On My Radar: Cockroaches, Sanctions, and the Debt Cycle’s Final Act

Written By Steve Blumenthal
Download as a pdf

October 24, 2025
By Steve Blumenthal

“History and logic have made clear that sanctions reduce the demand for fiat currencies and debts denominated in them and support gold. Throughout history, before and during shooting wars, there have been financial and economic wars that we now call sanctions (which means cutting opponents off from money and needed goods).

When there is a debtor-creditor relationship between opponents, the debtor choosing to not pay the debt service owed to the opponent creditor country has the beneficial effects of hurting the opponent financially and reducing its own debt service burdens. But it also has the detrimental effects of weakening the sanctioning/debtor country's currency and the value of its debt.

When this occurs with the world's leading power and its reserve currency, the global monetary order is inevitably weakened. As a result, the holding and price of gold rise, as it is a non-fiat currency that remains securely held and universally accepted.”

– Ray Dalio, @RayDalio

From a macro perspective, three seismic risks sit top of mind this week, all pushing the global monetary order toward a breaking point:

  • A Secular Bull Market Top:

    • Overvalued, overowned, and overleveraged.

    • The bull market that began in 2009 is aged and sits late cycle.

  • The China - U.S. Trade War:

    • A slow-motion decoupling of two economic giants.

    • All eyes on the APEC Summit (Xi - Trump) next week.

  • Putin:

    • Historic multilateral sanctions were announced this week against the Russian energy sector. My friend Rene Javier Aninao wrote, “this is either the final inning of the European conflict or the start of a serious escalatory cycle with potential spillovers into other bilatral negotiations (eg: with China).”

    • The U.S. announced sweeping new sanctions on the two major Russian oil producers, including Rosneft and Lukoil. The objective is to pressure Russia to negotiate an end to its war in Ukraine.

    • Russia’s Medvedev responded saying, “The USA is our enemy and their talkative “peascemaker” how now fully taken up the path of war with Russia.”

Ned Davis Research puts out an excellent “Secular Bear Market Watch Report.” The report follows 20 indicators that include a mix of technical indicators, such as year-over-year changes across markets and sectors, valuation metrics like GDP as a percentage of gross domestic income, Tobin’s Q, and stocks as a percentage of household assets (high is bearish, low is bullish). And fundamental indicators, such as U.S. spending-to-GDP, U.S. surplus-to-GDP, Real GDP growth, and others.

Currently, 7 out of the 20 are signaling a Secular Bear (a reading above 11 signals a Secular Bear). I think that pretty much summarizes our current state. The bull market remains in tact.

Grab that coffee and find your favorite chair. Last Saturday, my good friend John Mauldin did an excellent job summarizing some of Ray Dalio’s work on the end of the long-term debt cycle. Sometimes its nice to hear the same message from a different person. Mauldin is an excellent story teller / communicator. You’ll find the core of his piece below. And don’t miss the personal section. I think you’ll like it.

Needless to say, no one knows the exact timing of the secular bull market top nor the great reset. What we know is that the patient is very ill, the arteries are clogged and without exercise and a change in diet, the heart will eventually fail. I don’t see any signs of a change in diet. My best guess “debt reset” is 2028.

On My Radar: 

If you like what you are reading, you can subscribe for free.

 

The Final Crisis: This is Our Future

Turn out the lights, the party's over
They say that all good things must end
Call it a night, the party's over
And tomorrow starts the same old thing again

     - Willie Nelson

Willie Nelson is not, to my knowledge, a pioneer of economic theories – though now at 92, he’s seen more cycles than most of us. But he was singing back in the 1950s how good things eventually end… and then we quickly start them again.

Debt-driven growth definitely feels good. We all enjoy it immensely as long as it lasts. Then, the lights go out and the party’s over. Yes, it starts again, but not until we all stumble around in the dark for a while.

Unfortunately, The Debt Super Cycle is typically at least 80 years so nobody remembers the pain and why we should avoid it. Perhaps in this coming crisis we can do better. We can’t avoid it, but we can think about how to deal with it in advance rather than making decisions on the fly like we did during The Great Recession.

