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The Goldman Sachs Most Short Index surged 15.0% over the past five sessions. The Semiconductors rallied 10.6%, with Intel up 20.6%, Micron 17.4%, Analog Devices 17.8%, Broadcom 16.2%, and Applied Materials 14.5%. Bloomberg’s MAG7 index jumped 6.3% over five sessions. Google rallied 10.6%, Meta Platforms 10.0%, Tesla 8.8%, and Amazon 7.4%. The small cap Russell 2000 surged 8.5%. The NYSE Broker/Dealer Index jumped 6.6%, and the KBW Bank Index rose 5.6%. Robinhood spiked 21.0% in five sessions. Morgan Stanley and Goldman Sachs jumped 6.8% and 6.9%. Carvana surged 19.6%, as Capital One rallied 8.3%.

Europe’s STOXX 600 Banks Index jumped 4.4% this week, with Japan’s TOPIX Bank Index rallying 4.1%.

It's not just that U.S. and global markets are now in a hyper volatile condition. Marketplace liquidity has turned acutely unstable. In general, global markets are in a state of liquidity overabundance, fueled by unprecedented leveraged speculation across markets. At the same time, risk aversion has made some headway in key sectors including crypto and AI. Overheated markets are vulnerable to risk aversion developing into a more systemic de-risking/deleveraging dynamic.

November 25 – Financial Times (George Steer and Tim Bradshaw): “Nvidia shares fell sharply on Tuesday on fears that Google is gaining ground in artificial intelligence, erasing $115bn in market value from the AI chipmaker. Nvidia’s shares closed 2.6% lower after having shed more than 7% in early trading. The declines rippled through companies linked to the chipmaker. Server maker Super Micro Computer… fell 2.5% while software group Oracle, which has committed to spending billions of dollars on the chipmaker’s… systems, lost 1.6%. Shares in data centre operator CoreWeave, in which Nvidia owns a 6% stake, fell 3.1%, alongside its AI cloud rival Nebius, which was down 3.3%. Investors blamed the declines on excitement surrounding Alphabet’s own AI-specialised chips, known as tensor processing units. Google last week released Gemini 3, its latest large language model, which is considered to have leapfrogged OpenAI’s ChatGPT. The search groups’ model was trained using TPUs rather than the Nvidia chips that power OpenAI’s systems.”

November 27 – Financial Times (Robin Wigglesworth): “Oracle has emerged as the weakest member of the AI hyperscaler herd, with hedge funds now shorting both its stock and debt. Morgan Stanley’s credit analysts think things are going to get even worse. The investment bank’s analysts Lindsay Tyler and David Hamburger had previously recommended investors buy credit-default swaps on Oracle, but hedging the exposure with long positions in its bonds… They’re now recommending that investors ditch the bonds and simply go long Oracle CDS, because of its ‘funding gap, growing balance sheet, capex & obsolescence risk, ratings pressure, counterparty risk, and more’.”

Bucking the market rally, Nvidia declined 1.2% this week. The stock is down 12.7% for the month. Strategy sank 34.5% in November, Super Micro Computer 35.7%, Oracle 23.3%, Coinbase 21.0%, Arm Holdings 20.9%, Dell 18.2%, Palantir 16.7% and AMD 15.6%. CoreWeave collapsed 45.6% this month. Yields on CoreWeave’s 9% 2031 bond surged 255 bps to 11.47%. Oracle CDS jumped 37 bps during November to 120 bps, with prices up 75 bps over three months. After trading at 6.0% on October 3rd, yields on Oracle’s 5.95% 2055 bond jumped 45 bps to end November at 6.45%.

Bitcoin sank $18,700, or 17%, during November. At November 21st lows, bitcoin was 26% lower m-t-d. Bitcoin ended the month down 28% from the October 6th intraday high (126,273). For the month, XRP was down 15%, Solana 26%, Binance Coin 26%, and Dogecoin 19%. Ethereum sank 21% in November, with prices off 39% from August highs.

The late-month recovery somewhat stabilized trading dynamics, but the cryptocurrencies have suffered a serious round of deleveraging. We can assume that huge amounts of leverage have accumulated in this highly speculative marketplace. April’s “pause” rally triggered speculative blowoff dynamics throughout global markets, certainly including crypto. I read with interest Bloomberg Intelligence analysis this week from James Seyffart, “Ethereum ETFs & Basis-Trade Impacts.” A most abbreviated summary below:

“Hedge funds, the second-largest known holders of US spot Ethereum ETFs, likely contributed to the category’s $12.9 billion of inflows from April into October and the $2.5 billion of outflows since then via the Ether basis trade… Though Bitcoin’s ETF’s absolute flows were larger (a $27.5bn inflow, followed by a $5.4bn outflow in the past seven weeks), the relative moves were much greater for Ether ETFs. The group’s assets peaked at $32.2 billion in early October thanks to inflows and Ether’s rising price. But they slid to less than $17 billion… Ethereum ETFs flows this year have been impacted by changes in the yield from the Ethereum basis trade… Hedge funds account for 38% of Ethereum ETF holders, widening their lead over the 25% share in Bitcoin ETFs… Some hedge funds and other holders are almost certainly using the ETFs as the long leg of an Ethereum futures basis trade.”

According to Bloomberg, Bitcoin, Ethereum, XRP, Dogecoin, Solana, Cardano, Chainlink, and Stellar all now have futures contracts. The iShares Bitcoin ETF ended the week with total assets around $70 billion. There are now 12 separate Bitcoin ETFs, along with scores for other cryptocurrencies. There are five XRP ETFs, with a dozen more coming. The iShares Ethereum ETF has total assets of $11 billion. How instrumental have levered basis trades become to the crypto universe?

Crypto at least made it through the week. Fears of a more systemic liquidity issue escalated a week ago, as crypto deleveraging risked intensifying AI/tech de-risking/deleveraging. Such fears triggered aggressive hedging, along with shorting throughout the hedge fund community. And, of course, markets are conditioned to view such risk mitigation activities as yet another opportunity for a big short squeeze and unwind of hedges “buy the dip” payday.

Importantly, the global market liquidity backdrop has turned precariously unstable. Crypto and AI/tech speculative Bubbles are at the precipice of a bout of risk aversion and destabilizing deleveraging. Hedge funds, margin debt, option/derivatives, and the ETF complex create a fragile market structure.

Meanwhile, the general backdrop remains one of extreme global liquidity excess. When big tech comes under pressure, fears of systemic de-risking/deleveraging quickly mount. Hedging and shorting only exacerbate the risk of a major market downdraft, illiquidity, and dislocation. But – and this is a big but – the now typical “risk on” short squeeze/hedge unwind rally provides a powerful punch to underlying global liquidity overabundance.

Heightened systemic risk associated with festering Credit issues and crypto and AI/tech deleveraging has pressured Treasury yields lower, as markets boost bets for more aggressive Fed rate cuts. Right on cue, New York Fed President John Williams came out last Friday with dovish comments suggesting a probable December 10th rate cut. The market ended this week pricing an 83% probability of a cut a week from Wednesday. This is up from 29% on the 19th. Ten-year Treasury yields were down 12 bps in seven sessions (MBS yields 18bps lower).

Lower yields bolster “basis trade” and “carry trade” leverage, while squeeze/hedge unwind rallies stoke liquidity excess – creating a most unstable liquidity dynamic. It’s worth noting that money market fund assets (MMFA) – my proxy for the expansion of “repo” securities finance - surged $46 billion the past week to a record $7.567 TN. MMFA have ballooned $378 billion, or 19.5% annualized, over the past 14 weeks. Emblematic of the historic inflation of speculative finance, MMFA inflated $2.951 TN, or 65%, in just over three years (since Oct. 26, ’22). This is reflective of history’s greatest speculative Bubble and monetary inflation.

“Risk on” at this juncture is highly liquidity destabilizing. Silver surged 13% this week to a record $56.50, boosting y-t-d gains to 96%. Gold’s $174 (4.3%) jump to $4,239 pushed 2025 gains to 62%. Platinum’s 9.9% rise boosted y-t-d gains to 84%, while Copper’s 3.5% increase raised the year’s advance to 31%. The Bloomberg Commodities Index jumped 2.7% this week (up 11.8% y-t-d). It’s not unreasonable for the bond market to dismiss such late-cycle speculative dynamics, though more steadfast risk embracement comes with clear inflationary ramifications.

High-yield CDS prices sank 19 bps this week to a one-month low of 322 bps – the largest weekly drop since late June (positive U.S./China trade developments). High-yield spreads narrowed an astounding 32 bps to 269 bps, the biggest tightening since mid-May. The 7.1 point drop in the VIX was the largest since the week of April 18th. What to make of it all? Well, such exaggerated moves are indicative of dysfunctional hedging markets. In short, myriad hedging strategies are causing havoc and battering (hedge fund) performance. Funds zigging and zagging.

Pablo Hernández de Cos served as the governor of the Bank of Spain (2018-2024), chairman of the Basel Committee on Banking Supervision, and economics professor, before becoming General Manager of the Bank of International Settlements this past July.

August 26 – Bloomberg (Mark Schroers): “Central-bank independence is crucial for keeping inflation in check and contributing to people’s wellbeing, according to the new head of the Bank for International Settlements. Autonomy allows policymakers to take decisions ‘based on economic considerations in the long-term public interest, free from short-term political interference,’ General Manager Pablo Hernandez de Cos said… In his first speech since taking over, the former European Central Bank official stressed that independence also ‘shields central banks from pressures to use monetary policy to finance government budget deficits’.”

Hernández de Cos’ Thursday presentation at the London School of Economics, “Fiscal Threats in a Changing Global Financial System,” expands on critical analysis recently proffered by the BIS, Bank of England, and IMF. Hopefully Fed officials are at least contemplating the subject matter.

I have extensively extracted from this important and timely must-read analysis:

“The main focus of my lecture is on the combination of high government debt levels and the growing presence of non-bank financial institutions (NBFIs) in sovereign bond markets. This combination poses new financial stability challenges, which have both domestic and international components.”

“Two major changes have reshaped the global financial system since the Great Financial Crisis. The focus of financial intermediation has shifted from lending to the private sector towards financing governments. Partly as a result, NBFIs’ footprint in sovereign bond markets has grown considerably, facilitated by short-term funding markets that enable the build-up of leverage in the financial system.”

“Sovereign debt levels have increased considerably since the GFC. They have now reached historical post-World War II highs in many advanced economies (AEs). According to the IMF’s latest baseline projections, debt levels are projected to rise further, reaching an average of nearly 120% of GDP in AEs and 85% in emerging market economies (EMEs) as soon as 2030.”

