THE TWO MEN WHO COULD RUN THE FED

THE TWO MEN WHO COULD RUN THE FED

Good morning,

We are down to the finalists. Donald Trump has reportedly narrowed his list for the next Fed Chair to two names: Kevin Warsh and Kevin Hassett. The market is watching this race closely, and even Jamie Dimon has weighed in with his pick.

Meanwhile, the broader market is feeling a bit queasy. Stocks have slipped, yields are pushing up against 4.85%, and the cost to insure Big Tech debt is spiking. It seems the easy ride is hitting some turbulence.

And just to keep things interesting: Oracle bonds are trading like junk, and regulators in South Korea are now forcing day traders to watch educational videos before they’re allowed to buy stocks. It’s going to be a busy week.

Getting started.

The Pulse

As of 12/12/2025 market close.

Markets

  • U.S. stocks took a hit on Friday as the tech sector started selling off again.
    • The S&P 500 pulled back from its all-time high.
    • Both the S&P and Nasdaq finished the week in the red.
    • The small-cap Russell 2000 touched a new record before reversing to close lower.
  • The 30-year Treasury yield climbed to 4.85%, its highest level since September.
  • Fear is creeping into credit: Volumes in Big Tech CDSs (credit default swaps) have jumped 90% since September as investors look to hedge against AI-related debt.

Earnings

  • This week's lineup:
    • Wednesday: Micron, General Mills
    • Thursday: Accenture, Nike, FedEx, CarMax, Darden Restaurants
    • Friday: Carnival
  • See the full calendar here.

Prediction Markets

  • Trump has shortlisted Hassett and Warsh for Fed chair, boosting Warsh’s chances. Jamie Dimon has also voiced support for Warsh.
  • Trade your odds on Polymarket.

Headline Hunt

  • Regulators are now forcing traders in Korea to watch mandatory training videos before they can trade. (FT)
  • The adoption of AI on Wall Street is expected to trigger a significant hiring boom. (BBG)
  • Trump has officially named Warsh and Hassett as the top contenders to lead the Federal Reserve. (WSJ)
  • Jamie Dimon is backing Kevin Warsh for the next Fed Chair role. (FT)
  • The debate over rate cuts in the bond market is about to heat up with a heavy week of data ahead. (BBG)
  • The BOJ is expected to pledge more interest rate hikes at their policy meeting this week. (RT)
  • Equity funds just recorded their largest weekly inflow in five weeks. (RT)
  • Wall Street is rotating out of Big Tech and into old-school names for growth in 2026. (BBG)
  • Oracle debt is trading like junk bonds as delays in data centers spook investors. (BBG)
  • OpenAI is scrapping its six-month 'vesting cliff' to stay competitive in the talent war. (WSJ)
  • Asset managers are looking at stocks in India as a prime hedge against AI risks. (BBG)
  • Hedge funds are piling into commodities as they hunt for alpha. (FT)
  • The revival of the carry trade that boosted emerging markets is driving optimism for 2026. (BBG)
  • The IPO mania in China is so intense that investors have just a 0.02% chance of getting stock. (BBG)
  • Dealmaking in Switzerland has surged to record highs despite the strength of the franc. (FT)
  • Check sizes for VC seed funding broke records this year. (CB)
  • Nasdaq is seeking to block IPOs that look vulnerable to market manipulation. (RT)
  • Hedge fund Peconic posted a 79% gain YTD thanks to a concentrated bet on three stocks. (BBG)
  • RenTech is looking to tweak its trading models following volatility from meme stocks. (WSJ)
  • Banco Sabadell has banned Cerberus from purchasing its non-performing loans. (BBG)
  • Kirkland & Ellis is facing heat over a lawsuit alleging a credit-market monopoly. (WSJ)
  • Fundraising in Asia is having a blockbuster year, led by activity in Hong Kong and India. (BBG)
  • Banks in India are looking to double the cap on M&A finance as deal volume soars. (BBG)
  • Wells Fargo is on a hiring spree to fuel its investment banking ambitions. (RT)
  • Brown University canceled finals following a deadly shooting. (BBG)
  • A former JPMorgan banker took a 50% pay cut to go work for MrBeast. (ET)