I’ve been reviewing Ray Dalio’s latest book, How Countries Go Broke. He shows in exhaustive detail how our current party is quickly approaching its lights-out moment. I can’t recommend this book highly enough. If you missed Part 1 and Part 2 of my review series, read them and then read the whole book. The quotes I’m sharing only scratch the surface.

Today we’re going to zoom in on that light switch. Ray’s historical research found a specific sequence of events usually defined the cycle-ending crisis. Given where we are now, it may be a good preview of our next few years.

Broken Promises

Before we talk about the final crisis, I want to review a critical distinction Ray found in his research. Debt crises unfold differently depending whether the monetary system is based on hard money or fiat money. 

Note that a “hard” currency in this sense doesn’t have to be gold, silver, etc. It can be a government-issued currency that’s pegged to some other currency the issuing government can’t control. This lack of control is the key. Here’s Ray:  

“In brief, the way the hard currency cases work is that the governments have made promises to deliver money that they can’t print (e.g., gold, silver, or another currency that the parties view as relatively hard, like the dollar). Throughout history, when coming up with these hard currencies that they can’t print to pay debts becomes tough, the governments almost always renege on their promises to pay in the currency that they can’t print, and the value of their money and the debt payments denominated in it tumble at the moment the promise is broken.

“After governments break their promise by not going back to having a hard currency, they have what is called a fiat monetary system. In these cases, the currency’s value is based on the faith and incentives that the central banks provide. The most recent shift of most currencies from being hard to being fiat started on August 15, 1971. I remember it well because I was clerking on the floor of the New York Stock Exchange at the time and was surprised by it; then I studied history and found that the exact same thing happened in April 1933, and I learned how they worked.

“In fiat monetary systems, central banks primarily use interest rates, their ability to monetize debt, and the tightness of money to provide the incentives for lender-creditors to lend and hold debt assets. And throughout history they, like central governments and central bankers operating in hard currency regimes, have created too much debt (which are claims that people believe they can turn in to get money, which they expect they can use to buy things), so there are the same types of debt/credit dynamics at work…

“Big Debt Cycles through history have typically included currency regimes going back and forth between being hard and fiat because they each led to extreme consequences and required movements to the opposite—the hard currency regimes broke down with big devaluations because the governments couldn’t maintain debt growth in line with their monetary constraints, and the fiat monetary systems broke down because of the loss of faith in the debt/money being a safe storehold him of wealth.”

One critical point here: debt cycles happen even if you have a hard currency. They look somewhat different but still occur. This is because both regimes consist of humans who demand and extend unwise amounts of credit. 

Coincident Cycles

The Big Debt Cycles Ray Dalio describes generally last around 80 years. They are composed of smaller cycles which average around six years. The US has seen 12 of these short-term cycles since 1945 (80 years ago). We are presently almost six years into the short-term cycle that began in 2020. These timespans can vary a bit, but it certainly appears we are approaching the end of a short-term cycle which will likely also conclude a Big Debt Cycle.

In my view, it is not a coincidence that other cycles are similarly approaching critical phases: Neil Howe’s Fourth Turning, George Friedman’s institutional and social cycles, and Peter Turchin’s “elite overproduction” theory. We should pay attention when great minds independently agree on something like this. Especially when significantly different theoretical foundations all point to the same end result.

So where is this last phase going? Ray Dalio says the current short-term debt cycle revolves around the monetization of government deficits. The shortfalls were already giant before the pandemic. The policies governments developed to handle that problem made the debt problem far worse. Here’s how Ray describes it:

“The 2020-21 debt monetization was the fourth and the largest big debt monetization since the original big debt monetization/QE in 2008 (which was the first since 1933). From the start of the easing cycle of 2008, the nominal Treasury bond yield was pushed down from 3.7% to only 0.5%, the real Treasury bond yield was pushed from 1.4% to -1%, and the non-government nominal and real bond yields fell a lot more (because credit spreads narrowed). Money and credit became essentially free and plentiful, so the environment became great for borrower-debtors and terrible for lender-creditors and led to an orgy of borrowing and new bubbles forming.

