Enlightenment - A Herold & Lantern Investments Podcast

Tariffs, Rare Earths, And A Flight To Gold: How Geopolitics Hit Your Portfolio

• Keith Lanton • Season 7 • Episode 38

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October 13, 2025 | Season 7 | Episode 38

A sudden policy shock from Beijing and a hardline tariff posture from Washington can erase trillions in market value in a day—and that’s exactly what just happened. We walk through the sequence: China widens export controls on rare earths and related technologies, the White House floats a 100% additional tariff that would lift rates to 140%, and both sides layer on shipping levies that threaten to raise costs on everything from refined fuels to consumer goods. Then the tone shifts, rhetoric cools, and futures bounce. The message for investors is clear: supply chains, semiconductors, and shipping are now front-line macro variables.

We unpack why rare earth policy matters far beyond magnets and defense: even small content thresholds can trap complex products, complicating compliance across autos, EVs, and AI hardware. China’s latest export data show a strategic reorientation—declines to the U.S. offset by gains to Africa, the EU, and Southeast Asia—reducing susceptibility to a single-market squeeze. Add a U.S. government shutdown, questions over federal pay, and earnings season on deck, and you have a fragile tape where headlines steer intraday momentum.

Flight-to-safety behavior is back. Gold extends its rally as global wealth questions fiscal discipline and sovereign risk, while silver spikes on a thin-market squeeze and policy speculation. We dig into credit, where stress finally surfaced: alleged collateral issues, subprime auto weakness, and a rethink on private credit’s liquidity push BDC yields into double digits and discounts to NAV wider. That sets the stage for selective opportunity—first-lien exposure with disciplined underwriting—while reminding us that leverage and fees can cut both ways.

On the equity side, we highlight AI infrastructure as a resilient theme, with server demand supporting names tied to custom chips and data center buildouts. Valuations outside the megacap cohort remain compelling, but execution depends on mineral access, shipping costs, and export approvals. We close with practical takeaways: keep cash optionality, diversify supply risk, size gold positions thoughtfully, and be choosy in high yield and BDCs. If this helped you navigate a volatile week, follow the show, share it with a friend who watches the tape, and leave a quick review to tell us what you want covered next.

** For informational and educational purposes only, not intended as investment advice. Views and opinions are subject to change without notice.

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Alan Eppers:

And now introducing Mr. Keith Lanton.

Keith Lanton:

