Risks Out There 07 (May 23 - Dec 26)

[behappyalways]

The US debt crisis is more terrible than the stock market crash!
The Federal Reserve secretly rescued the market by 43.6 billion.
The world is selling off US assets

【CC字幕】美債危機比股災更可怕！聯準會偷偷救市436億 陳鳳馨：全球拋售美國資產⋯⋯【Yahoo TV ＃風向龍鳳配】

https://m.youtube.com/watch?v=A_hL6B-mIeY

[behappyalways]

Afraid of being eliminated!
AI threatens to "expose engineer's extramarital affair"
Chat GPT also out of control! Refuse to shut down and modify the code

怕被淘汰! AI威脅"揭露工程師婚外情" Chat GPT也失控! 拒絕關機竄改程式碼｜記者 盧睿鋐｜國際焦點20250529｜三立新聞台

https://m.youtube.com/watch?v=OmJOGyMuuKg

[behappyalways]

The fact that we are basically at April 2nd tariff levels is not getting enough negative press covfefe
https://x.com/markoinny/status/1942607580829712879

[behappyalways]

'Godfather Of AI' Warns Superintelligent Machines Could Replace Humanity
https://www.zerohedge.com/ai/godfather- ... e-humanity

[winston]

S&P 500: What Could Possibly Go Wrong in September?

By Ed Yardeni

1. The Fed & the economy
The economy doesn’t need a rate cut, especially with inflation closer to 3.0% y/y than the Fed’s 2.0% target.

2. The Fed & inflation
The monthly increases in the core inflation rate have been rising for the past four months.

3. The Fed’s independence
If the Fed cuts the rate even though the data don’t warrant such easing, the Bond Vigilantes are likely to protest.

4. Trump’s tariffs
The Bond Vigilantes might start acting up again if they can no longer look forward to a significant reduction in the federal deficit attributable to tariff revenues.

5. European turmoil

6. Japan’s debt crisis

7. Gold

Source: investing.com

https://www.investing.com/analysis/sp-5 ... -200666170

[winston]

by behappyalways:-

"Huge Red Flag" - Chanos Joins Growing Crowd Questioning Subprime Credit In "The Golden Age Of Fraud"

Source: Zero Hedge

https://www.zerohedge.com/markets/huge- ... -age-fraud

[behappyalways]

A Third Of Countries Plagued by "Abnormally High" Food Prices - Brings Risks Of Social Unrest
https://www.zerohedge.com/commodities/t ... ial-unrest

[winston]

World Economic Forum chief warns of three possible 'bubbles' in global economy

One is a crypto bubble, second an AI bubble and the third, would be a debt bubble.

Markets have for months shrugged off concerns over elevated interest rates, stubborn inflation and trade turmoil, pushing higher partly on expectations that AI could transform the prospects for the global economy and businesses.

Source: Reuters

https://www.businesstimes.com.sg/intern ... al-economy

[winston]

The next big crisis in the financial markets is going to be private credit

In a recent CNBC interview, Gundlach said that while many assets are wildly overpriced, the real trouble spot isn’t flashy AI stocks – it’s the rapidly ballooning private-credit market.

To make sure we’re all on the same page, “private credit” refers to loans made outside the traditional banking system.

After regulators tightened lending standards in the aftermath of the 2008 financial crisis, non-bank lenders stepped in – and the industry exploded from roughly $300 billion in 2010 to trillions today.

For borrowers, private credit offers flexibility when banks say no. For lenders, it promises high yields – often around 10% to 11%. But those juicy payouts come with a catch: leverage.

Bloomberg recently noted that over 40% of private-credit borrowers ended 2024 with negative free cash flow, a sharp increase from 2021.

Meanwhile, two recent bankruptcies – First Brands and Tricolor – have already forced portions of Wall Street to pull back.

Last month, JPMorgan CEO Jamie Dimon summed it up bluntly:
When you see one cockroach, there are probably more.

Gundlach just echoed that same fear. He warned that lenders are making “garbage loans,” just like the pre-2008 subprime era, and he’s especially concerned about the push to package these loans and sell them to retail investors who expect easy withdrawals from fundamentally illiquid assets.

If redemptions surge, these funds could be forced into fire-sale losses.

Source: Investor Place

[winston]

Finance billionaires warn of rising private credit market risks

Recent high-profile US bankruptcies may signal broader credit troubles in the financial system

Finance industry billionaires are raising concerns over what they see as increasing risk in private markets fueled by steep rises in asset valuations, limited regulation and macroeconomic pressures.

There is also a growing wariness that the US$1.7 trillion private credit industry could be introducing new layers of complexity and risk in the financial system.

When investors don’t mark to market and assume there’s enough dry powder, many times, “it’s all good until it isn’t.

Depending on the amount of gearing, “everything can ripple” if there is a refinancing crunch.

“You’re going to get some companies quite highly levered and over their skis when they don’t really want to be.”

It could be time for investors to “take risk down” by moving up in credit quality. Asset prices aren’t cheap and long-term interest rates are likely to stay high.

Source: Bloomberg

https://www.businesstimes.com.sg/wealth ... rket-risks