“That debt/credit/money surge in 2020 produced a big increase in inflation, which was exacerbated by supply chain problems and external conflicts (the third of the five major forces that I will touch on at the end of this chapter). That big increase in inflation led to the short-term debt cycle tightening by the Fed and the contraction in the balance sheet by having maturing debt roll off rather than buying more of it. As a result of the Fed (and other central banks) changing their short-term debt cycle mode from easing to tightening, nominal and real interest rates went from levels that were overwhelmingly favorable to borrower-debtors and detrimental to lender-creditors to levels that were more normal (e.g., a 2% real bond yield).”

That last point is important. The Fed’s 2022-2023 rates hikes seemed aggressive mainly because they followed (belatedly) a period of unprecedented debt stimulus. It didn’t so much “tighten” policy as simply bring it back closer to normal. But it didn’t feel that way those who had been feasting on debt.

Chief among those debtors was (and is) the US government, of course; which is why the Final Crisis is drawing near.

The Final Crisis: This Is Our Future 

In How Countries Go Broke, Ray Dalio both describes individual cases and develops what he calls the “archetype” Big Debt Cycle. The archetype is a baseline that generally describes how the process goes, though individual cases all have their own twists.

Dalio’s archetypal “Final Crisis” has nine stages. He notes there can be big variations in what happens and when it happens. The nine stages are more like a list of the negative things that produce the crisis, and the steps that are usually taken to try and get out of it.

Here’s how Dalio describes the Final Crisis which, as I said above, is very near, if not already upon us. These are the unhealthy conditions that typify the last stages of the Big Debt Cycle. Note that Ray is describing what he (and, to a great degree, I) believes will happen:

“This is our future:

1. The private sector and government get deep in debt.

2. The private sector suffers a debt crisis, and the central government gets deeper in debt to help the private sector.

3. The central government experiences a debt squeeze in which the free-market demand for its debt falls short of the supply of it.

That creates a debt problem. At that time, there is either:

a) a shift in monetary and fiscal policy that brings the supply and demand for money and credit back into balance or

b) a self-reinforcing net selling of the debt, which creates a severe debt liquidation crisis that runs its course and reduces the size of debt and debt service levels relative to incomes. Big net selling of the debt is the big red flag.

4. The selling of government debt leads to a simultaneous a) free-market-driven tightening of money and credit, which leads to b) a weakening of the economy, c) declining reserves, and d) downward pressure on the currency. 

Because this tightening is too harmful for the economy, the central bank typically also eases credit and experiences a devaluation of the currency. That stage is easy to see in the market action via interest rates rising, led by long-term rates (bond yields) rising faster than short-term rates, and the currency weakening simultaneously.

5. When there is a debt crisis and interest rates can’t be lowered (e.g., they hit 0% or long rates limit the decline of short rates), the central bank “prints” (creates) money and buys bonds to try to keep long rates down and to ease credit to make it easier to service debt. 

It doesn’t literally print money; it essentially borrows reserves from commercial banks that it pays a very short-term interest rate on. This creates problems for the central bank if this debt selling and rising interest rates continue.

6. If the selling continues and interest rates continue to rise, the central bank loses money because the interest rate that it has to pay on its liabilities is greater than the interest rate it receives on the debt assets it bought. 

When that happens, that is notable but not a big red flag until the central bank has a significant negative net worth and is forced to print more money to cover the negative cash flow that it experiences due to less money coming in on its assets than it has to go out to service its debt liabilities. That is a big red flag because it signals the central bank’s death spiral (i.e., the dynamic in which the rising interest rates cause problems that creditors see, which lead them not to hold the debt assets, which leads to higher interest rates or the need to print more money, which devalues the money, which leads to more selling of the debt assets and the currency, and so on). (SB here - reread what I bolded above twice) That is what I mean when I say the central bank goes broke. I call this “going broke” because the central bank can’t make its debt service payments, though it doesn’t default on its debts because it prints money. When done in large amounts, that devalues the money and creates inflationary recessions or depressions.

7. Debts are restructured and devalued. When managed in the best possible way, the government controllers of fiscal and monetary policy execute what I call a “beautiful deleveraging,” in which the deflationary ways of reducing debt burdens (e.g., through debt restructurings) are balanced with the inflationary ways of reducing debt burdens (e.g., by monetizing them) so that the deleveraging occurs without having unacceptable amounts of either deflation or inflation.

