And it's Just Monday Morning...
There's something happening here, what it is is increasingly clear.
▶Actually, this first one happened Sunday night…
That’s when the Wall Street Journal dropped a piece headlined, “Private Credit Is Under Growing Strain, Despite Industry’s Upbeat Tone.”
Buried in there was this chart…
Perhaps most compelling is that this story, which, as I write this, is leading the WSJ home page, has only 81 comments. A mere eighty-one!
The reason, of course, is that we’re talking debt, which to this market is akin to talking Greek.
Yet, if I’ve learned nothing else in my five-plus decades of doing this, it’s that when it comes to stocks or the market as a whole, the best canary of all is the debt markets.
So here we are, Monday morning, and up pops the headline that Cloudflare NET 0.00%↑ was proposing to offer $2.175 billion in convertible notes. While this doesn’t appear to be like so many other recent debt offerings tied to the AI buildout, but instead a form of financial arbitrage, I couldn’t help but snidely subtweet, “A little debt here, a little debt there.”
Then, during my morning social media scroll, I stumbled on a Substack post by somebody named Josiah Waters with the headline, “The Bond Market Is Warning of a Major Collapse.”
I have no idea who Waters is, and like so much I read these days, I don’t know if what I was reading was written by a person or AI. But the headline did its trick, so I started reading. The first paragraph snared me…
There is a recurring moment before financial collapses when the public becomes least capable of recognizing danger because the visible surface of the system still appears triumphant. Markets rise, headlines celebrate record highs, and investors convince themselves that soaring asset prices are proof the underlying economy remains healthy. The final stage of speculative cycles rarely feels like panic. More often, it feels like vindication. Skeptics are mocked, risk is dismissed as pessimism, and the crowd mistakes momentum for stability precisely as the foundations underneath it begin to weaken.
To which I posted…
Sounds about right.
Then, somewhere in the mix of all this came the news that Intel INTC 0.00%↑ was going to issue $15 billion in new stock. To which I couldn’t resist the classic…
The ducks are quacking, feed the ducks.
But then Kevin Hassett, director of the National Economic Council, who happened to be on CNBC around the time the headline hit. He was asked whether the U.S. government, which holds a 9.9% stake in the chipmaker, will now sell the stock now that it’s up nearly 400% since its initial investment. Hassett responded that President Trump will make that call.
To which I thought, “Why of course, he and only he.”
That’s my morning; how’s yours?
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DISCLAIMER: This is solely my opinion based on my observations and interpretations of events, based on published facts and filings, and should not be construed as personal investment advice. (Because it isn’t!) I have no position in any stock mentioned here.
I can be reached at herb@herbgreenberg.com.