Good morning and Happy Friday! American bankers are having a lucrative year helping Chinese companies go public in Hong Kong. Carlyle and Boyu Capital are leading bids for Starbucks China, which could fetch $10 billion.

Bitcoin slipped below $108k, falling from its over-$120k peak, as investors continue to pile into gold for safety. Yogurt maker Chobani raised $600 million at a $20 billion valuation. And tech firms in the AI arms race aren’t waiting for the U.S. power grid to catch up, they’re now building their own plants.

Plus: a former Carlyle exec is going all-in on extreme-weather bets, Trump unveiled a plan to cut the cost of a common IVF drug, and how highly successful people talk to their bosses.

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SQUEEZ OF THE DAY

More Cockroaches

Markets took Jamie Dimon’s “cockroach” warning seriously Thursday, as Wall Street began to see a pattern, a string of bad loans, fraud allegations, and one massive accounting hole weren’t so isolated after all.

Investors were already uneasy about Jefferies, which dropped another 11%, extending its three-week slide to nearly 30%.

Jefferies is entangled in the collapse of First Brands, a $10 billion auto-parts supplier that filed for bankruptcy after uncovering roughly $2 billion in accounting irregularities tied to double-pledged receivables. Jefferies’ closed-door investor day did little to calm nerves, offering few details beyond assurances that its exposure was “limited.”

Zions Bancorp plunged 13% after revealing a $50 million charge-off tied to two commercial loans whose borrowers now face legal action. Western Alliance followed, disclosing it had sued a borrower for fraud, its stock dropped 11%.

By day’s end, 74 U.S. banks had collectively lost more than $100 billion in market value.

Behind all of it is the shadow-lending machine that’s been running hot for years. Private-credit funds and smaller banks have stepped in to lend to companies the big players won’t touch. These lenders make their money by taking that extra risk and charging higher rates. It works… until it doesn’t.

Dimon’s now-viral line: “When you see one cockroach, there are probably more” echoed across trading floors as investors dumped anything tied to private credit. Blue Owl fell 7%, Ares 6%, Apollo 5%, and Blackstone 3%.

Takeaway: The golden age of private credit may finally be coming to an end as the industry faces its first true stress test. Mr. Wall Street himself (Jamie Dimon) has already taken down work-from-home and early private-equity recruiting, and it looks like private credit could be next.

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HEADLINES

Top Reads

• American bankers are making a mint helping China Inc. go global (WSJ)

• Carlyle, Boyu leading bids for Starbucks China business which could fetch $10B (FT)

• Chobani lands $20 billion valuation (Inc)

• Bitcoin sinks as investors flock to gold in search of safety (YF)

• TSMC profit jumps 39%, setting another record on surging AI chip demand (CNBC)

• AI data centers so power-hungry they’re building their own plants (WSJ)

• Trump strikes deal with German Merck on tariffs and IVF costs (YF)

• Dan Sundheim’s D1 Capital seeks $1 billion for new private equity fund (BB)

• Private equity veteran bets big on extreme weather investing (BB)

• Paul Singer’s Elliott Management raises $7 billion for a new activist war chest (BB)

• Wall Street–backed startup sparks surge in online loan trading (BB)

• Traders at top hedge funds take home 25% of profits (FT)

• Jamie Dimon warns employee health-care costs will climb 10% in 2026 (BB)

• Big investors scale back risky bond exposure (FT)

• Harvard posts biggest operating loss in 14 years (Axios)

• Tariff costs to companies this year to hit $1.2T, with consumers taking most of hit (CNBC)

• Is private equity ready to burn $50M on failed coaches? (BB)

CAPITAL PULSE

Markets Rundown

Market Update

• Stocks fell sharply after reports of deteriorating credit quality at two regional banks.

• Zions Bancorp and Western Alliance announced large loan write-downs, following news earlier this week that subprime lender Tricolor Holdings had collapsed.

