The Rebrew Intelligencer
And ye shall know the truth, and the truth shall make you free. John 8:32
Data-Center Lender Pays Near 15 Per Cent as Nasdaq Slides 2.14 Per Cent
Technology Shares Close the Worst Week Since June as CoreWeave Falls 11.91 Per Cent in a Day and Its Bonds Are Priced Like a Borrower in Trouble.
The Dow Ends the Week Ahead on the Strength of the Doctors, the Grocers and the Banks, While Lenders to the Builders of the Thinking Machines Ask When the Rent Comes In.
NEW YORK, Oct. 16 (Special). Technology stocks fell hard on Friday and closed the worst week for the Nasdaq since June. The Nasdaq composite lost 2.14 per cent and ended at 26,140.03. The Standard and Poor's average of five hundred stocks dropped 1.09 per cent to 7,659.44. The Dow Jones average of thirty industrials slipped 0.34 per cent to 52,002.41, yet finished the week higher than it began, as money moved into health care, consumer staples and the banks.
The trouble lay in debt. CoreWeave, a company that rents out computing power from data centers, the vast windowless buildings where the machines that answer questions are kept in rows and let by the hour, saw its shares fall 11.91 per cent on Friday to $61.39. Reports put its loss for the week at about a quarter of its value. CNBC reported that the yield on its 9.625 per cent notes due 2032 had climbed near 15 per cent. A bond's yield rises as its price falls, and 15 per cent is the sort of rate lenders ask of a borrower they fear may not repay.
The company is rated B+ by S&P Global Ratings, below investment grade, and reports differ on how much it owes, from $35 billion to more than $50 billion. Contracts that pay off if a borrower defaults, known as credit default swaps, were priced in one report to imply roughly 60 per cent odds of default within five years. Such a figure measures the nervousness of the market, not the intentions of the company.
Chief Executive Mike Intrator told his staff in a memo, as reported by several outlets, that the selloff was irrational and that the company's backlog of contracted business, $104.2 billion at the end of the second quarter, more than supports its debts. Critics replied that a backlog is revenue promised and not cash in hand.
Analysts tied the week's losses to three worries: the debt-financed building of data centers, competition from Chinese makers of chips, and rising oil prices that kept inflation in view. Chip makers fell across the board on Friday, with Micron and SanDisk among the weakest, and the Dow's mild decline was cushioned by the sturdier and duller concerns.
By Wire
Wholesale Prices Up 6.3 Per Cent in the Year
Producer Index Rose 1.3 Per Cent in September, More Than Twice the Forecast, and Retail Sales Also Beat the Economists.
WASHINGTON, Oct. 15. The Labor Department reported Thursday that prices received by producers, the figure the trade calls wholesale prices, rose 1.3 per cent in September and 6.3 per cent from a year earlier, the largest 12-month rise since late 2022. Economists polled by Dow Jones had looked for 0.6 per cent and 5.5 per cent. Energy was the main cause, and prices of final demand goods rose 2.6 per cent in the month, the largest one-month increase since the series began in December 2009.
Shoppers had not yet stopped. The Commerce Department said retail sales rose 0.8 per cent in September, against a forecast of 0.3. Sales at gasoline stations rose 6.4 per cent on higher prices, and without them the gain was about 0.2 per cent. The figures are not adjusted for prices, so part of the rise is the same goods costing more.
Brewers Sweep Dodgers and Win the Pennant
Milwaukee Goes to Its First World Series Since 1982, Taking the Fourth Game 6 to 4 After Trailing by Four Runs.
LOS ANGELES, Oct. 15. The Milwaukee Brewers beat the Los Angeles Dodgers 6 to 4 on Thursday night and won the National League Championship Series in four straight games, ending the Dodgers' bid for a third consecutive title. Garrett Mitchell hit a home run in the sixth inning to put Milwaukee ahead, having worked the count full against the left-handed reliever Tanner Scott. David Hamilton added a solo home run off Edwin Diaz in the ninth.
The Brewers last played in the World Series in 1982, when they were members of the American League. They will meet the winner of the American League series between Cleveland and Tampa Bay, which was still under way. The World Series is scheduled to open on Friday, Oct. 23.
Pope Recovering After Lung Operation
Vatican Says Leo XIV Had a Good Night, Took Breakfast and Has Begun to Walk; Audiences Are Cancelled Through Oct. 20.
VATICAN CITY, Oct. 15. Pope Leo XIV underwent surgery on Tuesday at Gemelli Hospital in Rome, where surgeons removed the lower lobe of his right lung. Tests confirmed a lung adenocarcinoma, a common form of lung cancer. The Vatican said the operation was successful and that there were no complications.
On Thursday the Vatican reported that the pope had a good night, got up and took breakfast, and had begun respiratory therapy and walking in his room. He issued his first message since the operation, to Catholics marking the tenth anniversary of Amoris Laetitia. His audiences through Oct. 20 have been cancelled, and the Vatican has announced no change to his planned journey to South America in November.
