Cockroaches in the Coal Mine

Bullish

• $PUBDEBT— Public debt offers superior liquidity and exit options compared to private credit, making it more attractive during potential credit stress periods

  • “It's important to note that whereas private credit has been the rage of late, all else being equal, it's great to hold public debt that can be exited more readily if you sour on the credit.”

    Howard·20:51Hear it

Bearish

• $PRIVCRED— Increased competition from new entrants and excess capital has eroded private credit's traditional advantages, suggesting deteriorating fundamentals in this popular sector

  • “The arrival of new entrants and a great deal of incremental capital created more competition to lend and inevitably reduced some of the lenders' advantages.”

    Howard·2:31Hear it
• $SUBIG— After 16 years of benign credit conditions, hidden risks are likely accumulating in sub-investment grade debt markets as the worst loans are typically made during the best times

  • “The worst of loans are made in the best of times.”

    Howard·9:21Hear it

Not investment advice.