Glenn Blogs

  Tricolor, First Brands, and the Shadow Credit Problem: Why Two Collapses Signal Deeper Trouble A Canary in the Debt Mine? When Texas-based Tricolor Holdings , a subprime auto lender ie(lends money for automobiles for hgiher risk individuals),  filed for bankruptcy earlier this month, the Wall Street Journal wondered if it was a “canary in a subprime debt mine.” Now, just weeks later, First Brands , a debt-loaded auto parts supplier, is also on the edge, leaving Jefferies, UBS , and other creditors exposed by billions. Two blow-ups in two weeks isn’t could be a warning sign. How Tricolor Collapsed: The Double Pledging Trap Tricolor specialized in lending to higher risk lenders and  immigrants  and thin-credit borrowers at very high interest rates, then packaging those loans into auto Asset backed securities(ABS) . On paper, these securities looked safe: rating agencies even stamped  “AAA.” But the real problem was how Tricolor allegedly funded itself. H...

The Shifting Sands of U.S. Debt: Why Higher Yields Are Here to Stay For decades, the United States has enjoyed an unparalleled advantage in global finance: the ability to issue debt in its own currency, backed by Treasuries widely regarded as the safest asset on Earth. This “exorbitant privilege” has allowed the U.S. to borrow at remarkably low rates, even as deficits ballooned. But in 2025, the landscape is shifting. Record deficits, central banks hoarding gold, and stubbornly high long-term yields and even Russias removal from the swift, USD depreciation has contirnuted significantly to the yields today. A Flood of Debt: Two Decades of Deficits The U.S. hasn’t balanced its budget since 2001. Over the past two decades, annual deficits have grown from modest to massive: 2022–2024 : Deficits remained enormous, with fiscal year 2024 hitting $1.8 trillion—the third-largest ever. The result? A huge flood of Treasury issuance. Every year, markets must absorb more debt, pushing yields higher...