Aramco’s warning regarding crude oil supply shortages appears to be quite serious. So I think we should expect inflation to continue rising going forward.
The Governor of the Bank of Japan has also indicated that the BOJ will continue raising policy rates depending on financial conditions.
If Japan continues raising interest rates, we could see an unwind of the yen carry trade, dollar weakness, and yen strength. I think the market could begin moving in that direction.
One of the biggest issues has now emerged.
Watch this carefully. This is how the situation is developing, and France is also facing quite a few problems, just as I mentioned before.
So why is this important right now? Investors are pulling out of an Evergreen fund associated with Partners Group, a major Swiss private-markets investment firm.
When we look at what actually happened, investors were demanding redemptions. There were redemption requests back in June as well, but this time the pressure on the Evergreen structure appears much more significant.
An Evergreen fund is designed to operate almost permanently, but liquidation pressure has now emerged. Why is this happening? Because investor confidence has been lost, and a large-scale withdrawal of capital is now taking place.
This is now being reflected immediately in the share price. We’re talking about developments around October 2.
Last week, they announced a massive restructuring involving approximately $7.4 billion.
Why did they do it? They have to return money to investors, so it looks like the approach may have been something like, “Let’s sell first and deal with the rest afterward.” The stock then plunged 16% in a single day.
That’s extremely dangerous. So is this only a Partners Group problem? No.
We’re talking about a major Swiss private-markets investment firm. Something very significant is happening. At the same time, enormous amounts of private capital are flowing into AI investments, including massive infrastructure funding.
So we now have liquidity risk, redemption restrictions, circular financing, bubble risk, and growing caution among institutional investors. The situation has reached a fairly dangerous level.
So what is the current default rate in private credit? It has been reported at around 6%, but the concern is that it could rise as high as 10%.
Why? Because of high interest rates and refinancing pressure. And remember the fund sales we were just discussing—where was that?
As asset sales involving Partners Group funds take place, what happens? The situation is being pushed into increasingly dangerous territory.
I talked about the high-yield market. Today, I’m talking about funds.
I’ve mentioned this from time to time, and it looks extremely dangerous. The charts also look dangerous, so make sure you keep an eye on this situation.
When we look at defaults, the current figure is around 6.3%.
It was about 2% in 2020. So the default rate has tripled. Actually, it has risen slightly more than threefold.
So default rates are rising. Financial distress is accelerating. We’re reaching historically extreme levels.
If it was already 6.3% in August and we’re now in October, I think it may have risen even further.
This is why we need to watch this risk. The problem is that these investments are not transparently disclosed. We don’t have full visibility into exactly what they have invested in.
And right now, enormous amounts of money have been invested in AI. What happens if defaults begin in this area? Oracle, for example, is one company that I’m watching closely because of the risks surrounding it.
Oracle is an individual company, but here we’re talking about entire funds.
What happens if a fund collapses? It’s over. That’s it. So you need to watch these developments as well.
Partners Group is currently down around 65% from its previous level. The decline began from around 2021, but the serious decline became visible from around 2025. You can see it.
That’s when the real decline began. The total drop is around 65%. It’s now trading around levels similar to the 2019–pandemic-era period.
Next is another major alternative investment firm, KKR. It has fallen around 50%.
That’s substantial. Its decline also began around 2025.
So these private-market investment companies are all developing problems.
They are moving into major downtrends. And what else are these private funds connected to? Banks. They’re tied to the banking system as well. That’s why we’re now detecting extremely significant warning signals.
You need to watch this carefully. Not many people are talking about this right now.
Next is Blackstone, one of the world’s largest and best-known alternative asset managers. It has also fallen around 50%.
From around 2025, it is currently down roughly 50%.
We also have to remain open to the possibility that this situation could deteriorate very rapidly. Next is Blue Owl.
It’s well known. This company looks almost like it’s about to pass out—almost on the verge of collapse. It has fallen by as much as 70%.
So we shouldn’t ignore these developments. Whenever new information or news comes out, I’ll update you immediately.
So why are stock prices jumping around like this right now?
It’s psychology. Psychology. The dominant belief is, “AI will solve everything.” But it won’t.
We’ll come back to this later. Let’s look at Bitcoin first and then slowly go through the rest. Now, Brent crude.
It’s around $98 and is currently maintaining its upward trend.
아직 유동성이 세게 안 들어오는 상황인데. ARK, 쌍봉 살짝 올라와 있고 KBWB.
