What Does the Historic Rise in Public Debt Mean for the Dollar and Bonds?

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Photo courtesyPeder Beck-Friis, economist at PIMCO

In a recent analysis, Peder Beck-Friis, economist at investment management firm PIMCO, warned about the sustained rise in public debt in G7 countries, highlighting its implications for the U.S. dollar and long-term Treasury yields. According to Beck-Friis, current debt levels are approaching historic highs last seen at the end of World War II.

In his view, these surges have been driven by recent crises such as the 2008 global financial recession and the COVID-19 pandemic, which forced governments to implement extraordinary fiscal measures. “Public debt in advanced economies has followed an upward trajectory for more than a decade, and in the case of the United States, projections from the Congressional Budget Office (CBO) suggest a potential rise to 200% of GDP by 2050 if no changes are made to current fiscal policy,” the analyst warned.

The Dollar Remains Firm, for Now


Despite the concerning trajectory of U.S. debt, Beck-Friis believes the dollar will maintain its status as the dominant reserve currency in the coming years, thanks to its central role in global trade and finance. Currently, nearly 88% of foreign exchange transactions worldwide involve the dollar. “The lack of viable alternatives strengthens the dollar’s position, although the sustainability of this advantage will depend on how the U.S. fiscal outlook evolves,” the economist noted.

Another key point of the analysis is the growing weight of interest payments within the U.S. federal budget. Historically, this type of pressure has led to episodes of fiscal consolidation, as occurred after World War II and again in the 1980s and 1990s. Beck-Friis believes a similar scenario could repeat if financing costs continue to rise.

Finally, the analysis suggests that there is a (though weak) relationship between the rise in public debt (excluding debt held by the Federal Reserve) and a higher term premium on 10-year Treasury bonds. This could result in a steeper yield curve, which would have significant implications for asset managers and the valuation of fixed-income instruments. “The accumulation of public debt could lead investors to demand higher yields on long-term bonds as compensation for future fiscal risk,” Beck-Friis concluded.

Private Debt Attracts Latin Americans: Nearly Two-Thirds Plan to Increase Their Exposure

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The trend of growing interest in private markets has made its mark across the board and shows no sign of slowing down. Latin America is no exception, according to a recently published survey by the specialized information platform Preqin, with a particular appetite for private debt.

These two asset classes, revealed the Latin America Investor Survey for this year, are attracting the most interest among regional investors. When asked which assets they expect to increase their exposure to in the next 12 months, 60% said they anticipated strengthening their bet on private debt.

This was followed by private equity—another area of high interest for Latin American investors of all sizes—with 40%. To a lesser extent, the region is also looking at infrastructure, with 41% expecting to increase their position in the asset class.

These three categories are, in fact, where investment professionals in the region see the main opportunities in Latin America over the next 12 months. Some 58% see greater appeal in private debt, while 46% pointed to private equity and infrastructure.

Regarding the geographic composition of portfolios, the Preqin survey revealed that home bias continues to prevail. Some 67% of the professionals surveyed indicated that Latin America—particularly Brazil and Mexico—offers the best investment opportunities for the next 12 months. This is followed by North America (43%), marking a sharp contrast with the 2024 survey, when 79% preferred the northern region.

Strong International Results


Despite the local bias in terms of future opportunities, when measuring satisfaction with asset performance, foreign portfolios are the clear winners, according to Preqin’s analysis. When asked about the expectations/results balance across various asset classes, investors in the region appear more satisfied with their international portfolios than with their local ones.

Once again, private debt receives the most praise. Some 38% of respondents indicated that their private debt assets exceeded expectations. In contrast, only 22% were surprised by the performance of their domestic private debt portion.

In the case of private equity, 18% saw their international portfolio outperform expectations, compared to just 9% who said the same about their local investments in this asset class.

The exception to the enthusiasm was the real estate investment segment, where none of the investment professionals surveyed saw their portfolios—whether domestic or foreign—exceed expectations.

Despite the strong results, Latin American investors have certain criticisms of foreign managers offering these types of strategies, particularly regarding sector expertise. Looking at the segment of international GPs, 47% of the professionals surveyed by Preqin indicated that the lack of focused experience was the most common mistake among international managers.

Clear Trail Advisors RIA Is Born in Houston, With $850 Million in AUM

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Clear Trail Advisors officially announced its transition to independence through a strategic partnership with Dynasty Financial Partners. The agreement will provide operational and administrative support, strengthen its investment capabilities, incorporate advanced planning and reporting tools, and position the firm for long-term growth, according to a statement released by Dynasty.