Good morning. Today is Monday, October 13th. Today is also Columbus Day or Indigenous People Day more recently it's been called as well. So this morning we have I would say some government offices closed, but the government offices are closed anyway because of the government shutdown. Also, the bond market in the United States is not open today, and many banks if you're looking to transfer funds are not open as well, vast majority. But the U.S. equity market is open, and certainly today is a day of tremendous news flow, lots to talk about. We'll start out with the good news. President Trump is in the Middle East celebrating the first phase of the plan that he helped broker between Israel and the Palestinians and Hamas, and news that hostages being released and have been released, which is excellent news in in response. Uh Israel is also in the process of releasing some Palestinians as well, so some optimism coming out of the Middle East, something that we've been yearning for for a long time, and hopefully this will be the beginning, not the beginning of the end, but the beginning of more positive developments. President Trump also this morning was talking about the war between Russia and Ukraine, where he suggested if there's not progress the U.S. could potentially authorize sending Tomahawk missiles to Ukraine, which could be used for strikes within Russia, something that Vladimir Putin has suggested would be a red line. So ratcheting up the the rhetoric between between the US and and Russia, perhaps after the success here in the Middle East and hopefully continued success, seeking to achieve some success in the other w major war that is taking place in in the Middle Eastern Europe. So this morning we're gonna talk a lot about the other big development that took place last week, rocked stock market here in the United States, and that was action that the Chinese took last week, which they're saying was in retaliation for some actions that that we here in the United States had taken in terms of restricting exports to China of certain products, certainly products that had to do with artificial intelligence and semiconductors, and the Chinese on Fr Thursday, actually last week came out and said that they were going to be restricting the sale, not just to the United States, but in general to they were going to be monitoring the sale of rare earth minerals, which are necessary to produce a lot of the technology, a lot of the military equipment that we produce. So this is obviously a very sensitive subject. We all have heard how the vast majority of rare earth minerals, , 70 plus percent, , are produced in China. So it's something that they have a lot of leverage with. This announcement certainly got the ire of President Trump saying the actions on Friday were hostile and suggesting that the United States was gonna November 1st, not only suggesting, but saying that in this post on Truth Social that the United States was going to impose a 100 percent additional tariff on Chinese goods. That would take the tariff rate up to 140%. This again November 1st, and this would this would in effect basically bring a trade between the U.S. and China to a to a halt with with tariffs as as high as that. Markets taken aback, surprised by this ramp up, this quick acceleration back and forth between the U.S. and China. The general feeling was before this that the US and China were getting closer to a deal. President Trump had said that he was going to meet on the sidelines at an Asian summit with President Xi, with perhaps a visit to China and then a visit by Xi to the United States. So this was not something that the markets anticipated, something that, you know, you could argue comes out of left field, kind of one of those events many times you'll hear market prognosticators say that typically when you get a change in market sentiment, it's the result of something that that you didn't anticipate that kind of came out of nowhere. So some were citing on Friday that this might have been that type of event. This morning we're seeing some more conciliatory remarks out of not only the United States, but also the Chinese, and we're seeing equity futures rebound based on this dialing down of the rhetoric, although keep in mind that this issue has has not been resolved. Another factor that got less attention, but is also very significant, is that the United States had previously said that we were going to impose taxes on Chinese ships that docked here in the United States, didn't get a lot of attention at the time, but something that angered the Chinese. The Chinese responded as part of the response with respect to rare earth minerals. There was another component, and that component was that U.S. ships that dock in China were going to be subject to significant levies as well. Now the thought process might be well, the U.S. doesn't really have a whole lot of ships. So what the Chinese did was they expanded that definition to basically any ship that the United States has a 25% interest in based on a whole bunch of metrics, which adds up to a meaningful amount of ships, which means that additional costs for ships to to carry goods back and forth from China would be imposed on not only Chinese ships by the U.S., but U.S. ships by China. And this is another factor that was causing this spiral or escalation between the two countries. There was lots of suggestions that both President Trump and President Xi were jockeying for position, you might call it the upper hand ahead of the potential meeting that was gonna take place allegedly because the U.S. had had suggested, or President Trump had suggested, that the President Trump