The First shall be last
Sept 29, 2025
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–I’m not usually a big fan of ‘AI summaries’ but I like the wording of BBG’s regarding the failure of First Brands: “The direction of travel is troubling, with private asset managers pushing to get more money from ordinary folks’ savings and non-banks borrowing increasing amounts from banks, inviting fresh horrors and strain for more borrowers.”
–First Brands is an auto parts supplier with assets between $1 and $10 billion. Not much more than a sneeze in the capital markets, but the BBG article mentions excessive leverage. Of course, CarMax (KMX) earnings and stock price plunge last week is a reminder of auto troubles. Lower in the piece: “The share of [US consumer] credit card balances more than 90 days late exceeds 12%, way ahead of 2020’s peak and not far off 2010’s 13.7%…” Didn’t Trump and Bernie want to cap credit card interest rates at 10%?
https://blinks.bloomberg.com/news/stories/T3CG60GPFI8Z
–Gov’t shutdown looms. Sev’l Fed speakers today: Waller on payments at 7:30, Hammack (still worried about inflation) at 8. Musalem and Williams (?) at 1:30.
–Crude oil pulling back from Friday;’s strength, CLZ5 currently down $1 at 64.14. Stocks and bonds merrily higher. Gold, the new central bank lynchpin of the global monetary structure is, of course, making a new all-time high with GCZ5 3838.
–Chart attached is the 10y treasury vs EFFR. I had noted when EFFR was 4.33 that tens weren’t deviating from that level all that much. Now EFFR is 4.08 or 4.09. Friday’s 4.183% (+1.1 on the day) offers some positive carry. Yield is 4.144% this morning.
