infinityhedge
PART 3: Circular Deals & Asset Life * Should we worry about so-called "circular deals"? In the telecom boom of the late 1990s, in which optical fiber became overbuilt, fiber-owning companies engaged in transactions with each other that permitted them to…
PART 4:
* FINANCIAL REALITY:
"The AI data centre boom was never going to be financed with cash alone... JPMorgan analysts have done some sums on the back of a napkin, or possibly a tablecloth, and estimated the bill for the infrastructure build-out would come to $5tn (not including a tip).". ...(&) we have good reason to expect close to $0.5t in spending next year. Meanwhile, the biggest spenders (MSFT, Google, Amazon, Meta & Oracle) had only about $350b in the bank, collectively, as of the end of the Q3.
* (JPM estimate that to drive a 10% return on their modeled AI investments through 2030 would require —$650bln of annual revenue into perpetuity, which is an astonishingly large number. But for context, that equates to $34.72/mo from every current iPhone user, or $180/mo from every Netflix subscriber: infinityhedge)
(OpenAI needs to raise at least $207bn by 2030 so it can continue to lose money, HSBC estimates. Based on a total cumulative deal value of up to $1.8tn, OpenAI is heading for a data centre rental bill of about $620bn a year — though only a third of the contracted power is expected to be online by the end of this decade. HSBC’s model assumes that OpenAI’s rental costs will be a cumulative $792bn between the current year and 2030, rising to $1.4tn by 2033. HSBC’s estimates are very optimistic because Google is excluded entirely & we have china also)
* Oracle, Meta, google have issued 30y bonds to finance AI. In the case of the latter two, the yields on the bonds exceed those on Treasurys of like maturity by 100 basis points or less. Is it prudent to accept 30 years of technological uncertainty to make a fixed-income investment that yields little more than riskless debt? And will the investments funded with debt – in chips and data centers – maintain their level of productivity long enough for these 30-year obligations to be repaid?
(Oracle sold $18bn in bonds in Sept. alone; Meta sold $30bn in recent weeks and raised another $27bn in private debt last month; Alphabet sold $25bn in bonds. CoreWeave, small by comparison, has issued $7.5bn in debt this year.......Oracle is the only one with negative free cash flow. Its debt-to-equity ratio has surged to 500%: infinityhedge). Oracle’s cash burn increased in the quarter and its free cash flow reached a negative $10 billion. Overall, the company has about $106 billion in debt.
(Oracle Bonds are now trading more like junk bonds, as some data centers delay reports add to fears about profits from its AI investments. Paper losses for investors that bought the $18 billion of high-grade notes that Oracle sold in Sept. now totals about $1.35 billion. Cost of protecting Oracle’s debt against default jumps to highest since 2009)
* The use of off-balance sheet financing via SPVs, which were among the biggest contributors to Enron's precariousness and eventual collapse. SPV is a way to make it look like a company isn't doing the things the SPV is doing and doesn't have the debt the SPV does. Hyperscalers are setting up SPVs to hold data center assets and debt, keeping leverage off their main balance sheets. Marks warns that this creates "systemic risk" where the true leverage of the system is hidden from investors and regulators.
* For AI infra, the warning signs are flashing: vendor financing proliferates, coverage ratios thin, and hyperscalers leverage balance sheets to maintain capex velocity even as revenue momentum lags. We see both sides – genuine infrastructure expansion alongside financing gymnastics that recall the 2000 telecom bust. The boom may yet prove productive, but only if revenue catches up before credit tightens. When does healthy strain become systemic risk? That's the question we must answer before the market does.
* FINANCIAL REALITY:
"The AI data centre boom was never going to be financed with cash alone... JPMorgan analysts have done some sums on the back of a napkin, or possibly a tablecloth, and estimated the bill for the infrastructure build-out would come to $5tn (not including a tip).". ...(&) we have good reason to expect close to $0.5t in spending next year. Meanwhile, the biggest spenders (MSFT, Google, Amazon, Meta & Oracle) had only about $350b in the bank, collectively, as of the end of the Q3.
* (JPM estimate that to drive a 10% return on their modeled AI investments through 2030 would require —$650bln of annual revenue into perpetuity, which is an astonishingly large number. But for context, that equates to $34.72/mo from every current iPhone user, or $180/mo from every Netflix subscriber: infinityhedge)
(OpenAI needs to raise at least $207bn by 2030 so it can continue to lose money, HSBC estimates. Based on a total cumulative deal value of up to $1.8tn, OpenAI is heading for a data centre rental bill of about $620bn a year — though only a third of the contracted power is expected to be online by the end of this decade. HSBC’s model assumes that OpenAI’s rental costs will be a cumulative $792bn between the current year and 2030, rising to $1.4tn by 2033. HSBC’s estimates are very optimistic because Google is excluded entirely & we have china also)
* Oracle, Meta, google have issued 30y bonds to finance AI. In the case of the latter two, the yields on the bonds exceed those on Treasurys of like maturity by 100 basis points or less. Is it prudent to accept 30 years of technological uncertainty to make a fixed-income investment that yields little more than riskless debt? And will the investments funded with debt – in chips and data centers – maintain their level of productivity long enough for these 30-year obligations to be repaid?