and Xi were gonna meet on the sidelines of this Asian summit. The Chinese had never confirmed that, but nevertheless, speculation that that this this back and forth could be positioning ahead of a a broader meeting. So this morning, as I said, we're getting a little bit of a dial-down after President Trump said trade relations with China will all be fine. Keep in mind on Friday we had two trillion dollars of market capitalization taken out of the market as a result of the significant sell-off. President Trump saying, don't worry about China, it will all be fine. Highly respected President Xi just had a bad moment. He doesn't want depression for his country, and neither do I, President Trump wrote. The USA wants to help China, not hurt it. Vice President J. D. Vance echoed those sentiments over the weekend. He told Fox News that the U.S. will negotiate with Beijing if Beijing is, quote, willing to be reasonable, though he added that the U.S. has, quote, far more cards, unquote, if not. So those comments could encourage investors to return to the market after the sell-off on Friday, especially if technology names got that got hit with the worst of the selling, if there's a feeling that that they will not be as much of a pawn in the negotiations between the U.S. and China. Now many tech companies do rely on rare earth minerals from China for the manufacture of semiconductors and electric vehicles, among other goods. Looking back to last week, all three major averages were down. Dow was down two point seven percent, the SP 2.4%, the Nasdaq down 2.5. You may say to yourself, well, the NASDAQ was down only 2.5. I thought it was down over 3% on Friday, it was, but that's because during the rest of the week the Nasdaq and other indices were higher. The SP's 2.7% drop on Friday was its largest since April when we had the initial tariff announcement from President Trump. But we do have other factors that are also at play, causing some anxiety for market participants. Government stretch shutdown stretching into a new week as major payroll deadlines loom. October 15th is the next pay date for most federal workers, and the possibilities that many employees will not get paid. There has been some talk from Politico that the administration may be moving some funds around to pay the military. There's also been some talk that that they don't have that power. That power is vested in Congress to move funds around. So we'll see if our hardworking folks in the military do get paid in a couple of days from today. Earnings season is kicking off this week, and we'll talk about all the different companies that are going to be coming out with earnings. And as I said at the outset, the bond market closed today due to the Columbus Day holiday. Now, back to the U.S. and China. China saying on Sunday that they are not afraid of a trade war with the United States. Spokesman for the Chinese Ministry of Commerce accused the United States of a textbook double standard. China said that their position on the trade war is consistent. We do not want it, but we are not afraid of it. So here in the United States, the Chinese are saying that the U.S. Commerce Control Agency here in the United States has a list of more than 3,000 items that we are, according to the Chinese, imposing some restrictions upon, whether that requires pre-approval or outright not sending those goods to China. And they're saying that, and again, this is from the Chinese, not independently verified, they're saying that is more than three times the 900 items that the Chinese now have on their export control list. China called its export controls on rare earth exports a quote legitimate measure under international law. The Commerce Ministry said the controls issued Thursday were part of Beijing's effort to strengthen their export control system and what they said was to better safeguard world peace and regional stability. The measures which not now cover not only rare earths but also related intellectual property and technologies were announced just before this potential meeting between President Trump and President and Premier Xi. The Chinese went on to say that these controls are not bans, that anything that meets the requirements will be approved, and they went on to say that the that they're confident that the impact of these actions that they took on Friday will be limited. But these actions do state the curbs for foreign entities to obtain license to export products containing more than 0.1% of domestically sourced rare earths, perhaps 0.1% certainly could have gotten the attention of President Trump and gotten them pretty angry, certainly justifiably so. So anything with 0.1% of rare earths or manufactured using China's extraction, refining, magnet making, or recycling technology would be subject to these export controls. U.S. Trade Representative James Greer said on Sunday that the U.S. was not notified of these new export controls in advance, and that they had found out about them from outside public sources, and that they even reached out to China and the Chinese did not get back to him. So this is certainly setting the stage for the actions that we're seeing this morning and the talk back and forth between the U.S. and China. Now the Chinese did say this morning that they are looking for the United States to meet them halfway. Perhaps that is another gesture at an off-ramp. Of course, we don't know exactly what that means, but it sounds like when someone says meet me halfway, that they are at least open to trying to work things out. Now, we had just talked about those oil tankers and the fact that this is a sector that could certainly affect