acquisitions or in limited situations CAPEX and is typically governed by an incurrence test (e.g., the borrower can only draw on a DDTL when the net leverage of the deal is below a certain leverage, use 6.0x as an example). If a borrower is already over levered from underwrite, it’s impossible to draw additional $s under the credit agreement for the DDTL. 12. BSL and Private Credit CLOs are required to be rated by one or several rating agencies at the underlying investment level and the CLO tranches. Rating agencies are obviously much more regulated and observed following GFC. Typically CLOs have a concentration limit for underperforming or what we’ll call ‘CCC’ and worse names, with the limit being 5-10% or less. 13. Portfolio companies are required to deliver monthly and quarterly financials to the private credit managers as a credit agreement covenant. Investment teams are required to report those financials to banks who are back levering the portfolio of investments. Banks typically also engage auditors to audit the borrowing bases of managers to ensure accurate reporting of portfolio company healthy. Furthermore, managers of scale have mostly outsourced valuations to valuation specialists like Houlihan Lokey, Lincoln, and VRC given cost of human capital. These valuation firms utilize the portfolio company delivered financials to value the positions monthly (if a BDC) and quarterly for private funds. See point #2 as well, which is inaccurate. 14. I just closed a private credit CLO late last year, none of the note buyers at AAA/AA were pensions or insurance companies. AAA was bought by banks and AA was bought by banks and one asset manager. 16. False, investors in CLOs can’t cash out quarterly… you might be referring to BDC or interval fund redemptions which is not related. CLO investors are only cashed out when the CLO reinvestment period ends and proceeds are used to pay down the note liabilities sequentially (e.g., AAA gets paid out first and the riskiest tranche last) 17. Again, think you might be referring to BDCs and Interval Funds. Though, agree that some managers are experiencing issues with redemptions but my belief is that financial advisors that have been pitching BDCs and interval funds to their clients as liquid products have (I) been selling a false narrative (ii) not actually educated on the product. W/r/t (ii), it’s clear in the offering documents that BDC managers have the ability to gate redemptions to preserve the funds value from fire sales.

Frequent_Bowl_3668

Bottom line: **There is a real private-credit risk story here**: rapid growth, opacity, model-based valuations, rising PIK use, refinancing pressure, and liquidity mismatches. But the post mixes documented risks with exaggerated claims and some unsupported leaps, especially the “bag holders left with nothing,” “SEC only protecting big money,” and “AAA CLOs are knowingly stuffed with hidden synthetic PIK bombs” parts.