Formerly part of Steward Partners, Clear Trail Advisors is based in Houston and manages $850 million in client assets. The firm is led by its Chairman Randy Price, CEO Matt Price, and Matthew Kerns as President.

“Dynasty allows us to maintain fiduciary independence while gaining access to top-tier research, technology, and operational support,” said Randy Price.

The decision to become independent reflects the team’s commitment to objective advice and stronger client service, the statement noted.

As part of its new phase, Clear Trail is implementing improvements in planning, faster performance reporting, and a more proactive client relationship. The firm selected Charles Schwab as its custodian, highlighting its scale, stability, and strong presence in Texas.

“Clear Trail Advisors serves a clearly defined client base, has strong leadership, and is deeply committed to independent, client-centered advice,” said Shirl Penney, Founder and CEO of Dynasty Financial Partners.

The new RIA plans to expand its service model over the next two years by hiring a Director of Financial Planning and adding in-house tax experts, according to the announcement.

Stablecoins Could Become the Largest Offshore Market, Surpassing the Eurodollar

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Stablecoins, cryptocurrencies generally pegged to the U.S. dollar and designed to maintain a stable value, are establishing themselves as a key player in the global financial system. According to an analysis by Jeffrey Cleveland, Chief Economist at Payden & Rygel, this type of digital asset could become the world’s largest offshore market, even surpassing the historic eurodollar market.

In his latest report, Cleveland draws a parallel between the rise of stablecoins in the 21st century and the expansion of eurodollars after World War II. While eurodollars (offshore dollar deposits) helped consolidate the dollar’s dominance internationally, stablecoins could amplify that hegemony in the digital environment. “Could stablecoins further reinforce the dollar’s status as the world’s leading currency? History suggests they could,” the economist posits.

Evolution of Offshore Dollars


He explains that the eurodollar phenomenon dates back to the mid-20th century, when various regulatory and geopolitical conditions led to a growing accumulation of dollars outside the U.S. In the 1970s, the market quintupled, and by the late 1980s, it already totaled $1.7 trillion in offshore deposits. Today, the eurodollar market is estimated to reach $16 trillion.

In his view, stablecoins follow a similar logic, though with a radically different infrastructure. Instead of being managed by banks outside the U.S., they are stored and transferred via public blockchains. Their market value is already approaching $250 billion, with daily trading volumes exceeding $24 billion, nearing that of Bitcoin and surpassing Ether.

“Unlike traditional cryptocurrencies, stablecoins aim to minimize volatility and are mostly backed by real assets. Currently, more than 95% of them are secured by financial instruments such as cash, Treasury bills, or money market assets. Issuing companies like Tether and USD Coin already rank among the top holders of U.S. Treasury debt, with more than $120 billion in sovereign bonds,” Cleveland notes.

Transforming the Global Payment System


Cleveland’s analysis highlights that stablecoins not only replicate many of the functionalities of eurodollars, but also offer competitive advantages that could accelerate their global adoption. These advantages include the ability to conduct transactions with immediate settlement, available 24 hours a day, seven days a week, independent of traditional banking hours. They also offer significantly lower transfer costs, often below three percent and, in some cases, even below one percent of the amount sent.

Added to this is a high level of transparency, as all transactions are recorded in real time on the blockchain, allowing traceability for both users and regulatory authorities. Furthermore, their accessibility far exceeds that of traditional financial systems: anyone with internet access can use stablecoins without intermediaries or bank accounts, opening the door to broader and more global financial inclusion.

These features have already been adopted by the private sector. For example, SpaceX uses stablecoins to collect payments for its Starlink satellite network services. In the past year, the average monthly transaction volume in stablecoins exceeded $100 billion, even surpassing the volume processed by the Visa payments network.

In addition, stablecoins are being used in the decentralized finance (DeFi) market to generate interest, often higher than what traditional banks offer.

Into the Unknown


Cleveland warns that, like eurodollars, stablecoins could pose macroeconomic challenges in the event of liquidity strains or crises of confidence. In 2008, the eurodollar system was one of the focal points of the global financial crisis, due to the pressure to quickly convert offshore deposits into “onshore” dollars.

However, the rise of stablecoins also represents a historic opportunity to strengthen the dollar’s dominance in the digital economy. Despite past efforts by governments to reduce the global influence of the dollar, Cleveland argues that these digital currencies could further deepen its global presence.

“We’ve seen this movie before. Eurodollars cemented the dollar as the hegemonic currency in the 20th century. Today, stablecoins may be writing a new chapter in that same story,” the economist concludes.