“A significant risk for debt sustainability is that bond yields could rise further, especially if inflation were to flare up again or if governments delay tackling large fiscal deficits.”

“More broadly, the prevailing political process in many countries often results in deficit bias.”

“The surge in government debt levels has been accompanied by a major shift in intermediation patterns in the global financial system – away from banks towards NBFIs.”

“Leveraged NBFIs, and hedge funds in particular, have played an important role in filling the gap between the rapidly increasing supply of government bonds and the demand from banks and other NBFIs. This has been primarily incentivised by hedge funds’ utilisation of relative value trading strategies, such as the cash-futures basis trade, that seek to exploit small price differences between related financial instruments. To boost the returns on these small price differences, relative value hedge funds heavily leverage their positions. They do so by borrowing in the repo market to finance the purchase of the cash security and profit from the small price difference between the security and its corresponding futures contract. While these developments have been most notable in the United States, they have also taken place in several other major AE jurisdictions, including the euro area, Canada and the United Kingdom.”

“The greater presence of some NBFIs in sovereign bond markets increases the likelihood of sharp non-linear yield spikes (ie “snapback risk”). More concretely, there are several channels through which NBFIs could generate and amplify stress in sovereign debt markets well before the theoretical limits implied by standard fiscal sustainability analyses are reached.”

“The first one is related to the role of duration matching by pension funds and insurance companies… The second of those channels is linked to the way that many money market funds and open-ended funds use government bond holdings for liquidity management, which can lead to fire sales of those assets if there is a need to raise cash in response to a spike in redemptions. The third stress amplification channel is related to ‘original sin redux’… When foreign NBFIs hold bonds denominated in the local currency of the issuer, exchange rate movements generate (hard currency) valuation losses, which can trigger portfolio outflows, raising government bond yields.”

“Since the above channels are well known, I would like to focus today on a more novel set of potential financial stress amplification channels, related to some NBFIs’ heavy reliance on leverage and (on- and off-balance sheet) short-term dollar funding.”

“The first of these channels stems from hedge funds’ leveraged trading strategies, which are facilitated by the availability of repo financing on very favourable terms. In recent years, hedge funds have been able to borrow amounts equal to or higher than the market value of the collateral provided – that is, without any discount, or haircut, protecting the cash lender from market risk. Around 70% of bilateral repos taken out by hedge funds in US dollars and 50% in bilateral repos in euros are offered at zero haircut, meaning that creditors are not imposing any constraint on leverage using government bonds. Larger hedge funds – those relative value funds typically involved in the basis trade – are especially prone to receive such favourable terms from their dealers relative to their smaller peers.”

“As a consequence, hedge funds’ relative value strategies are highly vulnerable to adverse shocks in funding, cash or derivatives markets, as evidenced by recent episodes. During the market turmoil of March 2020, for instance, margin calls in Treasury futures markets triggered an unwinding of the trade, including holdings of Treasuries in the cash market, contributing to destabilising deleveraging spirals. More recently, a more orderly unwinding of relative value trades – this time tied to interest rate swap markets, where investors had bet on a narrowing in spreads due to perceptions of potential regulatory loosening – seems to have contributed to the heightened volatility observed in Treasury markets in early April 2025.”

“The second novel financial stress amplification channel is linked to long-term private investors, such as asset managers, pension funds and insurance companies. Despite not being highly leveraged, these internationally active financial intermediaries also face considerable short-term dollar funding rollover risks related to their use of FX derivatives.”

“The third novel financial stress amplification channel stems from the fact that the repo market and the FX swap market are closely linked to each other. Major dealer banks are the key suppliers of short-term dollar funding in both markets. And while FX swaps are off-balance sheet instruments that do not count towards total assets, both repos and FX swaps are forms of collateralised lending and count towards the risk budget of major dealer banks. If stress in the repo market lowers banks’ risk-taking capacity or disrupts their funding, they are likely to pull back from the FX swap market. Thus, stress in the repo market could quickly spread to the FX swap market, and vice versa. Given the nature of the FX swaps, if banks do not roll over FX swaps, asset managers will have to come up with the full notional amounts of the underlying contracts in order to close them. This could cause a global scramble for dollars, similar to what we saw in March 2020. Thus, the traditional bank-sovereign nexus has now evolved into a broader nexus linking (bank and non-bank) financial institutions and sovereigns.”

“Limiting NBFI leverage when it gives rise to financial stability concerns should be a primary policy objective.”

Concluding comments:

“The global financial system has undergone profound structural changes since the GFC. Against the backdrop of rapidly increasing government debt levels, the focus of financial intermediation has shifted from lending to the private sector towards financing governments. This has been accompanied by a considerable rise in the presence of NBFIs in sovereign bond markets. NBFIs’ growing footprint has been facilitated by short-term funding markets, which have enabled a significant build-up of leverage in the financial system.

These developments pose serious financial stability challenges, which have both domestic and international aspects. In tranquil times, NBFIs’ greater presence in sovereign bond markets increases liquidity and lowers governments’ financing costs. However, this greater presence also increases the likelihood of sharp non-linear sovereign yield spikes through a number of channels.

While some of those stress amplification channels are well known, three of them are more novel. The first one stems from hedge funds’ leveraged trading strategies, which are facilitated by the availability of repo financing on very favourable terms. The second is related to the fact that by using FX swaps (which tend to have very short maturities) to hedge currency risk, many real money NBFIs are also exposing themselves to rollover risk and funding squeezes. The third novel channel stems from the close linkages between the repo market and the FX swap market, implying that stress in one can quickly spill over to the other.”

Hernández de Cos’ presentation includes charts that illuminate the momentous growth of hedge funds and NBFI (non-bank financial institutions) over recent years. At a similar 150% of global GDP level in 2011, NBFI ended 2023 at 225% versus Banks’ 175%. Since 2008, hedge funds have doubled to 8% of GDP. Expanding rapidly since 2021, NFBI holdings of “advanced economies’ debt” surpassed 50% of GDP – compared to Bank and central bank holdings individually less than 20%. Fueled by a surge in “other financial institutions” and “reporting dealers,” outstanding FX (foreign-exchange) swaps surged approximately 50% in three years to $130 TN. Over this period, hedge fund sovereign debt exposures more than doubled to about $7 TN – with hedge fund “repo” borrowing almost tripling to surpass $3 TN and prime brokerage borrowings doubling to $3 TN.

In the section “Hedge Funds’ Growing Presence in Government Bonds Markets Outside the US,” a chart shows hedge fund electronic trading volumes in euro government bond markets almost doubling since 2020 to approach 60%. From 2014, when all maturities (2, 5, 10 and 30-yr) saw less than 10% of Canadian government bond auction hedge fund allocations, by the end of 2024 allocations across maturities had jumped to between 40 and 50%.

On the subject of newfound hedge fund trading dominance, an interesting article this week from the FT: “Voice Trading Makes a Comeback in $30tn Treasury Market - The Rise of Leveraged Hedge Fund Strategies Means More Trades Conducted by Phone or Messaging.”

November 25 – Financial Times (Joshua Franklin and Kate Duguid): “The share of electronic trading in the nearly $30tn Treasury market has fallen to its lowest level in eight years, as exotic Wall Street bets on US debt push investors to make more trades manually. Almost half of all trading in Treasuries this year has been done by one-to-one messaging or over the telephone in transactions too large and complex to be conducted without human involvement — the biggest share since 2017… The comeback of so-called voice trading — which had been falling as a share of overall Treasury trading for decades — reflects the growing importance of what are known as package trades, often conducted by hedge funds. ‘The volume growth [in voice trading] is coming in large part from these large package trades that are executed manually,’ said Kevin McPartland, Coalition Greenwich’s head of market structure and technology research.”

Mentioned repeatedly: “basis trade.” Those critters seem to be Everywhere.

 

For the Week:

The S&P500 rallied 3.7% (up 16.4% y-t-d), and the Dow rose 3.2% (up 12.2%). The Utilities recovered 2.7% (up 19.5%). The Banks jumped 4.1% (up 20.9%), and the Broker/Dealers rallied 5.7% (up 27.2%). The Transports advanced 3.6% (up 4.3%). The S&P 400 Midcaps jumped 3.9% (up 6.0%), and the small cap Russell 2000 surged 5.5% (up 12.1%). The Nasdaq100 rallied 4.9% (up 21.0%). The Semiconductors spiked 9.7% higher (up 41.1%). The Biotechs jumped 3.7% (up 29.7%). With bullion leaping $174, the HUI gold index surged 14.0% (up 145.8%).

Three-month Treasury bill rates ended the week at 3.71%. Two-year government yields dipped two bps to 3.49% (down 75bps y-t-d). Five-year T-note yields slipped two bps to 3.60% (down 79bps). Ten-year Treasury yields declined five bps to 4.01% (down 56bps). Long bond yields fell five bps to 4.66% (down 12bps). Benchmark Fannie Mae MBS yields dropped 12 bps to 5.02% (down 83bps).

Italian 10-year yields declined six bps to 3.40% (down 12bps y-t-d). Greek 10-year yields dipped three bps to 3.29% (up 7bps). Spain's 10-year yields declined four bps to 3.16% (up 10bps). German bund yields slipped a basis point to 2.69% (up 32bps). French yields fell six bps to 3.41% (up 21bps). The French to German 10-year bond spread narrowed five to 72 bps. U.K. 10-year gilt yields dropped 11 bps to 4.44% (down 13bps). U.K.'s FTSE equities index rallied 1.9% (up 18.9% y-t-d).

Japan's Nikkei 225 Equities Index recovered 3.3% (up 26.0% y-t-d). Japan's 10-year "JGB" rose three bps to 1.81% (up 71bps y-t-d). France's CAC40 gained 1.8% (up 10.1%). The German DAX equities index jumped 3.2% (up 19.7%). Spain's IBEX 35 equities index surged 3.5% (up 41.2%). Italy's FTSE MIB index gained 1.6% (up 26.8%). EM equities were mostly higher. Brazil's Bovespa index rallied 2.8% (up 32.2%), and Mexico's Bolsa index rose 2.8% (up 28.4%). South Korea's Kospi was 1.9% higher (up 63.6%). India's Sensex equities index increased 0.6% (up 9.2%). China's Shanghai Exchange Index increased 1.4% (up 16.0%). Turkey's Borsa Istanbul National 100 index slipped 0.2% (up 10.9%).

