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The All-In Podcast
Chamath's CDS Bet: Outlining Major Corporate Debt Default Risks
"With all of the tariffs, the one thing that we haven't sufficiently talked about is there is a tremendous amount of corporate debt that supports these businesses today."
"And you would say, 'Well, if long-term rates go down, there's no real risk.'"
"But the tariff picture actually impacts revenues."
"And the problem with that is that there's a lot of companies that have debt covenants tied to revenue and EBITDA."
"And so this is what I spoke about at the beginning of January, which is, the one risk that is uncontrollable, is what happens to corporate debt and could we see a wave of defaults and a wave of action?"
On our 2025 predictions show in January, @chamath picked credit default swaps as his best-performing asset this year, calling it a long-shot with major upside:
" I would be long CDS. I'm buying insurance using credit default swaps. I think that there is a small chance of some volatility next year. I hope it doesn't happen. I hope that this trade loses money. But if it hits, it will be the best-performing asset of 2025."
Fast-forward to April:
" It has hit. For every billion dollars of risk you would've put on, would have cost you ~$1M, and that million dollars would've made you ~$7M in about three months."
"Why is this important? The CDS actually represents the structural risk in the United States corporate economy."
"So when you see these spreads blowing out, this is actually a very important warning sign."
"This is what was the canary in the coal mine for the Great Financial Crisis."
"The tariff picture and the recession picture will get played out in this chart."
"And I think it's something that folks can and should probably pay tremendous attention to."
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Chamath's CDS Bet: Outlining Major Corporate Debt Default Risks
"With all of the tariffs, the one thing that we haven't sufficiently talked about is there is a tremendous amount of corporate debt that supports these businesses today."
"And you would say, 'Well, if long-term rates go down, there's no real risk.'"
"But the tariff picture actually impacts revenues."
"And the problem with that is that there's a lot of companies that have debt covenants tied to revenue and EBITDA."
"And so this is what I spoke about at the beginning of January, which is, the one risk that is uncontrollable, is what happens to corporate debt and could we see a wave of defaults and a wave of action?"
On our 2025 predictions show in January, @chamath picked credit default swaps as his best-performing asset this year, calling it a long-shot with major upside:
" I would be long CDS. I'm buying insurance using credit default swaps. I think that there is a small chance of some volatility next year. I hope it doesn't happen. I hope that this trade loses money. But if it hits, it will be the best-performing asset of 2025."
Fast-forward to April:
" It has hit. For every billion dollars of risk you would've put on, would have cost you ~$1M, and that million dollars would've made you ~$7M in about three months."
"Why is this important? The CDS actually represents the structural risk in the United States corporate economy."
"So when you see these spreads blowing out, this is actually a very important warning sign."
"This is what was the canary in the coal mine for the Great Financial Crisis."
"The tariff picture and the recession picture will get played out in this chart."
"And I think it's something that folks can and should probably pay tremendous attention to."
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The Kobeissi Letter
BREAKING: Bitcoin’s losses accelerate, now trading below $79,000, as markets brace for US equity market futures to open. https://t.co/8jvB0wPizu
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BREAKING: Bitcoin’s losses accelerate, now trading below $79,000, as markets brace for US equity market futures to open. https://t.co/8jvB0wPizu
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The Kobeissi Letter
Ethereum, $ETH, extends losses to -11% in a matter of hours. https://t.co/Ft7IYK7HSH
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Ethereum, $ETH, extends losses to -11% in a matter of hours. https://t.co/Ft7IYK7HSH
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The Kobeissi Letter
Crypto has now erased -$150 billion in market cap over the last 4 hours.
Where do US stock market futures open? https://t.co/wB4iBMMbcS
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Crypto has now erased -$150 billion in market cap over the last 4 hours.
Where do US stock market futures open? https://t.co/wB4iBMMbcS
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The Kobeissi Letter
BREAKING: Ethereum extends losses to -13% on the day and falls below $1,600 for the first time since December 2022. https://t.co/CxrRZfXnR8
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BREAKING: Ethereum extends losses to -13% on the day and falls below $1,600 for the first time since December 2022. https://t.co/CxrRZfXnR8
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The Kobeissi Letter
We are now 1 hour out from US stock market futures opening.
The only word from the Trump Administration this weekend:
Tariffs will NOT be delayed, set to go live at 12:01 AM ET on April 9th.
As a result, crypto has erased -$200 billion in 4 hours and sentiment continues to deteriorate.
Unless something changes rather quickly here, it appears the flight to the sidelines will continue this week.
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We are now 1 hour out from US stock market futures opening.
The only word from the Trump Administration this weekend:
Tariffs will NOT be delayed, set to go live at 12:01 AM ET on April 9th.
As a result, crypto has erased -$200 billion in 4 hours and sentiment continues to deteriorate.
Unless something changes rather quickly here, it appears the flight to the sidelines will continue this week.
tweet
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The Kobeissi Letter
Bearish sentiment is arguably near its highest levels in history.
“Black Monday” has become the consensus view amid tariff uncertainty.
It would take a lot to not see at least short-term capitulation this week. https://t.co/CoqTwQcChc
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Bearish sentiment is arguably near its highest levels in history.
“Black Monday” has become the consensus view amid tariff uncertainty.
It would take a lot to not see at least short-term capitulation this week. https://t.co/CoqTwQcChc
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The Kobeissi Letter
The Kobeissi Letter for the week of April 7th has been published and may be viewed through the link below:
https://t.co/6TDuawjZAN
The Chart of the Week for the week of April 7th has been published. View or sign up for FREE through the link below:
https://t.co/jCCx3iSLbJ
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The Kobeissi Letter for the week of April 7th has been published and may be viewed through the link below:
https://t.co/6TDuawjZAN
The Chart of the Week for the week of April 7th has been published. View or sign up for FREE through the link below:
https://t.co/jCCx3iSLbJ
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The Kobeissi Letter
BREAKING: US stock market futures officially reopen with S&P 500 futures down -2.1%.
This brings total 3-day losses to -12.6%. https://t.co/WHZi72L5Cu
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BREAKING: US stock market futures officially reopen with S&P 500 futures down -2.1%.
This brings total 3-day losses to -12.6%. https://t.co/WHZi72L5Cu
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The Kobeissi Letter
BREAKING: S&P 500 futures extend losses to -4.5% bringing 3-day losses to -15%.
The S&P 500 is on track to open in bear market territory. https://t.co/47lSWr4RcJ
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BREAKING: S&P 500 futures extend losses to -4.5% bringing 3-day losses to -15%.
The S&P 500 is on track to open in bear market territory. https://t.co/47lSWr4RcJ
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