They Launch the First ETF That Offers Twice the Daily Returns of the Nasdaq-100 Top 30 Index

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ProShares, provider of leveraged and inverse ETFs, announced the launch of ProShares Ultra QQQ Top 30 (QQXL), the first and only ETF designed to offer twice (2x) the daily performance of the Nasdaq-100 Top 30 Index.

In this way, the company expands its $40 billion range of leveraged and inverse ETFs linked to the Nasdaq-100, which includes ProShares UltraPro QQQ (TQQQ), the largest leveraged ETF in the world.

The Nasdaq-100 Top 30 Index offers concentrated exposure to 30 of the largest and most influential companies in the technology-focused Nasdaq-100 Index, with leading companies such as Nvidia, Apple, and Meta Platforms.

“In recent years, market leadership has concentrated in a group of innovators—many in the technology sector—who are redefining what is possible, a trend that investors want to capture,” said Michael L. Sapir, CEO of ProShares. “With QQXL, investors can now seek twice the daily returns of these market leaders with the ease and convenience of a single ETF trade,” the executive added.

ProShares manages more than $90 billion in assets, pioneered the leveraged and inverse ETF category nearly two decades ago, and remains the largest provider globally. It offers funds linked to major stock indices, individual equities, fixed income, commodities, currencies, cryptocurrencies, and volatility.

Miami Surpasses New York for the First Time as the City of Choice for UHNW Individuals’ Second Residences

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Miami Surpasses New York as the Leading Global Market for Ultra-Luxury Second Homes, According to Altrata Report

Miami has established itself as the global leader in the ultra-luxury second home market, surpassing New York for the first time, according to Residential Real Estate 2025, a report by Altrata sponsored by REALM. The report notes that there are 13,211 individuals who own such properties in the city of Miami, compared to 12,813 in the Big Apple.

The UHNWI (ultra-high-net-worth individuals—those with net assets exceeding $30 million) segment has increasingly chosen the Florida city as a preferred destination, overtaking historic financial hubs such as New York, London, and Dubai.

“Miami has seen a strong influx of ultra-wealthy residents since the pandemic. The most prominent groups have been wealthy entrepreneurs from other parts of the United States and the expansion of an already sizable Latin American diaspora,” Altrata states in the report.

“The city has long been a popular destination for affluent buyers seeking an additional residence, attracted by Florida’s favorable tax regime, warm climate, and coastal location. Second homes account for just over three-quarters of the UHNW residential footprint in Miami—the highest proportion among the top 20 cities,” the report adds.

“We live in a world where wealth is no longer confined by borders,” said Julie Faupel, founder and CEO of REALM, a global luxury real estate membership platform. “Today’s wealthy are more mobile, more diversified, and have a stronger global presence than ever before,” she added.

Despite Miami’s rise, New York still tops the list of the world’s 20 leading cities by overall residential footprint, with over 33,200 UHNW individuals, followed by Los Angeles and Hong Kong, each with residential footprints nearing 20,000. Miami ranks fourth on that list, ahead of London, with nearly 18,000 UHNW residents.

“The luxury real estate market in New York has slowed in recent years, constrained by rising interest rates, limited inventory, and intense global competition in the second-home segment (including from other U.S. cities). Nonetheless, New York remains a powerful magnet for the wealthy, offering a blend of luxury consumption, vibrant culture, high-quality education, and prestigious lifestyle, with Manhattan at the epicenter of the luxury property market,” the report also notes.

Los Angeles and San Francisco rank third and fourth respectively in terms of UHNW individuals with second homes, each with more than twice the number found in the next most popular city, Boston. In both California cities, UHNW presence is fairly evenly split between primary and secondary residences.

Naples and Greenwich stand out as smaller urban centers that are highly sought-after for second homes. The seaside resort town of Naples, in southwest Florida, is an outlier with the highest proportion of UHNW second-home ownership, representing 95% of its ultra-wealthy residential footprint. Greenwich, meanwhile, has a high proportion of second-home ownership similar to Miami, attracting affluent buyers with its proximity and access to Manhattan, coastal location, low tax rates, and expansive luxury properties.

DWS Group Adds Marwin Martinez in Miami as Senior Xtrackers Sales Specialist

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DWS Group adds Marwin Martinez in Miami as senior Xtrackers sales specialist for the US offshore & non-resident clients market, according to a post shared by Martinez on his LinkedIn profile. According to information obtained by Funds Society, he will be responsible for managing relationships with financial intermediaries serving Latin American clients.

“I’m pleased to share that I’m starting a new position as Vice President, Senior Sales Specialist of Xtrackers – U.S. Offshore & NRC Business at DWS Group,” wrote Martinez, a professional with experience in relationship management and a strong track record in the industry.