(Oracle sold $18bn in bonds in Sept. alone; Meta sold $30bn in recent weeks and raised another $27bn in private debt last month; Alphabet sold $25bn in bonds. CoreWeave, small by comparison, has issued $7.5bn in debt this year.......Oracle is the only one with negative free cash flow. Its debt-to-equity ratio has surged to 500%: infinityhedge). Oracle’s cash burn increased in the quarter and its free cash flow reached a negative $10 billion. Overall, the company has about $106 billion in debt.
(Oracle Bonds are now trading more like junk bonds, as some data centers delay reports add to fears about profits from its AI investments. Paper losses for investors that bought the $18 billion of high-grade notes that Oracle sold in Sept. now totals about $1.35 billion. Cost of protecting Oracle’s debt against default jumps to highest since 2009)
* The use of off-balance sheet financing via SPVs, which were among the biggest contributors to Enron's precariousness and eventual collapse. SPV is a way to make it look like a company isn't doing the things the SPV is doing and doesn't have the debt the SPV does. Hyperscalers are setting up SPVs to hold data center assets and debt, keeping leverage off their main balance sheets. Marks warns that this creates "systemic risk" where the true leverage of the system is hidden from investors and regulators.
* For AI infra, the warning signs are flashing: vendor financing proliferates, coverage ratios thin, and hyperscalers leverage balance sheets to maintain capex velocity even as revenue momentum lags. We see both sides – genuine infrastructure expansion alongside financing gymnastics that recall the 2000 telecom bust. The boom may yet prove productive, but only if revenue catches up before credit tightens. When does healthy strain become systemic risk? That's the question we must answer before the market does.
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infinityhedge
PART 4: * FINANCIAL REALITY: "The AI data centre boom was never going to be financed with cash alone... JPMorgan analysts have done some sums on the back of a napkin, or possibly a tablecloth, and estimated the bill for the infrastructure build-out would…
PART 5:
OTHER POTENTIALLY WORRISOME FACTORS:
* A speculative asset (AI)...we don't know how much of it we're really going to need in two to five years.
* Lender personnel with incentives to make loans but no exposure to long-term consequences.
* The chance that future generations of AI chips will be more powerful, obsoleting existing ones or reducing their value as backing for debt.
* The possibility that the supply of AI capacity catches up with or surpasses the demand.
* Powerful competitors who vie for market share by cutting rental rates and running losses.
DOT-COM COMPARISON:
Bear Case (Similarities):
* A "change-the-world" narrative driving val.
* Suspect, circular revenue deals.
* The proliferation of SPVs and off-balance-sheet debt.
* $1 billion seed rounds
Bull Case (Differences):
* Product Reality: Unlike the "vaporware" of 1999, AI products exist at scale and have hundreds of millions of users.
* The absence of an IPO craze with prices doubling in a day.
* Well-established main players with revenues, profits, and cash flow
* Reasonable p/e ratios: Microsoft: 69x (2000) vs 32x (2025), Cisco: 101x (2000) vs. Nvidia's 30x (2025) (This valuation discrepancy is the strongest argument against a bubble)
OTHER POTENTIALLY WORRISOME FACTORS:
* A speculative asset (AI)...we don't know how much of it we're really going to need in two to five years.
* Lender personnel with incentives to make loans but no exposure to long-term consequences.
* The chance that future generations of AI chips will be more powerful, obsoleting existing ones or reducing their value as backing for debt.
* The possibility that the supply of AI capacity catches up with or surpasses the demand.
* Powerful competitors who vie for market share by cutting rental rates and running losses.
DOT-COM COMPARISON:
Bear Case (Similarities):
* A "change-the-world" narrative driving val.
* Suspect, circular revenue deals.
* The proliferation of SPVs and off-balance-sheet debt.
* $1 billion seed rounds
Bull Case (Differences):
* Product Reality: Unlike the "vaporware" of 1999, AI products exist at scale and have hundreds of millions of users.
* The absence of an IPO craze with prices doubling in a day.
* Well-established main players with revenues, profits, and cash flow
* Reasonable p/e ratios: Microsoft: 69x (2000) vs 32x (2025), Cisco: 101x (2000) vs. Nvidia's 30x (2025) (This valuation discrepancy is the strongest argument against a bubble)
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infinityhedge
PART 5: OTHER POTENTIALLY WORRISOME FACTORS: * A speculative asset (AI)...we don't know how much of it we're really going to need in two to five years. * Lender personnel with incentives to make loans but no exposure to long-term consequences. * The chance…
PART 6:
HISTORICAL ANALOGUES:
* AI's closest historical analogue here may be not electric lighting but radio.