trade. Nearly 16% of tankers that carry refined products, which is we're talking oil and oil byproducts, and 13% of those that carry specifically crude oil would be subject to these port fees. So this is certainly one of the reasons why markets sold off as well. So we're talking about the 100% tariffs, we're talking about these port fees that the Chinese are imposing, and therefore we are talking about a lot of uncertainty between the U.S. and China with respect to trade when we thought things were moving along in a smoother fashion. Now, you may say to yourself, well, what changed? Why are the Chinese ratching up their rhetoric? And perhaps it's because they feel that their hand has strengthened. Previously, perhaps President Trump felt that the US had a strong hand in our negotiations with Chinese, especially with respect to our our dominance of artificial intelligence and the semiconductors and technology, which the U.S. is arguably the world leader. But the Chinese we felt were very susceptible to pressure on trade because the U.S. was a very large importer of Chinese items, so we had some leverage with respect to technology, and we had with leverage with respect to, hey, the U.S. consumer is buying lots and lots of Chinese goods. We have leverage that they should come to the table because they need us to keep buying their products. But perhaps some of the news that came out over the weekend would give us some insight into why the Chinese are being more aggressive. So the Chinese announced that shipments overseas grew at the fastest pace in six months, that exports in September had risen 8.3% year over year, and this is even as shipments to the United States plunged 28%. So how did the Chinese make up for this shortfall? Well, you could argue that maybe the world economy is a little bit like a balloon. You squeeze one end, and and and it's it's very likely that that arrow goes somewhere else, and that's possibly what's happening here when it comes to world trade, the goods that the Chinese aren't selling to the United States. Well, they're shipping to Africa, 56% surge in exports to Africa, shipments to the EU, European Union rose almost 14%, the most in over three years. Southeast Asian trading bloc grew 16%. So the Chinese perhaps making up for some of the loss of U.S. markets and U.S. imports by selling to other areas of the world that that they previously weren't selling to. So not not purchasing goods in one place leads to purchasing goods in another place. What's also interesting is that the trade surplus with the United States and China last month actually widened from August to September, so we had a bigger deficit in September than August, about $23 billion. And it's possible that the Chinese is thinking to themselves that the U.S. has already weaned itself off of a lot of the the the sort of the easy goods it's easy for us to wean ourselves off of, and that it would be a lot harder for us to not import a lot of the items now that that that the ch that we are currently still importing, and therefore perhaps they feel that their hand is is not as weak as it previously was, and that's why they are being more aggressive with their stance towards the United States and therefore feeling more emboldened. So we will see. Certainly, President Trump is a person who's seeking a transaction and looking for a favorable outcome for the United States, and certainly the Chinese are somewhat aware of the fact that trade has been very one-sided for a very long time, and that's perhaps reflected in that statement that let's see how we will meet halfway. So while all this is going on, and all this is creating anxiety and uncertainty, another phenomena that we have been talking about is the fact that we are seeing lots of concern about paper currencies, US dollar, Japanese yen, the euro, currencies that governments print that are backed just based on their full faith and credit of those institutions, that there is a continued concern about those currencies and seeking to find a more stable place to invest your money. So again, if you're a foreign national sitting in a country like Russia or Venezuela, or even if you're you're sitting in in China and you have accumulated wealth because you're a family that has big business or is perhaps connected to the government, whatever the reason you've accumulated wealth, think of this, think to yourself, if you are that person and you've accumulated, let's put it in dollars, twenty, thirty, forty million dollars, and you're sitting, let's say, in Argentina, do you want to take your forty million dollars and invest it in Argentinian currency? Probably not. In the past, what you possibly did was you said, the United States is a place that I am very comfortable investing my money. The United States is fiscally responsible, so you are comfortable holding lots of dollars. You may still be comfortable holding lots of dollars, but you're starting to say to yourself, the United States is running a big deficit on their in their country. The United States also confiscated Russian assets. I know Argentina is not Russia, but nevertheless, you just never know. So as a prudent business person who has accumulated vast wealth outside the United States and there's lots of them, where are you going to invest? Where are you going to put your hard-earned dollars as a store of value? And you can see why the thought process has become to seek out alternative places to invest your hard-earned dollars, hard-earned money, whether it's in dollars or other currencies, and other means of store of value, and perhaps that's one of the reasons that we are seeing a significant rally in the price