8. At such times, extraordinary policies like extraordinary taxes and capital controls are commonly imposed. (Read this twice! - JM) (SB here - ditto JM)

9. The deleveraging process inevitably reduces the debt burdens and creates the return to equilibrium. One way or another, the debt and debt service levels are brought back in line with the incomes that exist to service the debts. Quite often, there are inflationary depressions, so the debt is devalued at the end of the cycle, government reserves are raised through asset sales, and a strictly enforced transition from a rapidly declining currency to a relatively stable currency is simultaneously achieved by the central bank linking the currency to a hard currency or a hard asset (e.g., gold) and central government and private sector finances being brought back in line to a sustainable level. (SB here again - debt devalued, new currency backed by hard assets)

“At the early stage of this phase, it is imperative that the rewards of holding the currency and the debt denominated in it, and the penalties of owing money, are great in order to re-establish the credibility of the money and credit by rewarding the lender-creditors and penalizing the borrower-debtors. In this phase of the cycle, there is very tight money and a very high real interest rate, which is very painful but required for a while. If it persists, the supply and demand for money, credit, debt, spending, and savings will inevitably fall back into line. (SB here - I intentionally bolded for emphasis)

“How exactly this happens largely depends on whether the debt is denominated in a currency that the central bank can create and whether the debtors and creditors are primarily domestic so that the central government and the central bank have more flexibility and control over the process. If so, that makes the process less painful, and, if not, it is inevitably much more painful. Also, whether the currency is a widely used reserve currency matters a lot because when it is there will be greater marginal inclinations to buy it and the debt that it is stored in.”

Our current situation, as I see it:

  • Stages 1, 2, 3 and 4 have already happened.

  • Stage 5 is underway as the Fed tries to see how low it can push rates without raising inflation, while Congress and the President seek ways to salvage politically popular spending programs and tax policies.

  • Stage 7 may be starting as some of the riskiest private borrowers (First Brands, Tricolor) start hitting the wall.

  • Stages 6, 8, and 9 are still over the horizon.

If I’m right, we still have some time to prepare, but it’s running out. Dalio holds out hope this could end in one of his “Beautiful Deleveraging” scenarios I described last week. I have a hard time thinking we will be so lucky. We’re definitely not doing the things needed to keep that possibility open. 

What we know is that the economy will be deleveraged, beautifully or not. Nothing about the process is fun. But we know it’s coming. Prepare while you can. Next week, we’ll wrap up this series with a look at the Big Debt Cycle in other times and places. You can sign up to receive John’s weekly letter here. It’s free.

SB here again: I read John’s piece last Saturday morning, sitting in my favorate chair with coffee in hand. Just after reading, John sent an email to me and a few friends. In the body of the email was the recent cover picture from The Economist. Pictured is a man with a life vest smothering his face in the midst of a storm with the header: “The Coming Debt Emergency.” With humor, John wrote, “Ok, the crisis I have been talking about has now been postponed for at least five years.”

You can view The Economist's cover here.

There is a well-documented history of popular magazine covers serving as contrarian indicators in financial markets. Known as the "magazine cover indicator," this phenomenon suggests that when major publications like Time, BusinessWeek, or The Economist feature overly optimistic or pessimistic stories on their covers, often coinciding with extreme market sentiment, the trend is frequently at or near a reversal. Bullish covers tend to signal tops (sell signals), while bearish ones often mark bottoms (buy signals).

My compliance department reminds us that there are no guarantees the above will prove correct, and that views are subject to change. See essential disclosures further below.

 

The Credit Divide: Cockroaches vs. Structural Strength

"When you see one cockroach, there are usually more." Jamie Dimon’s recent warning is clearly coming to life — and it's concerning. The question for investors is whether the infestation is evenly distributed.

Reflecting on Dalio’s nine stages, the most significant stress I see is in government debt and entitlement promises. That’s where the big bubble sits. That is where the coming reset sits. But interest rates and inflation affect everything so there will be challenges.