* When RCA started broadcasting in 1919, it was immediately clear that it had a powerful info tech on its hands. But less clear was how that would translate into business. "Would radio be a loss-leading marketing for department stores? A public service for broadcasting Sunday sermons? An ad-supported medium for entertainment?".. "All were possible. All were subjects of technological narratives." As a result, radio turned into one of the biggest bubbles in history – peaking in 1929, before losing 97% of its value in the crash. This wasn't an incidental sector; RCA was, along with Ford Motor, the most high-traded stock on the market. It was "the Nvidia of its day."
* In 1927, Lindbergh flew the first solo nonstop transatlantic flight from NY to Paris...It was the biggest tech demo of the day (ChatGPT-level-launch). "Expert investors appreciated correctly the importance of airplanes & air travel,".."the narrative of inevitability largely drowned out their caution. Technological uncertainty was framed as opportunity, not risk. The market overestimated how quickly the industry would achieve technological viability and profitability."....As a result, the bubble burst in 1929 – from its peak in May, aviation stocks dropped 96% by May 1932.
* Both helped inflate a bubble so big that when it burst, in 1929, it left us with the Great Depression.
* "The railroads were a bubble, they transformed America. Electricity was a bubble, & it transformed America. Broadband build-out of the late-1990s was a bubble that transformed America. I am not rooting for a bubble, and quite the contrary, I hope that the US economy doesn't experience another recession for many years. But given the amount of debt now flowing into AI data center construction, I think it's unlikely that AI will be the first transformative technology that isn't overbuilt and doesn't incur a brief painful correction".
IS AI FOLLOWING THE PATTERN?
"AI Could Be the Railroad of the 21st Century. Brace Yourself"
Sama:
"While the parallels to past bubbles are inescapable, believers in the technology will argue that "this time it's different."...."But on the third hand, it must be borne in mind that behavior based on the belief that it's different is what causes it to not be different!"
HISTORICAL ANALOGUES:
* AI's closest historical analogue here may be not electric lighting but radio.
* When RCA started broadcasting in 1919, it was immediately clear that it had a powerful info tech on its hands. But less clear was how that would translate into business. "Would radio be a loss-leading marketing for department stores? A public service for broadcasting Sunday sermons? An ad-supported medium for entertainment?".. "All were possible. All were subjects of technological narratives." As a result, radio turned into one of the biggest bubbles in history – peaking in 1929, before losing 97% of its value in the crash. This wasn't an incidental sector; RCA was, along with Ford Motor, the most high-traded stock on the market. It was "the Nvidia of its day."
* In 1927, Lindbergh flew the first solo nonstop transatlantic flight from NY to Paris...It was the biggest tech demo of the day (ChatGPT-level-launch). "Expert investors appreciated correctly the importance of airplanes & air travel,".."the narrative of inevitability largely drowned out their caution. Technological uncertainty was framed as opportunity, not risk. The market overestimated how quickly the industry would achieve technological viability and profitability."....As a result, the bubble burst in 1929 – from its peak in May, aviation stocks dropped 96% by May 1932.
* Both helped inflate a bubble so big that when it burst, in 1929, it left us with the Great Depression.
* "The railroads were a bubble, they transformed America. Electricity was a bubble, & it transformed America. Broadband build-out of the late-1990s was a bubble that transformed America. I am not rooting for a bubble, and quite the contrary, I hope that the US economy doesn't experience another recession for many years. But given the amount of debt now flowing into AI data center construction, I think it's unlikely that AI will be the first transformative technology that isn't overbuilt and doesn't incur a brief painful correction".
IS AI FOLLOWING THE PATTERN?
"AI Could Be the Railroad of the 21st Century. Brace Yourself"
Sama:
"When bubbles happen, smart people get overexcited about a kernel of truth"
"While the parallels to past bubbles are inescapable, believers in the technology will argue that "this time it's different."...."But on the third hand, it must be borne in mind that behavior based on the belief that it's different is what causes it to not be different!"
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infinityhedge
PART 6: HISTORICAL ANALOGUES: * AI's closest historical analogue here may be not electric lighting but radio. * When RCA started broadcasting in 1919, it was immediately clear that it had a powerful info tech on its hands. But less clear was how that would…
PART 7:
BOTTOM LINE:
no one should go all-in; no one should stay all-out; A moderate position seems like the best approach. These days, people promoting real estate funds say, "Office buildings are so yesterday, but we're investing in the future through data centers," whereupon everyone nods in agreement. But data centers can be in shortage or in oversupply, and rental rates can surprise to the upside or the downside. As a result, they can be profitable… or not…
THE PRODUCTIVITY PARADOX:
* "If a lot of jobs are lost to AI, how will people be able to afford the additional goods AI enables to be produced?".
* if we eliminate large numbers of junior lawyers, analysts, doctors, where will we get the experienced veterans capable of solving serious problems requiring judgment and pattern recognition honed over decades?
* Finally, I'm concerned that a small number of highly educated multi-billionaires living on the coasts will be viewed as having created technology that puts millions out of work. This promises even more social and political division than we have now, making the world ripe for populist demagoguery.
