Private Credit, Short Selling, and Taxes

What we learned about Business & Finance this week.

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Good morning. It's Thursday, April 2, and welcome to this week's Business & Finance newsletter. Today, given the headlines about rising default fears and investor withdrawals, we're breaking down everything you need to know about private credit. We're also covering short selling and income taxes, continuing our series on tax basics ahead of Tax Day.

As always, thank you for being a reader!

—Phoebe Bain, 1440 Business & Finance Section Editor

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Private Credit

Private credit, explained

The private credit industry offers nonbank loans directly to businesses, particularly privately held midmarket companies. A variety of institutions house private credit funds, from private equity firms to insurance companies. As of early 2025, the global private credit market was estimated to be worth roughly $3T.

Private credit can be traced back to ancient Mesopotamia, where farmers borrowed seeds and repaid lenders after the harvest. The modern industry took off after the 2008 financial crisis, when banks scaled back from lending and nonbank lenders stepped in to fill the gap.

Traditional investment banks (think: Goldman Sachs, JPMorgan) use public markets to lend to large businesses. These institutions typically underwrite a loan, distribute it to investors as "term loans" or bonds, and collect fees along the way. With private credit, the loan goes directly to the borrower, with the lender generally holding it to maturity. Because they aren't traded on public markets, they're illiquid, which contributes to higher interest rates, alongside other factors.

Explore everything else we've found on Private Credit.

Also, check out ...

> Retail investors cannot directly invest in private credit funds—but other financial vehicles can offer exposure to the industry. (Read)

> The basics of private credit—plus why it matters in 2026. (Listen)

> The $265B private credit meltdown: Why private credit has been making headlines in recent weeks. (Read)

> The world's top 20 private credit fund managers. (Read)

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Short and Sweet

What is short selling?

Unlike traditional investments, where investors buy stocks with the expectation that the value of those stocks will increase, short selling is an investment strategy in which investors bet that a stock will drop in value.

To "short" a stock, investors borrow shares through a brokerage company and sell them at the current market price, hoping to buy them back later at a lower price and pocket the difference. Short selling is generally legal in the US, though regulations restrict certain short sales during periods of sharp price decline.

Because short positions are made with borrowed stocks, short selling is considered a high-risk investment strategy. Despite the risk, financial institutions like hedge funds commonly short stocks for multiple reasons, including "hedging" against market downturns.

Critics point to vicious feedback loops and possible rewards for bad actors that may lead to a downturn in a company's stock, while proponents argue that short selling helps maintain market efficiency.

Explore everything else we've found on Short Selling.

Also, check out ...

> How one man placed the first short against the Dutch East India Company. (Watch)

> The most shorted stocks in the US. (Read)

> The Piggly Wiggly grocery store founder once attempted to squeeze short sellers by cornering the grocery store's stock. (Listen)

> How a Reddit thread drove GameStop's stock price up and gutted the pockets of short sellers. (Watch)

Income Taxes

Income taxes, explained

Income taxes are taxes governments levy on money earned by businesses and individuals. What's more, they're also many countries' largest source of revenue: In the US, individual income taxes made up nearly half of the federal government's revenue in 2024, while corporate income taxes added another 11%.

Enshrined in the 16th Amendment, the individual income tax the US uses today was enacted in 1913. World War II prompted the federal government to greatly expand the number of people required to pay income taxes, from about 5% of American workers in 1939 to 90% submitting tax forms and 60% paying income taxes by the end of the war.

Because income taxes' primary purpose is financing government operations—such as funding public programs like food stamps benefiting lower-income households—these taxes are also seen as an economic tool to redistribute resources and reduce inequality. But taxation is historically contentious. Critics argue income taxes discourage career advancement and push taxpayers to move to areas with lower rates.

Explore everything else we've found on Income Taxes.

Also, check out ...

> How income taxes evolved from a funding tool for war into a crucial revenue source for the federal government. (Watch)

> Learn how tax brackets actually work. (Watch)

> How income taxes in the US compare to other countries, visualized. (View)

> Tax laws helped the federal government catch mob bosses during Prohibition. (Read)

One Story We're Taking Stock In

While the SAVE America Act is currently stalled in the Senate during Congress' recess, Americans have been debating what another act's passage could mean for their wallets—beyond what form of ID they pull out at the polls, of course. The 21st Century ROAD to Housing Act (which was still being debated in Congress as of this writing) is a national housing bill that began as a collection of measures aimed at increasing the housing supply in the US.

Notably, the bill now includes a ban on any single investor taking control of more than 350 single-family homes or duplexes total, which could have significant impacts on the build-to-rent single-family home industry. This article dives into what the bill could mean for who gets to live in these hallmarks of American culture—small parcel of lawn, driveway, and all.

> Who gets to live in a single-family home? (Read)

> How American homeownership has evolved over the years. (1440 Topics)

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Best of the Week

We curate hundreds of resources into 1440 Topics each week. Here are some of our favorites from the world of business and finance.

> How to prepare financially if AI is coming for your job.

> Where incomes over $200K are most common in the US, mapped.

> The difference between profit and cash flow.

> How long Americans stay at the same job, visualized.

> What is a tranche?

> Hard credit checks versus soft credit checks, explained.

> Calculate the value of a paper savings bond.

> How the cost of college tuition has changed over time.

> What are commodities?

> The history of American Express.

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Private Credit, Short Selling, and Taxes