| Commercial real estate has been behind the eight ball for some time now, for all those pandemic-fallout-work-from-home reasons we’ve heard. But now there’s a really bad sign as to how deep the hole goes. For the first time since the financial crisis, investors in top-rated bonds backed by commercial real estate debt are getting hit with losses. Buyers of the AAA portion of a $308 million note backed by the mortgage on a building in midtown Manhattan got back less than three-quarters of their original investment after the loan was sold at a steep discount. It’s the first such loss of the post-crisis era, says Barclays. As for the five groups of lower ranking creditors? They got wiped out. Market watchers say the fact the pain is reaching all the way up to top-ranked holders, overwhelming safeguards put in place to ensure their full repayment, is a testament to how deeply distressed pockets of the US commercial real estate market have become. “These losses,” warns Barclays strategist Lea Overby, “may be a sign that the commercial real estate market is starting to hit rock bottom.” —David E. Rovella Over at Starwood Real Estate Income Trust, they’re taking the drastic step of imposing tighter limits on investors’ ability to pull money from the $10 billion fund, which is managed by Barry Sternlicht’s Starwood Capital Group. The move is the latest indication that higher-for-longer interest rates are causing cracks in the commercial-property market. SREIT and competitors including Blackstone Real Estate Income Trust faced rising pressure in the second of half of 2022 when investors began requesting more money back. Private credit’s historic rise is creating a problem that most asset managers would love to have: too much cash in their coffers. Dry powder, or the amount of money committed to private credit funds that has yet to be deployed, is at a record. That’s in part because demand for their capital from buyout firms remains tepid. What’s more, bank leveraged finance desks are increasingly seeking to poach back business. The result has been what some have called a “race to the bottom.” The universe of 401(k) accounts with balances of $1 million or more at Fidelity Investments rose to a record in the first quarter. With stocks surging, the number of retirement account millionaires jumped 15% from the prior quarter and 43% since March 2023. Average retirement account balances, meanwhile, hit their highest level since the end of 2021, rising to $125,900 for 401(k)s and $127,745 for IRAs.  As Archegos Capital was cratering in March 2021, it began trying to pull excess cash from trading accounts across Wall Street. At the time, it had about $470 million with Goldman Sachs. But instead of withdrawing the money, an Archegos staffer accidentally wired the amount to Goldman—and the bank didn’t immediately give it back. That, as testimony at Archegos chief Bill Hwang’s fraud trial in Manhattan showed, left his family office down almost $1 billion as it scrambled to prop up positions. A few days later, the firm was blown to pieces by massive margin calls in its now-notorious $10 billion implosion. Nikki Haley was once perceived by many Republicans as their hope for redeeming a party that had been taken over by “a morally corrupt, lying and craven narcissist,” Mary Ellen Klas writes in Bloomberg Opinion. But by announcing Wednesday that she will be voting for Donald Trump after spending months skewering him as “unfit for office,” “unhinged,” “diminished” and a chaos agent, Klas says Haley shamelessly proved what many Americans believe.  Nikki Haley, left, and Donald Trump Photographer: Mark Wilson/Getty Images The International Monetary Fund welcomed Zimbabwe’s introduction of a new bullion-backed currency as a big step forward, its first substantive comment yet on the ZiG since it was launched last month. “The introduction of ZiG represents an important policy action accompanied by several complementary policy changes,” the lender said. ZiG, short for Zimbabwe Gold, was unveiled on April 5. It is the southern African nation’s sixth attempt in the last 15 years to establish a functioning currency. Along NATO’s eastern flank, member states are ramping up defenses against any future Russian aggression. Two years of war in which Kremlin forces have killed tens of thousands of Ukrainians convinced NATO that what was once unthinkable is no longer. The plan is for hundreds of thousands of troops to eventually be rotated among its border states, with alliance members such as Germany planning a permanent presence. But to match a militarized Russian economy, NATO members must spend a lot more on defense. And the possibility of a NATO-disdaining Donald Trump taking power again has them worried America will shirk its commitment, further emboldening Vladimir Putin. In the Bloomberg Originals mini-documentary The High Price of Deterring Russia, we head to the Baltics to see firsthand where the new Cold War is taking shape.  In the Baltics, multinational brigades from Germany, Canada and the UK will make up part of the alliance’s promised alert force of 300,000 troops. Above, German armor during a 2022 exercise. Photographer: Sean Gallup/Getty Images Europe Flies buzz around a skull rotting in the desert. One lands on the brow, but immediately, a lizard wriggles out of an eye socket to swallow it whole. No sooner does the animal lick its lips than a roaring motorbike rolls over it, smashing flies, lizard, skull and all into the dust. Welcome to the pitiless world of Australian auteur George Miller. The director is back with Furiosa: A Mad Max Saga, the prequel to 2015’s Mad Max: Fury Road, the Oscar-winning reboot of the celebrated 1980s post-apocalyptic trilogy that made Mel Gibson (the original Max) a star. But for the first time, there are no Maxes to be found. No matter—the film is breathtaking.  Chris Hemsworth in Furiosa: A Mad Max Saga Courtesy of Warner Bros. Pictures Get the Bloomberg Evening Briefing: If you were forwarded this newsletter, sign up here to receive Bloomberg’s flagship briefing in your mailbox daily—along with our Weekend Reading edition on Saturdays. The Big Take Asia podcast: Each week, Bloomberg’s Oanh Ha reports on critical stories at the heart of the world’s most dynamic economies, delivering insight into the markets, tycoons and businesses driving growth across the region and around the world. Listen in here. Bloomberg Wealth: Can prosperity and instability comfortably coexist? Join us in Hong Kong on June 5 as we gather leading investors, economists and money managers for a day of solutions-driven discussions on wealth creation. Speakers include Hong Kong Exchanges and Clearing Limited Chief Executive Bonnie Y Chan and Hong Kong Monetary Authority Chief Executive Eddie Yue. Learn more. | 
