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South China Morning Post
2 days ago
- Business
- South China Morning Post
Why world must heed boy crying wolf over risk of financial crisis
There is an old joke that economic commentators have predicted nine out of the past five recessions. The implication is that they engage in doom-mongering while other people get on with real life. This is an exaggeration, and there are good reasons to heed 'the boy who cried wolf'. The financial world appears to be basking in the idea that US President Donald Trump's tariffs have fallen short of sparking a global trade war. Stock markets are riding high , bond markets are jittery but hardly panicking, inflation and interest rates are rising at a reasonable pace and – if there is anything to worry about – it is all geopolitical matters. Why heed the cry of those who would have us believe that another global financial crisis is stealing upon the world, ready to savage sheeplike investors who take comfort in flocking together? The answer is that the proverbial wolf is in disguise now, shielded from attention behind a facade of benign and regulated respectability. Few are worrying about the rich valuations of stocks, especially the 'Magnificent Seven' tech firms whose market capitalisations now rival the gross domestic product of some nations. The banking system appears to be on solid ground. In reality, global levels of lending and debt are real sources of concern. Myriad shadow banks and other nonbank financial institutions (NBFIs) have become wolf-like predators that have grown used to borrowing low-cost finance from big banks and lending it on at a useful margin to willing borrowers.
Yahoo
25-07-2025
- Business
- Yahoo
5 Ways the Wealthy Put Their Money To Work That the Middle Class Can't
Wealthy people often operate in a completely different financial world than the middle class. They have access to exclusive investment vehicles, unique tax-friendly strategies and investment structures, to name a few differences. And many affluent families can take advantage of financial tools that help them grow, protect and transfer wealth in ways most Americans simply can't. Learn More: Read Next: 'Middle-income individuals can build wealth in the areas where they have access (for example, low-cost, exchange-traded funds) just like the wealthy but may not have enough to put money into more alternative investments like private equity or hedge funds,' said Richard McWhorter, managing partner and private wealth advisor with SRM Private Wealth. Experts explained what the wealthy can do that the middle class can only aspire to. Access to Exclusive Investment Vehicles Wealthy investors often have access to private equity, hedge funds and other 'alternative investments,' which typically require high minimums or accreditation, McWhorter said. These opportunities are usually out of reach for middle-class investors. Most of the investments within the alternative investment bucket (hedge funds, private equity, venture capital) are not available due to certain criteria to be accepted and/or minimum investments imposed by the investment sponsors, McWhorter said. Even if these investments are volatile or don't have a quick return, wealthy investors have the financial padding to take on that risk without threatening their basic needs. 'They might have less leverage that can be impacted during this time as well,' he added. Find Out: The Long-Term Advantage Because wealthy individuals don't rely on their invested assets for day-to-day expenses, they're able to invest for the long term and potentially get higher returns over time. 'This means that affluent individuals can begin investing sooner, which translates into significantly higher returns over time, thanks to compounding dividends and returns,' said Leslie Kehoe, managing director and senior wealth strategist at CIBC Private Wealth, US. Advanced Financial Structures Wealthy individuals also benefit from unique financial structures like trusts, donor-advised funds and private foundations, McWhorter explained. These structures offer tax advantages and greater control over how their wealth is invested and transferred. 'Wealthier people have more funds to lock away in a trust structure or to donate monies to a donor-advised fund than those with less wealth as it could impact their standard of living,' McWhorter said. 'Trusts are central to many strategies,' Kehoe said. She explained that different types of trusts — such as Grantor Retained Annuity Trusts (GRATs), Spousal Lifetime Access Trusts (SLATs) and Dynasty Trusts — can help reduce estate taxes, protect assets from creditors and facilitate tax-efficient wealth transfers across generations, keeping money in wealthy families. Charitable Strategies and Tax Efficiency Charitable giving is another area where wealthy individuals have a great ability to take advantage of the financial benefits of their philanthropy. Vehicles like donor-advised funds, private foundations and charitable remainder trusts can help reduce taxable income, defer capital gains and establish long-term giving plans. 'These strategies aim to … ensure a smooth and tax-efficient transfer of wealth across generations — all within the framework of U.S. tax compliance,' Kehoe explained. Family Offices and Comprehensive Planning Some wealthy families also protect their wealth by using private family offices — essentially in-house financial firms — to manage their wealth. These offices handle everything from estate planning to portfolio management and then some. 'These offices help structure portfolios to take advantage of tax-efficient investments and use entities like LLCs or partnerships to consolidate control and manage income and estate tax exposure,' Kehoe said. While most middle-class investors won't have access to such services, it's still possible to hire financial advisors and planners for strategic support. 'Aside from valuable advice that often limits liabilities and risk exposure, having a strong relationship with a wealth advisor can help individuals craft a highly customized financial strategy to meet the specific goals of their clients,' she added. What Middle-Class Investors Can Do While the average middle-class investor may not have access to these elite financial tools, they still have meaningful ways to grow wealth. Experts emphasized consistency, planning and leveraging accessible vehicles like retirement accounts and low-cost index funds. 'They should still continue to build their wealth with the tools available to them, which,' McWhorter said, 'are ample.' More From GOBankingRates Are You Rich or Middle Class? 8 Ways To Tell That Go Beyond Your Paycheck This article originally appeared on 5 Ways the Wealthy Put Their Money To Work That the Middle Class Can't