Strange but True
New Dinosaur Named From a Fragment Collected in 1924
LONDON, Oct. 14. Researchers at the Natural History Museum have named a new meat-eating dinosaur from a piece of skull that an amateur collector, Reginald Walter Tooley, picked up at the foot of a cliff on the Isle of Wight, and that the museum acquired in 1924. It lay overlooked in a drawer until this week, when the findings appeared in the journal Royal Society Open Science. Invictibellatrix amberina, a name meaning unconquered female warrior, measured about 16 feet and weighed as much as a large tiger, and lived some 120 million years ago.
Hand-Built Computer of 1976 Fetches $1,148,200
BY WIRE, Oct. 14. An Apple-1, built in 1976 by the company now best known for telephones, sold at auction through Bonhams for $1,148,200 including the buyer's premium, a record for an Apple-1 sold commercially. Two bidders contested it for 28 minutes, and the machine, signed on its motherboard by the co-founder Steve Wozniak, had been estimated at $500,000 to $800,000. The same machine sold at auction in 2013 for roughly two-thirds of a million dollars.
What's Brewing in Real Estate
Mortgage Rate Holds at 7.40 Per Cent, Highest Since Late 2023
Freddie Mac Says the 30-Year Average Stopped a Seven-Week Climb, With Treasury Yields Still Setting the Pace for Lenders.
McLEAN, Va., Oct. 15. Freddie Mac reported Thursday that the average rate on a 30-year fixed mortgage was 7.40 per cent this week, unchanged from last week and the highest since late 2023. It ended a run of seven weekly increases. A year ago the average stood at 6.27 per cent, which puts the rise at 113 basis points.
Lenders price mortgages off the 10-year Treasury yield. It jumped on the news that consumer prices were up 3.7 per cent in the year, then fell nearly 10 basis points on Thursday to about 5.1 per cent as investors bought bonds during the stock sell-off. The consensus, according to Yahoo Finance, is that the Federal Reserve will hold its rate at its October meeting and possibly raise it in December.
Freddie Mac's survey covers conforming purchase loans to borrowers with 20 per cent down and excellent credit, so quotations to ordinary borrowers run higher than the average.
The Editor's Desk
On Borrowing, and the Branch Line.
We read that a firm which lets out thinking machines by the hour has borrowed a sum on which two newspapers cannot agree, and that its lenders now ask fifteen per cent for the pleasure of waiting. We have borrowed from no one, but our late father once took a share from Mr. Virgil Hatcher that paid nothing whatever, which taught us at an early age that the greater the promise, the greater the rate, and the greater the rate, the longer the wait.
We have not been able to learn whether the warehouses stand upon a former railway siding. We have our suspicions. The railroad interest, having no more trains to sell, has plainly turned to selling cabinets, and we call upon the Securities and Exchange Commission to inquire.
Our own savings sit in a coffee tin on the kitchen shelf. They have paid no interest in forty years, and they have never been downgraded. Mrs. Langston observed that the tin is also uninsured, and that the shelf is not high. We declined to discuss it before breakfast.
Letters to the Editor
The Thermostat That Learns.
Dear Editor: My new thermostat informs me that it has learned my habits. It has learned that I am out on Thursdays, and on that day it lets the house go to fifty-eight degrees, and I am not out on Thursdays. I have asked it to unlearn the matter, and it has replied with a picture of a leaf. [Show it the door, and the leaf. ED.]
A Householder, Wade Hampton Boulevard.
The Doorbell Has Opinions.
Dear Editor: My doorbell now photographs every caller and reports to my telephone. This week it reported eleven squirrels, a cat and the postman, in that order of alarm. I wish to know whether a man may still be surprised on his own porch. [He may, sir, by the bill. ED.]
A Retired Clerk, Pelham Road.
A Menu Without Paper.
Dear Editor: At a restaurant I was handed no menu, only a small square of black and white checks, and told to hold my telephone before it. My telephone saw the menu. I did not, the print being too small for either of us. [Order the soup. ED.]
A Diner, Laurens Road.
Have a word for Mr. Langston? Write to the Editor. Any letter the paper prints runs word for word.
Around Town
For the Lord's Day.
The rich ruleth over the poor, and the borrower is servant to the lender. Proverbs 22:7.
The Weather.
Mrs. Langston went across the street on Thursday for the barometer and returned with it under her arm. Mr. Royce Whitfield, whom we do not know, sent word by a boy that a clerk of his had signed for the parcel in error and that he regrets the inconvenience. We regard this as the first correct act of the Clarion in our recollection, and have not replied. The instrument has been hung again at a height the nephew Dewey cannot reach without a chair, and it reads Change. A reliable forecast for Greenville could not be had by press time, and readers are referred to the window.
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