The Lead Left’s exclusive Lead Left webinar, ”Of Rates and Recessions: What’s Ahead for the Economy,“ aired yesterday with over 400 attendees. We will dedicate space next week summarizing the views of our three expert economists. In the meantime, let’s position that conversation with a review of the state of our economic affairs as it…
One of many challenges of the investing climate is reading the economic signs. Is inflation coming down or going up? Is the labor market strengthening or weakening? Are we in a recession or just slow growth? Last Friday’s job report was a case in point. Job openings dropped dramatically by 1.1 million, the lowest level…
As our Quote of the Week concisely frames it, the world is changing from one where risk-taking was rewarded, to one where it is punished if not appropriately managed. The question for private credit investors is, can you be rewarded while managing today’s level of greater risk? In a nutshell, the Fed’s withdrawal of systemic capital and…
In a world where cash is either being withdrawn systemically through quantitative tightening or selectively by investor caution, capital formation is being challenged. Public capital utilization is governed by fast cash, so when money flows out of retail funds at the pace it has, it’s a headwind to deal activity. Private capital has long-term, locked-up…
Supply chain issues aren’t limited to bikes and baby formula. As the Fed withdraws liquidity from the banking system and investor cash exits public credit, it’s more challenging to deliver capital to traditional buyouts and M&A. In pivoting from a world of abundance to one of scarcity, credit markets are struggling to adjust. Direct lenders…
Our keynote address at this week’s SuperReturn US Private Credit conference allowed us to share a reconsideration of the impact of rate hikes and quantitative tightening on capital markets and private credit. This special series will further develop that thesis. For over a decade, including through Covid, the tide of capital has flowed mostly in…
We all have a few sad childhood memories. One of our lowest moments was coming home for Thanksgiving freshman year to discover our younger brother had traded away our baseball card collection. We had gifted him the shoebox full of Topps stars that summer, assuming he would prize it highly. Turns out he prized his…
“The easy money has been made; the harder money is left.” We noted this recently from an experienced asset manager reflecting on the current investing market. It’s fairly typical of a public trading approach emerging from a period of low prices. Eventually the worry discount goes away as fear fades. Finding the next bargain then…
Our characterization of the current economic picture as a “precession” took into account the second quarter’s negative GDP data. But last week’s “blowout” labor report for July – 528,000 jobs added – combined with unemployment edging down to 3.5%, hardly depict the prelude to a recession. The number of jobs now stands where it did…
News reached us last week of the demise of the Choco Taco. Or not. Cousin to the Klondike Bar, this chocolate-nut-waffle-taco-vanilla-fudge-ice-cream novelty seemed to be yet another victim of supply-chain issues when its manufacturer announced it was being discontinued. Choco-Taco’s creator chalked it up to the times. “I believe if there had never been Covid…