Yahoo
16-07-2025
- Business
- Yahoo
Why Jamie Dimon says we ‘may have seen peak private credit'—and why you should care
On July 15, JPMorgan Chase CEO Jamie Dimon sent ripples through the financial world by declaring, 'You may have seen peak private credit.' The comment, made during the bank's second-quarter earnings call, came with a hedge, as Dimon adding 'a little bit' at the end. Still, Dimon is one of the most successful bankers in generations, someone Fortune referred to nearly 20 years ago as the 'most watched, most discussed, most loved, and most feared banker in the world.' If he's signaling the peak of a $1.6 trillion asset class, it's notable. Private credit refers to loans made by non-bank lenders—such as private-equity firms, asset managers, and hedge funds—directly to companies, and it's exploded in the decade-plus since the financial crisis. Marquee names in the space have grown growing to titanic proportions: Think KKR, Blackstone, and Ares Management. These players often operate outside of traditional regulatory frameworks in transactions that are too risky or unconventional for traditional banks. As banks like Dimon's have been forced by regulations to reduce corporate lending, private credit has become a go-to source for everything from leveraged buyouts to business expansions, offering attractive returns but also carrying higher risks. Dimon's remarks also came in response to an analyst's question about whether JPMorgan itself is looking to deepen its own investments in the private-credit space, as reported by The Wall Street Journal. JPMorgan had a chance to own a private-credit operation but went in another direction in 2008, reportedly to Dimon's chagrin. 'I would say it's not high in my list,' Dimon said about JPMorgan buying a private-credit firm, adding he would have a 'slight reluctance,' depending on the acquisition target. Then he offered a nuanced explanation, reiterating 'credit spreads are very low.' Dimon was suggesting that credit spreads—the extra yield lenders demand for risk—have shrunk to levels that no longer compensate for potential losses. Coupled with looser underwriting and increased leverage, Dimon implicitly suggested we're seeing echoes of risk cycles that preceded past credit busts. In flat terms: Too much capital is chasing too few quality opportunities, driving up risk while driving down returns. Later in the day, as Dimon taped an episode of the 'Acquired' podcast at Radio City Music Hall, he said private credit is 'one place that people worry has unknown leverage.' JPMorgan declined to comment beyond Dimon's comments on the earnings call. Why it matters Dimon's remarks are notable for several reasons, ranging from the impact on corporate borrowing to macroeconomics. A peaking private-credit market suggests 'easy money' is ending—businesses may soon face stricter lending standards and higher costs, which could dampen expansion or M&A activity. Many pension plans, endowments, and affluent investors have loaded up on private credit for yield. If defaults rise or liquidity dries up, retirement plans and wealth portfolios could suffer unexpected losses at inconvenient moment in the economic cycle, or worse. Private credit isn't subject to the same regulations or oversight as banks, raising contagion risk if the market seizes up. Dimon is essentially signaling that what looks like healthy innovation can morph into a vulnerability if risk is mispriced en masse. Dimon's warning also comes in a context of elevated asset prices and policy uncertainty, when monetary policy is in flux and economic growth is cooling—a recipe for for a credit accident cocktail. The impact on your business A peak for private capital would signal tighter lending ahead: Companies—especially mid-sized and riskier firms—may find it harder or more expensive to borrow. This could slow expansion, hiring, and deal-making. As private lenders pull back, traditional banks may regain market share, but with stricter terms and higher scrutiny. Many pension funds, endowments, and even high-net-worth individuals have flocked to private credit for its high yields. If the market cools, future returns may disappoint, affecting retirement savings and investment portfolios. Private-credit investments are less liquid than stocks or bonds. In a downturn, investors may struggle to cash out or face losses if defaults rise. Most ominously, a wave of defaults in private credit could spill over into the broader economy, especially if highly leveraged companies start to fail. Dimon's warning is a reminder that financial innovation can sow the seeds of instability if left unchecked. Dimon's warning is a signal that the era of easy money and rapid growth in the private-credit market may be ending. For executives, business owners, and upper middle class investors, it's a cue to reassess borrowing strategies, investment allocations, and risk management. If Wall Street's hottest trend cools, it could impact everything from business expansion to retirement security. For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing. This story was originally featured on
Entrepreneur
05-06-2025
- Business
- Entrepreneur