Key_Raisin_5091

This post mixes some real risks, some accurate industry terminology, a few exaggerations, and several claims that are either unsupported or factually questionable. My assessment would be: **Core concern: plausible and worth paying attention to.** **Conclusion that "2008 but worse is inevitable": not supported by the evidence presented.** # What the post gets right # 1. Private credit has grown enormously Private credit has expanded from a niche market into a multi-trillion-dollar asset class over the last decade. That much is true. The growth creates several legitimate concerns: * Less transparency than public debt markets * Limited price discovery * Greater exposure to economic downturns * Potential liquidity mismatches between investors and underlying assets Regulators, the IMF, the Fed, and major banks have all discussed these risks. # 2. "Mark-to-model" valuation is a real issue Many private loans don't trade frequently. As a result: * Valuations often rely on internal models * Managers have significant discretion * Losses can appear later than they would in public markets This doesn't automatically mean fraud, but it does mean reported values may lag reality. One criticism of private credit today is that loan marks appear much smoother than comparable public-market loans. # 3. The maturity wall is real A large amount of debt issued during the low-rate period of 2020-2022 will need refinancing over the next several years. If rates remain elevated: * Interest costs increase * Refinancing becomes harder * Defaults rise This is not unique to private credit, but private credit borrowers tend to be more leveraged and less financially resilient. # 4. PIKs can hide stress Payment-in-Kind (PIK) structures allow interest to be added to principal rather than paid in cash. This can: * Prevent technical default * Delay recognition of problems * Make borrower health appear better than it is Investors generally view rising PIK usage as a sign of deteriorating credit quality. So the author's concern here is largely reasonable. # Where the post starts overstating things # "The real default rate is 5-6%" This is harder to support. Private credit default estimates vary widely depending on: * Definitions * Sample selection * Time period The post presents this figure as established fact when it is closer to an estimate used by some analysts. The confidence level implied is much higher than the available evidence. # "Synthetic PIKs were invented to hide defaults" This is partially misleading. Delayed-draw term loans (DDTLs) are legitimate financing structures used for many purposes. Could some lenders use them to effectively fund interest payments? Yes. Does that mean the entire structure exists primarily to hide defaults? No. The post takes a real concern and presents the most cynical interpretation as established fact. # "AAA CLOs are basically 2008 MBS again" This is one of the biggest leaps. There are similarities: * Pooling risky assets * Structured finance * Rating agencies involved But there are also major differences: 2008 mortgage securities: * Often backed by extremely poor underwriting * Highly interconnected with global banks * Massive embedded leverage Private credit CLOs: * Generally backed by corporate loans * Smaller market * Less interconnected with systemically important banks That doesn't make them safe. It does make "exactly like 2008" an oversimplification. # Questionable claim: "The Fed cancelled rate cuts and expects rate hikes" This statement sounds outdated or incorrect. The Fed can revise expectations, but the claim that it has "cancelled rate cuts" and is actively projecting end-of-year hikes would need verification against current Fed projections. This is one of several places where the post mixes fact with dramatic interpretation. # Biggest weakness in the argument The author assumes: > That connection is not proven. For a true 2008-style crisis you generally need: 1. Massive leverage 2. Interconnected institutions 3. Forced liquidations 4. Contagion across the banking system 5. Funding markets freezing The post spends most of its time proving that **private credit may have hidden losses**, which is not the same thing as proving **global financial collapse**. Those are very different claims. # What would a realistic bearish scenario look like? A more measured downside case would be: * Defaults rise through 2027-2029 * Refinancing becomes difficult * Private credit returns disappoint * Some funds gate withdrawals * Pension funds and insurance companies take losses * Valuations get marked down * Private equity exits become harder * Economic growth slows That's serious. But it's still not automatically "worse than 2008." # What would need to be true for the author's prediction to happen? Several things would have to occur simultaneously: * Recession * High interest rates persist * AI-related spending collapses * Private credit defaults spike into double digits * CLO structures fail to absorb losses * Banks are more exposed than currently believed * Liquidity freezes across multiple asset classes Possible? Yes. Probable? The post doesn't provide enough evidence to conclude that. # Bottom line The post identifies a **real area of financial risk**: * explosive private credit growth, * opaque valuations, * increasing PIK usage, * upcoming refinancing pressures, * and liquidity mismatches. Those concerns are taken seriously by regulators and institutional investors. Where it becomes less reliable is in the jump from: > to > The first statement is well-supported. The second is largely speculative and would require much stronger evidence than what's presented in the post.

