| The wheels are "coming off the car." |
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| Activist investor Boaz Weinstein is stepping up his warnings on private credit, saying the turmoil surrounding Blue Owl Capital's funds is exposing deeper cracks in the $1.8 trillion industry. "I think we are in the super-early innings of the wheels coming off the car," the Saba Capital Management founder said Tuesday at a conference in Miami Beach, Florida. The inherently opaque industry has been reeling from worries about lending standards and overspending on artificial intelligence. After Blue Owl, an alternative investment firm, restricted redemptions in one vehicle and began selling loans to raise cash for investors, Saba along with Cox Capital Partners announced cash tenders for stakes in three funds Blue Owl managed—at steep discounts to their stated value. Others have sounded warnings as well. JPMorgan Chief Executive Officer Jamie Dimon yesterday drew parallels with the years leading up to the 2008 global financial crisis, when Wall Street's scramble to make loans nearly collapsed the global financial system. —Jordan Parker Erb | |
What You Need to Know Today | |
| On the day of Donald Trump's potentially make-or-break State of the Union speech, there were new reports about his alleged connections to disgraced financier Jeffrey Epstein and the administration's mishandling of his case files. The Department of Justice appears to have withheld files including allegations related to a claim that Trump sexually abused a minor, a top Democratic lawmaker said. "The DOJ appears to have illegally withheld FBI interviews with this survivor who accused President Trump of heinous crimes. Oversight Democrats will open a parallel investigation into this," Democratic Representative Robert Garcia said in a statement.  From left, Donald Trump, Melania Trump, Jeffrey Epstein and Ghislaine Maxwell at Trump's Mar-a-Lago club in Palm Beach, Florida, in 2000. Photographer: Davidoff Studios/Getty Images Trump has said he cut ties with Epstein two decades ago and that he wasn't aware of his activities. Earlier, National Public Radio published an extensive investigation in which it reported the Justice Department under Trump withheld files related to the allegations, and that it removed some documents from the public database where accusations against Epstein also mention Trump. A Justice Department spokeswoman said the file that listed all FBI interviews with the victim was temporarily removed in order to do redactions and put back online. | |
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| According to the Conference Board, US consumer confidence ticked up in February on more upbeat prospects for the economy, job market and incomes. The group's gauge increased to 91.2, from an upwardly revised 89 last month, data out Tuesday showed. The report lends support to recent data from the Trump administration's Bureau of Labor Statistics that indicated rises in inflation and unemployment may be slowing. However, Americans have been generally cautious about their job prospects and are still dealing with high prices tied to Trump's trade war and before that the pandemic. | |
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| Meta will deploy six gigawatts' worth of data center gear based on processors from AMD, a massive deal that marks a win for the chipmaker's attempts to catch up with Nvidia. Meta will buy AMD chips and computers designed to run artificial intelligence models over a five-year stretch, beginning in the second half of 2026. The series of transactions will be worth "double-digit billions" of dollars per gigawatt, according to AMD CEO Lisa Su. The announcement signals that AMD is keeping pace with its larger rival, which disclosed its own deal with Meta last week. And it shows that broader spending on AI equipment continues to accelerate even as some investors express fears of a bubble. The growing financial ties between suppliers and customers in so-called circular deals have only added to those worries. | |
| Meanwhile, AI darling Anthropic is expanding into investment banking and other sectors. Just weeks after sparking a market meltdown, the company unveiled new AI tools for its Claude Cowork agent software that are designed to automate work in fields including human resources, investment banking and design. A large share of Anthropic's new customization offerings target the finance industry, with new plugins tailored for financial analysis, equity research, private equity and wealth management. | |
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| In more AI news sure to ruin many days, a new Harvard University study found that a machine-learning algorithm can predict about 71% of mutual-fund trading decisions, suggesting that much of what active fund managers do follows patterns machines can learn. However, the trades the system failed to anticipate—roughly 29%—were, on average, more closely associated with outperformance. In other words, the activity that falls outside routine, detectable investment patterns appears to be where most of the value lies. The implication is that machines appear to have learned much of the industry's common playbook—how managers tend to react to flows, market trends and their peers. What they struggle to capture is the smaller share of decisions that depart from that playbook. But it's early yet. | |
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What You'll Need to Know Tomorrow | |
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| Bloomberg Invest: Join the world's most influential investors and financial leaders in New York on March 3-4. Powered by insights from the Bloomberg Terminal and one of the largest global newsrooms, this flagship event examines how artificial intelligence disruption, geopolitical uncertainty, shifting central bank policy and the convergence of public and private markets are reshaping global finance. Don't miss forward-looking conversations with top CEOs, asset managers and industry titans in the heart of the financial district. Learn more here. | |
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