- Currencies and metals rally on Tuesday
- Private Credit is a problem waiting to happen
Good Day… And a Wonderful Wednesday to you! Well, I got through yesterday unscathed if you will…. But that will bring bout more tests to see if they can figure out where the blood leak is that caused by Anemia…. Anemia isn’t fun folks… I slept the whole afternoon after returning from the hospital… I just couldn’t stay awake for more than 5 minutes! Steve Winwood greets me this morning with his solo song: Roll With It…
Pfennig Tradition calls for this: One, two, three, four
One, two (one, two, three, four)
Let me tell you how it will be
There’s one for you, nineteen for me
‘Cause I’m the taxman
Chuck again… yes, it’s Tax Day… I so dislike this day so much I almost gave up Pfennig Tradition today…
Well, I never even looked at the market’s prices yesterday until late in the day, when I finally woke up! I did see the euro cross into the 1.18 level in the morning, but it couldn’t hold it even though the dollar was getting sold and the BBDXY ended the day at 1,193… Again, the dollar is teetering toward falling off a cliff, so don’t be surprised if you see a rally in the dollar, as the PPT will want to make sure that the dollar doesn’t fall of a cliff….
Gold & Silver fought back yesterday; after getting sold on Monday… Ed Steer tells me that these two metals got sold short immediately after the Sunday night open overseas… Gold lost $7 on Monday and Silver lost 32-cents on Monday… But yesterday was turnaround Tuesday, and Gold gained to close the day at $4,841 and Silver gained to close the day at $79.68… Yesterday, Silver was up over $80 in the morning, and then saw the SPTs wittle it down to close below $80…
I can’t believe my eye! The bond boys and the Oil traders are falling for another ruse by the White House, as they are saying that peace negotiations will resume… Oh, Really? And what do these traders thingk will result of the negotiations? The 10-year closed yesterday at 4.25%… And Oil saw the rug pulled out from under it as the price ended the day yesterday at $90.98…
In the overnight markets last night… the dollar got bought a bit, with the BBDXY gaining 1 index point… I wouldn’t put too much stock in the dollar gain overnight, because every day session brings us more news of this, that, and the other thing that drives the dollar down… So, be patient is what I’m saying…
Gold & Silver are seeing some selling overnight and in the early trading. Gold is down $31 and Silver is down 70-cents… The folks at Kitco.com say it’s “profit taking”… But I have my doubts… I suspect the SPTs saw yesterday’s performance of the two metals and said, “We must do something about that”… And they have…
The price of Oil slid another buck overnight and starts today at $92.45. I think the boys are really going to rue the day they marked down Oil so much… I’m just saying…
The 10-year starts the day at 4.27% yield… The same holds true for the bond boys… But I guess we’ll have to wait-n-see, eh?
OK, the other day I reported that the Consumer Sentiment had falled to a 40 year low, not seen since 1980… And left it at that… What I should have done is give you some reasons for this drop in Sentiment… And then I saw the Rude Awakening newsletter and James Rickads did that for me? Here’s Jim…
The University of Michigan just reported a consumer confidence reading of just 47.6.
And is any of this surprising?
Consumer prices have been out of control for nearly 6 years now…
Meanwhile every traditional form of income in America is either stagnating or outright FAILING:
Salaries are flatlining and layoffs are on the rise…
Bonds and dividends only move the needle if you have millions to invest in them…
Social Security is just years from either depleting entirely – or, at the very least, seeing a massive cut to allocations…
And our politicians are doing NOTHING to fix any of this. In fact, it’s only getting worse…”
Chuck again… yes, I spelled out the problems for the dollar a week or so ago, and now Consumers are seeing the problems piling up for them… This is getting really ugly folks…
With the dollar having so many problems and sinking like torpedoed ship, the Aussie dollar and New Zealand dollar/ kiwi have been on the rally tracks… Last week the A$ climbed above 70-cents and kiwi lagged behind remaining in the 58-cent handle for what seems like a month of Sundays… But yesterday, currency traders are beginning to see the light and the A$ climbed above 71-cents and kiwi above the 59-cents handles… I’m telling you this now, so maybe you’ll listen to me later and that is that these two currencies are tied to commodities, and Commodities are en vogue right now… So, what are you waiting for?
And even if China isn’t involved in the U.S. Israel/ Iran conflict, they are feeling the effects of shipping problems all over the word… this from Reuters: “China’s export engine slowed sharply in March as war in the Middle East triggered shocks to energy and transportation costs, hurting global demand and exposing the risks in Beijing’s strategy of leaning on manufacturing to sustain growth.”
