Good morning. Andrew here. We’ve been talking for months about potential problems in the private credit market. Well, here’s a new sign: Blue Owl Capital, one of the biggest private credit fund companies — which partnered with Meta recently to finance construction of a huge data center — has halted redemptions from retail investors. Keep an eye on this space. Meanwhile, we go deep into oil prices rising amid the continued tension with Iran and explore Niko Gallogly’s scoop yesterday on Etsy’s sale of Depop to eBay. (Was this newsletter forwarded to you? Sign up here.)
Who will blink first?The U.S. has continued to build up its military presence in the Middle East, and The Times reports that President Trump is weighing possible strikes against Iran as soon as this weekend. The prospect of more military action — in one of the world’s most volatile regions — has markets on edge. The latest: Brent crude, the global oil benchmark, climbed above $71 a barrel today, a level it last reached in July. S&P 500 futures and stocks in Europe were down. President Trump has called on Tehran to give up its nuclear program, and stop enriching uranium. U.S. and Iranian officials have held indirect talks in Geneva, but some administration officials have grown skeptical that a breakthrough is achievable, and Israel has been making preparations for a possible war, The Times reports. Tehran has been more upbeat. Officials say they have reached a “set of guiding principles” with Washington after talks. Oil prices could surge if talks collapse, analysts say. Military action carries economic and political risks for Trump, threatening to reignite inflation. Trump campaigned on fighting inflation and lowering energy bills, and falling gasoline prices have been a rare bright spot amid a wider affordability crunch. But military intervention in a key route for global oil supplies and shipping could hit households hard. How high could prices go? A major attack on Iran could push oil prices to near $90 per barrel, Jorge León, a senior vice president and the head of geopolitical analysis at Rystad Energy, an independent research firm, wrote to clients earlier this month. Others see more dire consequences. “It is our understanding that senior officials from the region had warned the White House that a war with Iran in the current environment could send prices to triple-digit levels,” Helima Croft, the head of global commodity strategy at RBC Capital Markets, wrote to investors yesterday. Those officials are hoping that potential “calamitous outcome” would prompt Trump to “seek a Greenland-esque off-ramp,” she said, referring to his retreat from threats to seize the semiautonomous island from Denmark.
Walmart says that consumer price increases should slow down. The retail giant reported that sales in the fourth quarter grew 6 percent year-on-year, beating expectations, though it gave a weaker-than-anticipated financial forecast because of potential labor and trade challenges. John David Rainey, Walmart’s C.F.O., told CNBC that price increases partly spurred by President Trump’s tariffs should ease in the coming months, and that retailers had largely “absorbed” the brunt of their costs. Fed officials appear to be in no rush to cut rates. Minutes from the central bank’s meeting last month showed deep divisions among policymakers. Several support holding borrowing costs steady unless inflation cools further. Higher rates could be justified, too, if inflation remains above target. The minutes suggest that President Trump’s choice to succeed Jay Powell as Fed chair, Kevin Warsh, would face resistance if he tries to push for quick, substantial rate cuts, as the president has demanded. Trump reportedly intervenes in Moderna’s flu shot application. The F.D.A. has decided to reverse course and review the application for a seasonal flu vaccine — a move that came after Trump pressured the agency’s commissioner, Dr. Marty Makary, in a White House meeting, according to Politico. (A White House official denied the report.) Robert F. Kennedy Jr., the health secretary, has been critical of the mRNA technology which the shot uses, and canceled $500 million in federal funding for mRNA vaccine development projects last year. Andrew Mountbatten-Windsor is arrested. Former Prince Andrew of Britain, who turns 66 today, was arrested this morning on suspicion of misconduct in public office after accusations that he shared confidential information with Jeffrey Epstein, the convicted sex offender, while serving as a British trade envoy. Several politicians and business officials who were in Epstein’s orbit have lost their jobs since the files were released, but arrests have been rare. “You’re mischaracterizing this”After more than a week of courtroom proceedings, the most anticipated witness in a landmark social media trial finally took the stand: Mark Zuckerberg. Over several hours, Zuckerberg, Meta’s C.E.O., faced tough questions about what his company knew about efforts to hook users on its apps — and repeatedly pushed back against accusations that its products are as addictive and harmful as substances like cigarettes. Zuckerberg was peppered with questions about Meta’s metrics. Lawyers for the plaintiff, a California woman identified as K.G.M., referred to internal documents about user engagement. Among them:
Zuckerberg also faced questions about his control over Meta. A plaintiff’s lawyer asked the C.E.O. about his appearance on “The Joe Rogan Experience” podcast in which he said that, because of his voting power at the company, “I have the benefit of not having to convince the board not to fire me.” Elements of Zuckerberg’s defense included pushing back against claims by the plaintiff’s lawyers — “You’re mischaracterizing this” was a frequent rejoinder — and admissions that he wasn’t good at speaking publicly. (When asked if he had extensive media training, Zuckerberg joked, “I’m actually well-known to be sort of bad at this.”) The stakes are high for Zuckerberg and Meta. K.G.M.’s trial is one of thousands of cases filed against tech giants centered on the addictiveness of social media. By focusing on the structure of apps like Instagram, the plaintiffs are seeking to get around a longstanding legal shield that protects companies from liability for content users post on their platforms. (Several countries and U.S. states are also weighing bans on social media for teens, in many cases, for those under 15 or 16.) Worth noting:
“At a certain point, for some firms, it’s a publicity stunt.”— David Lat, a corporate lawyer turned legal commentator, on the huge increases top lawyers are making to their hourly fees. Rates for partners at the 50 biggest U.S. law firms rose an average of 16 percent last year, The Wall Street Journal reported — and some senior partners are now charging as much as $3,400 an hour. EBay shops in the secondhand aisleOne of the original online bazaars is making a big bet on resale. EBay yesterday announced that it would acquire Depop, a secondhand clothing app popular with Gen Z, from Etsy, Niko Gallogly reports. The online resale sector has posted its shares of misses. Poshmark was sold to Naver, a major search engine in South Korea, in 2023 for $1.6 billion, less than half its I.P.O. price. And eBay’s $1.2 billion bid for Depop is $400 million below what Etsy paid for it in 2021, at the height of the coronavirus pandemic online shopping boom. But investors are still interested. Despite the threat from fast-fashion rivals like Shein, resale vendors are forecasting further growth, as cost-conscious customers seek out better deals. The secondhand apparel market is expected to grow two to three times as fast as the market for new products through 2027. Also consider:
Depop, where shoppers can find items like vintage Coach handbags and Carhartt overalls, had been a growing part of Etsy’s business. Gross merchandise sales last year were $1 billion, a 36 percent increase from 2024. But Etsy has been unwinding a series of acquisitions as it faces wider growth challenges and a declining share price. The market liked the deal. Shares in Etsy and eBay rose significantly in premarket trading after the deal was announced. Strong quarterly earnings released yesterday by eBay may have also helped its rally in shares. Another data point: At eBay, used product sales are growing faster than new product sales. Consumers are “finding that resale and pre-loved are actually more chic and more relevant,” Jamie Iannone, eBay’s C.E.O., told DealBook. We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times.
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