of gold. In fact, gold is up this morning about $95 an ounce. And the rally in gold that we are seeing arguably could sustain itself unless we see a change in the fiscal prudence here in the United States or elsewhere throughout the world. So Baron's talking about gold being a store of value. And what's what's interesting is that if you look at gold in inflation-adjusted terms, gold only recently topped its peak above $800 reached in January of 1980. So if you look at it from a c from an inflation standpoint, gold only now is slightly above its inflation-adjusted peak in 1980. So you could argue that now gold has possibly reassumed its status as a store of value, which is what it was, let's say, during most of history. There was a period here in history where gold had bottomed out at about two hundred and thirty or forty dollars, two hundred and fifty dollars an ounce in nineteen ninety-nine, period when the United States was running budget surpluses. But here we are, and taking a look at gold, since the turn of the century, gold has outpaced stocks as a return here. So even if you look at the SP 500, gold has outpaced the S P five hundred. And put differently, the S P 500 measured against gold is almost 70% lower than it was 25 years ago when gold was at $250 an ounce. So if you measured the SP 500 relative to the price of gold, the SP 500, if the SP 500 was denominated in gold instead of dollars, it would be 70% lower than it was 25 years ago. Now, to be sure, that's from deeply depressed levels, and that's from when equities were extremely high because of the dot-com bubble, but nevertheless, it's a it's an interesting statistic. Recently, Ken Griffin, the billionaire and head of Citadel, expressed concern that gold was being viewed as a safer asset than the dollar. He said we're seeing substantial asset inflation away from the dollar as people are looking for ways to effectively de-dollarize or de-risk their portfolios versus the United States sovereign risk. Gold has surged past 4,000 an ounce without a recession or a crisis in private equity or credit, things that would usually spur the Fed to flood the system. So even without the Fed taking any massive action that would typically give rise to gold, we are seeing gold rise significantly, which means perhaps gold has more room to run. So for the moment, there is a fear of missing out on gold, so lots of folks, short-term traders getting into gold, but the fundamentals for the rallying gold, Barron suggests, remain in place. And now the other precious metal that gets a lot less attention, probably perhaps the steps child, is silver. And silver this morning is hitting its highest level in decades as a short squeeze in London has intensified a surge in prices. Spot silver this morning is up over 3% an ounce, amid signs that market stresses are starting to spread to silver. The silver market is less liquid and roughly nine times smaller than gold. And without a central bank bid to anchor silver prices, even a temporary pullback in investment flows could trigger a disproportionate correction. So silver expected to be a lot more volatile, so silver is up a lot today, but you don't have that central bank buying like we're seeing in gold, so there is less support for silver. So just be careful if you're trading silver. This is not a commentary on whether silver prices are going higher or lower, but nevertheless, silver prices will possibly be more volatile than gold prices. And one of the other reasons that silver is moving higher is that the U.S. administration in its probe into critical minerals, that probe into critical minerals and actions that the U.S. may take with respect to critical minerals includes silver on that list of critical minerals. So it's possible the U.S. could take action with respect to restricting silver exports. And that's one of the reasons that you're seeing that short squeeze in London is concerns that the U.S. will put tariffs on silver and moving gold silver back and forth between Europe and the United States would become difficult and expensive. All right. Let's let's talk about markets this morning. As I mentioned, markets are moving higher on the dialing down of the tensions. Uh commentary from President Trump this morning that all will all be fine between the U.S. and China. Dow futures are up 400 points, NASDAQ futures up 420, SP up 78. So, you know, about half the losses on Friday. We're possibly going to recover at the open. We'll see if that that holds. And this is after Friday's commentary when again President Trump said that China was being very hostile and warned of massive increase in tariffs. So this dialing down of rhetoric is helping. Also, Treasury Secretary Scott Bessant added to the optimistic sentiment this morning, saying in a Fox Business interview that the U.S. and China communicated over the weekend and he still expects President Trump to meet Chinese President Zhi soon. Of course, we're getting the the glow from the positive news that Hamas has released all living hostage Israeli hostages as part of the Gaza ceasefire brokered by the United States. President Trump saying that the war is over in the region. We mentioned the fact that the government is no closer to opening. Taking a look at markets overseas, equity indices in the Asia Pacific region had a lower showing to begin the week. Japan was closed, , China modestly lower down two-tenths of one percent on that back and forth between the U.S. and China. Most European markets up modestly higher this morning. A couple of companies in the news. Uh, Warner Brothers WBD rejected Paramount Skydance Takeover approach. Uh so Warner Brothers up