{"content":"THE PRIVATE CREDIT MELTDOWN HAS BEGUN A $1 billion bond scandal isn’t a side note — it’s the first visible fracture in a $1.7 trillion shadow banking empire that quietly holds the real leverage of modern finance. EquipmentShare raised $1B through Goldman Sachs, Wells Fargo, Citi, JPMorgan, and Capital One — entirely private, unregistered, and with no public trace of who owns the debt. Now, amid lawsuits over alleged fraud and fund misuse, those bonds have plunged in value — and only the banks know who’s taking the hit. This isn’t a one-off. It’s 2007 all over again, reimagined through the lens of private credit. Then: mortgage CDOs. Now: opaque private loans hidden inside pension funds, hedge funds, and insurers. Same opacity. Same overconfidence. Same systemic risk. Since 2010, the private credit market has exploded 6×, fueled by years of near-zero interest rates. It’s now larger than the entire U.S. junk bond market — yet completely unregulated. No SEC oversight. No liquidity. No transparent pricing. Just a trillion dollars valued on optimism, secured by trust. But when trust breaks, the numbers stop working. If even 1% of this market defaults, that’s a $17 billion shockwave — roughly equal to 15 regional bank failures. At 5%, the fallout spreads to pensions, insurers, and sovereign wealth funds. And the same Wall Street giants underwriting it all? They’re sitting in the middle of the domino chain. Bloomberg called this “isolated.” It’s not. It’s the slow unraveling of the post–quantitative easing illusion — the moment the shadow financial system steps into the light. Every crisis starts as “an isolated event.” This time, the isolation is the system.","images":["https://d35imkjvkj28kt.cloudfront.net/uploadfile/article/blog/2025102025/10/26/77ba85a2bd1635685465b98318d41309.png"],"tags":[],"tradingPairs":[],"quotearticleid":0}