Federal Reserve Credit declined $17.2 billion last week to $6.504 TN. Fed Credit was down $2.386 TN from the June 22, 2022, peak. Since the September 11, 2019 restart of QE, Fed Credit expanded $2.777 TN, or 75%. Fed Credit inflated $3.693 TN, or 131%, since November 7, 2012 (681 weeks). Elsewhere, Fed holdings for foreign owners of Treasury, Agency Debt were little changed last week at $3.057 TN. "Custody holdings" were down $260 billion y-o-y, or 7.8%.

Total money market fund assets (MMFA) jumped $45.51 billion to a record $7.567 TN - with a 14-week surge of $378 billion, or 19.5% annualized. MMFA were up $892 billion, or 13.4%, y-o-y - and ballooned a historic $2.951 TN, or 65%, since October 26, 2022.

Total Commercial Paper added $1.4 billion to $1.302 TN. CP has expanded $214 billion y-t-d and $116 billion, or 9.8%, y-o-y.

Freddie Mac 30-year fixed mortgage rates slipped three bps to 6.23% (down 58bps y-o-y). Fifteen-year rates declined three bps to 5.51% (down 59bps). Bankrate's survey of jumbo mortgage borrowing costs had 30-year fixed rates up two bps to 6.49% (down 66bps).

Currency Watch:

For the week, the U.S. Dollar Index declined 0.7% to 99.479 (down 8.3% y-t-d). On the upside, the New Zealand dollar increased 2.2%, the South African rand 1.6%, the Australian dollar 1.5%, the Brazilian real 1.3%, the Norwegian krone 1.2%, the Swedish krona 1.1%, the British pound 1.0%, the Mexican peso 1.0%, the Canadian dollar 0.9%, the Singapore dollar 0.9%, the euro 0.7%, the Swiss franc 0.5%, the South Korean won 0.3%, and the Japanese yen 0.2%. The Chinese (onshore) renminbi increased 0.43% versus the dollar (up 3.18% y-t-d).

Commodities Watch:

The Bloomberg Commodities Index rallied 2.7% (up 11.8% y-t-d). Spot Gold jumped 4.3% to $4,239 (up 61.5%). Silver surged 13.0% to $56.5003 (up 95.5%). WTI crude increased 49 cents, or 0.8%, to $58.55 (down 18.4%). Gasoline increased 0.7% (down 6%), and Natural Gas jumped 5.9% to $4.85 (up 34%). Copper jumped 3.5% (up 31%). Wheat increased 0.8% (down 4%), and Corn recovered 2.4% (down 5%). Bitcoin rallied $6,800, or 8.1%, to $91,100 (down 3%).

Market Instability Watch:

November 28 – Bloomberg (Katherine Doherty, Isis Almeida, Sagarika Jaisinghani and Lynn Doan): “One of the first signs of trouble arrived at 9:41 p.m. Eastern time on Thursday, when most of Wall Street was shut and traders were still enjoying the Thanksgiving holiday in the US. ‘Due to technical issues,” CME Group Inc. said in a one-line email to clients, its futures and options ‘markets have been halted.’ The problem, it turned out, was the cooling system at a data-center complex in the suburban town of Aurora, Illinois, some 50 miles from Chicago, which serves as the main hub for trillions of dollars of derivatives traded each day.”
 

November 25 – New York Times (Patricia Cohen): “The stock market bounces in recent weeks are just one indicator of the profound uncertainty and heightened risks running through the global economy and financial system. It’s not simply that the hundreds of billions of dollars flooding into artificial intelligence investments might turn out to be a bubble. Or that the use of cryptocurrencies in mainstream banking is spreading even as their values have plunged after soaring to record highs. Or the billion dollar bankruptcies related to a mad rush of lending by shadow banks (and regular banks, too). It is also the titanic levels of debt that the United States and other governments have built up. President Trump’s erratic policy zigzags. And the possibility that the cornerstone of the administration’s economic agenda — tariffs — could be ruled unconstitutional by the U.S. Supreme Court. It’s everything, everywhere, all at once.”

November 26 – Financial Times (Robin Brooks): “Japan has long had an astronomical level of government debt. Yet government bond yields have been low for much of the past decade, which has given rise to the dangerous delusion that all this debt isn’t a problem. Japan’s recently announced fiscal stimulus… is the latest manifestation of this issue. Here’s the thing. Japan’s huge debt burden is real. Low interest rates are not. Government bond yields have been kept artificially low by the Bank of Japan, which has prevented yields from rising to market-determined levels through a combination of massive bond buying and its one-time yield curve control programme… All this was fine until the Covid-19 pandemic came along. The inflation surge in its wake saw central banks around the world hike policy rates and shift from quantitative easing programmes of asset buying to support economies and markets to quantitative tightening.”

November 26 – Wall Street Journal (Asa Fitch): “U.K. Treasury chief Rachel Reeves… announced a second consecutive year of hefty tax rises, a move aimed at reassuring investors that the British state wasn’t slowly going bust under the weight of growing welfare spending and ballooning interest payments... Reeves said that a smorgasbord of tax hikes—from a tax on more expensive properties to a levy on sweet dairy products such as milkshakes—would raise £26 billion… to patch up public finances when the economy is forecast to grow slowly for years to come… ‘I have kept everyone’s contribution as low as possible,’ Reeves said… Last year, the U.K. government deficit was 5.1% of the economy—the third-highest among European countries. The welter of taxes is expected to lower the government deficit after five years, offsetting higher state spending, according to the U.K.’s budget watchdog.”

November 27 – Bloomberg: “The worsening debt crisis at China Vanke Co. has increased vigilance among sovereign bond traders over contagion from the property developer’s woes. Some government bond traders are concerned debt troubles facing Vanke, once China’s largest builder by sales, may impact bond demand and potentially trigger a cascade of redemptions from fixed-income funds. China’s benchmark 10-year yields rose to the highest in two months this week before steadying, while equivalent futures were on track for their biggest weekly loss since August.”

U.S. Credit Trouble Watch:

November 23 – Axios (Paul J. Davies): “Blue Owl Capital Inc. is caught in a trifecta of market worries about private credit, artificial intelligence and the flightiness of wealthy individuals who’ve been the new growth hope for alternative managers in recent years. Its abortive effort to give investors an easier exit from one of its unlisted private credit funds by merging it with a listed version thrust it into the spotlight last week. Co-Chief Executive Officer Marc Lipschultz has argued that markets are in the grip of a mass delusion about all three issues… But investors have good reasons to be edgy and, right now, Blue Owl is the perfect focus for those concerns… Wall Street analysts almost all rate the stock a ‘buy,’ but several characteristics stick out. More than half its assets under management are in private credit, and it’s leaned strongly into the data center financing boom, helping fund the three biggest projects so far, including Meta Inc.’s $30 billion Hyperion site in Louisiana.”

November 24 – Bloomberg (Ronan Martin): “A flood of debt sales from Big Tech risks overwhelming buyers and could weaken the credit market on both sides of the Atlantic. That’s the warning from Wall Street and investors, if the recent pace of mega bond offerings from the likes of Alphabet Inc. and Meta Platforms Inc. continues in 2026. These sales have capped a record year of global issuance. With tech firms expected to turn to debt for as much as $1.5 trillion by 2028…, that could widen spreads across the whole market, Morgan Stanley argues. Bond buyers are starting to worry about being compensated for the risks of a bubble in the sector, given recent turmoil in tech stocks. ‘Our biggest concern is that a flood of data center financing could cause supply indigestion, particularly in dollars, but with euro markets also absorbing part of the funding needs,’ said JPMorgan... strategist Matthew Bailey.”

November 23 – Wall Street Journal (Sam Goldfarb): “Wall Street is straining to absorb a flood of new bonds from tech companies funding their artificial intelligence investments… Since the start of September, so-called AI hyperscalers Amazon.com, Alphabet, Meta Platforms and Oracle have issued nearly $90 billion of investment-grade bonds…, more than they had sold over the previous 40 months. AI data-center developers like TeraWulf and Cipher Mining, both started as bitcoin miners, also have stormed the speculative-grade market, issuing more than $7 billion of those lower-rated bonds… ‘The markets are very interconnected now,’ said John Lloyd, global head of multisector credit at Janus Henderson Investors. ‘It will be hard for the credit markets to do well if AI stocks are selling off, and vice versa.’”

November 24 – Bloomberg (Jeannine Amodeo): “US leveraged loan sales are coming under pressure as demand for the risky debt wanes, forcing some borrowers to cancel deals and others to sweeten terms. Defense and cybersecurity contractor ManTech International Corp. scrapped a planned $2.3 billion leveraged loan sale Friday, while offerings for American Auto Auction Group and Heidrick & Struggles International Inc. also showed some signs of pushback.”

November 25 – Bloomberg (Rene Ismail): “Defaults are poised to rise across the $1.7 trillion private credit market next year as a growing number of middle-market firms are experiencing stress, according to Kroll Bond Rating Agency. A record 61 borrowers with private debt have a rating of CCC-, KBRA said…, which analyzed more than 2,200 middle-market companies backed by private equity in the 12 months through September. The firm tacks on that label for borrowers ‘facing severe operational or liquidity challenges.’ The rising share of firms falling into the CCC- cohort is ‘a clear signal that pressure is building in certain segments of the direct lending market,’ KBRA said in its report. The companies in this group collectively held a record 1.4% of the more than $1 trillion of debt assessed by KBRA.”

November 22 – Bloomberg (Emily Graffeo and Jeannine Amodeo): “Private equity firms, struggling to find buyers for their investments, are turning to an old playbook like never before. Financial sponsors are extracting cash from their portfolio companies by raising debt to fund payouts to themselves and their investors at an unprecedented clip. Such dividend loans have hit $28.7 billion so far this year, putting them on track to surpass 2021’s record $28.8 billion… Their efforts come as the private equity machine hits snarls at nearly every turn… To quell impatient investors, buyout shops are increasingly layering extra borrowing on their companies and funneling the proceeds of debt sales to their stakeholders instead.”

November 26 – Bloomberg (Ameya Karve): “US ABS sales are headed for their highest tally in November since at least 2016… ABS sales crossed $39 billion so far this month, topping the nearly $38 billion of issuance in November 2021…”

November 26 – Bloomberg (Charles Williams): “US securitized issuance is expected to maintain strong momentum, with more all-time highs possible, according to JPMorgan’s 2026 outlook report. CMBS. Another record year ahead, with combined private-label and agency issuance expected to reach $360 billion ($180bn). New issues largely a carry trade.”

Global Credit and Financial Bubble Watch:

November 23 – Wall Street Journal (Emma Dunkley): “The global fund management industry is on track to reach $200tn in assets by 2030, up from $139tn last year, with private markets poised to account for more than half of revenues, according to… PwC. A survey of 300 asset managers, institutional investors and distributors estimated that revenues generated by private markets would reach $432bn within five years, driven by demand for higher returns and the industry opening up to more retail investors.”

