I don’t think it’s possible to overbuild AI. Overbuild in the sense we have unused capacity like Chinese apartments or US offices/retail. If there is unused capacity prices will fall to the marginal cost of power (data centers will eat losses on chips and construction). There is almost infinite applicability for the technology and as cost falls it will just find its way into more and more things (ie Jevon’s paradox). This also doesn’t mean that people won’t lose a lot of money. There are a lot of junk AI adjacent names which have been pumped to ridiculous levels and technology will definitely change (cheaper and more energy efficient) which could leave some assets with a very low/negative return on capital.

Last week in the middle of tariff headlines Republicans in both the House and Senate passed versions of their “tax” plans.

There is a lot to unpack. 🧵 These changes will be just as big as Trump’s tariff plan. Tariffs were bad for stocks and good for bonds. This is the exact opposite. It’s another “all gas, no brakes” fiscal policy.

Gold rallied to record highs and bonds tanked for good reason.

Sexual freedom is a lot like capitalism. Works really well for those with all the chips.

But it’s actually worse than that… women realistically have a shelf life in the dating market

The Fed hikes quickly, borrowers feel it much more slowly...

While the Fed has hiked a lot, but most borrowing in the US is long term. Rate won't rise until this debt matures.. So while we are at short term rates we haven't seen since before the GFC, the effective interest rate for existing debt (corporates and households) is basically back to where it was before COVID The average mortgage rate is still below 4%

The internet is no longer the public square🧵 People think the internet is about free speech but that’s useless with no audience. What makes it special is the ability to work with others to build common ground. There is a reason freedom of Assembly is part of the first amendment.

Equities have sold off but this is not even close to being a cheap market ….🧵

Forward PE’s are still close to 22 and were near the highs of 2021 The entire move since Q4 of last year was predicated on Fed cuts that never came alongside AI hype.

But trailing earnings haven’t budged during the rally

Powell already pivoted but they put it in writing yesterday…

They nixed the prospect of hikes and noted they would consider cuts next (though still marginally hawkish as they noted they will not move until they see a path to 2% - makes sense given they also upgraded their view on growth and nixed worries over banking) He is no longer afraid of growth…

The stimmy keeps on coming 🍾

Inflation adjustments to social security and increases in retiree healthcare (+150bn) completely offset expiring income tax credits (-$150bn)…

Next year those two categories will rise by another $200bn yet again (~1% of GDP) with no real offset.

This is all due to a massive wave of retirees now eligible to receive government benefits… 💴 💴 💴 This is on top of all the blue wave spending proposals which added another $200bn in spending (~1% of GDP). The spending however isn’t the total as it supurred a ton of related investments.