aild23

The next Financial Crisis is here, and it's not just AI. It's not just an AI bubble, it's a systemic collapse worse than 2008. \^(Yes I used the AI sentence structure, beep boop fuck you.) \>\*Dog shit wrapped in cat shit.\* If you're too dumb to read, feed these points into your favorite AI tool and ask it about the information's reliability. Then ask it how fucked retail is. 1. Increasing amount of companies are taking on private credit, up from $500B in 2020 to $2+ \*trillion\* in 2026, expected to grow past $4 trillion by 2030. For comparison, the 2008 subprime loans were estimated around $2 trillion. 2. This private credit market (unironically called \*"shadow banking"\*) relies almost entirely on Level 3 assets. This means unregulated, often unreported credit that's being valued using the funds' own internal models ("\*mark-to-model\*") rather than real-time market prices (\*"mark-to-market\*"). Basically, their analysts decide the price and tell the buyer to trust them. 3. Huge portion of these loans were written in 2021-2022 during low interest rates, and are now becoming mature in 2027-2029. We're talking over half a \*trillion\* in leveraged private debt scheduled to mature in 2028 alone. Many loans written to SaaS companies that are now being driven underwater by AI. 4. It has been labeled \*"The Maturity Wall"\*. If the rates stay high, many borrowers won't be able to refinance, leading to defaults or fire sales. And many of these loans are backed by software and depreciating GPUs. The bag holders will be left with nothing. 5. And Fed just cancelled rate cuts, now estimating rate hikes for the end of the year. Meaning the companies will be even less capable of making the interest payments. 6. The IMF estimates that roughly 40% of private credit borrowers operate with \*\*negative free cash flow\*\*, up from 25% in 2021. 7. And while the reported default rate of this private credit is currently sitting at just 1.5-2%, \*\*the real private credit default rate is estimated at 5-6% and increasing\*\*. 8. Why don't the reported and the actual numbers match? Because private credit lenders are offering \*Payment-in-Kinds\* (PIKs) to avoid defaulting the loans, allowing the borrowers to skip the interest payment in favor of increasing the debt. They're literally kicking the can on loans that aren't being paid. 9. Payment-in-Kinds usage more than doubled from 5% to 11% by late 2025. Out of the 5-6% default rate, estimated 50% is driven by PIKs and interest deferrals. 10. However, private credit funds have Payment-in-Kind exposure limits, mandated by the big commercial banks that they loan from. To circumvent these limits and maintain access to bank leverage, \*synthetic PIKs\* were invented to hide PIKs from the books. 11. When a borrower fails to pay the interest, they use a secondary \*delayed-draw term loan\* (DDTL) to pay the interest. Technically the first loan is getting cash interest payments, at the cost of a new, bigger loan. It's the private credit equivalent of paying off your credit card debt with another credit card. They invented a new instrument to hide the fact that interest payments are being missed and that these loans are growing into dog shit so that they could leverage more. 12. Furthermore, these private loans are increasingly being packaged into \*Private Credit CLOs\* (Collateralized Loan Obligations). The idea is simple; while any one loan might be risky on its own, bundling a bunch of them together reduces the risk. Just like index funds, for example. And similar to Mortgage Backed Securities. What could possibly go wrong? 13. Due to the private nature of these private loans, nobody knows the true health of what's really being packaged into the AA and AAA CLOs. We know synthetic PIKs exist and are being used to some extent, but we don't know the full exposure. 14. Who buys these Private Credit CLOs? Mainly pension funds and insurance companies, sometimes retail directly. They commit capital through third-party fund managers like Ares, Blackstone, and Blue Owl, or through \*Business Development Companies\* (BDCs). 15. The SEC is busy ensuring that the big banks aren't secretly leveraged on this. They literally know shit is about to go down, and are only protecting the big money. Retail will hold the bags. 16. Worse yet, most of the underlying credit loans mature in 5-7 \*years\*, yet the investors in CLOs are allowed to cash out every quarter. This means the asset managers will have to freeze withdrawals altogether to tackle the illiquidity, meaning that retail won't be able to cash out as the defaults keep happening. 17. And \*\*this has already begun\*\*, with numerous asset managers already freezing withdrawals. Stone Ridge fulfilled only 11% of withdrawals earlier this year, Blackstone raised affiliate capital to meet the withdrawals, and Blue Owl froze all withdrawals indefinitely. TL;DR: They're wrapping dog shit in cat shit as we speak, valuating it themselves as AAA packages with the help of PIKs, and selling those CLOs to pension funds and retail. The assets will be frozen due to liquidity mismatch, and it will be 2008 again but this time unwinding over multiple years of slow-burning crisis. The opacity is even worse, the leverage is hidden, and the buyers are retail. Add in a bit of an AI bubble with increasing rate hikes, and we got the dot-com bubble and the 2008 crisis combined into one bomb from 2027 onward. \*\*Edit:\*\* And it's not AI you dumb fucks, just because someone can write one page worth of bullet points doesn't mean they're AI. I did get inspired by Tom Bilyeu's video few months ago though, maybe watch that instead of commenting whatever dumb shit you were going to comment.

zennsunni

"AAA? Shit! B's, C's, all shit!"