Trump Administration Watch:

November 26 – Wall Street Journal (Lingling Wei, Brian Schwartz, Meridith McGraw and Jason Douglas): “Chinese leader Xi Jinping was angry, and President Trump was listening. Days after Japanese Prime Minister Sanae Takaichi outraged China by suggesting a Chinese attack on Taiwan could mobilize a Tokyo military response, Xi spent half of an hourlong phone call with Trump…, hammering home China’s historic claim to the democratic self-governing island as well as Washington and Beijing’s joint responsibility to manage the world order. Later the same day, Trump set up a call with Takaichi and advised her not to provoke Beijing on the question of Taiwan’s sovereignty… The advice from Trump was subtle, and he didn’t pressure Takaichi to walk back her comments… The Japanese officials said the message was worrying: The president didn’t want friction over Taiwan to endanger a detente reached last month with Xi, which includes a promise to buy more agricultural products from American farmers hit hard by the trade war.”
November 24 – Axios (Rebecca Falconer): “Multiple international airlines canceled flights to Venezuela over the weekend after the Federal Aviation Administration warned of a ‘worsening security situation’ in the South American country… The FAA, in a Friday NOTAM (Notice to Airmen) warning of ‘heightened military activity’ in the region, has seen at least six airlines cancel flights…”

November 24 – Axios (Tony Czuczka): “Treasury Secretary Scott Bessent said the Trump administration is working on bringing down US health-care costs and an announcement to address the issue is planned for this week. ‘We believe health care’s going to come down,’ Bessent said… in response to a question about Vice President JD Vance asking Americans for ‘a little bit of patience’ as the White House works out a plan to address the cost of living. ‘We will see an announcement this coming week on that,’ he said.”

November 25 – Wall Street Journal (Olivia Beavers and Natalie Andrews): “Speaker Mike Johnson cautioned the White House that most House Republicans don’t have an appetite for extending enhanced Affordable Care Act subsidies…, showing how hard it will be politically to stave off sharp increases in healthcare costs next year for many Americans. The message from Johnson… came as President Trump’s advisers were drafting a healthcare plan that extended the subsidies for two years. The warning underscores the hurdles facing any deal in coming weeks. Lawmakers have a mid-December deadline for healthcare votes promised as a condition for Democrats voting to end the government shutdown earlier this month.”

November 23 – Wall Street Journal (David Wainer): “Healthcare politics and investing might as well be living in alternate universes. President Trump and some Republicans have been describing Obamacare as a gravy train for insurers. Trump’s latest broadside slammed ‘big, fat, rich insurance companies who have made trillions,’ and he urged Congress to send healthcare subsidies directly to patients instead. Wall Street sees it another way. Many Affordable Care Act plans are losing money this year and investors have grown increasingly bearish… Profitability has deteriorated sharply in 2025 as sicker patients—many of them transitioning from Medicaid—have driven up medical costs. Insurers have responded by implementing substantial premium increases for 2026 in an effort to restore viability…”

November 27 – Bloomberg (Ramsey Al-Rikabi): “President Donald Trump called for ‘reverse migration’ in the US as he outlined a further crackdown on immigration following the shooting of two National Guard members in Washington. In a pair of Truth Social posts… that disparaged many US immigrants, Trump said he would halt admissions from unspecified developing nations and revoke citizenship from some naturalized migrants. He also said he would end all federal benefits for non-citizens.”

November 24 – Reuters (Courtney Rozen): “U.S. President Donald Trump’s Department of Government Efficiency has disbanded with eight months left to its mandate, ending an initiative launched with fanfare as a symbol of Trump’s pledge to slash the government’s size but which critics say delivered few measurable savings. ‘That doesn’t exist,’ Office of Personnel Management Director Scott Kupor told Reuters… when asked about DOGE’s status. It is no longer a ‘centralized entity,’ Kupor added…”

November 24 – Bloomberg (Zoe Tillman): “The Trump administration is fighting efforts by government workers and contractors to force billionaire Elon Musk to testify in a lawsuit that accuses him of unlawfully directing the dissolution of the US Agency for International Development while he was a senior adviser to the president.”

November 25 – New York Times (Ana Swanson): “The Trump administration is snapping up ownership shares of private companies it deems essential to national security. It is an unusual new strategy that has already committed more than $10 billion in taxpayer funds and shows little sign of slowing. The government’s growing portfolio of corporate ownership involves minority stakes, or the option to take them in the future, in at least nine companies involved in steel, minerals, nuclear energy and semiconductors… The deals were all struck in the past six months, with the bulk made in October and November.”

November 27 – Wall Street Journal (Dave Michaels and Ben Glickman): “Corporate tie-ups are surging under Trump 2.0. Companies are more willing to take a shot at deals that merge direct competitors, bankers and lawyers say, thanks in part to the Trump administration’s more lax approach to enforcement. The Justice Department and Federal Trade Commission… have sued to block only three mergers since Republican leaders took over at the two agencies earlier this year. They sued to block an average of six deals a year during… ‘People are encouraged and willing to take more risk, willing to entertain bigger deals,’ said Oliver Smith, co-head of mergers and acquisitions for law firm Davis Polk. That has prompted an increase in deal volume. Deal value in the U.S. so far this year is up more than 40% from the same period in 2024 to about $1.9 trillion…”

November 25 – Axios (Rebecca Falconer): “The Trump administration is raising national parks’ prices and adding fees for international tourists from next year in an ‘America-first’ initiative that'll see U.S. residents ‘continue to enjoy affordable pricing,’ the Interior Department announced…”

China Trade War Watch:

November 25 – Bloomberg (Justin Sink): “US President Donald Trump said he urged Chinese President Xi Jinping to increase the speed and size of agricultural purchases and said Beijing had ‘more or less agreed’ to do so. ‘I think he’s going to very much surprise you on the upside,’ Trump told reporters… ‘I think he’s going to — I asked him, ‘I’d like you to buy a little faster, I’d like you to buy a little more.’ And he’s more or less agreed to do that.’”

Trade War Watch:

November 24 – Bloomberg (Brian Platt, Josh Wingrove, and Derek Decloet): “Trade talks between the US and Canada remain stalled, and there’s an emerging belief in both governments that key issues will be rolled into next year’s broader review of the North American trade accord… There have been no negotiations since US President Donald Trump’s Oct. 23 social media post that halted them… Until that day, the two sides had been discussing a limited agreement that may have eased some US tariffs on steel and aluminum, which stand at 50% for Canada and most other American trading partners.”

November 24 – New York Times (Ana Swanson and Jeanna Smialek): “It’s been nearly four months since Ursula von der Leyen, the president of the European Commission, and President Trump made a handshake deal to resolve trade tensions between their economies. But details of the trade pact have proved contentious — and they have been up for debate again this week, when American trade officials visited their counterparts in Brussels… Both sides have signed onto a trade agreement in principle — one that has left the 27-nation bloc facing 15% tariffs across the board, with various exceptions. But key parts of the deal have not been completed and carried out.”

November 27 – Bloomberg (Juan Pablo Spinetto): “Indonesia is resisting attempts by Donald Trump to force it to accept so-called ‘poison pill’ and other coercive clauses in its ‘reciprocal tariff’ trade deal with the US, a move that challenges American efforts to counter China’s influence in south-east Asia. The rebuff to the US president’s bid to impose the clauses emerged during negotiations to finalise a preliminary trade deal agreed in July that slapped a 19% ‘reciprocal tariff’ on Jakarta… The US has sought to increase the use of so-called ‘poison pill’ or ‘loyalty’ clauses in trade deals with junior partners that threaten to end the agreements if they sign any rival pact deemed by the US to jeopardise essential US interests.”

Constitution Watch:

November 28 – Bloomberg (Mica Soellner): “President Donald Trump said he is terminating every document former President Joe Biden signed with an autopen in his latest move to eradicate his predecessor’s legacy. In a Truth Social post Friday, Trump accused Biden of signing ‘approximately 92%’ of documents through the use of an autopen. The president threatened perjury charges against Biden if he claims he consented to the use of the mechanical pen to sign papers. ‘The Autopen is not allowed to be used if approval is not specifically given by the President of the United States,’ Trump said in his post.”

November 22 – Bloomberg (Josh Wingrove): “President Donald Trump’s administration is working behind the scenes on fallback options if the Supreme Court strikes down one of his major tariff authorities, looking to replace the levies as quickly as possible. Both the Commerce Department and the Office of the US Trade Representative have studied Plan B options if the court rules against the administration… Those include Section 301 and Section 122 of the Trade Act, which grant the president unilateral ability to impose duties.”

November 24 – Associated Press (Konstantin Toropin and Ben Finley): “The Pentagon announced… it is investigating Democratic Sen. Mark Kelly of Arizona over possible breaches of military law after the former Navy pilot joined a handful of other lawmakers in a video that called for troops to defy ‘illegal orders.’ The Pentagon’s statement… cited a federal law that allows retired service members to be recalled to active duty on orders of the defense secretary for possible court martial or other measures. It is extraordinary for the Pentagon, which until President Donald Trump’s second term had usually gone out of its way to act and appear apolitical, to directly threaten a sitting member of Congress with investigation.”

November 27 – Axios (Rebecca Falconer): “Fresh U.S. efforts to stop suspected Venezuelan drug traffickers will take place on land ‘very soon,’ President Trump said… There’s been a buildup of U.S. military activity in the Caribbean as Trump outlined next steps in his push toward toppling Venezuela's Maduro regime, as American forces strike alleged drug boats… ‘In recent weeks, you've been working to deter Venezuelan drug traffickers, of which there are many. Of course, there aren't too many coming in by sea anymore,’ Trump said… ‘You probably noticed that people aren't wanting to be delivering by sea, and we'll be starting to stop them by land also… The land is easier, but that's going to start very soon’.”

Budget Watch:

November 25 – Reuters (David Lawder): “The U.S. government posted a higher $284 billion deficit for October in a report delayed and impacted by the recent federal government shutdown and which reflected record tariff revenues offset by a shift of some November benefit payments into last month’s data… The deficit last month was up $27 billion, or 10% higher, than the $257 billion deficit posted in October 2024, largely due to the shift of some $105 billion worth of November benefit outlays for some military and healthcare programs into October.”