The Deal Room

M&A / Investments

  • Tech PE firm Thoma Bravo is discussing merging shipping software firm Auctane with logistics provider WWEX Group and injecting $500M to create a $12B entity.
  • ServiceNow, the AI workflow platform, is in advanced talks to buy cybersecurity startup Armis for $7B.
  • SK Capital is closing in on a deal to acquire Swiss drug distributor Swixx Biopharma for $1.8B.
  • Intel is in advanced discussions to buy AI chip startup SambaNova for $1.6B, debt included.
  • Chinese miner Jiangxi Copper has raised its bid for the UK’s SolGold to $1.13B.
  • Crypto giant Tether has made a binding all-cash offer to buy a 65.4% stake in Juventus FC from the Exor family office for $634M.
  • The Big 12 conference is finalizing a deal with RedBird Capital Partners and Weatherford Capital to unlock $500M in funding for schools.
  • Harbour Energy has agreed to buy the UK North Sea subsidiaries of Waldorf Energy and Waldorf Production for $170M.
  • First Eagle Investments agreed to buy Diamond Hill Investment Group in an all-cash deal valued at $473M, a 49% premium.
  • Moroccan conglomerate Holmarcom is negotiating to buy a 67% stake in BMCI bank from BNP Paribas.
  • Australian miner Ioneer is eyeing a bid for a bundle of Rio Tinto's boron assets in the US.
  • Germany is in early talks to buy a majority stake in the German power grid owned by Dutch utility TenneT.
  • Tether-backed farming firm Adecoagro has offered to buy a 50% stake in fertilizer maker Profertil from YPF.
  • PE firm TDR's $1.3B acquisition of Costa Coffee from Coca-Cola is on the verge of collapsing over valuation issues.

Venture Flow

  • Elon Musk's SpaceX is selling secondary shares at an $800B valuation.
  • AI no-code startup Emergent is raising a $60M round led by Khosla Ventures.
  • PsiThera, a drug-discovery startup, raised a $47.5M Series A led by Samsara Biocapital and Lightstone Ventures.
  • The Owl AI, a sports officiating startup, raised an $11M seed round led by S32.
  • Worktrace AI, an automation startup, raised a $9.3M seed round co-led by Conviction and 8VC.
  • Blockchain security startup TestMachine raised $6.5M led by Blockchange Ventures, Decasonic, Delphi Ventures, and New Form Capital.
  • Data privacy protocol ORO AI raised a $6M seed round led by a16z Crypto and Delphi Ventures.

IPO / Direct Listings / Issuances / Block Trades

  • SpaceX has started the bake-off process for what could be the biggest IPO ever.
  • Chinese robot maker Galbot is eyeing a Hong Kong IPO at a $3B-$4B valuation.
  • Blackstone-backed Horizon Industrial Parks is prepping a $500M IPO in India.
  • Fintech Wealthfront raised $485M in its IPO at a $2.6B valuation.
  • Warburg Pincus-backed lender Truhome Finance wants to raise $300M in an India IPO at a $1.5B valuation.

The Debt Desk

  • Apollo shorted loans of software companies like Internet Brands, SonicWall, and Perforce over AI concerns before closing the positions.
  • Thoma Bravo is talking to lenders like Blackstone to raise $5B in private credit to fund the Auctane-WWEX Group merger.

Bankruptcy Watch

  • Brazilian airline Azul got the green light to exit Chapter 11, cutting $2.6B in debt and raising $950M from United Airlines and American Airlines.
  • Investors in Zhejiang Zhejin Asset Operation failed to get paid on $2.8B of products backed by Sunriver Holding.
  • First Brands is asking the court for $250M in receivables after its $1.1B DIP loan fell apart.
  • TPG exited most of its stake in Anastasia Beverly Hills in a restructuring that wiped out 85% of its investment.
  • Chinese developer Vanke is facing debt failure after creditors rejected a delay on a $283M bond payment.
  • Saks subordinated debt has crashed to 12 cents on the dollar ahead of a $100M payment due this month.
  • Roomba maker iRobot filed for Chapter 11 and will hand control to Shenzhen PICEA Robotics and Santrum.
  • Creditors of Tricolor want investigations into what JPMorgan and Fifth Third Bank knew about the fraud.

Fresh Capital

  • UK hedge fund Fulcrum Asset Management raised $2.8B from Millennium for its equities strategy.
  • UK hedge fund Armar Capital raised $850M from Millennium.
  • Aberdeen is buying $2B of US closed-fund assets from MFS.
  • MML Capital raised over $740M for a continuation fund.

Crypto Corner

  • Terraform Labs founder Do Kwon was sentenced to 15 years for the $40B crypto collapse.
  • Interactive Brokers is letting retail clients fund accounts with stablecoins.
  • Strategy is staying in the Nasdaq 100 index.
  • Circle, Ripple, BitGo, Paxos, and Fidelity Digital Assets all got approval for national trust bank charters.
  • Has AI reduced the workload in M&A – or just moved it around? Read UpSlides's The AI Paradox in M&A report to see what pros in the US and UK are saying.
  • Josh Brown wrote a smart piece on why market concentration in a bull market isn't a bug, but a feature.

Today’s Meme Pick

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