* More Americans are turning 65 in 2025 than in any preceding year, and that approximately 16M baby boomers will retire between now and 2035. Could AI merely make up for that? There's an optimistic take for you.
BOTTOM LINE:
no one should go all-in; no one should stay all-out; A moderate position seems like the best approach. These days, people promoting real estate funds say, "Office buildings are so yesterday, but we're investing in the future through data centers," whereupon everyone nods in agreement. But data centers can be in shortage or in oversupply, and rental rates can surprise to the upside or the downside. As a result, they can be profitable… or not…
THE PRODUCTIVITY PARADOX:
* "If a lot of jobs are lost to AI, how will people be able to afford the additional goods AI enables to be produced?".
* if we eliminate large numbers of junior lawyers, analysts, doctors, where will we get the experienced veterans capable of solving serious problems requiring judgment and pattern recognition honed over decades?
* Finally, I'm concerned that a small number of highly educated multi-billionaires living on the coasts will be viewed as having created technology that puts millions out of work. This promises even more social and political division than we have now, making the world ripe for populist demagoguery.
* More Americans are turning 65 in 2025 than in any preceding year, and that approximately 16M baby boomers will retire between now and 2035. Could AI merely make up for that? There's an optimistic take for you.
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infinityhedge
MEMORY SUPERCYCLE! Massive AI Demand: * OpenAI in October signed initial deals with Samsung and SK Hynix to supply chips for its Stargate project, which would require up to 900,000 wafers per month by 2029. That's about double current global monthly High…
Technological Recession for Consumers Powered by AI: INFINITYHEDGE
* RAM Shortage: The core issue driving this crisis is that memory manufacturers Samsung, SK Hynix, and Micron have strategically reallocated production capacity from consumer segments to HBM for AI data canters. AI data centers will consume massive quantities of HBM, LPDDR5X, and GDDR7 memory.
* Micron and Samsung Both are also pulling out of the consumer SSD market at the same time. Samsung is reportedly halting SATA SSD production in 2026, which would put pressure on the pricing of both SATA and M.2 NVMe SSD drives; Samsung's withdrawal has significantly more serious consumer implications than Micron's decision to exit the Crucial consumer brand.
* Samsung reportedly Also abruptly raised the DDR5 contract prices by 100%.
Impact:
* Samsung: expected to increase price of smartphones or downgrades on specs
* Dell: Price increases of 15-20% from mid-Dec. 2025.
* Lenovo: Price increases from Jan 1, 2026.
* HP: warned Price increases starting in May 2026.
* Memory downgrades: Entry-level Laptops may drop to 8GB, mid-range to 12GB, & high end may drop to 16GB RAM. Entry-level phones may drop to 4GB, mid-range to 6-8GB, & high end to 12GB.
* Storage downgrades: 64GB of storage instead of 128GB, 512GB SSD configuration reduced to 256GB, and 1TB models are being cut back to 512GB.
* GPU: AMD considering increasing prices in response to climbing prices of GDDR6 memory. Nvidia reportedly no longer supplying VRAM to its GPU board.
* Nintendo Switch, PlayStation and Xbox Series: might hike prices soon, global console adoption might stagnate.
* Other Electronics: smart TVs, routers, medical devices will be paying higher prices or facing supply delays.
Recovery Projections:
- 2026: Demand exceeds supply across all memory types, driving sustained price increases.
- 2027: Peak pricing and inventory depletion arrive
- 2028: New Megafabs in Korea, US, and Taiwan begin easing pressure.
Multiple experts warn that memory constraints could persist well beyond 2026:
- SK Hynix's Internal Analysis Suggests Tight Memory Supply Lasting Through 2028.
- TeamGroup Manager predicts deeply constrained memory through 2026, with serious relief only in 2027-2028.
- Counterpoint Research: Projects DRAM prices could double by late 2026 compared to early 2025.
YOU WILL OWN NOTHING AND BE HAPPY
* RAM Shortage: The core issue driving this crisis is that memory manufacturers Samsung, SK Hynix, and Micron have strategically reallocated production capacity from consumer segments to HBM for AI data canters. AI data centers will consume massive quantities of HBM, LPDDR5X, and GDDR7 memory.
* Micron and Samsung Both are also pulling out of the consumer SSD market at the same time. Samsung is reportedly halting SATA SSD production in 2026, which would put pressure on the pricing of both SATA and M.2 NVMe SSD drives; Samsung's withdrawal has significantly more serious consumer implications than Micron's decision to exit the Crucial consumer brand.
* Samsung reportedly Also abruptly raised the DDR5 contract prices by 100%.
Impact:
* Samsung: expected to increase price of smartphones or downgrades on specs
* Dell: Price increases of 15-20% from mid-Dec. 2025.
* Lenovo: Price increases from Jan 1, 2026.
* HP: warned Price increases starting in May 2026.