U.S./Russia/China/Europe/Iran Watch:

November 27 – Politico (Victor Jack and Laura Kayali): “Russia’s drones and agents are unleashing attacks across NATO countries and Europe is now doing what would have seemed outlandish just a few years ago: planning how to hit back. Ideas range from joint offensive cyber operations against Russia, and faster and more coordinated attribution of hybrid attacks by quickly pointing the finger at Moscow, to surprise NATO-led military exercises… ‘The Russians are constantly testing the limits — what is the response, how far can we go?’ Latvian Foreign Minister Baiba Braže noted… A more ‘proactive response is needed… And it’s not talking that sends a signal — it’s doing’.”

November 26 – Reuters (Vladimir Soldatkin): “Russia said… the leak of a recording of a call between top advisers to Donald Trump and Vladimir Putin was an unacceptable attempt to undermine Ukraine peace negotiations and amounted to hybrid warfare. Bloomberg News published the transcript of an October 14 telephone call in which Trump envoy Steve Witkoff advised Putin's foreign policy aide Yuri Ushakov on how to pitch a Ukraine peace plan to Trump.”

November 22 – Financial Times (Alice Hancock): “Political polarisation in the west is a ‘candy shop’ for hybrid warfare as Russia seeks to sow division among Nato members through attacks on infrastructure and by hijacking elections, Sweden’s top military official has warned. Michael Claesson, Sweden’s chief of defence staff, told the Financial Times that Russia was combining ‘sabotage, special operations, even attacks against individuals’ with attacks on critical infrastructure and ‘exploiting vulnerabilities in the information environment’ in order to ‘split us up’ and ‘break up cohesion in our societies’. ‘The fact that we have a certain political polarisation in many countries in the west is, of course, a candy shop for a hybrid-warfare warrior to exploit,’ said Claesson.”

November 26 – Bloomberg (Tony Capaccio): “The Pentagon concluded that Alibaba Group Holding Ltd., Baidu Inc. and BYD Co. should be added to a list of companies that aid the Chinese military, according to a letter to Congress… Deputy Defense Secretary Stephen Feinberg informed lawmakers of the conclusion in the Oct. 7 letter… to the heads of the House and Senate Armed Services Committees.”

November 26 – Bloomberg (Josh Xiao): “China took a veiled swipe at the US for plans to change nuclear policies and warned that maintaining large arsenals increases the risk of conflict, after Washington said it would match its rivals by resuming atomic weapons tests. ‘Certain countries continue to adjust their nuclear policies, stubbornly maintaining massive nuclear arsenals, enhancing nuclear deterrence and combat capabilities, thereby heightening the risk of global nuclear conflict,’ the State Council Information Office said…”

China vs. Japan Watch:

November 24 – Wall Street Journal (Jason Douglas and Junko Fukutome): “Sanae Takaichi has been Japan’s first female prime minister for barely a month and already she has made an impression on the world’s two most powerful men. First, it was President Trump, who gushed on an October trip to Tokyo that she would prove to be one of Japan’s greatest leaders. Next, it was Chinese leader Xi Jinping, who was infuriated by her remark that Japan would likely get sucked into a war if China made a move on Taiwan. Takaichi’s comment ignited an economic and political pressure campaign that has seen Beijing berate Tokyo at the United Nations, cancel tourist flights to Japan and threaten a ban on imports of Japanese seafood. The result for Takaichi? Buoyant approval ratings for her month-old government.”

November 25 – New York Times (Keith Bradsher and River Akira Davis): “If anyone needed evidence that a critical moment is developing in Asia-Pacific diplomacy, look no further than the phone call… between Xi Jinping… and President Trump. Mr. Xi reached out to Mr. Trump because a Japanese leader is taking her country’s strongest stance since World War II to assert that Taiwan’s security is also Japan’s security. While that has long been apparent to military planners, given Taiwan’s proximity to southern Japan — and also to U.S. bases there — Japan’s new strategic posture has alarmed Beijing’s leaders. China has been doing everything possible in recent years to isolate Taiwan… and persuade other countries to accept Beijing’s claim to sovereignty there. Most countries have switched diplomatic recognition from Taipei to Beijing, leaving Taiwan increasingly friendless.”

November 24 – Bloomberg (Alastair Gale and Sarah Hilton): “In a letter to the United Nations, Japan criticized an earlier missive from China as mis-representing the nature of remarks Prime Minister Sanae Takaichi made on Taiwan, saying Beijing’s letter was ‘inconsistent with the facts and unsubstantiated.’ ‘China’s assertion that Japan would exercise the right of self-defense even in the absence of an armed attack is erroneous,’ Japanese Ambassador… Kazuyuki Yamazaki wrote… A government spokesman echoed those views... ‘Factually incorrect claims by the Chinese side cannot be accepted, and I believe it is necessary for the Japanese government to firmly rebut and communicate this,’ Japanese government spokesman Minoru Kihara said…”

November 24 – Bloomberg: “In the roughly three weeks since Japanese Prime Minister Sanae Takaichi commented on a possible Taiwan contingency in parliament, China has unleashed economic reprisals, nationalist barbs and a diplomatic offensive to show its displeasure. Now, President Xi Jinping’s government is escalating the dispute with an appeal to the United Nations, a move aimed at pressuring all countries to side with China’s stance on any future conflict over Taiwan — or stay out of its way. In a letter to UN Secretary-General Antonio Guterres…, Fu Cong — China’s envoy to the global body — accused Takaichi of violating international law with her comments, which publicly linked a Taiwan Strait crisis with the possible deployment of Japanese troops.”

November 23 – Bloomberg (Alastair Gale): “Japan’s defense minister, visiting a military base close to Taiwan, said plans to deploy missiles to the post would move forward as tensions smolder between Tokyo and Beijing over the East Asian island. ‘The deployment can help lower the chance of an armed attack on our country,’ Shinjiro Koizumi told reporters… as he wrapped up his first trip to the base on the southern Japanese island of Yonaguni. ‘The view that it will heighten regional tensions is not accurate.’ In January, former Defense Minister Gen Nakatani said Tokyo wanted to base Type 03 Chu-SAM missiles on Yonaguni, but little progress has been made so far.”

New World Order Watch:

November 26 – Axios (Colin Demarest): “Xi Jinping is attempting to ‘construct an alternative world order’ in which Beijing sits at the center and is propped up by fellow anti-democratic states, such as Russia and North Korea, according to the latest findings of the U.S.-China Economic and Security Review Commission… The commission published its annual report this month. It's a hefty read; the final product is more than 700 pages long, with dozens of recommendations offered. They include: Studying China’s support for the Russian war machine — including economic and technological aid as well as intelligence-sharing and cyber operations… ‘Since Russia’s invasion of Ukraine in 2022, China, Russia, Iran and North Korea have rapidly deepened their cooperation,’ the study reads. ‘A Russian collapse would significantly alter the global balance of power, weakening China's influence and strategic position.’”

November 23 – Bloomberg (Antony Sguazzin): “Canadian Prime Minister Mark Carney said the world can make progress on a range of issues without the US, and that consensus reached at a Group of 20 leaders’ meeting in Johannesburg this weekend carries weight despite a boycott by President Donald Trump’s administration. South Africa, the G-20 host this year, defied the US by releasing a declaration from the meeting. Trump ordered the stayaway after repeating a debunked claim that White Afrikaner farmers in South Africa are being subjected to a genocide… The summit ‘brought together nations representing three-quarters of the world’s population, two-thirds of global GDP and three-quarters of the world’s trade, and that’s without the United States formally attending,’ Carney told a press conference… ‘It’s a reminder that the center of gravity in the global economy is shifting’.”

November 26 – Bloomberg (Josh Wingrove): “President Donald Trump said that he would not invite South Africa to participate in next year’s G-20 summit in Miami and that he planned to ‘stop all payments and subsidies’ to the country, as relations between Washington and Pretoria continue to deteriorate. Trump… repeated claims without evidence that South Africa was committing genocide against White Afrikaners and seizing land without compensation and criticized the country’s handling of the recent global summit.”

November 26 – Bloomberg (Ailing Tan): “China will continue to work with Russia to deepen energy partnership in all sectors, China Central Television reports, citing President Xi Jinping’s letter to a China-Russia business forum on energy. Calls to jointly safeguard stable, smooth global energy supply Chains.”

November 25 – Financial Times (Melissa Heikkilä): “China has overtaken the US in the global market for ‘open’ artificial intelligence models, gaining a crucial edge over how the powerful technology is used around the world. A study by the Massachusetts Institute of Technology and open-source AI start-up Hugging Face found that the total share of downloads of new Chinese-made open models rose to 17% in the past year. The figure surpasses the 15.8% share of downloads from American developers such as Google, Meta and OpenAI — the first time Chinese groups have beaten their American counterparts. Open models — which are free to download, modify and integrate by developers — make it easier for start-ups to create products and researchers to improve them.”

November 25 – Wall Street Journal (Jiyoung Sohn): “As China and the U.S. race to dominate artificial intelligence, countries are increasingly wary of becoming overly dependent on the superpowers for a technology that could profoundly affect their economic competitiveness and national security. In response, a select few are seeking to build out their own AI capabilities and become leaders alongside the U.S. and China. South Korea… is a strong believer in the idea that smaller countries can succeed in developing a wide degree of autonomy in AI… ‘In the age of artificial intelligence, falling behind by one day could mean falling behind by a whole generation,’ South Korean President Lee Jae Myung said... ‘We are currently facing an urgent, life-or-death crisis’.”

Ukraine War Watch:

November 25 – Wall Street Journal (James Marson and Nikita Nikolaienko): “Nataliia Melnychenko stood outside a residential building hit by a Russian drone…, with dark circles under her eyes. She hadn’t slept since the drone struck her building at 2:30 a.m. ‘I’ve learned over these years that Russian missile strikes usually follow every attempt at peace initiatives,’ said Melnychenko. ‘On top of Russian attacks, we now also have pressure from our allies’… Like many Ukrainians, Melnychenko remains defiant—unwilling to cave to Russia at the negotiating table, even under U.S. pressure. After nearly four years of war, Ukrainians are bruised but still standing on the battlefield. The bravery and resilience of Ukrainians in resisting their giant neighbor’s invasion are now stymieing the Trump administration’s attempts to offer big concessions to Moscow… Ukrainians are unwilling to accept the kind of capitulation terms that initial U.S. proposals envisaged, which would have handed Russia a victory that it hasn’t won on the battlefield. Giving up territory ‘won’t stop the occupier’s appetite,’ said 51-year-old Herman Hiso…”

November 27 – Reuters: “Russian President Vladimir Putin… called the Ukrainian leadership illegitimate and said it was senseless to sign any documents with them. He said the Kyiv leadership lost legitimacy after refusing to hold elections when President Volodymyr Zelenskiy's elected term expired. Kyiv says it cannot hold elections while under martial law and defending its territory against Russia.”

