The current geopolitical tensions could lead to a boom for mining companies and emerging markets.
Between 2003-2008 there was an emerging markets and energy companies market capitalization boom, which followed the 1999-2001 dot com boom and bust.
Currently, a similar situation could develop.
We have now a technology artificial intelligence, AI driven boom carried to a large extent to money flows to the lightly regulated private credit markets. The current circa 2 trillion USD of assets under management private credit industry size lead inflows in AI technology companies.
The recent TriColor, First Brands, Market Financial Services, MFS large profile bankruptices and funds like Blue Owl, Apollo holding private credit redemption could signal a slowdown of the AI boom or even an AI bust
Funds could easily flow into emerging markets and energy and mining companies, especially.
The private credit 2 trillion USDs of assets under management go to a large extent to finance high yield loans for private equity buyouts.
If there is a sudden stop to the private equity and private credit funds financing mainly mid sized technology deals, the artificial intelligence AI boom could slow down significantly.
And if the AI boom turns into a bust, caused either by the Federal Reserve raising rates or money suddenly stopping flowing into private equity and private credit, defined by the Nasdaq Composite falling more than 62 % from its recent peak, the next boom where the money flows is emerging markets and energy, resources, commodities mining company, according to Wolfteam Ltd.'s projections and estimates.
No comments:
Post a Comment