_freckles__

Like QQQ, there should be a new ETF called AAA it will contain all the poor performing companies that are highly speculative and volatile. So whoever invests in it, will keep saying AAAAAAAAAAAA everytime they look at their portfolio. and there be a XXX Etf, like the name says, it will include all companies related to spicy adult stuff only, like OnlyGrans for example.

hexcraft-nikk

They are still hedging on terrible decisions. Common sense should have been to expand within their market- and options there are limited. Video game development is expensive on the AAA side, but chasing the gatcha or mobile markets could've been an opportunity. Instead they're making Bitcoin deals and throwing their dick around with eBay. Terrible leadership only surviving because of memes.

That-Account6064

so S and P was willing to get bribed to rate mortgage backed securities as AAA, but now they are too good for Elons bribe?

Open_Pollution_8038

Most companies are not AAA, AA, etc etc. You can’t just go ask for $10B from bondholders in a week unless you’re Google / MAG 7. They also need the capital right now now 2 months from now.

jollyGreenGiant3

This investment is triple AAA rated boys!!!

80sCocktail

I could still play bf1. The ww1 game. But I skipped all the AAA releases the past few years. Could still play gtav and rdr2 but that dragged hard.

Average_TechSpec

07's crash was because of Lehman Brother's AAA junk bonds that were truly F tier.... This is nothing like 07, so please go back to tiktok and calm down with that tinfoil hat of yours

BJ_Fish2

I think it's a great buying opportunity right now to be honest. Right now you have all of those game festivals going on and a bunch of announcements. And then you have the World cup. I see no reason for Rockstar to have to do anything with marketing until maybe end of June or sometime in July. I'm not worried whatsoever. It's coming out November 19th. Call of duty is a AAA game and it was just recently announced and is coming out a month prior. So just hold your horses for Grand theft Auto it's coming out late. It's one of the latest games coming out of the year.

JoeyJuJoe

Is there any reason for you to trust the release date? It’s just so unnatural for a AAA to be dead silent like this. There’s general sentiment about trailer releases during the “summer” but I can’t base it on faith alone

Reggio_Calabria

I am so very much bullish about gaming companies’ stocks. One AAA game now only costs 2 to 3 burgers at McDonalds and doesn’t need to burn Hormuz fuel to get shipped to your house as people download games. I see it as a great resilient business to make it through the current recession.

nyse25

Wolverine looks like another Sony AAA slop that tries its best to imitate Arkham combat by rubberbanding from one enemy to the next with cinematics crammed up your asshole GOW Laufey is more of the same What happened to the games 😔😔😔😔 At least until dawn 2 looks alright

MoaiTrist

I was not their customer when S&P rated Mortgage Backed Securities AAA before 2009.

MoaiTrist

They completely missed the problem with giving mortgage backed securities a AAA rating before 2009.

Downtown_Plantain158

IMO AI NPCs in WWM were interesting at first but later became boring/chore. MMORPGs have tried to make "dynamic virtual worlds" hype for sometime, I don't think it sticks well and eventually becomes obsolete. What gamers like are world expansions with the latest greatest techology/game mechanic/raid/world/art/etc hence why they have expansions every year like in WoW or FF14. Complex systems? I think that needs to be designed by humans. I don't think AI is good at creating new things (yet). It is great at recommending things that already exist though. AI is "great" for rapid development of software though. I personally think GTA is washed and GTA6 is going to be overhyped as most triple AAA games are these days.

Naytosan

AAA rated you say...?

Maakus

I've used Mac for personal use and Apple Configurator. The M series Macbook I have is not capable of AAA gaming, so I can't speak much there. I just feel like I'm always having to search how to do stuff that I do with Windows and then I ask myself if there is any single benefit that I like and it's literally just battery life, so the Macbook is really just a media device at this point.