November 26 – Reuters (Gram Slattery and Erin Banco): “The U.S.-backed 28-point peace plan to end the war in Ukraine, which became public last week, drew from a Russian-authored paper submitted to the Trump administration in October, according to three sources… The Russians shared the paper, which outlined Moscow’s conditions for ending the war, with senior U.S. officials in mid-October, following a meeting between U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskiy… The paper, a non-official communication known in diplomatic parlance as a ‘non-paper,’ contained language that the Russian government had previously put forward at the negotiating table, including concessions that Ukraine had rejected such as ceding a significant chunk of its territory in the east.”

November 23 – Bloomberg (Natalia Drozdiak, Alberto Nardelli, and Mario Parker): “The controversial 28-point plan dropped suddenly by the Trump administration to Ukraine as a take-it-or-leave it proposition mere days ago was mostly the result of several weeks of negotiations behind the scenes between Steve Witkoff and his Russian counterpart Kirill Dmitriev that excluded not only Ukraine and its allies but even some key US officials…”

November 22 – Financial Times (Amy Mackinnon): “US secretary of state Marco Rubio sought to distance the US from a 28-point peace plan aimed at ending the war in Ukraine on terms favourable to Russia, according to senators he spoke to… ‘It is not our recommendation. It is not our peace plan,’ said Republican Senator Mike Rounds, who spoke to Rubio… Rubio told senators that the Russians gave the plan to Trump’s Special Envoy Steve Witkoff, which the US then relayed to the Ukrainians in its role as an intermediary. ‘It is essentially the wish list of the Russians,’ said Senator Angus King, an independent from Maine.”

November 22 – Politico (Tim Ross): “Ukraine’s staunchest allies are scrambling to rewrite Donald Trump’s peace plan to stop him forcing Kyiv to hand swathes of territory to Russia in an unbalanced deal. Western governments were privately shocked and dismayed at the new 28-point outline for an agreement from the U.S. president’s team this week, seeing it as an attempt to push Ukraine to give Vladimir Putin everything he wants.”

November 25 – Bloomberg (Olesia Safronova): “Russia and Ukraine exchanged fire early Tuesday with heavy air raids on Kyiv and assaults on southern Russian areas, just hours after President Donald Trump struck a positive tone on prospects for a ceasefire deal. Ukraine’s air defenses worked to shield the capital from combined missile and drone attacks and loud explosions were heard, with authorities instructing residents to stay in shelters. Kyiv Mayor Vitali Klitschko said a residential apartment building had been severely damaged in the attacks and fire fighters were trying to extinguish blazes in several stores.”

November 26 – Bloomberg: “As President Vladimir Putin’s war on Ukraine enters a fourth winter, Russians are having to come to grips with its growing impact on nearly every aspect of their daily lives. Dozens of regions in central and southern Russia are now feeling the war’s proximity as drones and sometimes missiles hit energy sites and residential buildings. Air raid sirens wail almost every night… Beyond the front lines, the rest of Russia, Moscow included, has started to feel the economic toll. From households cutting back on food spending to struggling steel, mining and energy companies, the country’s economic engine is showing multiple fractures, and the earlier resilience spurred by massive fiscal stimulus and record energy revenues is being tested.”

Taiwan Watch:

November 25 – Bloomberg: “When Xi Jinping and Donald Trump sat down in South Korea last month to discuss a pause in their trade war, Taiwan surprisingly didn’t come up. Now the biggest flashpoint between the US and China is firmly back on the agenda. In an hourlong phone call with Trump…, Xi seized on a diplomatic row with Japan in a bid to assert China’s sovereignty over Taiwan — and shape US policy in its favor. Framing Beijing’s claim as an ‘integral part of the post-World War II international order,’ the Chinese leader reminded Trump that their nations once fought side by side against fascism and ‘militarism’ — a thinly veiled nod to Japan’s expansionist past.”

November 26 – CNBC (Anniek Bao): “Taiwan will introduce a supplementary defense budget of 1.25 trillion Taiwanese dollars ($40bn) as Beijing accelerates military preparations near the island, President Lai Ching-te said… China has continued to increase military drills and so-called ‘gray-zone harassment’ around Taiwan, with the goal of seizing the island by force by 2027, Lai said… Lai added that Beijing had intensified its ‘infiltration and influence campaign,’ using a range of tools to interfere in Taiwan’s politics and society as it seeks to sway public opinion and undermine the island’s democracy. He also cautioned ‘unprecedented military buildup’ by Beijing and ‘intensifying provocations in the Taiwan Strait, in the East and South China Seas, and across the Indo-Pacific’.”

November 27 – Bloomberg: “China… warned countries not to stir up any trouble around Taiwan after reports that a New Zealand naval vessel transited the strait between the island and the mainland earlier this month. ‘We firmly oppose any country stirring up trouble in the Taiwan Strait or sending wrong signals to Taiwan independence separatists forces,’ Chinese Ministry of Defence spokesman Jiang Bin said…”

AI Bubble/Arms Race Watch:

November 26 – Wall Street Journal (Asa Fitch): “It has become a tech-industry truism: Spending too little on chips and other computing infrastructure for artificial intelligence is riskier than spending too much. As OpenAI Chief Executive Sam Altman recently put it, people can either overinvest and lose money or underinvest and lose revenue. Or as Meta Platforms chief Mark Zuckerberg said…, AI’s promise as a revenue driver meant ‘we want to make sure that we’re not underinvesting.’ But investors have begun questioning this logic, fretting that the spending spree might be inflating a bubble that will inevitably pop. Indeed, spending too much can be very bad. Just ask Intel. The storied American chip maker faced a similar spending decision—albeit under different circumstances—not long ago.”

November 24 – Wall Street Journal (Jonathan Weil): “It seems like a marvel of financial engineering: Meta Platforms is building a $27 billion data center in Louisiana, financed with debt, and neither the data center nor the debt will be on its own balance sheet. That outcome looks too good to be true, and it probably is. Indeed, it is quintessential structured finance—the point of which is to help companies try to achieve seemingly irreconcilable financial-reporting goals. Meta wants other people’s money to pay for the data center. Those investors want to know Meta ultimately has their backs. But at the same time, Meta wants to keep its near-pristine credit rating and doesn’t want the extra assets and debt on its books… Meta said it won’t be consolidating the joint venture, meaning the venture’s assets and liabilities will remain off Meta’s balance sheet. Instead Meta will rent the data center for as long as 20 years… This lease structure minimizes the lease liabilities and related assets Meta will recognize, and enables Meta to use ‘operating lease,’ rather than ‘finance lease,’ treatment.”

November 25 – Bloomberg (Subrat Patnaik and Sagarika Jaisinghani): “A rally in Alphabet Inc. shares is poised to shake up the ranking of the world’s most valuable companies, amid signs the search giant is making headway in efforts to rival Nvidia Corp.’s bestselling AI accelerator. That’s prompting investors to reassess the technology landscape and the potential changes in stock market leadership, as rave reviews for Alphabet’s new Gemini artificial intelligence model and demand for AI chips pushes its shares higher.”

November 26 – Bloomberg (Jeran Wittenstein and Ryan Vlastelica): “Nvidia Corp. is facing rising concerns that its stranglehold on the market for semiconductors used in artificial intelligence computing is slipping. And that skepticism is now showing up in the stock market… ‘Nvidia’s valuation was really based on the idea that it would maintain its market share,’ said Adam Sarhan, chief executive officer of 50 Park Investments. ‘If it starts losing some market share, then investors will reassess what growth could look like, and what kind of valuation it should have.’”

November 24 – Yahoo Finance (Daniel Howley): “Amazon will invest $50 billion to grow its AI offerings for the US government… The investment will include nearly 1.3 gigawatts of new data center capacity for Amazon's AWS Top Secret, AWS Secret, and AWS GovCloud services. Amazon said its latest announcement will give federal agencies access to the company's Amazon SafeMaker AI for model training, Amazon Bedrock for AI agent deployment, Amazon Nova, Anthropic's (ANTH.PVT) Claude, Amazon's Tranium AI chips, and Nvidia’s AI infrastructure.”

November 23 – Bloomberg (Matt Day): “Amazon.com Inc.’s data center operation is much larger than commonly understood, totaling more than 900 facilities in more than 50 countries… Amazon Web Services is best known for sprawling data center hubs in Virginia and Oregon. But those sorts of enormous complexes, which the company owns or operates through long-term leases, don’t account for its full footprint. The cloud unit also stashes server racks in hundreds of so-called colocation facilities, renting space that as of last year provided about a fifth of the computing power at Amazon’s disposal…”

November 24 – Axios (Ina Fried): “Investors have handed billions of dollars to star AI executives, but their startups still face an uphill battle… Even with star power and funding, competing in frontier AI demands massive compute, access to data and tolerance for long losses — conditions that favor incumbents like Google, Microsoft and Meta… Meta AI chief scientist Yann LeCun… is the latest star heading for the exits. Meta says it plans to partner with LeCun’s new startup… Former OpenAI executive Ilya Sutskever departed the ChatGPT maker in May 2024, after the failed ouster of Sam Altman, establishing Safe Superintelligence last June and raising more than $1 billion in funding. Mira Murati — briefly named OpenAI CEO — left the company in September 2024 and this year announced her new venture, Thinking Machines Lab. Former Amazon CEO Jeff Bezos earlier this month named himself co-CEO and backer of Project Prometheus, an AI startup… Even Anthropic was founded by former OpenAI executives…”

November 26 – Bloomberg (David Wethe): “The eye-popping amounts Big Tech is shelling out on artificial intelligence resembles shale’s golden age of spending before a price crash wiped out $2.6 trillion in equity, Carlyle Group Inc.’s Jeff Currie says. Energy and technology are two of the most important pillars of the economy, leaving other key sectors including finance and health care ‘useless’ without the other two, the veteran commodity market forecaster wrote... ‘The shale boom was arguably the most notorious ‘growth at all costs’ capex cycle in the modern era, where energy industry-wide capex reached 110-120% of cash flow at its peak,’ Currie said. ‘So for technology spending to reach energy industry levels should raise a lot of questions.’”