Strong liquidity hasn’t really entered the market yet. ARK is showing something resembling a double top with a slight rebound. Then we have KBWB.
I’ve repeatedly told you to watch the banks carefully.
The reason private funds were able to grow so large is that banks were providing financing behind the scenes.
I believe this is eventually going to break. We could see something on the scale of a 30% move.
Now Nvidia. It’s pushing its share price higher with share buybacks.
But it’s only Nvidia and a handful of other companies doing this.
Want to look at Apple? Double top.
Google can’t move higher.
Microsoft has a large double top.
Amazon is gradually moving lower.
Then TSMC.
TSMC has actually moved above its previous high.
Tesla isn’t looking good either. After a major decline.
Look at SMCI. I think seven or eight of the companies we just looked at could potentially end up looking like this.
Here’s Palantir. A large double top.
And now Oracle.
I’ve been watching Oracle continuously. Its credit position is just above junk territory, so if its bonds fall into junk status, or if the company is pushed toward a default situation, then in my view that would mark a major turning point for the AI boom.
So this is connected with private-market financing and has reached a fairly dangerous level.
CoreWeave is similar.
It’s down around 70%.
The situation looks very similar. SoftBank is down 3% today. I believe the second leg of the decline has begun.
Next is Micron. Micron can’t move higher.
SanDisk is similar. That’s the situation.
If semiconductors begin a second major breakdown, that’s when I would consider the broader decline to have truly begun.
Real estate is also entering a full-scale decline.
A real estate collapse is taking place right now.
Private funds are involved here as well. And now look at CMBS—
Commercial real estate is plunging like this. I think several of these problems could erupt at the same time, triggered by some event. Watch this carefully.
The price of the U.S. 10-year Treasury is falling.
It looks like it could take another significant drop. RSI is around 32.
So I think it could fall toward roughly $95, with the 100 level breaking first. The U.S. 10-year yield is around 5.27%. That’s high.
Here’s the three-month yield. It’s moved slightly higher.
Next is the two-year yield.
I’ve told you that the two-year yield also has a relationship with gold.
The five-year is around 5%.
The 20-year around 5.6%
The 30-year weekly yield around 5.63%. These are high levels.
The interest-rate spread has now become entrenched.
It’s around 1%. So what happens if rates move even higher from here?
The probability increases that we could see conditions resembling the pandemic shock, Lehman, the dot-com collapse, or other major financial crises.
The possibility that this develops into something comparable to the 1929 Great Depression is gradually increasing. Which weak link will break first? One of the areas I’m currently watching most closely is real estate.
Private funds and banks are the other major areas. Watch them carefully.
Next, the dollar has paused after rising. It’s still strong. The dollar is also linked to interest rates, so watch this carefully.The dollar has strengthened in the short term, but you need to watch it carefully.
Now let’s look at the yen.
Japan is raising interest rates. If the yen turns strongly higher, that could create a very difficult situation for global markets.
The Australian dollar has paused for now.
The euro was falling and has now paused. The euro looks weak.
It’s very weak. Why? Because of the problems in France. It’s particularly weak against the dollar.
Next, the yuan is strengthening.
USD/KRW is strong. Korea’s currency often moves in connection with the yuan.
The dollar has paused for now, and gold is moving back and forth in response. Now let’s look at gold.
Gold is currently consolidating after a correction and moving sideways.
Next, silver is around $61.
Next, silver again, and then the gold-to-silver ratio, which is around 67.
Next is oil.
It has come down to around 87. RSI has moved toward the 50 level, and we’re clearly beginning to see signs of change.
Natural gas looks like it’s preparing to move higher as the weather gets colder. Wheat also appears to have found a bottom.
If wheat rises sharply, that could become a serious problem.
Natural gas is similar. It’s not in a clear downtrend yet.
It’s roughly neutral at the moment.
Copper is doing well, and the gold-to-silver ratio is continuing to fall.
Silver now looks like it’s preparing for an explosive move.
So for gold, my approach remains physical gold purchased gradually in stages. And as I’ve said before, look again at the two-year Treasury yield.
When the two-year yield begins falling, that’s when gold tends to enter a rising phase.
This time, the Federal Reserve’s ability to raise rates may be somewhat limited, although things can change depending on conditions.
The two-year yield is forming something resembling a double top on the monthly chart. So if you watch the two-year yield carefully through the end of this year and into early next year, I believe you’ll be able to see where gold is heading.
So in the short term, watch the two-year Treasury yield. Over the longer term, watch the dollar.