BabaThoughts

At 58, and close to retirement… consider only 42% in the market. The rest in cash, AAA corporate bonds, treasuries.

Electronic-Cell-3404

You’re basically right. The movie dramatizes a lot for clarity. Burry absolutely did not invent CDSs, he mainly pioneered using them specifically against subprime MBS at that scale. And yes, the premiums were initially “cheap” relative to the actual risk because everyone believed AAA housing debt was ultra safe. The painful part wasn’t that the CDS itself was irrational, it was the carry cost and timing. He had to keep paying premiums while the market stayed irrational longer than expected, and his investors were freaking out before the collapse actually hit. Also correct that CDS value can rise before outright defaults happen. Spreads widening alone can generate mark-to-market profits. The movie compresses that nuance because “housing collapses = Burry wins” is easier for audiences to follow.

malhal

Currently there is no incentive to upgrade and all it needs to undie is a couple years for RAM prices to come down and a new AAA game that requires a new GPU feature. It probably will be a larger upgrade cycle than ever. They even said in the video all their friends are waiting.

AffectionateAd7980

Let's start with what stocks and bonds are ... very simplified. Bonds are a promise to return a fixed amount at a fixed point in the future for some amount invested today. If you sell a bond early (before the promise date) you generally have to sell at a discount, a reduction in the face value of the bond. You buy things like t-bills at a discount, say paying $4,950 for a $5,000 returned at a later date. Stocks represent ownership in a corporation where you share in the boons and busts of that company. While holding bonds can protect from dramatic market "adjustments" (crashes). Typically, when stocks fail sharply, bonds will also fall. Interest on bonds is driven by demand. When demand is high interest rates are low, when demand is low, rates are high(er). When the stock market drops sharply, people (who have sold stock to protect profits) will move to bonds giving high demand and low interest rates. What happens to the stock market when the bond market collapses (https://www.reddit.com/r/bonds/comments/172kqot/explain\_the\_bond\_crash\_like\_im\_5/)? That depends greatly on why the bond market crashes. A rapid spike in bond yields (interest rates) reduces the current bond value (if you sell early it will be at a steep discount), but if you buy you might be able to lock in an attractive long term rate. This can cause people to move out of the stock market and into bonds. If I can get a fixed 15% in a AAA bond, I'm not as likely to risk my $ in the stock market. When $ comes out of the market the stock prices go down. Enough people doing that can cause a market crash, that will push people into bonds ... and likely drive bond rates back down. However, bond market collapses typical have serious causes. Bond sellers don't wake up one day and just want to pay higher yields. If yields rise sharply something is going on. A sudden increase in $ burn (i.e. need for quick case) and/or lack of trust in the bond market (i.e. pay me more for the perceived risk). A collapse in the bond market can be much more disruptive than a stock market crash. You can have a bond market collapse and a strong market when there is an expectation of high inflation. We are seeing some of that now. Stocks tend to index with inflation. Bonds have fixed returns and people tend to expect better yields when they know their future $ is going to be worth a lot less than their current $. Current policies are very inflationary and bond rates will continue to rise. Part of the market rise we have seen is due to inflation.

tonvor

He didn’t bet against AAA. He bet against crappiest CDS. There was no real market, hence the banks were the only buyers/sellers and could manipulate the price.

anonymousbopper767

Yup “what Trump says is AAA rated truth” vibes. Reality: it’s subprime dog shit with a fico score below 550

FryerTuckit

The first CDS that was rated by S&P and Moody’s was a corporate single name swap on Walmart. The iSDA based swap was modeled after interest rate swaps and was structured by JP Morgan in early 1990’s. I should know I rated the transaction and ran the largest AAA rated credit derivatives company years before Bury heard about CDS. RMBS and CMBS default swaps came later but he wasn’t the structure guy behind them