* Memory downgrades: Entry-level Laptops may drop to 8GB, mid-range to 12GB, & high end may drop to 16GB RAM. Entry-level phones may drop to 4GB, mid-range to 6-8GB, & high end to 12GB.
* Storage downgrades: 64GB of storage instead of 128GB, 512GB SSD configuration reduced to 256GB, and 1TB models are being cut back to 512GB.
* GPU: AMD considering increasing prices in response to climbing prices of GDDR6 memory. Nvidia reportedly no longer supplying VRAM to its GPU board.
* Nintendo Switch, PlayStation and Xbox Series: might hike prices soon, global console adoption might stagnate.
* Other Electronics: smart TVs, routers, medical devices will be paying higher prices or facing supply delays.
Recovery Projections:
- 2026: Demand exceeds supply across all memory types, driving sustained price increases.
- 2027: Peak pricing and inventory depletion arrive
- 2028: New Megafabs in Korea, US, and Taiwan begin easing pressure.
Multiple experts warn that memory constraints could persist well beyond 2026:
- SK Hynix's Internal Analysis Suggests Tight Memory Supply Lasting Through 2028.
- TeamGroup Manager predicts deeply constrained memory through 2026, with serious relief only in 2027-2028.
- Counterpoint Research: Projects DRAM prices could double by late 2026 compared to early 2025.
YOU WILL OWN NOTHING AND BE HAPPY
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JPMORGAN LAUNCHES FIRST TOKENIZED MONEY MARKET FUND ON ETHEREUM: INFINITYHEDGE VIA WSJ
* JPMORGAN TO SEED FUND WITH $100 MILLION INTERNAL CAPITAL
* JPMORGAN SEES 'MASSIVE' INTEREST IN TOKENIZATION FROM CLIENTS
Details:
* JPMorgan will seed the fund with $100 million of its own capital, and then open it to outside investors on Tuesday.
* Called My OnChain Net Yield Fund, or "MONY," the private fund is supported by JPMorgan's tokenization platform, Kinexys Digital Assets, and will be open to qualified investors, or individuals with at least $5 million in investments and institutions with a minimum of $25 million.
* Investors can subscribe to the MONY fund through the bank's Morgan Money portal, a money-market investing platform. In exchange, they will receive digital tokens in their crypto wallets.
* JPMORGAN TO SEED FUND WITH $100 MILLION INTERNAL CAPITAL
* JPMORGAN SEES 'MASSIVE' INTEREST IN TOKENIZATION FROM CLIENTS
Details:
* JPMorgan will seed the fund with $100 million of its own capital, and then open it to outside investors on Tuesday.
* Called My OnChain Net Yield Fund, or "MONY," the private fund is supported by JPMorgan's tokenization platform, Kinexys Digital Assets, and will be open to qualified investors, or individuals with at least $5 million in investments and institutions with a minimum of $25 million.
* Investors can subscribe to the MONY fund through the bank's Morgan Money portal, a money-market investing platform. In exchange, they will receive digital tokens in their crypto wallets.
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The Week Ahead: infinityhedge
Mon:
* Cboe Futures to offer trading in Continuous Futures for BTC and ETH
* Saylor expected announce another BTC purchase
Tue: U.S. combined Oct & Nov Nonfarm Payrolls (Powell cited a weakening labor market as the main reason for cutting rates). Economists project a 50,000 increase in payrolls and a 4.5% unemployment rate, consistent with a sluggish, but not rapidly deteriorating, labor market. Fall in payrolls could help extend the rally and pull forward the first full rate-cut pricing from June to April.
Wed:
* Coinbase to launch prediction markets and tokenized stocks
* Fed’s Williams speaks
Fri:
* BOJ expected to hike rates (first hike since Jan) (Investors will keep a close eye on Ueda’s post-meeting press conference for clues on how many more rate hikes could lie ahead)
* Putin to hold a televised event
* Deadline for the U.S. Department of Justice to release Jeffrey Epstein-related files
TBA/Whole Week: Ukraine-US talks to continue as Ukraine willing to drop NATO ambitions
ICYMI:
* Vanguard Equity Quant Says Bitcoin Still a ‘Digital Labubu’ Toy, For Now.
* Tether Blocks Investor Sales While Pitching $20 Billion Funding
* Five cryptocurrency firms (Circle, Ripple, BitGo, Fidelity and Paxos) received preliminary approval to perform certain banking functions (they can hold assets in custody) from a US regulator on Friday.
* Wall Street Hedged Big Crypto Bet in $500M Ripple Deal. Two of the funds that put in money assessed that at least 90% of the company’s net asset value derived from a token XRP. The funds investing in Ripple were given the option to sell their shares back to Ripple after 3 or 4 years at a guaranteed annualized return of 10%.
