Glitch in the Credit

Follow the debt.

All of the moving pieces behind the AI Debt bubble in one place

The chain reaction

    When all three crack within a few weeks of each other, a slow squeeze can snap into a panic.

    Stress index

    —

    Six layers, in the order things usually break

    Collateral cracks first, then the shakiest borrowers, then the loans and the funds holding them. Pick a signal to see the evidence and where it came from. One red light doesn't mean much. Several layers lighting up at once does.

    View

    Trend (easing, steady, worsening) is how far a signal's score moved since the last check: 5 points or more either way counts. Changed compares its status with the last check. ·

    Market tape

    A year of daily closes for 18 names. Each line is drawn against its own one-year high, so they all share one scale. Neoclouds are the canary in the coal mine. The spenders are who pays them, the BDCs hold the loans, and the managers run the funds.

    Credit gauges

    The plumbing, straight from the Fed's own data. Spreads are what borrowers pay over Treasurys, so wider means lenders are getting nervous. The dashed lines are where we'd call it watch and flashing.

    Filings and fund books

    What the lenders and borrowers have told the SEC. These come straight from EDGAR, so nothing here is secondhand.

    BDC book check

    BDC Price Book value Price vs book PIK share

    SEC red flags

      Withdrawal windows

        Power and the grid

        A data center is only worth what it can plug in. These are the queues and auctions that decide when the power shows up, and every month it doesn't is a month a borrower pays interest on an empty building.

        Hookups and capacity

          History, day by day

          One column per daily check. A row that turns red and stays red is a layer giving way. Several rows turning red together is the thing to worry about.

          Layer status by check

          C CalmW WatchF Flashing Check not run yet

          Events

          The moments behind the readings, newest first.

          Event log

          Date Layer What happened Source

          Help

          How the score works, what the jargon means, and what this page isn't. Any term used in a reading links straight here from its evidence window.

          How to read this

          How the score works

          • Every signal gets a score from 0 to 100. Claude grades the news each morning on five steps: 0, 25, 50, 75 or 100.
          • Where there's hard data (prices, spreads, bank lending), each measure is scored against its own last few years, the way CNN's Fear & Greed index works: a normal day scores 0, a reading worse than 90% of its history scores 80. The data then counts for more than the news in the signal's score.
          • Under 40 is calm, 40 to 74 is watch, and 75 or more is flashing. A signal flashes when its evidence crosses a set line, like CoreWeave's CDS going above 1,000bp or several fund managers gating withdrawals at once.
          • Each layer averages its signals: 75 or higher is flashing, 37.5 or higher is watch.
          • The stress index averages the six layers on a 0 to 100 scale, split into five bands: quiet, stirring, elevated, warning, panic. The pixel field behind it rises with the number.
          • The chain reaction is the alarm that really matters. Its title turns yellow when one link is missing, and red when collateral, the weakest borrowers and the funds are all flashing at once.
          • Trend is how far a signal's score moved since the last check: up 5 or more is worsening, down 5 or more is easing. Changed is different: it just compares today's status with the last check.
          • A reading is marked old tag when its evidence is more than 14 days older than the latest check. Old readings still count toward the index. If more than a day goes by without a check, the page flags it as overdue.
          • Prices are daily closes, and each change is against five trading days earlier.
          • Gauges, filings and book values aren't scored into the index yet. They're the raw evidence Claude reads when it judges the signals each morning.

          What it isn't

          This isn't a timing tool, and it isn't financial advice. The readings are judgment calls based on public reporting, some of it secondhand or unconfirmed. Every one links to its source and date so you can check for yourself.

          Terms

          Neocloud
          A company that rents out AI computing power, often on borrowed money (CoreWeave, Nebius, IREN).
          BDC
          Business development company: a fund that lends to private companies. Listed BDCs trade on exchanges; non-traded ones limit withdrawals.
          NAV
          Net asset value: what a fund says its loans are worth.
          PIK
          Payment in kind: a borrower pays interest with more debt instead of cash.
          Amend and extend
          A lender pushes back a deadline or loosens terms instead of calling a default.
          CDS
          Credit default swap: insurance against a company defaulting. Its price is quoted in basis points (bp); 100bp is 1% a year.
          Redemption gate
          A fund capping how much investors can withdraw in a quarter.
          10-Q, 10-K
          The quarterly and annual reports US companies file with the SEC. A late one is a warning sign.
          Back-leverage
          A loan a bank makes to a private credit fund, secured on the fund's own loans.
          Shadow default
          A borrower that avoids a recorded default only because its lender amended the loan.
          Mark, at cost
          The value a fund puts on a loan. "97.6% of cost" means it is carried near what was lent, whatever similar debt trades at.
          Hyperscaler
          One of the giant cloud companies (Microsoft, Amazon, Google, Meta, Oracle) that lease most data center capacity.
          Spread
          The extra yield a borrower pays over US Treasurys. 340bp means 3.4 percentage points more a year.
          Tender offer
          How a non-traded BDC lets investors cash out: once a quarter it offers to buy back a slice of its shares, usually capped at 5%.
          Full-cost floor
          What an hour of GPU rent has to earn to pay off the chip, its power and its data center space over a normal life. Rent below it loses money.
          Cash floor
          Just the power, space and running costs of an hour. Owners usually keep renting down to here, since the chip is already bought.
          Opportunity-cost floor
          The least an owner will rent for, given the next best use of the chip, like selling it or running their own work on it.
          Collateral cushion
          GPU rent divided by the full-cost floor. Above 1×, the chips backing a loan earn their keep; below 1×, they earn less than they cost.
          Performance parity
          Comparing chips by price per unit of work, like dollars per petaflop-hour, so an older chip and a newer one can be weighed fairly.
          Risk-neutral default odds
          The default odds a CDS price implies. They include what investors charge for taking the risk, so they run higher than real-world odds.
          Basis
          The gap between two prices for the same thing, like two indexes' H100 rents, or a futures price and today's rent.

          Where the data comes from

          Source What we take How often
          SEC EDGAR8-K red flags (officer exits, auditor changes, restatement warnings, debt accelerations), late-filing notices, BDC tender offers, and book value and PIK income from BDC quarterly reportsDaily
          OFR (US Treasury)The OFR Financial Stress Index and its credit partDaily, two days behind
          Federal Reserve BoardThe corporate bond (GZ) spread, the excess bond premium and its recession oddsMonthly
          FRED (St. Louis Fed)The Fed's loan officer survey and H.8 bank loans to nonbanksWeekly or quarterly, as published
          Yahoo FinanceDaily closes for the 18 tape names and the 10 BDCs in the book checkDaily
          ERCOT, PJM, Berkeley LabLarge-load hookup queues, capacity auction results, the national interconnection queue (via each grid row's linked source)When they publish, checked weekly
          News and filingsThe 17 signal readings and the event log. Claude reads them every morning and links each reading to its sourceDaily
          JK Signal N Flashing 1–6 Layer F Filter Not a timing tool. Not financial advice.

          Today’s reading, in plain text

          As of Oct 26, 2026, the AI credit stress index is 52 out of 100 (Elevated). That's down 3 since Oct 25, 2026. 2 of 6 layers are flashing: weakest borrowers and funds. The chain reaction isn’t complete yet: collateral isn’t flashing.

          Read the full brief · Get it as JSON · All the data