The Wrap: Gold Rebounds, AI Stocks Slump & Trump Takes Crypto Profits
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This week in the July 4th edition of “The Wrap,” we feature the top events in Washington and on Wall Street over the past week. And please watch “The Wrap with Chris Whalen” on The Julia LaRoche Show every Saturday on YouTube to catch our discussion of what’s hot and what’s not in the world of finance and investing.
July 3, 2026 | The U.S. national soccer team secured a 2-0 victory over Bosnia and Herzegovina in the World Cup round of 32, advancing to the next stage. Team USA actually scored their second goal a man down after star striker Folarin Balogun was sent off with a red card. The US team plays Belgium on Monday in Seattle.
In Washington, President Donald Trump’s latest public disclosure shows that his various crypto ventures pulled in an estimated $1.4 billion last year, Emma Tucker at The Wall Street Journal reports. Yet roughly two-thirds of investors who bought into his signature meme coin are deep in the red. If you’ve followed President Trump’s investment history over the decades, he usually manages to profit at the expense of everyone else in the room.
“Citigroup, Manufacturers Hanover (a predecessor of JPMorgan), the British lender NatWest, and of course Bankers Trust—had endured hundreds of millions of losses at the hands of Trump,” wrote David Enrich in his 2020 book "Dark Towers."
Also this week, President Trump said acting Director of National Intelligence Bill Pulte would be in his role for “a month or two months or something” and is empowered to “declassify almost everything,” he told reporters on Wednesday. In the meantime, Jay Clayton, the president’s nominee for the full-time DNI post, will have his Senate confirmation hearing in two weeks, Trump said.
Private Credit Firms Sinking
The majority of publicly traded business development companies (BDCs) — the visible part of the private credit market — have turned unprofitable due to falling asset values and rising costs, a Reuters analysis shows, in the latest sign of pressure building in this highly leveraged corner of finance. Higher interest rates are pressing corporate borrowers across the board.
Source: dataQollab
A Reuters analysis of balance sheet data from S&P Global Market Intelligence examined 53 publicly traded BDCs, finding that their loan losses and debt costs have jumped. A number of those BDCs are also utilizing more off-balance-sheet borrowing to conceal support for portfolio companies.
Len Tannenbaum, founder of Tannenbaum Capital, told Bloomberg's Carrol Massar that some BDCs could buckle as the pressure mounts, depending on how leveraged they are, their overall exposure to troubled loans and “how long they’ve swept things under the rug” using such methods as "payment in kind" or PIK to avoid default.
“PIK is POOP — Principal On Outstanding Principal — and it doesn’t matter how much, POOP smells,” Tannenbaum said. “That pile of stuff builds up and when liquidity is draining, it all shows up.”
Meanwhile, as AI stocks swoon, Blackstone (BX) is selling its stakes in a trio of data centers across Northern Virginia for $3.5 billion, cashing out of part of a bet it made less than three years ago. Digital Realty Trust will pay $1.2 billion of cash and offer $2.3 billion of its shares to Blackstone funds. BX has a talent for selling private equity assets when the operational and/or political prospects of the investment change.
Housing Inflation Surges
Co-op and condo prices in New York City rose to a record $1.25M median sales price as year over year gains extended into a sixth straight quarter, reports housing market expert Jonathan Miller.
The market share of sales above the $1 million threshold reached the highest share on record due to a lack of inventory, he relates, and overall apartment sales declined annually with the exception of the $2 million to $4 million range.
Gold, Silver Rally
In the precious metals markets, over the past five trading days, gold and silver have experienced a strong bullish rebound, with both metals recovering from recent lows and posting solid gains.
Of note, gold's disappointing performance over the past four months may not signal the end of the precious metals rally this year. "Gold is not done," Goldman Sachs co-head of global commodities research Samantha Dart said in a note on Sunday evening.
Noting the precious metal has gained 123% since 2022, Dart and her team wrote, "we continue to see further upside, driven by both structural and eventually cyclical factors." We continue to accumulate positions in gold and silver, taking advantage of what we see as ST weakness in both metals.
We Don’t Need More Credit Scores
This week in The Institutional Risk Analyst, we featured an important comment by David Battany, Executive Vice President, Capital Markets, at Guild Mortgage Company. He talked about the disconnect between the desire to improve the use of credit scores in the world of mortgage finance and the poor quality of consumer credit data maintained by the like of Experian, TransUnion (TRU) and Equifax (EFX). Bottom line:
“If all three bureaus had identical data, we would know this because they would all produce nearly identical credit scores. The current tri-merge rules give no incentive for any bureau to get all data… and arguably provides a disincentive to do so. If each bureau had a complete data set, each would produce effectively the same and correct credit score, so there would no longer be a need for a tri-merge report.”
Jobs, Jobs, Jobs
“There are too many inconsistencies within the jobs report to make sense of the June data relative to May that showed a 57,000 increase in payrolls but a 507,000 plunge in household employment,” writes John Ryding of Brean Capital.
“Yesterday, Chair Warsh described the labor market as "steady" and said that it is important to look at "trends" in the data. Noting that the Fed cannot influence the labor force or immigration trends (so staying in its lane), is the labor market still steady when examining trends? Yes.”
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