this morning and I guess hopes that there will be a higher offer. Apple this morning, moving up predominantly because tech stocks are up, but also an announcement they are in discussions to acquire talent and technology from Prompt AI. Apple under a lot of criticism for their AI incorporation into their products, so perhaps an acquisition is something the markets would welcome. The White House has launched Trumprx.gov. Site will connect patients directly with the best prices for medicines, increasing transparency and cutting out costly third markets from the Trump administration. I mentioned earlier that President Trump says he might tell Russian President Putin that if he doesn't settle the war, he will give Tomahawk missiles to the Ukrainians. All right, let's take a look at a couple of other stories here. One with respect to JP Morgan, their CEO, Jamie Diamond, last week saying that he thinks that there is a 30% chance of a correction. He said he's far more worried than others. I would give it a higher probability than others that there would be some sort of market adjustment to the downside, and he says many are pricing in 10%. He would price in 30%. Diamond in his most recent comments said the timing of the end of the rally is difficult to predict. It's possible a stock market downturn could hit in six months, yet the stock market could also hold on for another two years, he said. He said bull markets go on a lot longer than you think. Diamond added some of the investment in AI will probably be wasted money, and some investors in the technology may be worse off. He did go on to say AI is real. AI in total will pay off, just like cars in total paid off, TV in total paid off, but he said most people involved in it didn't do well from a financial standpoint. Now, this morning, JP Morgan said it will invest ten billion dollars into industries critical for national security to finance and take direct stakes in companies they consider is cr crucial to U.S. interests. These include companies in four areas defense and aerospace, frontier technologies, including AI and quantum computing, energy technology, including batteries, and supply chain and advanced manufacturing. Let's talk about one AI company, arguably, AI company. Most people don't think it's an AI company, but Barron suggesting perhaps they should think of it more that way. And that is Dell, no longer called Dell Computers, now called Dell Technologies, the symbol though the same, D-E-L-L. Barron saying Dell is just beginning to tell its AI story to buy the stock. Dell Infrastructure Solutions Group reported 44% sales growth year over year in the second quarter, driven by AI server demand. Dell now projects over $20 billion in AI service sales this year, positioning it as a leader in the growing AI market. Perhaps one of the most attractive features has to do with Dell's valuation, trading at 13.5 times expected earnings, significantly lower than the S P 500's 22 times earnings, despite the fact that earnings are expected to grow 16% at Dell this year. Transitioning to the credit markets. Lots of discussion with a couple of bankruptcies in the credit markets getting attention the last couple of weeks. Uh First Brands, which is a company that that supplied auto parts, sounds boring, , to to lots of retailers like O'Reilly's and Walmart, perhaps perpetuating a fraud, selling selling guarantees on assets, some suggesting to more than one party, and exposure to first brands is UBS Jeffries group, both with exposure and lots of concern that perhaps this this mischaracterization of of collateral could be more widespread, and concerns that the private credit market and the junk market may have more exposure than than was previously thought to to situations like this, and this is causing weakness in in many areas of the private credit, high yield, or junk market. The other large bankruptcy was tricolor. This was a subprime lender, kind of brings us back to 08-09 to people who were buying cars with poor credit. But Barron's saying that that this news could be creating an opportunity in the business development company structure, which are BDCs. BDCs, they say many are now yielding 10% or more, and they now may be worth the risk. They have BDCs have declined 15% since mid September. Many are now yielding 10%, eleven, twelve, and and higher as a result of the sell off. Now the sell off began even before these credit concerns when the Federal Reserve started cutting interest rates. The concern was that many loans that business development companies make are variable rate. So When the Fed cuts rates, the interest that you receive will be lower, and therefore that was causing some of the selling before the credit concerns. So put both together and you got a storm of concern. But Baron's saying that despite the risks like leverage and high fees, the current discounts, the net asset value, and high yield present a potential buying opportunity for investors. Now they say that business development companies tend to be more volatile than other fixed income asset classes because in general it's a space that individual investors are the primary investors. Lots of funds don't like to purchase business development companies because business development company fees have to get incorporated into the fee structure of a of a mutual fund. When you're looking at the expense ratio, that tends to raise expense ratios, and fund companies these days are competing on keeping expense ratios low. So, therefore, even though income-oriented funds may find BDCs attractive, they tend to shy away from them, meaning that this market is getting concentrated in the hands of