Despite our view that beef prices will remain elevated this year amid the smallest US cattle herd size in more than 60 years and mounting concerns over New World screwworm detections in Texas, live cattle futures in Chicago have tumbled this month as speculative traders unwind bullish bets.
Chicago live cattle futures have dropped to their lowest point since December 2025, as speculative traders liquidate positions amid weakening cash trade and falling wholesale beef prices.
The commodities firm CIH Cattle Team pointed out on X that both speculative and commercial traders are reducing their long exposure: "Live Cattle OI in a major downtrend! Down 11k over the past month and 83k contracts year-over-year; OI lowest since 2022 for July."
Live Cattle OI in a major downtrend!
Down 11k over the past month and 83k contracts YoY
OI lowest since 2022 for July#cattle #beef #ag pic.twitter.com/bGT12q5L8h
Feeder Cattle Index -$3.55
CIH Est: $365.52; Previous: $369.07
2,963 head dropping off (15% of index); 1,979 head traded (11%) #ag #cattle #feedercattle pic.twitter.com/8uQtyXI9da
Analysts from Hightower Report noted that the "market is vulnerable to further losses" as the physical trade slows and funds continue to liquidate positions, adding that a strong cash trade had been driving the long bull market, but cash is now a liability.
Chris Lehner, a senior livestock analyst at ADM Investor Services, was quoted by Bloomberg as saying that the decline in cattle prices was mostly driven by spreads, with traders selling cattle positions and buying lean hog futures.
"Consumer beef demand has been strong, but indications of growing consumer headwinds could weigh on the sector going forward," University of Georgia Assistant Professor Will Secor wrote in a note for the Livestock Marketing Information Center.
Recent USDA data show that wholesale beef values have fallen to their lowest levels since late February. The national average retail price for ground beef remains sticky around $7 per pound.
Analysts at Bernstein spoke with industry experts this week and concluded that beef prices are likely to remain high for several reasons:
We left the conversation with greater conviction that beef prices will remain elevated for a while.
The experts emphasized how the current state of herd size, which has reached a 60-year low, is unlikely to expand given that (1) land has become more expensive and is being used by developers (due to population migration into Texas), making it hard for farmers to raise more cattle, (2) farmers are opting to sell heifers (given the current high spot prices) rather than raising them, as they fear that prices will eventually fall, making it economically sub-optimal to wait 2 years to increase the herd size through the eventual calves of that heifer. (3) recreational use of land has also become more profitable, with a buck sold at "30k a kill" vs "$500 per cattle".
Important to understand: When Will The Cattle Cycle Turn? BofA Has Answers For Beef Lovers
Tyler Durden Fri, 07/17/2026 - 07:45Authored by Ed Dowd via Beyond the Narrative,
Private Credit: The New Junk Bond Market...Except It Lacks Transparency, Liquidity & Is About To Be Stress Tested
HistoryPrivate credit was born from the ashes of the Great Financial Crisis. In the aftermath of that debacle, regulators moved to limit the risks banks could take. Loans deemed too risky were no longer being originated by commercial banks. To fill that void, non-bank lenders stepped in, creating what is known as private debt or direct lending market. You may know these vehicles as Private credit funds, also referred to as business development companies (BDCs). These funds raised capital from pensions, endowments, insurance companies, and wealthy individuals.
Unlike junk bonds or corporate bonds, these loans are not publicly traded and are typically held to maturity. In fact Private credit has quietly taken a big chunk of market share from the traditional junk bond market. These private deals give borrowers speed, confidentiality, and customized terms they can't always get from public bonds, while investors get higher yields and perceived lower volatility. The public junk bond market has actually improved in average credit quality as the riskier companies moved into these opaque structures.
The funds have traditionally targeted middle-market companies with revenues between $10 million and $1 billion, though the strategy has recently expanded to larger firms and bigger deals, including those in AI. Last November Morgan Stanley estimated that of the $1.5 trillion in external financing needs for the projected AI datacenter buildout that as much as 50% could be funded by Private credit (hold that thought).
One notable drawback of private credit funds is their high degree of opacity also called a lack of transparency. These funds disclose limited information about their loans and mark their own books, which can potentially mask deterioration in the portfolio. Because of the illiquid nature of these assets and the lack of a public trading market, the investments are inherently illiquid and often include gating provisions should too many investors want their money back at the same time.
GrowthThe industry started the way any small new industry does: by filling a niche need. The fee structure, while lower than that of private equity, remained extremely attractive to managers, with total effective fees often running from 3% to 4% of NAV. The pitch to investors was straightforward: higher yields than public bonds and lower reported volatility because there is no daily mark-to-market. The risks, of course, are illiquidity and higher default rates in a recession (hold that thought).
Bottom line: The fat fee structure attracted many firms to get into this business and the Wall Street sales machine was engaged, went into action and the money flowed into these firms.