The impact on interest rates, due to the debt and spending trap the U.S. government (and other developed-market governments) is in, affects everything. Inflation and higher interest rates are highly probable outcomes in the near future. Governments will likely impliment some form of interest rate control. That may hold down the short term interest rates (Fed Funds rate) but it won’t hold down the long end.

As investors, I believe our number one objective over the next five years is to beat inflation and avoid defaults. Not so easy to achieve but doable. Key will be proper risk exposure. Diversification is critical. And remember, sitting in a money market fund may be strategic if you intend and can act on taking advantage of crisis-created opportunities, but that is difficult for most people to do. If you miss and you don’t time it perfectly, a money market fund investment will lose to inflation and a devaluing dollar. We’ve spoken before about the asset classes that tend to perform better in a stagflation (high inflation, low growth) cycle: gold, metals, natual resources, oil, natural gas, uranium, commodities, agriculture and newer assets like bitcoin and the various plays in the digitaliztion world. Hard assets, low leveraged businesses that provide services people need. Think, high free cash flow, low leveraged, high and growing dividend paying companies. Not a specific recommendation for you.

Dimon’s cockroaches: The initial failures are concentrated where consumer stress meets financial engineering tethered to the weakest of borrowers. Let’s call it sub-prime cockroaches.

  • First, there was the collapse of Tricolor Holdings, a subprime auto lender that buckled under bad loans.

  • Then, First Brands, a heavily indebted auto parts maker, filed for Chapter 11.

  • Most recently, PrimaLend Capital Partners, another subprime lender, was pushed into bankruptcy after defaulting on its bond payments.

These failures are linked by a single, critical flaw: fragile balance sheets built on high-risk, fixed-rate loans and funded by the volatile public securitization (ABS) market. An Asset-Backed Security (ABS) is a financial security collateralized by a pool of assets, such as loans, leases, credit card debt, royalties, or receivables.

This model worked when the Fed held rates near zero, but after two years of aggressive tightening, the ecosystem is choking on higher refinancing costs and soaring consumer defaults. The model worked because it created free, easy money for everyone.

The subprime auto sector is the early warning system because it sits right at the intersection of consumer pain and illiquid bond funding. Subprime loans are loans to the weakest of creditors. No surprise that is where we are seeing the first signs of stress.

The stress is real, and the $2 trillion leveraged loan market is feeling the heat, with default rates already hitting decade-highs near 5.6%. Health care insurance costs are high, inflation is on the rise again, credit card late payments are nearing the 2008 high.

These failures are the first visible cracks and signal that the easy-money era is likely over.

The Bifurcation: Resilience in the Core Private Credit Market

While the subprime end faces collapse, the core Private Credit market, the massive, $1.7 trillion-plus engine of middle-market corporate lending, is showing structural resilience.

The core market private credit market is not built on fixed-rate consumer debt. It is dominated by:

  1. Senior Secured Loans: These give lenders first claim on a company's assets, providing a stronger cushion against loss.

  2. Floating Interest Rates: Because interest payments rise with SOFR rates, investor yields are inflation-protected (they rise when interest rates rise), unlike fixed-rate investments, which are crushed when interest rates rise.

  3. Institutional Funding: Capital comes from patient institutional investors (pension funds, sovereign wealth funds) that are not prone to sudden panic selling that destroys the ABS market.

This stability is reflected in the data: the default rate for core private credit loans remains significantly lower than the leveraged loan market, tracking around 2.7% in mid-2024. I will update you on this as time steps forward.

What This Means for Investors:

The credit market is experiencing a slow-motion crisis rather than a rapid implosion. Dimon’s cockroaches have emerged on the low-quality periphery, signaling that the at-risk consumer can no longer handle the cost of debt.

However, the core of the shadow banking system is not collapsing though it is likely entering a multi-year period of grinding defaults and low recovery rates as the cost of capital finally catches up to years of excess leverage. It’s coming. Lights on!