He worked for six years at asset manager Vanguard, across two separate periods. His last role at Vanguard was similar to his current position at DWS. Prior to that, he spent 11 years at AllianceBernstein, where he held various positions and ultimately served as Assistant VP – Senior Relationship Manager Latin America Institutional, US & Canada Offshore.

Martinez holds a degree in International Business and Finance from Temple University – Fox School of Business and Management, and also holds FINRA Series 7, 6, and 63 licenses.

From Attitude to Aptitude: Why Risk Tolerance Alone Cannot Determine the Appropriate Risk

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The Difference Between the Risk an Investor Is Willing to Take and the Risk They Should Take Is Not Academic—It’s the Difference Between Checking Boxes and Delivering Truly Suitable Solutions

According to Oxford Risk, for many years, advisers and firms have relied on some version of what is often called Attitude to Risk (ATR) as the main— and in many cases, the only—criterion for portfolio selection. However, they believe that ATR was never truly fit for purpose. “It provided an easy number to anchor to, but not a complete picture. It only captures part of what we need to know about an investor, and often not even that particularly well,” the firm argues.

Oxford Risk’s approach begins with a simple premise: the amount of investment risk an investor should take—their Suitable Risk Level (SRL)—must be based on a more complete understanding of who they are and how they relate to their investments. This requires moving beyond a narrow focus on a single attitude and instead considering a combination of key factors:

  • Risk tolerance, understood as a long-term psychological trait that reflects how much risk an investor is willing to take in relation to their total wealth;

  • Risk capacity, representing their financial ability to take on risk, considering time horizon, dependency on assets, income stability, and liquidity needs;

  • Behavioral capacity, referring to their emotional strength to tolerate market volatility, expressed in traits like composure; and finally,

  • Knowledge and experience, which help assess the investor’s familiarity with the investment world and may temporarily limit their exposure to risk.

Each of these components plays a distinct and complementary role in constructing the investor’s SRL.

The Limits of “Attitude” Toward Risk

The term attitude to risk conceals significant complexity. Each investor has multiple attitudes toward risk: long-term and short-term; rational and emotional; domain-specific and general. What matters is not how a person feels about risk today or in response to recent events, but their stable, long-term willingness to balance risk and return across their total wealth over time.

This is precisely what a well-designed risk tolerance assessment should measure. But market RTA tools often fall short: they confuse risk tolerance with optimism, confidence, or knowledge; they fail to isolate the core trait; and they produce unstable results that may change drastically with the markets.

Moreover, ATR—even when well-measured—is only part of the story. Most tools that use ATR completely ignore risk capacity, and with it, the dynamic life context of the investor’s financial situation. In their view, risk tolerance tells us how much risk people are willing to take; risk capacity, how much they can afford to take. “Ignoring the latter can cost decades of compounded growth and lead to very unsuitable long-term outcomes. Suitable risk isn’t what feels safe today, but what supports financial security over time,” they note.

From Investor to Portfolio

At Oxford Risk, they believe that understanding the investor is only half of the equation. “Assigning them the right portfolio also requires knowing the long-term risk level of that portfolio. This is where another mismatch often arises. Too often, portfolio risk is assessed using short-term historical volatility—a highly unstable and context-dependent measure. This leads to inadequate risk labels and poor long-term alignment,” they state.

In their view, what’s needed is stability on both sides: a stable measure of the investor’s SRL, based on proven traits and models over time; and a stable measure of portfolio risk, based on expectations of long-term outcome uncertainty. “Only if both conditions are met can we ensure that the risk match is accurate at the time of recommendation and remains appropriate as both markets and personal circumstances evolve,” they affirm.

Their key conclusion is that attitude to risk was a useful stepping stone, but it is no longer sufficient (indeed, it never truly was). “A truly suitable level of risk must combine: a precise, psychometric measure of risk tolerance; a forward-looking, situational awareness of risk capacity; a behavioral understanding of composure and its effect on behavior; and an appreciation of knowledge and experience and their role in informed decision-making,” they argue.

In their view, only in this way can we deliver investment solutions that align not only with what an investor says or feels, but with who they are, where they are in life, and the best way to support their long-term goals. “Suitability is not a number. It is a relationship (between investor and investment) based on understanding, adapted over time, and empowered by technology that embeds science into every recommendation,” they conclude.

CI Banco Sues the Treasury Department, Intercam Fails to Withstand Pressure and Sells

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The damage is done, and the crisis unleashed by U.S. sanctions on three Mexican financial institutions is now set to be resolved through several avenues: political, judicial, and, in the case of Intercam, through a sale.

