Global financial jitters about what are referred to as non-bank banks or priv...
Despite wholesale inflation coming in hot this morning, investors are still buying US government
bonds this morning, the benchmark tenure interest rate is now below 4%.
“But analysts say it's a move toward a safe haven, but why now?”
Christopher Lowest, Chief Economist at FHN Financial in New York, hey Chris. Hey David. So US government bonds, people are buying those because they're worried about something else. The something else is coming out of London. What is it? It's private credit. It's specifically MFS, which is a big lender making risky loans, the kind of loans that banks don't want to make. And they do it by borrowing from investors
and from banks and securing capital, which they then pledges collateral, they've been accused
of double counting collateral. And as a result, the banks have pulled funding and MFS is in the British equivalency of bankruptcy this morning. All right. We'll see if those accusations are borne out. But we do see evidence. There
“are published reports that some of the banks that are creditors are exposed to some of”
these losses. This sounds familiar to that auto subprime lender tricolor that ran into trouble late last year. That's right. And people are starting to think it might be a bigger pattern. And so what we're seeing in the broad market today, treasuries lower and yield, that's people fleeing to quality. And high yield debt, what we affectionately know as junk bonds, those yields
are rising. When junk spreads rise, it's a signal to the entire industry credit industry that lenders are nervous and pulling back from what they perceive as the most risky parts of the credit market. All right. We'll continue to monitor this. Christopher Lowe, Chief Economist, FHN Financial in New York. Thank you, David.
“And this will remind many of a comment made last fall by the CEO of the biggest of banks,”
Jamie Diamond of JP Morgan Chase, after that private credit auto lender tricolor went bankrupt. His quote, "When you see one cockroach, there are probably more." . The artificial intelligence firm anthropic has rejected the Pentagon's demands for unrestricted use of its technology. The Department of Defense says anthropic has to agree to its terms
by the end of the day or face consequences, Marketplace's Nancy Marshall Games reports. Enthropic is insisting that its technology, like its chatbot plot, not be used in mass domestic surveillance or fully autonomous weapons. The Defense Department is insisting it be allowed to deploy AI for, quote, "any lawful use," in a post on X, Chief Pentagon spokesman Sean Parnell says, "The military has no interest in using AI to conduct mass surveillance
of Americans and doesn't want to use AI to develop autonomous weapons." Parnell says anthropic has until 501 PM Eastern time today to decide. Otherwise, the Pentagon will terminate its partnership with Enthropic and label the company a supply chain risk. Enthropic would be blacklisted, and its partnerships with other firms could be severed. Enthropic still says its strong preference is to continue to serve the Pentagon with surveillance
and autonomous weapons safeguards. But a senior Pentagon official tells Marketplace the Defense Department sent Enthropic its last and final offer Wednesday night. I'm Nancy Marshall Gensor for Marketplace. Time to take the Marketplace economic pulse views on the economy from a wide range of perspectives. Today, a check-in on what we used to call a lobster fisherman, when I grew
up in Maine, now that I live on the other coast, I have to say lobster professional. In 2024, Maine's commercial fisheries did about $700 million in business with lobsters accounting for the largest share of that total. Sunny Beale is a lobsterman and board member of the Maine lobsterman's association. He's on an island wicked down east to be a welcome.
Thank you for having me. I guess it's like actors who never say the name of the Scottish
Shakespeare play because bad things will then happen. What is it that lobster folks stay away from the precise number of how their catch was? We're usually pretty secretive on what we catch, you know, because if somebody finds out
To try doing good, they might move in on your territory and stuff so we try t...
kind of hush-hush. Yeah, and as it refers to your business, what's the vibe?
“The catch was down a little bit this season. I was down about 30% statewide. We can't have”
record years every year. So, you know, it kind of just take it for what it is. The price was down a little bit from last year, but last year was a record price. So, we're still chucking along, you know, and we have good years in bad years and, you know, we've taken as it goes. Now, when you're out in the ocean doing your work, it is not a free for all. Some of it is strict custom, you know, mess with anybody else's traps. But some of it is formal government
regulation, and I know that is something that people in your business have to plan around and
compensate for and sometimes has costs. Yes, that's correct. 20 years ago, so we had to switch from floating ground lines to sinking ground lines to the ground lines of the lines that are in between your traps on bottom. And also, you know, the rope doesn't last as long, whereas chief and on bottom. So, you know, it's rope that we have to buy every single year. We have to buy break away devices for our buoys. So, if a whale gets caught in a buoy, you know,
the device breaks the buoy pops off the wheel doesn't get entangled. We now have to put
break away links, plastic links in our lines. So, you know, if the buoy doesn't break,
then the line will break and actually they said that now that we have the link in our line, we don't need the link in our buoy. So, it's just, you know, they're going, going right around Robin Hood's barn, kind of a deal. We also have to put colored traces in our lines. Like where I fish, I have to have a purple tracer. And then when I fish out with federal waters, I have to have a green tracer in my line. And I have to have three of those from buoy to trap. So, we're highly regulated.
“That's the shore. You've been doing this since you were a kid. I think you have two children”
a teenager and maybe college age. I have two boys, 18 and 20 years old, yes. So, what do they think about getting into this business? It's one of those things when they say, you know, you got salt in your veins. That's really a thing. I was kind of, you know, disappointed, not disappointed, but when my youngest son didn't go to college and now my oldest son wants to come home and go fishing, I was told that I said I wish you guys would use your brain and not your back. And my wife said,
you know, she says, you can't raise these guys fishing and being on the ocean and expect them not to do it when they get old. Sunny Beal is a lobstering professional from Maine. Thank you very much for the briefing. No problem. You're very welcome. Beal is a big name up there. I had another Mr. Beal is my stern driver's ed instructor in high school. Look, Sidna Lynn, look young fella. David Broncache, a marketplace morning report from APM,
American Public Media. Hey, David Broncache, here I hope you're well and that your passport is up to date because I am hosting a trip to Italy this fall and you, you are invited. Stay at a world-class Tuscan villa, step into the world of the Medici, the formidable family who's influence and power, help give rise to the Renaissance and the art we still celebrate today, not to mention the banking system. We're going to visit the world's oldest bank,
swim in the thermal spa waters in Montecotini and take in the art of the U. Fizzi. All of this, and then we'll try to put it all into context with great conversation over even better meals
“and wine tasting. Please join me and know this buying into this trip will provide essential”
support for public media. Discover more about this fall's Tuscany adventure at Marketplace.org/travel to reserve your spot today, that's Marketplace.org/travel.
