4 Market Must Reads Before Monday's Open
Submitted by QTR's Fringe Finance
Before Monday rolls around, I wanted to make sure you caught four pieces I published last week that I think are worth your time if you’re trying to understand what in the everloving f**k is going on in markets right now.
The most important is a $26 billion time bomb that may have just been set off — that no one in the market seems to notice:
Private Credit Just Turned Into Public Panic
Another looks at a $25 million private credit loan that was abruptly marked down to zero. Just three months earlier it had been valued at par. The borrower was one of the many pandemic-era Amazon aggregators built on cheap leverage and aggressive growth assumptions. It’s a small story on the surface, but it illustrates how quickly supposedly stable credit positions can go from “fine” to worthless.
Another One Bites The Dust
Another piece revisits something I’ve been warning about for the last couple of years: the massive passive bid supporting equities.
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For a long time, automatic flows from retirement plans and ETFs have been buying stocks regardless of valuation or fundamentals. But new data suggesting a surge in 401(k) hardship withdrawals raises an uncomfortable question about what happens if those automatic inflows begin to slow.
What If The Automatic Stock Buying Stops?
I also wrote about the idea of forward-looking investing and why being contrarian almost always means looking wrong for a while. Finance loves to talk about the future, but in reality the industry is dominated by recency bias. If something has worked lately it’s declared permanent, and if something hasn’t it’s dismissed as broken. That mindset creates some of the biggest opportunities — and some of the loudest criticism — for people willing to think differently.
Forward Looking Investing Radicalism
And finally, I took a closer look at the accelerating stress inside private credit markets. Blackstone’s flagship private credit fund just experienced the largest redemption requests in its history, with investors seeking to pull billions of dollars from the vehicle in a single quarter. While geopolitical headlines have been dominating the news cycle, developments like this suggest that some important financial fault lines may be forming under the surface.
The Private Credit Collapse Accelerates
If you have a few minutes this weekend, I’d encourage you to catch up on these before Monday. Markets often look calm on the surface right up until the moment they aren’t.
Here’s what else is new on the blog:
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Tariff Refund Delays Could Cost Taxpayers $700 Million A Month
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How Justice Gorsuch Helped Save Us From a “Climate Emergency”
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