individual investors, so you get a sell-off and there's not a lot of strong hands around, potentially creating the opportunity that we see now. So Barron suggesting that many business development companies are now trading at a 20% discount to their net asset values. What that means is if you were to value each security in the portfolio, that the underlying share price is about 20% below that, . So bad news baked in, and you've got a 20% cushion suggesting that there is an opportunity here. Last time discounts got to 20%, the return over the next year was 40%. Barron's not that optimistic, , but suggesting you could see returns over the next year if the market stabilizes in the neighborhood of about half that or 20%. Couple of specific names that mentioned here Blue Owl Capital and Blue Owl Technology Business Development Companies trading at about a 15% discount to net asset value. Blue Owl Capital has a distribution yield of about 12%, Blue Owl Technology about 10%, Blackstone Secured Lending BDC yields more than 12%, has over 95% of its portfolio and first lien secured loans, which are the highest quality BDC loans. The BlackRock Secured Lending BDC has among the lowest level of non-accrual loans, those are loans that haven't made a payment for 90 days, under 1%. The BlackRock BDC trades around 25, which is where it was issued several years ago. The 7% discount to net asset value. Just a few months ago, this BDC was trading at a 20% premium to net asset value. For those who are willing to take some more risk, Barron's suggests that perhaps it's worthwhile, but certainly not not assured success. And this is the FSK KKR Capital BDC. This BDC has been among the biggest losers in BDCs in the past few months. Its stock is down by over one-third since July. It's now trading around 14, which is a steep 34% discount to its June 30th net asset value. And FSKKR is currently yielding, now there could be a dividend change, but at the moment it's yielding 19%. Now, this is not without reason. The shares came under pressure when the stock goes down. If there's no dividend cut, the yield goes up because they announced in the second quarter that their non-accrual loans ticked up over five percent. Remember, we just mentioned Blackstone under one percent, these guys over five percent, so there's concerns here that perhaps there is some underlying issue with FSKKR's ability to identify risk, and therefore going forward the concern is even though the stock is cheap, that there is more problems lurking below the hood. For those who are risk-inclined, may want to do some more digging and see if perhaps the bad news is already reflected in the share price. Speaking about private credit, over the weekend this double line CEO Jeffrey Gunlock said on a webcast actually on Friday that he thought that private credit would be the leading candidate to cause the next financial disruption/slash crisis. He said he doesn't think anything else is close. All the classic signs he says are present. And he said he's concerned that market participants are even willing to launch private credit ETFs, suggesting that you're putting these illiquid securities into vehicles that trade real time. The fact that folks are willing to do that and have that much confidence in private credit is a source of great concern to him that perhaps the private credit has gone too far. Now he's not suggesting that private credit is going to disappear or that it's not going to exist anymore. He feels just like other asset classes, and now I'm putting these words into his mouth, but if you go back to when high-yield bonds or junk bonds were created in the late eighties or mortgage-backed securities or CMOs were created in the 1990s, you had both situations where these asset classes folks got overly exuberant and there was a significant drop in price, and then they became more established mainstream investments. That's perhaps what we'll see with private credit going forward, is is what Mr. Gunlack is alluding to. Now on Friday we did have one of our worst sell-offs in in the junk or high yield space, and this is on the heels of President Trump's response to Premier Z retaliatory actions against the United States, and we did see high yield bonds for the first time sell off significantly, or the first time in a long time sell off significantly, so that's something else to keep on your radar as the yield premium or how much extra yield you get to own high yield bonds relative to more well-rated bonds or bonds that have better credit profiles has been at historic lows, and for the first time in a while we were seeing that trend reverse. So something else to put on your radar to see see how the markets act going forward. So I will mention I see news since we started that Broadcom stock is up about 10%. The symbol is AVGO. They are going engaging in an open AI custom chip deal. They had already announced deals with NVIDIA and AMD, and now OpenAI announcing a deal with AVGO. Uh some folks thought that AVGO was left out of the party, but apparently they are joining the party as well. That's everything I've got.

Alan Eppers:

Thank you for listening to Mr. Keith Lanton. This podcast is available on most platforms, including Apple Podcasts and Spotify. For more information, please visit our website at www.heroldlantern.com.

Sophie Cohen:

Opinions expressed herein are subject to change and not necessarily the opinion of the firm. The information presented herein is for informational purposes only and is not intended to provide personal investment advice. It is important that you consider your information investment goals that are making investment decisions.