Our POTUS is scheduled to meet face to face with China’s Xi I think next week or sometime around that frame… The U.S.’s decision to block ships entering the Hormuz heading for Iran… Yesterday, there were reports that 3 ships were allowed passage because their destination wasn’t Iran… And that the U.S. turned away 6 other ships… I can’t imagine that China’s Xi is happy about this and will no doubt lead off the meeting with President Trump when that takes place…
I only bring all that up because it slows shipping and with the recent halt in shipping, we just aren’t seeing trade going on right now, and that will slow everyone’s economy, folks…
The U.S. Data Cupboard had the March print of PPI (wholesale inflation) and it didn’t show the big increase in PPI that was expected, so that’s a good thing for future inflation… Not that future inflation is receiving much good news these days…
Today’s Data Cupboard has the Import Price index, and more importantly the most recent Fed Beige Book…
For What It’s Worth… I’ve talked about the problems with Private Credit before and I came across this article on Zerohedge.com and thought this was a good update on the building problem and it can be found here: With Private Credit We See The Credit Cycle Hasn’t Been Repealed | ZeroHedge
Or, here’s your snippet: “Something cracked in private credit this month, and the men who manage systemic risk for a living are saying so.
Goldman Sachs CEO David Solomon’s just-released 2025 annual shareholder letter warns that concerns about private credit – including “underwriting quality or exposure to software companies that may be negatively affected by AI” – are “a reminder that the credit cycle has not been repealed.” His predecessor Lloyd Blankfein went further on Bloomberg’s Big Take podcast: “I don’t feel the storm, but the horses are starting to whinny in the corral.” JPMorgan has already voted with its balance sheet, marking down software company loans held as collateral by private credit funds and reducing borrowing capacity for those funds, before any actual defaults. “I’m shocked that people are shocked,” said JPMorgan’s Troy Rohrbaugh.
The backdrop is three major liquidity failures in the space of six weeks. Blackstone’s $82 billion BCRED faced record redemption requests of $3.7 billion (7.9% of assets) and had to inject $400 million of its own capital to honor them. BlackRock gated its $26 billion HLEND after receiving withdrawal requests of 9.3% of NAV. Blue Owl permanently halted redemptions in OBDC II and sold $1.4 billion in loans to fund an orderly exit. Blue Owl shares have since fallen roughly 40% year-to-date.
These are not random liquidity events. They are the structural consequence of a capital concentration problem I have been watching build for a decade. In 2025 alone, the ten largest private credit funds captured nearly 46% of all capital raised, the highest concentration in over a decade. That tidal wave of capital forces mega-platforms into ever-larger deals, typically companies with $200 million or more in EBITDA, where they compete head-to-head with broadly syndicated loan syndicates and public high-yield. The result is spread compression, yield erosion, and the complete elimination of the pricing advantages that private credit was supposed to offer.”
Chuck again… This article goes on and on, but I think I gave you the gist of it… Private Credit isn’t a major problem now, but the problem is gaining strength and that’s what scares me…
Market prices 4/15/2026: American Style: A$.7131, kiwi .5900, C$ .7252, euro 1.1777, sterling 1.3544, Swiss $1.2777, European Style: rand 16.3974, krone 9.4411, SEK 9.2121, forint 309.76, zloty 3.6032, koruna 20.6830, RUB 75.62, yen 158.99, sing 1.2724, HKD 7.8352, INR 93.38, China 6.8210, peso 17.29, BRL 4.9886, BBDXY 1,194, Dollar Index 98.25, Oil $92.45, 10-year 4.27%, Silver $78.96, Platinum $2,113.00, Palladium $1,619.00, Copper $6.13, and Gold… $4,810
That’s it for today… What a game last night for my beloved Cardinals! After falling behind by 3 runs in the 8th inning, they found a way to tie in the 9th and win it in the 10th! This young team can frustrate one to no end and then elate the fans the next day! Things are really weird for me right now, but I’ll get through it… As Popeye used say: I yams what I yams… and that’s all that I yam! I still can’t believe that traders are falling for this peace scenario… I’m just saying… Our Blues won last night VS the Penguins… too late for their playoff hopes… 10CC takes us to the finish line today with their song: I’m Not In Love… I hope you have a Wonderful Wednesday today, and Please Be Good To Yourself!
Chuck Butler