Capital Structure Just Lost Its Anchor

Markets still look orderly.

Indexes are steady. Volatility is higher, but contained. Credit spreads have not snapped wider.

But the repricing is happening underneath.

Capital stacks built on “easy refinance” assumptions are now being tested by governance risk, funding competition, and a shifting risk-free anchor.

It showed up first around the Federal Reserve.

Trump named Kevin Warsh as the next Fed chair this morning. Gold fell 7%. Silver dropped 16%—its worst day since 2013. The dollar bounced off four-year lows.

That same day, Coinbase’s CEO went public about a Davos confrontation with Jamie Dimon over stablecoin rules. And the White House threatened to decertify Canadian aircraft over a Gulfstream certification dispute.

Different headlines. Same signal.

Capital conditions are tightening before demand cracks.

The coming Fed transition is not just “policy.” It is governance uncertainty that feeds straight into term premium, duration pricing, and refinance confidence. When the anchor becomes disputed, capital tightens quietly.

That is the private-markets setup for 2026. Demand can hold and businesses can execute, while financing tolerance shrinks. The next stress won’t start with earnings misses. It will start with wider spreads, tighter covenants, delayed exits, and less leverage capacity.

Private markets don’t reprice on headlines. They reprice when capital conditions change.

When the risk-free base, the rules, or the funding pipes become less reliable, capital starts acting like a stressed lender. Discount rates rise. Refi windows narrow. Leverage assumptions break—often before NAVs move.

PMD’s frame is structural: if your stack depends on assumed stability, it is now exposed.

Let’s be real.

Most investors froze at the bottom. Fear won. That window is gone.

But the recovery just opened a second chance — and in some ways, it’s even better. This time, there’s confirmation.

The crash wiped out hype and exposed which cryptos actually matter. What survived? Fundamentals.

One crypto is flashing the same setup we saw before massive runs:
8,600% (OCEAN)
3,500% (PRE)
1,743% (ALBT)

Strong on-chain data. Growing network. Active development.

Yet the price still hasn’t caught up.

That gap won’t stay open for long.

See the crypto before this window slams shut.

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At Davos last week, JPMorgan CEO Jamie Dimon confronted Coinbase CEO Brian Armstrong over claims that banks are blocking digital asset legislation.

This wasn’t just noise. It was balance-sheet defense.

The dispute centers on the CLARITY Act’s treatment of stablecoin rewards. Armstrong helped derail a Senate markup on January 14 after learning language would restrict crypto firms from offering yield on stablecoins. He posted: “We’d rather have no bill than a bad bill.”

Bank of America’s CEO warned stablecoins could pull trillions from deposits. The White House scheduled a February 2 meeting with bank and crypto groups to break the deadlock.

This is not a “crypto adoption” story. It is a funding competition story.

If stablecoin rewards act like deposit substitutes, banks defend funding by tightening credit terms. That pressure flows into sponsor lending, subscription lines, and NAV facilities.

Armstrong’s “everything exchange” plan—equities, prediction markets, commodities—also pushes Coinbase closer to services PE firms use to manage liquidity.

PMD Take:

This is not a crypto adoption story. It is a funding competition story. When stablecoin rewards behave like deposit substitutes, banks protect balance sheets by tightening credit terms, not by losing deposits quietly. That pressure flows directly into sponsor lending, subscription lines, and NAV facilities.

Investor Signal: Expect tighter bank-intermediated leverage, wider spreads, and stricter covenants even without a spike in losses. Deposit sensitivity reduces lending tolerance first.

Trump announced Thursday the U.S. would decertify Bombardier Global Express jets and other Canadian-made aircraft unless Canada certifies Gulfstream’s 500, 600, 700, and 800 series. He also threatened 50% tariffs if the issue is “not immediately corrected.”

There are 2,678 Bombardier planes registered in the U.S.

Airlines called the move “an incredibly bad idea.” Analysts warned that turning safety certification into a trade tool creates a new lever for retaliation.

The authority is debated. The precedent is the point.

This is operating-permission risk entering the capital stack.

When certification and cross-border approvals can be politicized, underwriting shifts from credit risk to enforceability and timing risk. The asset can still perform. Financing can still become conditional.

That adds a variable many 2024 diligence frameworks did not stress: geopolitical certification risk, especially for leasing portfolios with Canadian exposure.

PMD Take:

This is operating permission risk entering the capital stack. When certification and cross-border approvals can be politicized, underwriting shifts from credit risk to enforceability and timing risk. Assets still perform, but financing becomes conditional.

Investor Signal: Assets tied to regulatory validation will face higher haircuts, tighter docs, and longer financing timelines. Duration is being repriced as governance risk.

Gold fell 7% Friday morning, testing $5,000. Silver dropped 16% from its $121 peak to around $100—its worst single-day move since 2013.

The trigger was Trump’s nomination of Kevin Warsh as Fed chair. Markets read the pick as hawkish and dollar-supportive, and that was enough to unwind crowded “debasement” trades.

Positioning was stretched. Silver ETF turnover hit $40B on January 26. Chinese demand ran hot enough that the Shanghai Futures Exchange rolled out cooling measures. Gold’s RSI hit 90.

This isn’t a fundamentals break. It’s a collateral unwind.

When crowded hedges gap lower, margin behavior tightens across the system. Private-market leverage depends on collateral staying calm.

Gold is still up 17% in January and silver is up 45% YTD, but the momentum premium is gone. That whiplash can tighten metals-backed lending and pull liquidity from less liquid positions.

PMD Take:

This is not a fundamentals story. It is a collateral unwind. When crowded hedges gap lower, margin behavior tightens across the system. That matters for private markets because leverage assumptions depend on stable collateral values and lender confidence.

Investor Signal

Advance rates, margin requirements, and fund-level financing terms will tighten before asset-level performance changes. Collateral volatility now constrains leverage tolerance.

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Kevin Warsh was named as the next Fed chair.

Markets reacted fast: gold down, dollar up. The read was hawkish.

For private markets, the bigger issue is governance and timing risk around the transition.

Senator Thom Tillis pledged to block Fed nominees until the Justice Department resolves its investigation tied to Powell and the Fed’s HQ renovation. Powell called it a “pretext” for political pressure. Either way, it can delay confirmation.

Powell’s term ends in May. The gap between nomination and confirmation could last months.

That gap turns the “risk-free anchor” into a spread variable. Refi math can wobble even if the 10-year yield looks stable.

The 10-year held around 4.24%, but the term premium inside it is shifting. Longer-duration assets face discount-rate uncertainty that has nothing to do with cash flows.

Many private credit deals written in 2021–2023 assumed a rate path that no longer exists. And the “true” default rate—once you include selective defaults and liability management—already looks closer to 5%. Governance-driven uncertainty shrinks the margin for error.

Marks can stay smooth while terms move. The adjustment starts with capital: tighter covenants, higher haircuts, and less leverage—before NAVs formally move.

Investor Signal: Treat refinancing assumptions as stressed variables, not base cases. Governance-linked discount rates require wider spreads, lower leverage, and stronger docs. If your stack relies on smooth refinancing, stable term premium, or unquestioned institutional continuity, it is no longer conservative.

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Private markets aren’t facing a demand shock. They’re facing a capital structure reset.

Governance uncertainty is rising. Funding competition is intensifying. Financing tolerance is tightening before marks adjust.

The Fed anchor is contested.
Deposit competition is real.
Certification is becoming a trade lever.
Crowded collateral trades are unwinding.

PMD is positioned for assets that are still clear under wider spreads, tighter covenants, and uncertain refi windows.

In this cycle, access to capital is earned through structure, not optimism.