To The Moon

News and my thoughts from the past week (27Oct25)

S&P 500 Growth divided by S&P 500 Value is right now testing some big, bad, bold resistance. - X user Jeff Weniger

Fatality rates involving heavy-duty trucks have increased by 40% over the past decade. Culprit: the elimination of training standards and issuance of a CDL to anyone. - X user Craig Fuller

President Trump says he is raising tariffs on Canada by 10% “over and above what they are paying now.”

BREAKING: 67.6% of US consumers are now living paycheck to paycheck, according to a PYMNTS survey. This percentage has risen by +10 points over the last 18 months. This comes as nearly 30% of consumers lost their financial safety net before July 2020 and have struggled since. A similar percentage began facing the same situation over the last 12 months. All while 46% of consumers who once had some financial comfort say they have since lost it and feel overwhelmed by their situation. The US wealth divide is hitting historic levels. - X user The Kobeissi Letter

Investors are DUMPING US financial stocks: Investors sold $0.8 billion of financial stocks last week, marking the 8th week of selling in the last 9. The 4-week average of selling hit $0.8 billion, more than 2 standard deviations below the average over the last 17 years. - X user Global Markets Investor

Zions Bank and Western Alliance Bank claimed they were defrauded out of nearly $160M. Zions subsidiary California Bank & Trust claims it lent more than $60M to an investor group that listed 16 properties as collateral; six of those assets were investments under Newport Beach-based MOM CA Investco, which filed for bankruptcy in February. When California Bank & Trust underwrote the loans in 2016 and 2017, the company required lender protections, namely that it would be first in line for repayment if the borrower defaulted and liquidated its assets. California Bank & Trust said it later discovered other lenders actually held liens on several of those same buildings, thus rendering Zions’ protection obsolete when the assets went into liquidation. Western Alliance Bancorp filed a complaint in August, saying the same investor group, led by Gerald Marcil, Andrew Stupin and Deba Shyam, owes it nearly $99M. The bank alleges the group hid the fact that some of the collateral properties were already in foreclosure, in turn undermining the bank’s repayment rights. - X user Nightingale Associates

Debts around the world

“I’m not surprised that credit scores are slipping,” said Matt Schulz, chief credit analyst at LendingTree. “Millions of Americans are struggling mightily in the face of stubborn inflation, high interest rates, a difficult job market and overall economic uncertainty — and tough times often force tough decisions.” - CNBC

AMERICA’S DEBT CRISIS EXPLODES: MILLIONS NOW DROWNING IN CAR LOANS, MAXED-OUT CREDIT CARDS AND PERSONAL LOAN DEFAULTS AS FICO SOUNDS THE ALARM ON SOARING DELINQUENCIES - First Squawk

China’s debt BUBBLE is massive: China’s government debt-to-GDP ratio hit a record 93%. Nonfinancial corporate debt stands at 142%, household debt at 60%, and financial corporate debt at 41%. That gives a total debt-to-GDP ratio of 336% - X user Global Markets Investor

JPM: “Oracle’s debt to equity ratio is already 500% compared to 50% for Amazon, 30% for Microsoft and even less at Meta and Google. In other words, the tech capital cycle may be about to change” (Cembalest, Sept 24).

This shift to ~80% fixed long-term debt (from 44% in 2007) shields S&P 500 firms from rising rates, stabilising interest costs and boosting earnings resilience. Analysts like BofA and TIAA project 13-14% EPS growth in 2025, aiding market stability. However, refinancing risks loom if rates remain high, per Moody’s and Goldman Sachs, with default risks at 9.2%. Overall, it supports a positive near-term outlook amid economic uncertainties. - From Grok

The US has had its fastest accumulation of a trillion dollars in debt outside of the COVID-19 pandemic, per PBS

Americans are drowning in credit card debt: US household credit card debt hit a record $1.33 trillion in August. The combined average credit card balance across all age groups is now at a whopping $10,668 PER household. States with the largest average debts in Q2 2025 were Hawaii at $15,100, California at $13,800, and Alaska at $13,600. Other high-debt states include New York at $12,900, Texas at $12,800, and Florida at $12,600. Credit card debt continues to skyrocket. - X user The Kobeissi Letter.

The US leveraged loan market is now on track for its biggest monthly loss since at least 2022. This comes as defaults of First Brands and Tricolor Auto in September have exposed possible weak underwriting standards and growing vulnerabilities in credit markets. The collapse of First Brands alone has triggered over -$4 billion in losses, affecting funds run by Blackstone, PGIM, Franklin Templeton, CIFC, and Wellington. Despite these failures, leveraged loan issuances hit a record +$404 billion in Q3 2025. The leveraged loan market now stands at an estimated $2 TRILLION. Cracks in the credit market are becoming more apparent. - X user The Kobeissi Letter

Total US debt reached a record $98.8 trillion in Q2 2025, equal to 324% of GDP. Federal government debt rose to $35.6 trillion in Q2, but the most recent data shows it has reached $37.5 trillion, or 123% of GDP. Nonfinancial corporate debt hit $21.9 trillion, representing 72% of GDP. Financial corporate debt totaled $20.9 trillion, or 69% of GDP. Household debt reached $20.5 trillion, corresponding to 67% of GDP. America has never been this indebted.

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