I was in Boston this week, attending one of our credit managers' annual institutional client meetings. I left feeling reassured in their lending process and risk exposures. The manager has a small amount of exposure to First Brands. There will be a small hit to fund performance and no distribution to investors this quarter. The key is properly structured loan agreements, first lien senior secured collateral and a line of site to that collateral. In our managers case, the collateral sits outside of the bankrupcy process and the fund gets paid first (bond and equity holders of First Brands sit much lower on the capital stack). They have bigger issues.

What is critical in debt transactions is the quality of the collateral supporting each loan and the structure of the loan agreements.

The cockroaches are appearing where you’d expect to see them to appear first, in the subprime consumer area. I don’t see a problem in the mortgage space (aka 2008), and overall, I think individual balance sheets are in pretty good shape. The level of corporate debt looks reasonable. There will be some hot spots but I don’t see anything alarming. The systemic risk is government debt, money printing and the devalution of the dollar. Maybe there is an out. One million gold visas at $5 mil apiece is $5 trillion. Revaluing the gold held in by the government. No idea what the real holdings are. Selling mineral rights. AI, quantum computing, robotics. We need legislators to legislate and none seem too concerned except for their reelection. Increasing our taxes, cutting our benefits - who’d vote for that person? You and me, maybe.

By now, your lights are on. I’ve written about gold and the dollar since 2015. You and I have been talking about the debt crisis for for several years. Some nasty bugs are starting to appear.

There is time to prepare. Now is the time to really understand your credit exposures. Do keep in mind that everything in life has risk. We investors must take risks. Sitting it out in a money-market fund is a risk. The best thing we can do is make sure the probabilities are in our favor. Find ethical, talented teams focused on getting from here to the other side of the coming debt reset with your wealth intact while beating inflation.

The views expressed herein are solely those of Steve Blumenthal as of the date of this report and are subject to change without notice. Not a recommendation to buy or sell any security. Please note that the information provided is not recommended for buying or selling any security and is provided for discussion purposes only. Current viewpoints are subject to change. Please note that the information provided is not recommended for buying or selling any security and is provided for discussion purposes only. 

 

Trade Signals: Update - October 23, 2025

Trade Signals is Organized in the Following Sections:

*Trade Signals basics: The Market Commentary section summarizes notable changes in the core key indicators: Investor sentiment, market breadth, stocks, treasury yields, the dollar, and gold. The Dashboard of Indicators provides a detailed view of all Trade Signals indicators.

Market Commentary

Oil (West Texas Crude) was up approximately 5.99% today—a sharp rebound from recent lows near $58 per barrel earlier in the month. The primary driver? The U.S. announced sweeping new sanctions on the two major Russian oil producers, including Rosneft and Lukoil. The objective is to pressure Russia to negotiate an end to its war in Ukraine.

Japanese Prime Minister - Latest Update

Sanae Takaichi was officially elected as Japan's 104th Prime Minister, marking a historic milestone as the country's first female head of government.

As mentioned last week, Takaichi is a strong supporter of Abenomics, the economic framework pioneered by her mentor, the late Prime Minister Shinzo Abe (2012–2020). She has consistently advocated for Abenomics’ core "three arrows," aggressive fiscal stimulus, ultra-loose monetary policy (e.g., low interest rates and quantitative easing), and structural reforms to boost growth and end deflation.

The Yen moved lower. I share this next chart each week with you - A declining Yen is bullish for global liquidity. If Takaichi does what she says she will do, the Yen Carry trade is back in vogue.

StockCharts.com, CMG notations

Notables This Week:

The Xi-Trump APEC Summit is scheduled for next week, October 31 – November 1, 2025. Tensions remain high.

Oil rallied on the Russia news. Gold sold off sharply this week. The S&P 500 looks to be forming an intermediate-term top - Its Weekly MACD trend indicator is nearing a bearish signal. The Daily MACD is bearish. The 10-year yield is back below 4%, closing at 3.99%. Its Weekly MACD continues to signal lower yields which is bullish for bonds.

Key Macro Indicators - Investor Sentiment, Market Breadth, The S&P 500 Index (Stocks), The 10-year Treasury Yield (Bonds), and the Dollar

About Trade Signals

Trade Signals is a paid subscription service that posts the daily, weekly, and monthly trends in the markets (and more). Free for CMG clients. Not a recommendation to buy or sell any security. For discussion purposes only.