* SpaceX Sets $800B Valuation, Confirms 2026 IPO Plans that would be aimed at funding an “insane flight rate” for its developmental Starship rocket, AI data centers in space and a base on the moon.
https://infinityhedge.substack.com/p/the-7-days-fe1
Mon:
* Cboe Futures to offer trading in Continuous Futures for BTC and ETH
* Saylor expected announce another BTC purchase
Tue: U.S. combined Oct & Nov Nonfarm Payrolls (Powell cited a weakening labor market as the main reason for cutting rates). Economists project a 50,000 increase in payrolls and a 4.5% unemployment rate, consistent with a sluggish, but not rapidly deteriorating, labor market. Fall in payrolls could help extend the rally and pull forward the first full rate-cut pricing from June to April.
Wed:
* Coinbase to launch prediction markets and tokenized stocks
* Fed’s Williams speaks
Fri:
* BOJ expected to hike rates (first hike since Jan) (Investors will keep a close eye on Ueda’s post-meeting press conference for clues on how many more rate hikes could lie ahead)
* Putin to hold a televised event
* Deadline for the U.S. Department of Justice to release Jeffrey Epstein-related files
TBA/Whole Week: Ukraine-US talks to continue as Ukraine willing to drop NATO ambitions
ICYMI:
* Vanguard Equity Quant Says Bitcoin Still a ‘Digital Labubu’ Toy, For Now.
* Tether Blocks Investor Sales While Pitching $20 Billion Funding
* Five cryptocurrency firms (Circle, Ripple, BitGo, Fidelity and Paxos) received preliminary approval to perform certain banking functions (they can hold assets in custody) from a US regulator on Friday.
* Wall Street Hedged Big Crypto Bet in $500M Ripple Deal. Two of the funds that put in money assessed that at least 90% of the company’s net asset value derived from a token XRP. The funds investing in Ripple were given the option to sell their shares back to Ripple after 3 or 4 years at a guaranteed annualized return of 10%.
* SpaceX Sets $800B Valuation, Confirms 2026 IPO Plans that would be aimed at funding an “insane flight rate” for its developmental Starship rocket, AI data centers in space and a base on the moon.
https://infinityhedge.substack.com/p/the-7-days-fe1
Substack
The 7 days
Week Ahead:
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OCT+NOV. NFP PREVIEW: INFINITYHEDGE
NFP DATA IN 50MIN ⌛
NOV. CONSENSUS: +50K
PREV. +119K (SEPT.)
JPM:
OCT: -25K
NOV: +50K
GS:
OCT: +10k
NOV: +55k
BofA:
OCT.: -65k
NOV.: +50k
* Powell cited a weakening labor market as the main reason for cutting rates in December.
* BE: There won’t be an unemployment reading for October, and the November data were collected later than normal. That could introduce what Fed Chair Jerome Powell called ‘technical’ issues, such as problems with seasonality adjustment.
NFP DATA IN 50MIN ⌛
NOV. CONSENSUS: +50K
PREV. +119K (SEPT.)
JPM:
OCT: -25K
NOV: +50K
GS:
OCT: +10k
NOV: +55k
BofA:
OCT.: -65k
NOV.: +50k
* Powell cited a weakening labor market as the main reason for cutting rates in December.
* BE: There won’t be an unemployment reading for October, and the November data were collected later than normal. That could introduce what Fed Chair Jerome Powell called ‘technical’ issues, such as problems with seasonality adjustment.
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*US OCT. NONFARM PAYROLLS FALL 105K M/M; EST. -25K
*US AUG PAYROLLS REVISED TO -26K FROM -4k
*US SEPT. PAYROLLS REVISED TO +108K FROM +119K
*US NOV. NONFARM PAYROLLS RISE 64K M/M; EST. +50K
*US NOV. UNEMPLOYMENT RATE 4.6%; EST. 4.4%
* FEDERAL GOVERNMENT OCT. CHANGE: -162K
* FEDERAL GOVERNMENT NOV. CHANGE: -6K
* EX GOVT, OCT +57K, NOV +70K
*US AUG PAYROLLS REVISED TO -26K FROM -4k
*US SEPT. PAYROLLS REVISED TO +108K FROM +119K
*US NOV. NONFARM PAYROLLS RISE 64K M/M; EST. +50K
*US NOV. UNEMPLOYMENT RATE 4.6%; EST. 4.4%
* FEDERAL GOVERNMENT OCT. CHANGE: -162K
* FEDERAL GOVERNMENT NOV. CHANGE: -6K
* EX GOVT, OCT +57K, NOV +70K
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* OIL HITS 5-YEAR LOW: INFINITYHEDGE
* Russia Oil Prices Also Hit Lowest Since War Began on Western Pressure
* Russian Oil down 28% over the last three months, with recent restrictions targeting oil giants Rosneft PJSC and Lukoil PJSC widening the markdowns.
* Indian imports (largest importer) of Russian oil are expected to fall to ~800kbpd in Dec. 2025 (~50% drop). Jan 2026 forecast is just 500kbpd lowest in 4 years)
* Russia need Oil revenue to fund its war. Oil and Gas revenues accounted for 25% of Russia's federal budget. Oil and Gas revenues in Dec. is at 4-year low per rtrs.