In my view, the dollar will eventually move into a weakening trend. Money continues to be created, and that’s the situation we’re dealing with.
So make your judgment carefully.
Next, rather than the interest-rate spread, look at the ratio between large-cap and small-cap stocks. There is a strong possibility that it continues moving according to this chart. There is clearly a bubble now.
In fact, the bubble has become even larger. But the Russell 2000 is in a downtrend. You can see it.
That suggests the situation ahead could become extremely difficult. The Dow is also moving lower.
The VIX remains around the same level.
And this is the S&P 500 futures market—it’s moving sideways, right?
Only a handful of stocks are holding the market up right now. In my view, this is deceptive.
I think we may have to wait until after the midterm elections before we see truly major volatility. So you need to watch these developments very carefully.
Look at the Nasdaq as well. It has risen. So what’s happening here?
Because it’s market-cap weighted, it creates the impression that the entire index is rising. But the underlying picture is completely different. The charts themselves no longer match.
So don’t be fooled. We now have a divergence, and I see that as a warning of a potentially major decline.
Next, as a crisis indicator, credit risk has begun rising. Credit stress has clearly started to emerge. Since when? Since September.
It began appearing in September and has gradually been moving higher. Watch this carefully.
Next, let’s look directly at CCC-rated debt, the lowest end of the high-yield market.
This is the yield, and it has broken out. It had previously come down around this area before the rate-hiking cycle.
2021year July, rates were raised, yields moved higher, and things later calmed down. But now it has broken above that level.
You can see it. That means, in my interpretation, a crisis comparable in scale to the stress created by the rate-hiking cycle has now emerged in CCC-rated credit.
People talk about many of the other indicators, but I don’t hear much discussion about CCC-rated debt.
Even the so-called experts aren’t talking much about it. The next target I’m watching is here—the pandemic level.
What was it? Around 19%. So I’m going to show you this indicator every day.
We’ll track how high it goes. This level corresponds to pandemic-type stress.
This area corresponds to the China-related crisis. We’ve already moved beyond that level. This next area represents the European crisis.
This level is comparable to Lehman, and this one corresponds to the dot-com crisis. You can see the progression—dot-com, Lehman, and so on.
So the move has begun. In my view, we’ve already exceeded the level associated with the rate-hiking stress. The next question is whether we exceed the pandemic level—whether the yield breaks above 19%.
If it breaks above 19%, that would mean conditions are developing that are worse than the pandemic-era credit stress.
Why do we need to watch this? Because this indicator is connected to bankruptcies and also to unemployment.
If this continues, those effects could begin showing up in the real economy within the next several months. You really need to watch this. I don’t see many places explaining this indicator.
This is CCC-rated debt, one of the lowest ratings in the high-yield market. The yield is 16.93%.
That’s a brutal borrowing cost. So make sure you remember this indicator.
The stock market may look calm and may look as though it wants to keep rising, but I believe these underlying indicators show the real condition of the market.
The Dow, the Russell, and the equal-weighted S&P 500 are all showing essentially the same picture.
To me, that’s a sign that the broader market has already broken down. Only a handful of stocks are holding the market up.
Maybe this is happening because of orders from Trump, maybe Wall Street is deliberately doing it, or perhaps some other powerful players are involved. Whatever the reason, be careful.
A sudden plunge could occur.
The market could get hit extremely hard. That’s why I believe we need to be prepared with cash and physical gold and silver.
What have I been saying repeatedly?
Real estate is already in serious trouble, right?
Semiconductors are now preparing for what I see as a second major decline, and banks are also at risk.
And what’s behind all of this? This—private funds. These funds are breaking down.
Can you see it? Look at this chart. Does this look like a healthy chart to you?
It clearly doesn’t look healthy. Partners Group, the Swiss private-markets investment firm, is now trading around roughly 2019 share-price levels. Put simply, in my interpretation, the stock has been devastated.
If you see something like this and still don’t react, then ultimately everyone has to make their own decision. No matter how much someone tells you that there’s good water at the well if you don’t want to drink it, you don’t have to. Right?
But we should at least understand exactly what is happening.
A crisis could erupt immediately.
Or it could take quite some time before it fully appears. But my view is that a major crisis—a major collapse—is already in progress beneath the surface.
This is not a normal or healthy situation. I want you to keep in mind that an enormous crisis is developing and watch these developments very carefully.
You understand what I’m saying, right? This is a time when I really need your support. Thank you for your continued support, and I’ll end here.
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