Is the $1.8 trillion private credit market is facing its first serious stress test since 2008?

Multiple major funds are blocking investors from withdrawing their money, and defaults are rising fast. @crypto_condom has mentioned this on my timeline multiple times, so thought I'd write a quick brief:
What's Happening at Each Firm
BlackRock - capped redemptions at 5% on its $26B HLEND fund after withdrawal requests hit 9.3% of NAV. Essentially told investors: you can't have your money back right now
Morgan Stanley - restricted withdrawals from its North Haven fund. Investors wanted 10.9% out, got capped at 5%. Stock collapsed on the news
JPMorgan - marked down private credit portfolios and restricted lending to software-linked loans specifically. They see AI disrupting the companies these loans were made to
Deutsche Bank - flagged $30B in private credit exposure, raising alarm bells about how deep banks are in this
Blackstone - BCRED fund saw record 7.9% redemption requests. Had to inject $400M of its own capital and raise its withdrawal cap
Why It's happening
1. AI disruption - many private credit loans went to software companies that are now getting disrupted by AI.
2. Loose underwriting - PIMCO says the industry got sloppy, lending too aggressively during the boom with weak covenants
3. Liquidity mismatch - these funds promised investors semi-liquid access to fundamentally illiquid assets. Now everyone wants out at the same time
4. UBS worst case - default rates could hit 15% if AI disruption accelerates
How Bad Is It?
Look at the market, every day I see bank stocks drop further and further.
JPM -16.1%
GS -20.0%
MS -19.9%
BAC -18.1%
C -15.7%
WFC -23.0%
SCHW -15.1%
OWL -60.6%
ARES -50.6%
BX -46.3%
KKR -45.5%
APO -36.2%
BLK -24.3%
DB -27.2%
COF -31.7%
Very interesting to see what happens here