The U.S. Department of the Treasury has granted a new extension to CI Banco and Intercam, as well as to the Mexican brokerage firm Vector, which now have until October 20, 2025, to reach agreements and address the findings—or be disconnected from the U.S. financial system. The previous deadline had been set for September 4.

This marks the second time the Financial Crimes Enforcement Network (FinCEN) has extended the deadline.

“This extension reflects the continued measures undertaken by the Government of Mexico to effectively address the concerns raised in FinCEN’s orders, including maintaining temporary administration of the affected institutions to promote regulatory compliance and prevent illicit financing,” the Treasury Department stated in an informational note released Tuesday evening when announcing the extension for the Mexican financial institutions.

“Death Sentence”: CI Banco


The extension was granted despite reports earlier this week that CI Banco filed a lawsuit against the U.S. Department of the Treasury and FinCEN over the money laundering accusations made against it. CI Banco argued that the institution had been given a “death sentence” by being effectively blocked from the U.S. financial system.

The bank accused the Treasury and FinCEN of damaging its reputation and credibility without presenting solid evidence, which immediately triggered a managerial intervention by Mexican authorities in the institution, as well as in the other two implicated entities.

CI Banco has been seriously affected by the accusation. On Tuesday, it was also reported that Grupo Financiero Multiva signed an agreement to acquire all of CI Banco’s trust business assets, although the financial terms of the deal were not disclosed.

However, data from the National Banking and Securities Commission (CNBV) show that, as of the end of June this year, CI Banco’s trust business amounted to 3.102 trillion pesos (around USD 163.266 billion), representing 26.7% of the entire system.

In contrast, Multiva’s trust business stood at 33.733 billion pesos (USD 1.775 billion), just 0.29% of the more than 11.5 trillion pesos (USD 605.264 billion) handled by the banking sector’s fiduciary operations.

“With this transaction, Banco Multiva, in its capacity as trustee, will ensure the continued normal operation within the applicable regulatory compliance framework, guaranteeing the protection of the rights of the parties involved in the trust businesses,” Multiva stated in a message sent to the Mexican Stock Exchange.

Intercam Fails to Withstand Pressure, Sells to Kapital Bank


Intercam could not withstand the pressure triggered by accusations of alleged money laundering operations by the U.S. Department of the Treasury. The institution—which next year would have marked 26 years in operation as a financial group—announced its sale to Kapital Bank.

Kapital Bank, a Mexican financial institution, will acquire the assets, liabilities, branches, and trusts of Intercam Banco, Intercam Casa de Bolsa, and Intercam Fondos. The total value of the transaction was not disclosed.

The acquisition, subject to approval from the CNBV and other regulatory authorities, represents a strategic move for Kapital Bank and an opportunity to strengthen its operational capacity and value proposition for corporate clients.

Kapital Bank announced it will inject USD 100 million to reinforce Intercam’s operations, provide greater financial stability, and ensure the fulfillment of obligations to clients and investors.

Second Extension


The initial deadline to disconnect the accused Mexican institutions from the U.S. financial system had been set for July 21. However, just days before that date, the first extension was granted through September 4.

Now, a second extension has been issued to allow the institutions involved to comply with the orders issued by the Treasury Department. However, while that process unfolds, the damage continues. On Tuesday night, in addition to news of the sale of CI Banco’s trust business, the potential end of Intercam was revealed, as it sells its assets to a smaller bank.

Merrill Lynch Wealth Management Appoints Fabio Concesi as Market Executive for Palo Alto

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Merrill Lynch Wealth Management announced the promotion of Fabio Concesi to market executive for the Palo Alto, California market. Until this past July, Concesi served at the investment bank as associate market executive in the Wealth Management Miami & Islands division.

“I’m pleased to announce that Fabio Concesi has been named market executive for the Palo Alto market,” wrote Brian Ludwick, managing director of Merrill Lynch’s Wealth Management division, on his LinkedIn profile, where he invited others on the platform to congratulate Concesi on his new role at the firm.

In a post on his own profile on the same social network, Concesi wrote that he feels “honored and grateful for this incredible opportunity” to lead Merrill’s Palo Alto market and “our talented financial advisors and associates.”

According to his LinkedIn post, they aim to “empower our teams in Palo Alto and San Mateo with all the resources they need to help clients achieve their financial goals and life purposes.”

A graduate of Universidade Candido Mendes in Rio de Janeiro with a postgraduate law degree from the Universitat de Barcelona, Concesi began his professional career in 2004 at PwC Brazil before joining Citi, where he worked for nearly 10 years, based in Barcelona, Zurich, and Miami. In January 2016, he joined Merrill Lynch Miami, covering Wealth Management.