“Extreme patience combined with extreme decisiveness. You may call that our investment process.

Yes, it’s that simple.”

– Charlie Munger

TRADE SIGNALS SUBSCRIPTION ACKNOWLEDGEMENT / IMPORTANT DISCLOSURES 

The views expressed herein are solely those of Steve Blumenthal as of the date of this report and are subject to change without notice. Not a recommendation to buy or sell any security.

Please note that the information provided is not recommended for buying or selling any security and is provided for discussion purposes only. Current viewpoints are subject to change. Please note that the information provided is not recommended for buying or selling any security and is provided for discussion purposes only. 

 

Personal Note: F.A.M.I.L.Y.

“Forget About Me, I Love You.”

I loved the following short video I’m about to share with you. It’s about team, friendships, and love. It’s about life.

FAMILY stands for “Forget About Me, I Love You.”

Coach Sue shared the following video with her team this week. As they watched, the room fell silent, and became filled with emotional. Click on the photo to watch.

You’ll love it, I promise. Please share it with your children.

Brett Ledbetter narates the video. He consults high performers in sports, education, and business. I liked this quote in particular:

“What motivates people are the bonds, the loyalty, and the trust they develop between each other. What matters is the mortar not just the bricks.” - Margaret Heffernan

On the kitchen table this morning, I found this book by Brett sitting next to Susan’s backpack. I’ll be reading it this weekend and encouraging my team to do the same.

The world could sure use a few more walls full of bricks, written with team values, and bounded together by mortar. We are better together!

I was in Boston for a business dinner Wednesday and Thursday meeting with one of our top credit managers. The meeting was excellent. The Schwab conference in Denver is up next November 4-6 (one of our fintech PE investments is presenting). Then, a family office meeting in Austin, TX. And dare I say an Eagles game in LA in early December. Go BIRDS!

I'm hitting the send button to my edit team to review and rushing to the 4 pm ET soccer game between Malvern Prep and EA. The Frairs have dropped the last five games. Four games remain, and the boys are fighting to finish in the middle of the table. They play an excellent brand of soccer and are generally outshooting and outpossessing their opponents. Four goals in the last eight games tells the story. The boys are now 7-8-2. Mortar indeed! And goals!

Cold IPA held high. Don’t worry about the debt mess / coming reset. We are going to be just fine.

Let’s go… FAMILY on three! F.A.M.I.L.Y.

Wishing you and your family the very best,

Steve

CLICK HERE TO SUBSCRIBE TO ON MY RADAR - IT’S FREE

You can share this letter on X by clicking here.

You can share this letter on LinkedIn by clicking here.

Subscribe to OMR for free by clicking the photo.

Stephen B. Blumenthal
Executive Chairman & CIO
CMG Capital Management Group, Inc.
75 Valley Stream Parkway, Suite 201, Malvern, PA 19355
Private Wealth Client Website

CMG Customer Relationship Summary (Form CRS)

Metric-Financial, LLC Customer Relationship Summary (Form CRS)

Metric-Financial, LLC Form Reg BI

Stephen Blumenthal founded CMG Capital Management Group in 1992 and serves today as its Executive Chairman and CIO. Steve authors a free weekly e-letter entitled, “On My Radar.” Steve shares his views on macroeconomic research, valuations, portfolio construction, asset allocation and risk management. Author of Forbes Book: On My Radar, Navigating Stock Market Cycles.

Follow Steve on X @SBlumenthalCMG and LinkedIn.

IMPORTANT DISCLOSURE INFORMATION

This document is prepared by CMG Capital Management Group, Inc. (“CMG”) and is circulated for informational and educational purposes only. There is no consideration given to the specific investment needs, objectives, or tolerances of any of the recipients. Additionally, CMG’s actual investment positions may, and often will, vary from its conclusions discussed herein based on any number of factors, such as client investment restrictions, portfolio rebalancing, and transaction costs, among others. Recipients should consult their own advisors, including tax advisors, before making any investment decision. This material is for informational and educational purposes only and is not an offer to sell or the solicitation of an offer to buy the securities or other instruments mentioned. This material does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual investors which are necessary considerations before making any investment decision. Investors should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, where appropriate, seek professional advice, including legal, tax, accounting, investment, or other advice. The views expressed herein are solely those of Steve Blumenthal as of the date of this report and are subject to change without notice. 

