| Swan Dive — March 12, 2026  Today, Addison is braving America's dysfunctional airports and underfunded DHS employees to attend The Gathering, hosted by our friends at Real Estate Trend Alert, in Panama City.
Before departing, Addison and I had a great conversation yesterday for members of our Grey Swan Trading Fraternity service.
One idea we discussed stood out in my mind last night and this morning – the idea of what should carry greater weight in financial markets right now.
Addison is through and through committed to macro first in any economic analysis – even when it comes to the stock market.
I follow several factors, and try to weigh them accordingly. But those macro themes do seem to be what's weighing on markets now – a trend that may continue despite seasonality trends that should turn bullish.
Right now, the macro is bearish. War headlines will do that. We also have a sluggish labor market, and inflation can't quite seem to go fully away.
But some analysts have gotten bullish this week. Tom Lee, a fixture at finance conferences and on CNBC for his bullish outlook on tech, says the S&P 500 Index could hit 7,200 by the end of April.
The "could" in that sentence carries a lot of weight.
The S&P 500 could – and I think should – first hit its 200-day moving average before making new highs.
Remember, since last April's low, the stock market has rallied about 40% over the summer and into the autumn. It's now down less than 3% from all-time highs.
A rotation out of tech and into defensive sectors such as energy, consumer goods and telecoms has had to do a lot of heavy lifting.
Technically, the calendar is somewhat bullish going into the end of March and into April most years.
But it's 2026, we have a midterm election to contend with. And in a midterm year, the calendar is far less bullish than talking heads like Tom Lee would care to admit:  In midterm years, most gains are made after Election Day. Frankly, at times like these, long-term investors can ignore the fear and find oversold opportunities to buy.
But as the calendar shows – and as today's macro headlines demonstrate– there's no need to be in a rush.
2026 may yet turn out to be another double-digit year for stocks.
But if that's backloaded at the end of the year, it's best to buy when the outlook is grim now – whether by upping your 401(k) contributions or strategically buying great companies when they go on sale. 💳 Private Credit Continues to Crunch Well, private credit is in trouble… again.
I've been warning about private credit since September 2024. And a follow-up back in November, following the collapse of First Brands. And the last time I wrote Swan Dive in February.
An increasing number of private credit giants, such as Cliffwater and Blue Owl, are limiting or halting redemptions. Cliffwater limited redemptions to 7% of its account, even though investors wanted to pull out 14%. That's half their money locked up. Yikes.
Bigger names in the financial markets – household names – are getting in on the game too. BlackRock announced limited redemptions last week. Morgan Stanley joined the group of limited/halted redemptions yesterday.
And J.P. Morgan, the biggest of Wall Street's "too big to fail" banks, has likewise made a similar move.
In total, these financial institutions have north of $30 billion in private credit funds where investors might be able to redeem part, but not all, of their holdings.
I don't quite feel that what's happening in private credit is as bad as, say, subprime mortgages in 2008. But it's trending that way. And quickly.
Meanwhile, subprime mortgages still exist today, and their default rates are ticking higher. Canadian supreme lender Goeasy just saw shares collapse amid a $178 million write-off:  Commercial office properties routinely sell for 70% to 80% of their prior sale price.
Last month in Chicago, 401 S. State Street, a century-old office building in the city's historic Printing House Row district, sold for $4.2 million, down from $68.1 million in 2016. That's a 94% drop.
It just goes to show one of my favorite investment adages – you make your money when you buy, not when you sell.
In short, private credit is part of a broader problem in the financial sector right now, including collapsing office real estate and subprime lending.
There are three canaries in this coal mine. Yet Wall Street's eyes aren't at Blue Owl headquarters; they're currently glued to the Strait of Hormuz. Continued Below...
It's not missiles. It's not sanctions. It’s not tariffs. It’s a commodity found in the Appalachian Mountains. America controls 80% of the one material every enemy nation needs to build advanced technology — semiconductors, AI chips, military electronics. Trump is expected to weaponize this monopoly with an export ban that cuts off China and Iran overnight. Morgan Stanley estimates the reshoring boom triggers a $10 trillion transformation. See the full story here.
Oil: Higher For Longer There's an old military adage about how no plan survives first contact with the enemy.