• Financials led declines, falling close to 3%, though analysts suggested the write-downs appear isolated rather than systemic.

• Other major sectors were also lower, marking a fragile backdrop after a strong rally since April.

• Bond yields dropped, with the 10-year Treasury yield falling below 4% for the first time this year.

• Gold rose above $4,300 per ounce, while oil declined to a four-year low near $57 per barrel.

Economic Data Highlights

• Government data blackout continues amid the shutdown, delaying reports on retail sales, CPI, and jobless claims.

• Regional Fed surveys (Philadelphia and New York) came in weaker, but cover limited portions of the U.S. economy.

• Fed officials signaled continued support for easing, with Governor Waller calling for incremental 25 bp cuts in response to economic uncertainty.

• Market expectations now reflect two additional rate cuts this year, as investors price in slower growth.

Reported Earnings

• Taiwan Semiconductor (TSM) – Reported solid results, supported by robust AI chip demand and strong utilization rates.

• Charles Schwab (SCHW) – Earnings beat expectations, aided by higher client inflows and lower expenses.

• U.S. Bancorp (USB) – Results were in line with forecasts, as stable loan growth offset rising credit costs.

Earnings Today

• American Express (AXP) – Focus on consumer spending trends and credit performance.

• Schlumberger (SLB) – Watch for oilfield-services demand amid weaker crude prices.

• Ally Financial (ALLY) – Key to monitor auto-loan portfolio and credit provisions.

Movers & Shakers

• (+) Nestle ($NSRGY) +9% after the food and drink processing company will cut 16,000 jobs thanks to automation.

• (+) Micron ($MU) +6% because the computer data storage company was upgraded by Citi.

• (–) Jefferies Financial ($JEF) -11% after the firm’s closed-meeting investor day failed to placate investors.

Prediction Markets

• Will the S&P 500 drop +7% in a single day and trigger a circuit breaker?

• Trade on real-world events with Kalshi. Use code OWS to get a $10 bonus when you trade $10.

Private Dealmaking

• Chobani, the Greek yogurt maker, raised $650 million at $20 billion valuation

• Zepto, a grocery delivery company, raised $450 million

• Vantaca, a housing association management software provider, raised $300 million

• Kardigan, a cardiovascular drug developer, raised $254 million

• HistoSonics, a histotripsy therapy platform, raised $250 million

• Upgrade, a consumer lender, raised $165 million

For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

BOOK OF THE DAY

How Progress Ends

Description:
Frey challenges the common assumption that technological progress is perpetual and inevitable. Drawing on a sweeping historical lens—spanning a thousand years—he shows how periods of innovation are often followed by stagnation when institutions, incentives, or social structures fail to adapt. He argues that advances in AI and modern technology aren’t guarantees of progress, but potential catalysts of disparity or decay depending on how societies manage change.

Book Length: 552 pages
Release Date: September 2025

Ideal For: Economists, policy makers, tech skeptics and futurists, institutional leaders, and anyone curious about whether the next century’s breakthroughs will raise all boats—or leave many behind.

“Progress is not self-perpetuating; its survival depends on institutions that can scale and sustain innovation without stifling what makes it possible in the first place.”

DAILY VISUAL

AI Taking Over

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DAILY ACUMEN

The Mirror Principle

Life has a strange way of reflecting what you project.

When you move through the world cynical and guarded, it gives you more reasons to stay that way.

When you act with curiosity and generosity, it responds in kind.

Markets mirror psychology too: optimism attracts liquidity, pessimism dries it up.

The mirror does not change first; you do.

Shift your internal state and the external world starts to follow. It is not mystical, it is math.

Energy compounds like interest.

ENLIGHTENMENT

Short Squeez Picks

• Telltale signs someone isn’t ready to step into leadership 

• How highly successful people talk to their bosses

• How to break free from romantic obsession

• The power of doing less to achieve more

• 7 easy dinner cheats busy people swear by 

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Memes of the Day

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