Investing involves risk.

This letter may contain forward-looking statements relating to the objectives, opportunities, and future performance of the various investment markets, indices, and investments. Forward-looking statements may be identified by the use of such words as; “believe,” anticipate,” “planned,” “potential,” and other similar terms. Examples of forward-looking statements include, but are not limited to, estimates with respect to financial condition, results of operations, and success or lack of success of any particular market, index, investment, or investment strategy. All are subject to various factors, including, but not limited to, general and local economic conditions, changing levels of competition within certain industries and markets, changes in legislation or regulation, Federal Reserve policy, and other economic, competitive, governmental, regulatory, and technological factors affecting markets, indices, investments, investment strategy and portfolio positioning that could cause actual results to differ materially from projected results. Such statements are forward-looking in nature and involve a number of known and unknown risks, uncertainties, and other factors, and accordingly, actual results may differ materially from those reflected or contemplated in such forward-looking statements. Investors are cautioned not to place undue reliance on any forward-looking statements or examples. All statements made herein speak only as of the date that they were made. Investing is inherently risky and all investing involves the potential risk of loss.

Past performance does not guarantee or indicate future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by CMG), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from CMG. Please remember to contact CMG, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. CMG is neither a law firm, nor a certified public accounting firm, and no portion of the commentary content should be construed as legal or accounting advice.

No portion of the content should be construed as an offer or solicitation for the purchase or sale of any security. References to specific securities, investment programs or funds are for illustrative purposes only and are not intended to be, and should not be interpreted as recommendations to purchase or sell such securities.

This presentation does not discuss, directly or indirectly, the amount of the profits or losses realized or unrealized, by any CMG client from any specific funds or securities. Please note: In the event that CMG references performance results for an actual CMG portfolio, the results are reported net of advisory fees and inclusive of dividends. The performance referenced is that as determined and/or provided directly by the referenced funds and/or publishers, has not been independently verified, and does not reflect the performance of any specific CMG client. CMG clients may have experienced materially different performance based upon various factors during the corresponding time periods. See in links provided citing limitations of hypothetical back-tested information. Past performance cannot predict or guarantee future performance. Not a recommendation to buy or sell. Please talk to your advisor.

Information herein has been obtained from sources believed to be reliable, but we do not warrant its accuracy. This document is general communication and is provided for informational and/or educational purposes only. None of the content should be viewed as a suggestion that you take or refrain from taking any action nor as a recommendation for any specific investment product, strategy, or other such purposes.

In a rising interest rate environment, the value of fixed-income securities generally declines, and conversely, in a falling interest rate environment, the value of fixed-income securities generally increases. High-yield securities may be subject to heightened market, interest rate, or credit risk and should not be purchased solely because of the stated yield. Ratings are measured on a scale that ranges from AAA or Aaa (highest) to D or C (lowest). Investment-grade investments are those rated from highest down to BBB- or Baa3.

NOT FDIC INSURED. MAY LOSE VALUE. NO BANK GUARANTEE.

Certain information contained herein has been obtained from third-party sources believed to be reliable, but we cannot guarantee its accuracy or completeness.

In the event that there has been a change in an individual’s investment objective or financial situation, he/she is encouraged to consult with his/her investment professional.

Written Disclosure Statement. CMG is an SEC-registered investment adviser located in Malvern, Pennsylvania. Stephen B. Blumenthal is CMG’s founder and CEO. Please note: The above views are those of CMG and its CEO, Stephen Blumenthal, and do not reflect those of any sub-advisor that CMG may engage to manage any CMG strategy, or exclusively determines any internal strategy employed by CMG. A copy of CMG’s current written disclosure statement discussing advisory services and fees is available upon request or via CMG’s internet web site at www.cmgwealth.com/disclosures. CMG is committed to protecting your personal information. Click here to review CMG’s privacy policies.

Steve Blumenthal
Next

On My Radar: Xi-Trump Collision Course