The Last Two Years of GrowthThe industry itself is not nefarious, but like all credit markets, it is prone to excesses at the end of a cycle. Growth in assets under management (AUM) over the last two years (2024 & 2025) has been estimated at 50% to 75%. The entire category is now estimated to stand between $2.5 trillion and $3 trillion in AUM. When you examine credit creation across the broader banking system over that same period, most of the incremental loan growth in the economy flowed to these non-bank institutions from commercial banks (See chart below).
Source: Phinance Technologies US Economy Outlook 2026The key question investors should ask is: With this explosive growth in AUM and competition for loans in the industry, have the funds found enough creditworthy borrowers in an already high-risk category, or rather did the inflows chase incrementally "junkier" credits with looser loan covenants?
Trouble in ParadiseStarting in the fourth quarter of last year, several high-profile Private credit bankruptcies emerged, most notably First Brands and Tri-Color Auto. Questions about the structure of Private credit funds began to surface, particularly around opacity and illiquidity. This led to investor redemptions and the gating of several prominent funds in Q1, including those from BlackRock, Blackstone, Apollo, Cliffwater, Blue Owl, and others. The pressure continued into Q2, with redemption requests accelerating across these major platforms. The problem is not improving, rather it is getting worse.
ImplicationsEffectively, the Private credit markets are now shut down and at best stalled. They are in redemption mode which could ultimately lead to liquidation mode at subpar pricing. While some new loans may still be originated, the market as a whole has slowed dramatically. As noted previously, we saw that the marginal credit creation of the past two years in the US economy has come from an industry known for being opaque and illiquid...and that driver of credit is now in question. The critical questions are: how large are the losses, how long will this downturn in private credit last, and what will recovery rates look like? PIMCO (one of the largest fixed income investors) has recently stated that the credit default cycle has begun and that losses will be higher than expected, with clear implications for the broader economy.
To make matters worse the lack of transparency and public quotes make determining what is going on in these funds extremely difficult for the capital markets to assess other than the fact that we are seeing outflows from the sector. The investors have unanswered questions and are like mushrooms growing in the dark on manure.
Private credit woes may also have implications for the commercial banking system. I mentioned above that most of the credit creation from commercial banks in 2024 & 2025 was Private credit and Private equity. Private credit funds rely on bank credit lines (subscription lines, NAV facilities, revolvers) for liquidity and leverage. These have grown rapidly with contingent liquidity to Non-Depositary Financial Institutions (NDFIs) standing at approximately $2.3 trillion overall, with Private credit market share rising over the last few years. Simultaneous drawdowns from credit stress in Private credit could transmit shocks to bank balance sheets. I don't believe it's a systemic problem yet but it bears watching. At a minimum it would likely curtail commercial bank enthusiasm for overall credit creation in the economy (i.e. consumer loans, commercial & industrial loans and real estate loans).
Earlier I told you to hold two thoughts in your head. First that AI funding datacenter buildout was contingent on the Private credit market to fund 50% of the external financing, and secondly, the default rates in Private credit would be higher in a recession as advertised initially by the industry. Given that flows in the Private credit industry are going the wrong way, and the industry is effectively paused...I don't see how AI data center build out will be funded by Private credit in the near term, and secondly I believe the industry's recession default assumptions are about to be tested very soon and could be higher than expectations.
ConclusionCredit is the lifeblood of economic activity, and recently a great deal of it has flowed through this new channel. Significant losses have yet to be fully recognized, and they will ultimately hit pension funds, insurers, asset managers, and wealthy individuals who hold these investments. The commercial banks also have exposure to this market and losses in this sector could lead to a broader credit contraction. And finally, AI financing could become prohibitively expensive and pause or dramatically slow the capital expenditure cycle, affecting what has now become about 45% of the S&P 500's market capitalization.
I believe the feedback loops are already underway and are likely to spread to the economy and eventually the equity markets.
P.S. If you are interested in a much deeper nitty gritty dive into Private credit markets and the risks check out the Unicus Investor on Substack: The Unicus Investor - Blackstone's BCRED: Earned $0.54. Paid $0.60. Cut to $0.54.
Disclosure: I have no financial relationship with Unicus...I just think they do good work.
"Be careful that you do not forget the Lord your God... Otherwise, when you eat and are satisfied, when you build fine houses and settle in them, and when your herds and flocks grow large and your silver and gold increase and all you have is multiplied, then your heart will become proud and you will forget the Lord your God..." Deuteronomy 8:11-14
Tyler Durden Fri, 07/17/2026 - 07:20Azerbaijani President Ilham Aliyev lavished praise on President Donald Trump's diplomacy, telling a group of journalists at the 4th Shusha Global Media Forum that the president achieved peace between Azerbaijan and Armenia in mere months, a historic feat that both Democrat and Republican administrations had failed to accomplish over nearly 30 years.
White House Photo by Daniel TorokWhen asked by Breitbart News reporter Joshua Klein what distinguished Trump's approach, Aliyev said the difference was one of mindset for the willingness to treat an entrenched conflict as something to be settled rather than contained.