Pleasant-Shallot-707

The reply: “I understand where you are coming from, and I appreciate the feedback. However, I think it is important to separate tone from substance here. The main point I was making is that the movie simplified the financial mechanics for a general audience. Michael Burry did not invent credit default swaps themselves. Rather, he identified a specific way to use them against weak mortgage-backed securities. That distinction matters.” Additionally, the issue with the premiums was not simply that the bonds were AAA rated. It was that Burry was early, isolated, and paying for protection before the rest of the market understood the risk. This made the trade psychologically and financially painful before it became profitable. So while my comment may have sounded formal or structured, the underlying facts are still valid. If there is a specific factual issue, I am happy to discuss that, but dismissing it as “ChatGPT” does not really address the argument.

BeneficialVisit2477

You are right bro. The movie simplifies a lot for storytelling. Burry didn’t invent CDSs, he just recognized that AAA subprime MBS were being badly mispriced. And you’re also right that CDS positions can become profitable before actual defaults occur, simply from weakening credit conditions and spread widening. The book explains the mechanics a bit more clearly than the film does.

D_Pablo67

The credit rating agencies sold AAA ratings on garbage mortgages rolled into a securitized portfolio. This brought the whole system down. S&P and Moody’s aggressively lobbied for exclusion in the Dodd Frank act and were never held accountable.

Commercial-Group4859

Movies like these are simplified to be understood by a general audience. Yes, his premiums will be low but, in the end, if the notional of the CDS is high, the amount would still be important. Additionally, he would most likely be shorting the higher risk tranches which were not necessarily AAA. This connects to the part of the movie where the two guys from Brownfield get the brilliant idea of shorting the AA tranches becaues no one was doing it. The profit part is when they go to the ratings agencies. Since they had not adjusted the credit rating of the MBS's, that left Burry unable to profit from his position while already having spent a significant amount on premiums.

Level_Agent_2955

bro you are absolutely right on all three points. the movie dramatized the hell out of it for theatrical effect. let me break it down. First the CDS invention thing. The movie definitely makes it feel like Burry invented the CDS on mortgage bonds. He didnt. Credit default swaps existed since the 1990s. J.P. Morgan created them. What Burry actually did was realize you could buy CDS on mortgage-backed securities without owning the underlying bonds. That was the innovation. Not the instrument itself but the bet structure. The movie compressed that for drama . Second the premium thing. You would think AAA rated stuff means cheap insurance right? Wrong. And this is where the movie actually gets it kinda right. Burry was paying huge premiums not because of the rating but because he was early. Like really early. His fund was paying $80-90 million annually on a $555 million fund . The banks thought he was insane. They were happy to take his money because nobody believed housing would crash. Being first meant the banks quoted him terrible prices. They laughed at him. If he waited until 2006 or 2007 he would have gotten better premiums but also worse payoff ratios because other buyers would have driven up prices . Third and this is the big one you caught. You are 100% correct that the market didnt need to fully collapse for Burry to profit. Just a bend not a break. The movie makes it seem like everything had to go zero. Not true. Burry hand picked the weakest loans. He bet on specific tranches filled with garbage. Once those specific loans started defaulting he should have gotten paid. The problem was the banks pretended the defaults werent happening. They delayed paying him for months because acknowledging the losses would have tanked their own positions . So the movie turned that into a full collapse narrative because its cleaner for audiences. The book is more realistic about all this. Michael Lewis goes into the actual mechanics. The movie had to use Margot Robbie in a bathtub to explain CDOs. You cant expect precision from that . So nah you arent missing anything. You just understand finance better than the average moviegoer. The reality was still insane just not quite as insane as the film made it look. Burry was right early and got punished for being early. Thats the real story

egamruf

With respect, ANYTHING can be a start up. What I know about Musk is he has a history of lying about partnerships, product roll-outs, technological achievement and sales. Why on earth would him bundling five middling start ups with no earnings into one company make that company worth 2 trillion? He's effectively just creating CFDs out of B-rated startups, bundled as Tesla and SpaceX then trying to tell everyone to treat them as AAA shares.