November 24 – Bloomberg (Seth Fiegerman and Carmen Reinicke): “For almost as long as the artificial intelligence boom has been in full swing, there have been warnings of a speculative bubble that could rival the dot-com craze of the late 1990s that ended in a spectacular crash and a wave of bankruptcies. Tech firms are spending hundreds of billions of dollars on advanced chips and data centers, not just to keep pace with a surge in the use of chatbots such as ChatGPT, Gemini and Claude, but to make sure they’re ready to handle a more fundamental and disruptive shift of economic activity from humans to machines. The final bill may run into the trillions. The financing is coming from venture capital, debt and, lately, some more unconventional circular financing arrangements that have raised eyebrows on Wall Street.”

November 26 – Financial Times (Zijing Wu and Ryan McMorrow): “Top Chinese companies are training their artificial intelligence models overseas to access Nvidia’s chips and bypass US efforts to prevent their development of the powerful technology. Alibaba and ByteDance are among the tech groups training their latest large language models in data centres across south-east Asia… People said there had been a steady increase in training in offshore locations after the Trump administration moved in April to restrict sales of the H20… ‘It’s an obvious choice to come here,’ said one Singapore-based data centre operator. ‘You need the best chips to train the most cutting-edge models and it’s all legally compliant’.”

Bubble and Mania Watch:

November 25 – Wall Street Journal (Hannah Erin Lang): “The chief executive of Robinhood Markets took the stage at the online brokerage’s annual summit in Las Vegas this fall decked out in a race-car driver’s jumpsuit and customized Nikes. Vlad Tenev told the hundreds of cheering traders… they had chosen ‘one of the most intense lifestyles out there.’ He compared trading to driving a race car. ‘A finely tuned machine can make all the difference,’ he said, ‘and that’s the role we feel Robinhood plays for our active investors.’ Risk-taking is back for individual investors, and few people have done more to stoke those spirits than… Tenev. Robinhood’s trading app makes it easy not just to buy and sell ordinary stocks, but to invest in options, cryptocurrencies and other exotic financial products, even to make sports bets and play the prediction markets. The company’s critics liken the environment to a casino, but its fans credit Robinhood with democratizing the lucrative world of sophisticated investments. ‘He’s almost building a cult,’ said Aaron Cook, a 28-year-old plumber who was in the audience... Cook said he had used his profits from trading stocks, options and memecoins to buy a Jeep Wrangler and a $60,000 home.”

November 26 – Financial Times (James Fontanella-Khan and Oliver Barnes): “Transactions of $10bn or more have hit an all-time record in 2025 after Donald Trump’s deregulatory push unleashed Wall Street’s animal spirits and a blitz of global dealmaking. Naver’s $10.3bn all-stock acquisition of South Korea’s biggest crypto exchange Upbit on Wednesday took this year’s megadeal total to 63, topping the 2015 record… ‘Companies are taking advantage of this window to pursue the larger transactions that they’ve long wanted to do and have been expected by the market,’ said Ivan Farman, global co-head of mergers and acquisitions at Bank of America.”

November 24 – Bloomberg (Bailey Lipschultz): “One of the biggest fads of the Covid-19 retail-stock trading era is making a ­comeback—thanks in part to two buzzy trends. Special-purpose acquisition companies, or blank-check firms, have latched onto crypto treasury companies and emerging technologies like quantum computing that are benefiting from President Donald Trump’s ‘America First’ rhetoric. Some researchers are already warning that many everyday investors betting on these companies are liable to lose money. ‘It all looks like turducken, where we’re just putting one thing inside of another,’ says Peter Atwater, founder of Financial Insyghts… (Turducken refers to a Louisiana dish where a deboned turkey is stuffed with a duck that’s stuffed with a chicken.)”

November 22 – Associated Press (Damian J. Troise): “A strong year for initial public offerings on Wall Street has fizzled out due to the government shutdown and a cautious turn by investors. Many IPOs targeted for the end of this year will likely be pushed into next year as the Securities and Exchange Commission works to clear a backlog of hundreds of registration statements. Meanwhile, shares of companies that did make their market debuts haven’t fared well lately amid concerns that stocks have gotten too expensive after another double-digit gain for the market this year.”

November 25 – Bloomberg (Sridhar Natarajan): “Wall Street’s top prosecutor has a warning for private-market players getting creative with their numbers. Stark divergences in how competing firms value private assets in their portfolios are drawing increasing attention from market participants, academics — and, now, the Department of Justice, according to Jay Clayton, the head of its Manhattan outpost. ‘There are definitely some areas of concern for me in private markets,’ Clayton said… ‘People should know that the financial regulators and the department are looking at those’.”

November 25 – Associated Press (Alex Veiga): “The Federal Housing Finance Agency is increasing the size of home loans that the government can guarantee against default as it takes into account rising housing prices. Beginning next year, mortgage buyers Fannie Mae and Freddie Mac will be able to acquire loans of up to $832,750 on single-family homes in most of the country… The new conforming loan limit is a 3.3% increase from its 2025 level.”

Inflation Watch:

November 25 – Reuters (Lucia Mutikani): “U.S. producer prices rebounded in September as the cost of energy goods surged and producers passed on some tariffs. The Producer Price Index for final demand increased 0.3% after an unrevised ‌0.1% drop in August… In the 12 months through September, the PPI increased 2.7% after advancing by the same margin in August… Producer ⁠goods prices jumped 0.9%‌, the largest gain since February 2024, after climbing 0.2% in August. Energy goods, which accelerated 3.5%‍, accounted for two-thirds of the increase in goods prices. Wholesale services prices were unchanged after falling 0.3% in August…”

November 25 – Financial Times (Myles McCormick): “An affordability crisis is sweeping the US, as high prices of food, rents and healthcare force lower-income Americans to cut back on necessities just as Donald Trump’s administration curbs government supports. In Bethlehem, Pennsylvania, and the surrounding Lehigh Valley, making enough just to get by has become a struggle. ‘It feels like everything is just closing in around us, honestly,’ said Anissa Camacho, a 26-year-old florist in Bethlehem. She recently moved in with her grandparents because renting was too expensive. ‘I work two jobs, my partner works two jobs, and it just feels like we are like scraping for crumbs here,’ she said.”

November 26 – Bloomberg (Naureen S Malik): “American households are paying more than ever before for electricity after prices surged the most in almost two years, according to the US Energy Information Administration. The average retail price for electricity gained 7.4% in September to a record 18.07 cents per kilowatt-hour, the biggest gain since December 2023… The figures highlight the rising pressure consumers are facing from higher energy bills, as increased power consumption from data centers and industrial users boost prices.”

November 26 – Bloomberg (Alastair Marsh and Naureen S Malik): “The US faces a potential electricity crisis this decade as a surge in demand to power data centers bumps into the cold reality of aged and vulnerable grids. That’s according to Schneider Electric SE, which estimates that by 2028 the amount of electric generation available at peak moments won’t be enough to meet demand if the same level of backup capacity is maintained. According to the electrical-equipment manufacturer’s analysis, a capacity shortfall of as much as 175 gigawatts will emerge by 2033, resulting in outages and blackouts. America’s power system, a patchwork of regional networks and utilities, is being strained by data centers, new factories and electric vehicles. Even before the artificial-intelligence boom of the past two years, the grid was under stress from extreme weather and a growing amount of intermittent renewable energy.”

November 25 – Associated Press (Malena Carollo/Calmatters): “With California electric rates stuck at nearly the highest in the nation, the state’s utility regulator is poised to lower the payout shareholders can receive from California’s three large investor-owned power companies. In a proposed decision, the California Public Utilities Commission recommended dropping the ‘return on equity’ by 0.35% each for Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric… Utilities said the decline would affect their ability to bring in needed investment for their work. Critics of the decision said that the decline is too small to meaningfully impact ratepayers’ bills, even if it’s a step in the right direction.”

November 24 – Bloomberg (Michael Hirtzer, Kristina Peterson and Erin Ailworth): “High turkey prices and historically low production are creating a critical shortage of the birds for food banks nationwide as Thanksgiving approaches… Turkey costs have soared 44% this year, contributing to shortages that are straining the budgets and inventories of charitable organizations.”

November 26 – Bloomberg (Debby Wu, Dina Bass and Yoolim Lee): “Dell Technologies Inc., HP Inc. and other tech companies are warning of potential memory-chip supply shortages in the coming year due to soaring demand from the buildout of artificial intelligence infrastructure. Consumer electronics makers including Xiaomi Corp. have sounded the alarm about potential price increases, while others including Lenovo Group Ltd. have begun stockpiling memory chips in anticipation of rising costs. Counterpoint Research this month forecast a 50% price rise for memory modules through the second quarter of next year.”

Federal Reserve Watch:

November 25 – Bloomberg (Saleha Mohsin): “White House National Economic Council Director Kevin Hassett is seen by advisers and allies of President Donald Trump as the frontrunner to be the next Federal Reserve chair, according to people familiar…, as the search for a new central bank leader enters its final weeks. With Hassett, Trump would have a close ally whom the president knows well and trusts installed at the independent central bank… Hassett is seen as someone who would bring the president’s approach to interest-rate cutting to the Fed, which Trump has long wanted to control…”

November 25 – Bloomberg (Daniel Flatley): “Treasury Secretary Scott Bessent said that a key theme of his interviews for the next chair of the Federal Reserve has been simplifying the US central bank, which he indicated has become too complex in how it manages money markets. ‘One of the things in terms of the criteria that I’ve been looking for’ has been the interplay of the Fed’s various instruments, Bessent said.... ‘I realize the Fed has become this very complicated operation’.”

November 25 – CNBC (Jeff Cox): “Treasury Secretary Scott Bessent said… he expects President Donald Trump to make a decision on the new Federal Reserve chair by the holiday season… Bessent… said he still has one interview to go and was not ready to speculate on who might get the job. ‘I think there’s a very good chance that the president will make an announcement before Christmas,’ he said. ‘But it’s his prerogative, whether it’s before the Christmas holidays or in the new year. But I think things are moving along very well’.”

November 25 – Bloomberg (Alexander Pearson): “‘It looks like that might be fraying a bit here in terms of whether the reserves are actually ample in the system,’ US Treasury Secretary Scott Bessent says…. ‘There are all these facilities and operations, the standing repo facilities, and I think we’ve got to kind of simplify things… I think it’s time for the Fed just to move back into the background like it used to do,’ he adds.”

U.S. Economic Bubble Watch:

November 26 – Associated Press (Christopher Rugaber): “The number of Americans applying for unemployment benefits declined last week in a sign that overall layoffs remain low, even as several high-profile companies have announced job cuts. U.S. applications for unemployment benefits in the week ending Nov. 22 dropped 6,000 from the previous week to 216,000… The figure is below the 230,000 forecast by economists…”

November 25 – CNBC (Jeff Cox): “The U.S. labor market is showing further signs of weakening as the pace of layoffs has picked up over the past four weeks, payrolls processing firm ADP reported… Private companies lost an average of 13,500 jobs a week over the past four weeks, ADP said… That’s an acceleration from the 2,500 jobs a week lost in the last update a week ago.”

