Collapsing breadth. Stretched positioning. The worst seasonal window of the year. The worst year of the political cycle. And a war that won’t end. Market correction risk is stacking up. The S&P 500 hit a fresh record high last week. The median stock in the index is sitting 13% below its 52-week peak. That divergence is […]
Gated funds, collateral fraud, and auto-sector defaults are giving investors in private credit funds and their stock-market equivalents, business development corporations (BDCs), a headache. We have discussed the recent woes of private credit funds (HERE, HERE, HERE), yet we haven’t addressed BDCs. The similarities and differences between private credit funds and BDCs are important. For […]
As of this writing, the Strait of Hormuz remains effectively closed since February 28. Roughly 20% of the world’s seaborne oil stopped moving through the chokepoint. The International Energy Agency described the event as “the largest supply disruption in the history of the global oil market.” Gulf producers shut in nearly 9 million barrels a day […]
In Part One, we explored how leverage and derivatives turned subprime mortgages into a crisis that nearly brought down the global financial system. With a better understanding of the derivatives and leverage that led to the Global Financial Crisis (GFC), we now explore private credit, a small “niche” financial sector, such as subprime mortgages, which […]
The Iran shock erased 18% from valuations and fully recovered in two weeks. Investors who panicked missed it all. Here’s what the market lesson is about: risk management, behavior, and what to do with your portfolio right now. The stock market selloff between February 28 and April 14 produced one of the more instructive market […]
Believe it or not, it’s been 18 years since the Global Financial Crisis (GFC). Despite many detailed investigative reports on the events and even the popularity of The Big Short, a box-office hit and bestselling book, the role of subprime mortgages in the near-fatal collapse of the banking system remains a mystery to many investors. […]
Over the last few weeks, we have published real-time market commentary as the correction proceeded. The goal was to help investors navigate the more dire outcomes promoted on social media. A largely unexpected outcome was that the S&P 500 outlook changed dramatically in a matter of days. After five consecutive weeks of decline driven by […]
While tech giants invest billions in AI, Apple executives are quietly sitting on their hands and a mountain of cash. Given the massive growth in AI investments, as shown in the graphs below, executives of leading companies at the forefront of AI development must be ecstatic about the prospect of AI significantly boosting their bottom […]
Last week, the stock market rally was one of the best performances in nearly a year. The S&P 500 surged 3.4%, the Nasdaq climbed 4.4%, and the bulls declared the correction over. As I have stated before, having watched markets for more than 35 years, I have come to recognize the difference between a relief […]