mistletoe9

None of this turns out to mean anything when American consumers still spend in spite of high prices. AAA has reported record highway travel for Memorial's Day, for instance, even with high gas

OkCelebration6408

Gaming is more competitive than ever and slowing overall revenue growth, there is no guaranteed long term success for any game right now. GTA6 will have good initial sales base on hype alone which is already priced in, long term outlook for its future online content is very uncertain. Longer term Sales and online revenue could take a huge nosedive and the outlook will worsen very rapidly for rockstar and take two. The past gta games like 4 and 5 aren't clear GOTY choice. So if overall AAA gaming is on decline, I doubt GTA 6 can truly be this ultimate game that people want, it's very likely to disappoint just like many other AAA games now.

tgent133

>packaged together with understated risks and sold to completely different entities. Sooooo Elon privately merges xAI, spends billions on Tesla assets, and packages all that together into the one profitable company (before the packaging) to sell to the public. That sounds just like packaging all the shit with high risk and selling to a completely different entity. Overstated value you say? You mean like a $2T valuation for a company that lost $5B last year?? >There was no notable circular buying within these banks and companies.  It was largely the opposite, with anyone who understood the situation trying to package the shit mortgages, polish that turd and sell it fast. There was circular buying of the mortgages until there wasn't. Bank 1 gives mortgage to C buyer > packages, sells to Bank 2 as B > packages, sells to Bank 3 as A >>> packages, sold as AAA. Elon milks Tesla > Fucking accidentally buys xAI > Sells Tesla chips/compute to xAI > Rolls all that shit into SpaceX > Sells SpaceX to public via IPO. That's the point, it's circular until there isn't any money left and someone is holding the bag, aka the public. IF the hit is hard enough, confidence in the market's regulations to avoid this (ahem the entire AI Sector) will tank, and the entire market will go with it.

FrumpyFollicle

The issue with the '08 crisis wasn't just that MBSes were fraudulently being rated AAA, it's that highly rated debt is used as collateral for short term liquidity. Banks, insurance companies, any company that has a lot of long-term holdings and could theoretically need a lot of cash on short notice, use their long-term assets as collateral for liquidity (same concept as home owners getting a HELOC) via repos or other measures. So the value of these MBSes collapsed and with it came a liquidity crisis until the Fed fired up the money printer to buy all the garbage MBSes from the banks to bail them out and pump cash into the economy. In the meantime, people got fucked as the economy went to shit, the value of their homes went down, and they lost their jobs, which resulted in more people selling their houses, lowering the prices of houses even more, more people defaulting, etc. In my view, a company like SpaceX can definitely pump and dump and the bag holders will be fucked. But I don't see how the AI bubble bursting will have the same ripple effects as the MBS market collapsing did.

Hatchz

Isn't this the same thing that caused the last financial crisis? That was selling mortgages, bundled deceptively as AAA debt when it was junk, and derivatives of that debt. Its the same dollars at the root but it was a lot more by the end of it. Now we are instead of using debt and passing it around its dollars, just being passed around by the same few companies, that looks like organic growth but its just the same buck being passed along directed by the ownership in those companies? I can't word that well but do you know what I mean?

RavenRainTie

Big Short Incoming. High end paying jobs are being replaced by AI and because of it AAA loans are going to become worthless.

SmoothOperator423

What if we just take the national debt and package it up into little more diversified bonds and sell them as AAA rated securities.

junbun2

any suggestions ? or just AAA ? i don't know the bond trading world too well how to get started?

mardonic

On the bright side of things our national debt quietly exceeded our GDP. Really wealthy smart money doesn't like uncertainty and devours high rate AAA bonds. Stay the course. Look for a sudden drop as earnings season ends until AFTER the midterms. Itys not different this time.

melvinzee

A great example of *tranches* with AAA+ rating names, mixed in with some Bs that will go to shit.

is_it_gif_or_gif

The only one of those with a major AAA name was Blackberry though.

stoplossftw

diversified AAA rating only