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Good morning: The private credit problems that I’ve discussed for months have gotten worse… Iran is laying mines in the Strait of Hormuz. And the IEA just proposed the largest reserve release in its history… We’re doing great, everyone…
Let’s talk markets… TODAY’S CALENDARI’ll be covering the CPI report for Money Printer Pro subscribers at 8:30 am… This report won’t capture the most recent oil spike, but it will serve as a baseline… Consensus is 2.4% per year. If it comes in hot, the Fed is stuck. Rates could even move higher at some point if oil stays above $90… While sticky inflation adds to a supply shock. The wildcard… the IEA is expected to decide on the proposed strategic reserve release today. That decision alone could move oil 7% in either direction. On earnings. Oracle beat after the bell on Tuesday. Revenue sits at $17.2 billion, up 22%. Cloud revenue jumped 44%. Meanwhile, Campbell’s reported today as a consumer staples bellwether. It didn’t go well… Private Credit Crisis DeepeningRemember what we talked about yesterday with MetLife and private credit? It’s happening faster than anybody expected. Cliffwater’s flagship private credit fund… $33 billion in assets… is facing redemption requests exceeding 7%. BlackRock’s HPS Corporate Lending Fund… $26 billion… got hit with 9.3% in redemption requests and has already capped withdrawals at 5%. Blackstone saw a record 7.9 percent in redemptions and had to backstop the fund with company capital. Three of the biggest names in private credit… Don’t say you weren’t warned… Investors are pulling money because of concerns about loan quality and exposure to software companies that might get disrupted by AI. JPMorgan is now marking down private credit software loans. And when interval funds start capping redemptions, every other investor in those funds gets the same message… your money is locked. That is how a correction becomes a crisis. Iran Mines the Strait of HormuzThe war is not winding down. It is escalating. Iran has placed mines in the Strait of Hormuz. CBS and CNN confirmed it. US officials told the Wall Street Journal that fewer than 10 mines have been placed so far. Trump responded by saying that if they are not removed immediately, the military consequences will be “at a level never seen before.” Meanwhile, the Energy Secretary posted that the Navy had escorted an oil tanker through the strait. That post was deleted. The White House said it was not true. So the Energy Secretary posted a false claim about a military escort during a live conflict at the planet's most important oil chokepoint… IEA Proposes Largest Reserve Release Ever The big story is oil… The IEA has proposed the largest release of oil reserves in its history. The Wall Street Journal reported the proposal was circulated during an emergency meeting on Tuesday. No decision yet. Countries decide today. The proposal would exceed the 182 million barrels released in 2022 after Russia invaded Ukraine. Reports suggest 300 to 400 million barrels. The catch… a single country can block it. If it passes, Goldman says it offsets roughly 12 days of disruption and could take $7 off oil. If it gets blocked, oil rips back toward $100 because the physical disruption through Hormuz is still very real. All right, everyone… I’ll be going through CPI and ideas with Money Printer Pro members at 9 am… Be sure to check out the video above… And… Stay positive, Garrett Baldwin About Me and the Money Printer Me and the Money Printer is a daily publication covering the financial markets through three critical equations. We track liquidity (money in the financial system), momentum (where money is moving in the system), and insider buying (where Smart Money at companies is moving their money). Combining these elements with a deep understanding of central banking and how the global system works has allowed us to navigate financial cycles and boost our probability of success as investors and traders. This insight is based on roughly 17 years of intensive academic work at four universities, extensive collaboration with market experts, and the joy of trial and error in research. You can take a free look at our worldview and thesis right here. Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.
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