President Trump managed to get the market to briefly tick higher on Wednesday by repeating his "the war will be over soon" theme, a repeat of Monday's statement.
What worked wonders on Monday – turning a flat market into a massive last-hour rally in stocks – was met with a fizzle this time .
Meanwhile, oil prices initially dropped on news that countries would tap their Strategic Petroleum Reserves (SPRs) to keep a lid on prices.
However, that bullishness was short-lived.
What happens after the SPR oil is out in the markets? It gets used in a matter of days. But with closed shipping lanes and oil infrastructure in the Middle East shut down for weeks, perhaps months, it can't be easily replaced anytime soon.
That's a recipe for higher prices, although the jawboning about the SPR release starting on Sunday night did move oil from over $120 (in thinly-traded hours) to around $85 by Wednesday – technically putting oil in a bear market.
The war may be over soon. Or it may not, as seen by two oil tankers that were blown up in the Persian Gulf last night – sending oil higher and stocks lower in overnight trading.
Either way, the effects of knocking out 25% of global oil shipping and at least 6% of oil supply will keep oil prices higher for longer.
That's why I'm focused on U.S.-based oil companies now. They can keep pumping out oil at $90 per barrel – oil that was $60 at the start of the year.
Look for U.S. energy producers to see big revenue and earnings growth in the second quarter. That's what I'm expecting with our latest energy trade in the Grey Swan Trading Fraternity. Be cautious of any U.S. oil major with assets in the Middle East – it's a target until conditions cool. 💰Salesforce Trashes Its Balance Sheet Salesforce (CRM), a Dow component since 2020, is looking to raise up to $25 billion. The bonds will likely pay somewhere near the top-tier corporate rate of 4%, a hair better than U.S. Treasurys right now.
Will the money be used to expand operations? Build out some amazing new AI tools?
Nope. It'll be used to fund share buybacks.
This practice, which began with some Big Tech companies in the 2010s, epitomizes what Wall Street calls financial engineering.
It's become a critical source of price support. Over the past 15 years, nobody has been more bullish on Wall Street than companies buying back their own shares.
It's easy to see why…
When it starts, it's like the Fed printing money or having two drinks at the company holiday party. You buy back shares, and even if your earnings don't increase, your earnings per share do. Wall Street loves it, and your stock goes higher.
But as with anything in life, all things need to be in moderation.
Salesforce has a market cap of $180 billion, give or take. So they're looking to buy back nearly 15% of their company. And they already have $17 billion in debt on the balance sheet.
However, Salesforce shares have already slid 30% in the past year. The market is skeptical that it can deliver in the age of AI.
Buying back shares may boost prices in the short term, but a more indebted company will have fewer options if it runs into trouble. With the fast changes from new AI tools, any company could face trouble at any moment.
Time will tell how this ends – companies like Apple, Google, and Microsoft have managed to do the debt-raise, share-buyback tango with Wall Street and come out ahead.
But even those companies are now spending more than 100% of their cash flows on AI projects – meaning their share buybacks are stalling out. And that's one big source of market support fading away.
~ Andrew
P.S. Today, Addison is braving TSA lines – snarled amid a DHS funding snafu – to visit old friends in Panama.
Addison is traveling to join The Gathering, a group of investors in an international real estate project led by Grey Swan friend and associate Ronan McMahon and his team at Real Estate Trend Alert.  Ronan stuck in the sand in Baja California – living the life! I made the journey to Panama City in 2012 – even back then, it was a vibrant global city with plenty of first-world amenities, bustling with construction. In 2012, the very first of the artificial islands were being built, replete with modern condos for foreign investors.
Addison is getting a more in-depth look at some of the latest deals in Panama and beyond.
He’ll be recording a special Grey Swan Live! on scene in Panama City. We’ll let our paid-up fraternity members know once Addison reports in and the video is up on site.
How did we get here? Find out in these riveting reads: Demise of the Dollar, Financial Reckoning Day, and Empire of Debt — all three books are now available in their third post-pandemic editions. You might enjoy one or all three. 
(Or… simply pre-order Empire of Debt: We Came, We Saw, We Borrowed, now available at Amazon and Barnes & Noble or if you prefer one of these sites: Bookshop.org, Books-A-Million or Target.)
Please send your comments, reactions, opprobrium, vitriol and praise to: feedback@greyswanfraternity.com |
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