* Russia needs to refill its war chest, which is now down to $1b/week vs $2b back in the summer.
* Russia Oil Prices Also Hit Lowest Since War Began on Western Pressure
* Russian Oil down 28% over the last three months, with recent restrictions targeting oil giants Rosneft PJSC and Lukoil PJSC widening the markdowns.
* Indian imports (largest importer) of Russian oil are expected to fall to ~800kbpd in Dec. 2025 (~50% drop). Jan 2026 forecast is just 500kbpd lowest in 4 years)
* Russia need Oil revenue to fund its war. Oil and Gas revenues accounted for 25% of Russia's federal budget. Oil and Gas revenues in Dec. is at 4-year low per rtrs.
* Russia needs to refill its war chest, which is now down to $1b/week vs $2b back in the summer.
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TRUMP: WILL BE GIVING AN ADDRESS TO NATION TOMORROW NIGHT AT 9PM EST, LIVE FROM WHITE HOUSE
* Trump's Address Will Be About Accomplishments, What's To Come Next, Maybe Tease New Year Policies: White House
* Trump's Address Will Be About Accomplishments, What's To Come Next, Maybe Tease New Year Policies: White House
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*BINANCE EXPLORING US COMEBACK STRATEGY INCLUDING A POTENTIAL RECAPITALIZATION THAT COULD REDUCE CZ'S MAJORITY STAKE: INFINITYHEDGE VIA BBG
*BINANCE ALSO PURSUING CLOSER RELATIONSHIPS WITH BLACKROCK INCLUDING ADDITIONAL PRODUCTS AND POTENTIAL REVENUE-SHARING ARRANGEMENTS
*BINANCE URGENTLY SEEKING US MARKET REENTRY BEFORE POTENTIAL DEMOCRATIC POLITICAL SHIFT IN MIDTERM ELECTIONS
*WE CANNOT COMMENT ON HYPOTHETICAL STORYLINES, NONE OF THESE SPECULATIVE SCENARIOS REFLECT ACCURATE FACTS: BINANCE SPOKESPERSON
*BINANCE ALSO PURSUING CLOSER RELATIONSHIPS WITH BLACKROCK INCLUDING ADDITIONAL PRODUCTS AND POTENTIAL REVENUE-SHARING ARRANGEMENTS
*BINANCE URGENTLY SEEKING US MARKET REENTRY BEFORE POTENTIAL DEMOCRATIC POLITICAL SHIFT IN MIDTERM ELECTIONS
*WE CANNOT COMMENT ON HYPOTHETICAL STORYLINES, NONE OF THESE SPECULATIVE SCENARIOS REFLECT ACCURATE FACTS: BINANCE SPOKESPERSON
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* SILVER SURPASSES GOOGLE TO BECOME THE 4TH LARGEST ASSET BY MARKET CAP: INFINITYHEDGE
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*US NOV. CONSUMER PRICES RISE 2.7% Y/Y; EST. +3.1%
*US NOV. CORE CPI RISES 2.6% Y/Y; EST. +3.0%
*U.S. CORE CPI EASES TO SLOWEST PACE SINCE 2021
Views:
* GS: canceling of the Oct report makes MoM comparisons impossible...Fed will instead focus on the Dec. CPI for more accurate bellwether for inflation.
* Omair Sharif: This is totally inexcusable. BLS just assumed rent/OER were zero for Oct....There is just no world in which this was a good idea... (While he says there may be a good technical reason for doing so, the end result has distorted the data)
BE: One notable takeaway from the October-November CPI report is that inflation in most tariffed-exposed goods categories is peaking or has already peaked. Businesses slashed prices in November amid holiday sales events. Food-price growth slowed sharply in both months.
* Also Remember what Powell said last week. There may be quality issues with these numbers, given gov shutdown. Both inflation & labor market data “may be distorted,” he said. He called out the CPI specifically in saying “we’re going to look at that really carefully and understand that it may be distorted by very technical factors."
“All told this is a positive report, that comes with an asterisk."
*US NOV. CORE CPI RISES 2.6% Y/Y; EST. +3.0%
*U.S. CORE CPI EASES TO SLOWEST PACE SINCE 2021
Views:
* GS: canceling of the Oct report makes MoM comparisons impossible...Fed will instead focus on the Dec. CPI for more accurate bellwether for inflation.
* Omair Sharif: This is totally inexcusable. BLS just assumed rent/OER were zero for Oct....There is just no world in which this was a good idea... (While he says there may be a good technical reason for doing so, the end result has distorted the data)
BE: One notable takeaway from the October-November CPI report is that inflation in most tariffed-exposed goods categories is peaking or has already peaked. Businesses slashed prices in November amid holiday sales events. Food-price growth slowed sharply in both months.
* Also Remember what Powell said last week. There may be quality issues with these numbers, given gov shutdown. Both inflation & labor market data “may be distorted,” he said. He called out the CPI specifically in saying “we’re going to look at that really carefully and understand that it may be distorted by very technical factors."