November 25 – Reuters (Lucia Mutikani): “U.S. retail sales increased less than expected in September, taking a breather following a recent stretch of strong gains. Retail sales rose 0.2% after an unrevised 0.6% gain in August… Sales had accelerated in prior months, in ⁠part as consumers rushed to buy ‌battery-powered electric motor vehicles before the expiration of EV tax credits at the end of September. The moderation in sales likely does not change ‍economists' expectations consumer spending picked up in the third quarter. Retail sales excluding automobiles, gasoline, building materials and food services fell 0.1% in September after a downwardly revised 0.6% increase in August.”

November 26 – Bloomberg (Catarina Saraiva): “US economic activity was little changed in recent weeks, though overall consumer spending declined further except among higher-end shoppers, the Federal Reserve said. Employment declined slightly and prices rose moderately, according to the US central bank’s Beige Book survey... ‘Outlooks were largely unchanged overall,’ the Fed said. ‘Some contacts noted an increased risk of slower activity in coming months, while some optimism was noted among manufacturers.’”

November 26 – Bloomberg (Reade Pickert): “US mortgage applications to buy a home surged last week to the highest level since early 2023, despite still-elevated borrowing costs. The Mortgage Bankers Association’s index of home-purchase applications jumped 7.6% to 181.6 in the week ended Nov. 21…”

November 25 – Bloomberg (Prashant Gopal): “Homesellers in the US are yanking listings off the market, as the nation’s real estate sector stagnates. Nearly 85,000 sellers removed their properties in September, the highest number for that month in eight years, according to Redfin. The number of stale listings — those sitting on the market for 60 days or more — jumped to the highest level for any September since 2019… ‘Buyers and sellers are living in different worlds now,’ said Chen Zhao, head of economics research at Redfin. ‘Buyers are demanding that prices need to be coming down, but sellers are still expecting prices to stay resilient and to continue growing. Sellers are not liking where market clearing prices are’… Miami saw the highest share of delistings, with 7.8% of all listings pulled off the market, followed by Fort Lauderdale with 7.7%. Dallas, Philadelphia and West Palm Beach, Florida, each saw 7.5%.”

November 25 – CNBC (Jeff Cox): “Consumers soured on the current economy and their prospects for the future, with worries growing over the ability to find a job, according to a Conference Board survey… The board’s Consumer Confidence Index for November slumped to 88.7, a drop of 6.8 points from the prior month for its lowest reading since April… In addition, the expectations index tumbled 8.6 points to 63.2, while the present situation index slipped to 126.9, a decline of 4.3 points. ‘Consumers were notably more pessimistic about business conditions six months from now,’ said Dana Peterson, the board’s chief economist. ‘Mid-2026 expectations for labor market conditions remained decidedly negative, and expectations for increased household incomes shrunk dramatically, after six months of strongly positive readings.’”

China Watch:

November 26 – Bloomberg: “China’s real estate sector suffered another blow after China Vanke Co. proposed delaying repayment on a local bond, sending some of its notes plunging to record lows and fueling concerns about Beijing’s willingness to support even the largest distressed developers. Vanke, once the nation’s largest builder by sales, is seeking to delay paying principal on a 2 billion yuan ($283 million) note due Dec. 15… The company’s dollar bond due in 2027 fell 17 cents Thursday morning to about 23 cents, the lowest since issuance in 2017. That brings losses on the note to 60% just this week.”

November 26 – Bloomberg: “China’s battered real estate sector suffered another blow after China Vanke Co. proposed delaying repayment on a local bond, raising fresh concerns about Beijing’s willingness to support even the largest distressed developers… The surprise move is another setback for the housing industry, which is still struggling to recover from years of sales declines and massive defaults by China Evergrande Group, Country Garden Holdings Co. and others. Vanke had long been considered one of the healthier property firms.”

November 26 – Bloomberg: “China’s property market is bracing for a worsening crisis at state-backed China Vanke Co., as the builder struggles to convince investors it can avoid default in the months ahead without clearer signs of government support. Once China’s largest developer and now a bellwether for the nation’s struggles to ease broader property woes, Vanke plunged in credit and stock markets this week. The builder’s local notes extended their declines Wednesday, with its bond due in May 2028 dropping as much as 29 yuan to 65 yuan…”

November 27 – Reuters: “China’s top economic-planning agency has warned over the risk of a bubble forming in humanoid robotics, in a rare official expression of concern about the booming sector. ‘Frontier industries have long grappled with the challenge of balancing the speed of growth against the risk of bubbles — an issue now confronting the humanoid robot sector as well,’ Li Chao, spokeswoman of the National Development and Reform Commission, said… More than 150 makers of humanoid robots are operating in China and their number is still rising, Li said.”

Europe Watch:

November 26 – Bloomberg (Philip Aldrick, Alex Wickham, Ellen Milligan, and Lucy White): “Chancellor of the Exchequer Rachel Reeves did enough in her budget to help her and Prime Minister Keir Starmer survive, building back a vital fiscal buffer and expanding welfare. Investors reacted positively. So did the rank-and-file Labour lawmakers who have frustrated their past spending plans. But on both fronts, there were few signs that the budget, with its £1.6 trillion ($2.1 trillion) of government spending, would by itself brighten the country’s fortunes… The plan offered little on growth — the government’s ‘No. 1 mission’ — and no meaningful tax reform. Nor did it provide the sort of grand vision Labour Members of Parliament have said Starmer needs to demonstrate to regain public support from Nigel Farage’s populist Reform UK.”

Japan Watch:

November 26 – Bloomberg (Alastair Marsh and Naureen S Malik): “Japanese Prime Minister Sanae Takaichi’s government plans to issue more new bonds to fund its economic package than the corresponding amount last year… Takaichi’s extra budget will be financed by additional bond issuance of at least ¥11.5 trillion ($73.5bn), according to… people… The newly added debt load is considerably larger than the ¥6.7 trillion issuance needed to fund former Prime Minister Shigeru Ishiba’s set of economic measures a year ago.”

Emerging Market Watch:

November 27 – Bloomberg (Juan Pablo Spinetto): “As financial scandals go, this one has it all: a flamboyant, politically connected executive taking on Brazil’s financial titans with a fast-growing bank built on aggressive tactics and exotic financial engineering; a spectacular collapse amid billion-dollar fraud allegations; and an airport arrest just as the businessman was about to leave the country on his private jet… The downfall of Daniel Vorcaro and his Banco Master is now rippling across Brazil’s business and banking circles, the latest major corporate implosion to shake Latin America’s largest economy… The bank’s liquidation has prompted the biggest intervention in the history of Brazil’s financial markets. The Banco Master debacle caps a turbulent year for Brazilian companies. Earlier this month, telecom operator Oi SA was declared bankrupt and placed into liquidation… In September, waste-management firm Ambipar Participações e Empreendimentos SA unexpectedly entered a process akin to default… Around the same time, Braskem SA, Latin America’s top petrochemical producer, hired advisers to shore up its capital structure… And there’s the case of Raízen SA, the biofuels powerhouse turned penny stock. The list goes on…”

November 27 – Financial Times (Chris Kay): “India’s economy expanded much faster than expected in the latest quarter, buoyed by robust consumer spending and growth in manufacturing and services that outweighed the hit to exports from US tariffs. GDP rose 8.2% year-on-year in the July to September quarter… That overshot a 7.3% forecast among economists… and beat the 7.8% rate in the previous quarter.”

Leveraged Speculation Watch:

November 28 – Bloomberg (Greg Ritchie): “Hedge funds are pushing back against Bank of England proposals intended to limit risk taking among UK bond traders, arguing the policies would hurt liquidity and the market’s global attractiveness. The Alternative Investment Management Association and the Managed Funds Association — the two largest industry groups representing hedge funds — do not support plans for so-called minimum haircuts on gilt repurchase agreements… Such a policy would effectively cap the amount of cash investors can borrow using gilts as collateral, limiting the ability of funds to amass leverage.”

November 22 – Bloomberg (Georgie McKay): “Bill Ackman lit the fire and Bill Pulte supercharged it. Their influence helped drive retail traders to Fannie Mae and Freddie Mac, whose shares have soared more than 500% since Donald Trump’s election a year ago. But now, as equity markets are gripped by volatility and crypto assets suffer their worst rout in years, those same investors are fleeing… Ackman, a billionaire hedge fund manager, sent out a social media post this week blaming forced liquidations and margin calls in the cryptocurrency market for the sagging prices on the mortgage giants.”

Social, Political, Environmental, Cybersecurity Instability Watch:

November 22 – Axios (Ben Geman): “UN climate talks in Brazil are wrapping up Saturday with a push to help move nations away from fossil fuels, but the deal lacks explicit mention of the CO2-spewing energy sources. The compromise underscores the Paris Agreement's limited ability to move from aspiration to stronger real-world action. It's a disappointment for nations and advocates that want an explicit ‘roadmap’ away from fossil fuels — coal, oil and gas. But it prevented collapse of the talks that had already extended beyond Friday’s scheduled close.”

November 27 – Reuters (Sybille de La Hamaide): “The bird flu virus that has been spreading among wild birds, poultry and mammals could lead to a pandemic worse than COVID-19 if it mutates to transmit between humans, the head of France's Institut Pasteur respiratory infections centre said. The highly pathogenic avian influenza, commonly called bird flu, has led to the culling of hundreds of millions of birds in the past few years, disrupting food supplies and driving up prices, though human infections remain rare.”

November 25 – Bloomberg: “The real costs of climate change are rising, potentially faster than we’re spending money on solutions. Insurers shelled out $1.4 trillion last year for climate-related damages, according to data from Bloomberg Intelligence. That is more than double the level of just a decade ago.”

November 25 – Bloomberg (James Stavridis): “If you ask the average American, ‘where does the internet come from?’ the answer you would most likely get would be from space, via satellites. Wrong. The vast majority of information that flows across the tens of billions of devices connected to the internet comes from the sea. Around 500 fiber-optic undersea cables carry more than 95% of all internet data, strung like 19th-century telegraph cables under the oceans. And they are very vulnerable. While the cables are reasonably sturdy… it is possible to damage them. First, they can be vulnerable to natural disasters… A second threat is man-made: from terrorists, anarchists, luddites who hate the internet and other random agitators. While such actors can’t really get at the seafloor cables, they can attempt to disrupt the connections at the water’s edge, or use cybertools to hamper the cable operations.”

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