"Previous administrations spent nearly three decades pursuing policies that effectively froze the Armenia-Azerbaijan conflict rather than resolving it," Aliyev said, noting that Trump "approached the conflict from an entirely different perspective."
The Azerbaijani president called Trump "a person who loves peace" who "sees peace as an opportunity."
"Trump and his team understood Azerbaijan's concerns, worked to persuade Armenia that peace served both countries' interests and ultimately created such a framework that peace became possible," the leader added.
Those negotiations culminated at the White House last August, when Trump brought together Aliyev and Armenian Prime Minister Nikol Pashinyan.
The two leaders signed a Joint Declaration while their foreign ministers initiated a comprehensive peace agreement. The accord created a joint U.S.-Azerbaijani working group charged with carrying out its provisions within six months.
"For the first time in my experience, American officials kept their word so strictly," the Azerbaijani President said.
Aliyev said the deal opened the door to something larger, a Strategic Partnership Declaration between Washington and Baku, and described the relationship between the two nations as having reached "unprecedented" heights.
"This is amazing, this is unbelievable," he said. "This is something which we could only dream about."
Trump, rarely one to pass up praise, shared the Breitbart News article on Aliyev's remarks, prompting the Azerbaijani leader to heap on still more.
Mr. President (@realDonaldTrump), Thank you for sharing my remarks from the Shusha Global Media Forum, where I described you as a “Man of Peace,” citing Breitbart. With less than a month remaining until the first anniversary of the historic Washington Summit, I would like to… pic.twitter.com/02Lcs2lPKk
— Ilham Aliyev (@presidentaz) July 16, 2026"Mr. President, Thank you for sharing my remarks from the Shusha Global Media Forum, where I described you as a "Man of Peace," citing Breitbart," Aliyev wrote on X. "With less than a month remaining until the first anniversary of the historic Washington Summit, I would like to once again express my sincere appreciation for your indispensable role in advancing lasting peace between Azerbaijan and Armenia. Your leadership has made a historic contribution to bringing our region closer to peace, stability, and prosperity."
"You truly are a Man of Peace," he concluded.
Tyler Durden Fri, 07/17/2026 - 06:55Authored by Ross Pomeroy via RealClearScience,
For years, scientists have hypothesized that safe, cheap, generic drugs like metformin and rapamycin could slow aging, based on promising findings in animal models. But despite the evidenced hope, little has been done to see if these drugs actually slow aging in humans. There have been no rigorous clinical trials exploring whether metformin or rapamycin prolong life and and boost health.
How is it possible that metformin and rapamycin, long used to respectively treat diabetes and prevent organ transplant rejection, have had their anti-aging potential ignored for so long? To conspiracy-minded critics of 'Big Pharma', the answer is obvious: there's no money in it. In this case, they seem to be correct. Speaking at the 12th Aging Research and Drug Discovery (ARDD) meeting convened at the University of Copenhagen last summer, industry leaders conceded the point.
"Repurposing cheap, off-patent drugs like metformin fails mathematically. Phase 3 clinical trials cost hundreds of millions of dollars. Companies cannot recover this money without a patent monopoly. Therefore, the industry tests new, patented drugs for specific diseases."
Rapamycin costs between $40 and $150 per month out of pocket. Metformin is even cheaper, between $4 and $20 per month. To pharmaceutical companies, this meager revenue simply doesn't justify an expensive clinical trial to treat a nebulous medical condition like "aging," which insurers don't even consider reimbursable. To put it bluntly, treating aging with generic drugs may be economical and worthwhile for humans and society as a whole, but it isn't commercially viable for pharmaceutical companies.
The industry leaders speaking at ARDD explained a strategy that makes more financial sense.
"Industry tests new, patented drugs for specific diseases. During these trials, researchers simultaneously measure aging biomarkers like epigenetic clocks. This secondary strategy generates the hard numbers of regulators demand. The goal is to force regulators to classify aging as a reimbursable medical condition. This mirrors how objective data transformed obesity from a lifestyle choice into a treated disease."
So it's possible that what recently happened with obesity and GLP-1s will one day happen with aging.
In the meantime, independent institutions are trying to launch efforts to explore metformin and rapamycin's anti-aging potential in humans. The American Federation for Aging Research has - for a decade now - sought "visionary donors" to begin their Targeting Aging with Metformin (TAME) Trial, a six-year study testing whether metformin can delay development or progression of age-related chronic diseases in 3,000 adults aged 65-79. Earlier this year, scientists at The University of Texas at San Antonio secured funding from the National Institute on Aging to carry out a including a "randomized, placebo-controlled clinical trial involving approximately 84 older adults who will receive either daily rapamycin, intermittent dosing or a placebo" for six months, while monitoring the treatment's effects.
Tyler Durden Fri, 07/17/2026 - 06:30