What the Bitcoin Price Today Reveals About Markets and Mindsets
Bitcoin is often called digital gold, but unlike gold, it trades 24/7. That means its price shifts constantly, reacting to headlines, interest rates, and even tweets. Understanding the Bitcoin price today gives you a window into how the global market feels now. Opinions expressed by Entrepreneur contributors are their own. You're reading Entrepreneur India, an international franchise of Entrepreneur Media. In today's always-connected financial world, price movements are instant, global, and often emotionally charged. Nowhere is this more visible than in the daily shifts in Bitcoin's value. Few numbers in finance draw as much attention—or reaction—as the Bitcoin price today. More than just the value of a digital asset, it reflects a constant stream of investor sentiment and global market shifts. A sudden spike or drop in price isn't just movement; it's a message. Bitcoin is often called digital gold, but unlike gold, it trades 24/7. That means its price shifts constantly, reacting to headlines, interest rates, and even tweets. Understanding the Bitcoin price today gives you a window into how the global market feels now. Why Intraday Price Movements Matter A lot can happen in a single trading day. Economic reports are released, central banks give policy updates, or crypto regulations make headlines. Each event can send Bitcoin's price soaring or sinking within minutes. For example, when inflation data comes in hotter than expected, Bitcoin often moves sharply as investors assess how it impacts interest rate policy. On days when ETF inflows spike or a large exchange announces a listing or delisting, BTC reacts almost instantly. These movements aren't random. They reveal how investors process the news and shift their strategies. The Bitcoin price today acts as an emotional barometer for the entire market. Key Forces Driving Daily Price Swings The Bitcoin price today doesn't move in isolation. It reacts quickly to both outside influences and developments within the crypto ecosystem. Behind every price shift is a mix of global trends and crypto-native triggers. Here are a few of the most influential short-term factors: Macroeconomic drivers include: U.S. dollar strength or weakness Fed interest rate outlook or statements Global risk sentiment in stock and bond markets On-chain and exchange activity: Inflows and outflows from major crypto exchanges Large wallet movements (whale activity) Short squeezes or liquidation cascades in derivatives markets These forces combine to create the kind of fast-paced volatility that makes Bitcoin trading both exciting and risky. Recognizing what's moving the market on any given day can help traders better manage their positions and avoid making emotional decisions. Support, Resistance, and Strategy Even in today's unpredictable markets, some price patterns still hold. Traders often compare today's Bitcoin price to historical levels to find meaningful support and resistance. Breaking above a known resistance level (like $30,000) could trigger a wave of buy orders, while falling below a support zone might lead to panic selling. These patterns repeat not because they're guaranteed to work but because so many traders are watching them. Understanding where these zones are—and how Bitcoin is moving in relation to them—helps shape smarter short-term strategies. A Market Mood Swing in a Single Number The price of Bitcoin today doesn't just influence Bitcoin: it shapes the behavior of altcoins. When Bitcoin rises steadily, it often signals a growing risk appetite, which can spark rallies across the crypto landscape. When it drops sharply, that appetite disappears—and altcoins usually fall even harder. In that way, today's BTC price becomes the anchor for crypto sentiment. It sets the tone for how much risk traders are willing to take, how confident they feel in the broader market, and what momentum may be building or fading. Tracking the Pulse of Crypto in Real Time Bitcoin's daily price isn't just for chart watchers. It's a dynamic pulse check on global confidence, investor psychology, and fast-moving financial events. By understanding what drives the Bitcoin price today and using platforms like Bybit to track it in real time, traders can understand how to move in sync with the market, not against it. The Bitcoin price today is more than just a figure on a chart—it's a reflection of global sentiment, investor psychology, and the fast-moving currents of macroeconomic and crypto-specific events. As Bitcoin continues to operate as a 24/7 asset, its price serves as a real-time barometer for how the market is responding to the latest news and trends. Whether it's reacting to inflation data, regulatory shifts, or large-scale whale activity, the movements in Bitcoin's price provide traders with a snapshot of the market's mood. Understanding these fluctuations and the forces driving them can help investors navigate the volatility and make more informed, strategic decisions in the ever-evolving crypto landscape. Investing involves risk and your investment may lose value. Past performance gives no indication of future results. These statements do not constitute and cannot replace investment advice.
Bloomberg
04-06-2025
- Business
- Bloomberg
The TACO Trade Will Explode in July
Donald Trump has proven to be a lot more malleable than many in the financial world initially anticipated. Equity markets have adapted well, and now trade on the theme that Trump always chickens out (or TACO for short). That helped the S&P 500 gain 7% last month. But will this last? And will Trump capitulate again when the 90-day reciprocal tariff deadline comes? It could go either way: Either Trump caves and equities go up, or Trump keeps at least some tariffs on and the economy goes into a recession and equities melt down. With the decision coming in July, I'm still mostly in the latter camp. This makes bonds a better bet, even in the face of legitimate concerns around debt and deficits.