“All told this is a positive report, that comes with an asterisk."
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BOJ RAISES INTEREST RATES TO 30-YEAR HIGH AS EXPECTED, FIRST HIKE SINCE JANUARY 2025: INFINITYHEDGE
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JAPAN 10-YEAR YIELD HITS 2%, HIGHEST SINCE 2006: INFINITYHEDGE
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TRUMP: THE ONLY REASON OUR UNEMPLOYMENT TICKED UP TO 4.5% IS BECAUSE WE ARE REDUCING THE GOVERNMENT WORKFORCE BY NUMBERS THAT HAVE NEVER BEEN SEEN BEFORE. 100% OF OUR NEW JOBS ARE IN THE PRIVATE SECTOR! I COULD REDUCE UNEMPLOYMENT TO 2% OVERNIGHT BY JUST HIRING PEOPLE INTO THE FEDERAL GOVERNMENT, EVEN THOUGH THOSE JOBS ARE NOT NECESSARY.
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DEBASEMENT TRADE CONTINUES: INFINITYHEDGE
*GOLD HITS RECORD HIGH OF $4,420
*SILVER HITS RECORD HIGH OF $69.4
*COPPER HITS RECORD HIGH OF $11,990
*PLATINUM RISES TO 17-YEAR HIGH
*PALLADIUM HITS 3-YEAR HIGH
*GOLD HITS RECORD HIGH OF $4,420
*SILVER HITS RECORD HIGH OF $69.4
*COPPER HITS RECORD HIGH OF $11,990
*PLATINUM RISES TO 17-YEAR HIGH
*PALLADIUM HITS 3-YEAR HIGH
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The Week Ahead: infinityhedge
Mon: Saylor expected announce another BTC purchase
Tue: U.S. delayed Q3 GDP
Wed: Christmas Eve Markets close early
Thu: Christmas Day Markets closed
Fri: $24B worth of BTC Options Expiry: Max Pain Price $96k; Put/Call 0.37; OTM Calls value: $21B; Call options are clustered at strike prices of $100k and $120k, with heavy put option exposure accumulating at $85k.
ICYMI:
* Trump Orders Blockade of Sanctioned Oil Tankers in Venezuela
* Amount of oil held on tankers has risen to 1.3B barrels of “oil on water” - crude held at sea, That is the largest volume since April 2020, when oil consumption cratered due to COVID-19 lockdowns, and about 30% higher than August levels. This spike in supplies on water is partly due to tightening sanctions on Russia.
* NVIDIA, BlackRock, Microsoft Backed Startup PsiQuantum Founder: so we will have useful quantum computers solving meaningful problems across science and technology you know creating new technologies generating revenue, having serious impact way before Qday (break RSA encryption) happens and so we will be forewarned when you start to see people using quantum computers to solve really genuinely important problems then you can think right well maybe Qday is actually 5 years away maybe 10 years away and that’s when you should start to to worry right.
https://infinityhedge.substack.com/p/the-7-days-118
Mon: Saylor expected announce another BTC purchase
Tue: U.S. delayed Q3 GDP
Wed: Christmas Eve Markets close early
Thu: Christmas Day Markets closed
Fri: $24B worth of BTC Options Expiry: Max Pain Price $96k; Put/Call 0.37; OTM Calls value: $21B; Call options are clustered at strike prices of $100k and $120k, with heavy put option exposure accumulating at $85k.
ICYMI:
* Trump Orders Blockade of Sanctioned Oil Tankers in Venezuela
* Amount of oil held on tankers has risen to 1.3B barrels of “oil on water” - crude held at sea, That is the largest volume since April 2020, when oil consumption cratered due to COVID-19 lockdowns, and about 30% higher than August levels. This spike in supplies on water is partly due to tightening sanctions on Russia.
* NVIDIA, BlackRock, Microsoft Backed Startup PsiQuantum Founder: so we will have useful quantum computers solving meaningful problems across science and technology you know creating new technologies generating revenue, having serious impact way before Qday (break RSA encryption) happens and so we will be forewarned when you start to see people using quantum computers to solve really genuinely important problems then you can think right well maybe Qday is actually 5 years away maybe 10 years away and that’s when you should start to to worry right.
https://infinityhedge.substack.com/p/the-7-days-118
Substack
The 7 days
Week Ahead:
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US TO TAKE TARIFF ACTION ON SEMICONDUCTORS FROM CHINA
U.S. SAYS TARIFF ON CHINA SEMICONDUCTORS ZERO UNTIL JUNE 2027
Context: These new tariffs (0% for now but US will announce new tariff rate in 2027) are in addition to the existing 50% Section 301 tariff that's already in place on semiconductors from China.
U.S. SAYS TARIFF ON CHINA SEMICONDUCTORS ZERO UNTIL JUNE 2027
Context: These new tariffs (0% for now but US will announce new tariff rate in 2027) are in addition to the existing 50% Section 301 tariff that's already in place on semiconductors from China.
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