Oil, AI, and Private Credit: The New Market Stress Cycle — Jordi Visser (15 marzo 2026)

[0:00] Another week of uh
[0:03] volatile movements
[0:05] and the markets have
[0:08] as is usually the case during any kind
[0:10] of a geopolitical event or even one
[0:14] event that's going on that's become
[0:15] obsessed right now
[0:17] uh with oil and
[0:20] taco and when is it going to break down
[0:23] and everything? So, I'm going to try to
[0:25] take you guys through this for those of
[0:26] for the subscribers who
[0:29] saw the webinar this week, there'll be
[0:30] another one this coming week. I'm really
[0:33] trying to focus more on the weekends of
[0:35] just kind of going through the overall
[0:36] framework of what's happening and then
[0:39] now that the paywall is up and
[0:40] everything's going on, I will continue
[0:42] to bring the investment ideas there as
[0:44] well as a lot of the things on the
[0:46] turbulence model and I'm building a lot
[0:48] more
[0:49] behind the scenes. Uh I've really and
[0:52] I'll show some of it uh but I've moved
[0:54] on into
[0:55] Perplexity Computer, the video series to
[0:59] help any of you and in particular your
[1:01] kids uh
[1:03] really be able to
[1:05] take an idea and convert it into
[1:07] something actionable. Uh that video
[1:09] series, five videos uh went up on the
[1:12] paywall this week. It will go up
[1:14] separately probably within a month, but
[1:17] for the time being
[1:19] uh
[1:20] it's on the site. So, for those of you
[1:22] who are in that level, you're going to
[1:24] see it uh and it includes
[1:28] a lot of stuff with it. This is kind of
[1:29] the opening slide from it and I just
[1:31] wanted to highlight this because for
[1:33] those of you who are
[1:35] let's say still getting started with AI
[1:38] I continue to say the same thing, which
[1:40] is if there's one kind of short phrase,
[1:43] just keep putting in the reps. It's
[1:45] never been more important. Every day use
[1:48] it, use it verbally, use it typing, use
[1:50] it every possible way that you can, but
[1:52] you have to use it all day long for
[1:54] everything.
[1:56] Um
[1:58] I went through and again, this is what
[2:00] the videos are about. There's five
[2:02] videos, they cover each different part
[2:04] of this.
[2:05] Uh
[2:05] it also includes all of the prompts that
[2:08] I use during it. So, every single one of
[2:11] them, uh this is part of the Claude
[2:13] skill and you can just see the depth in
[2:15] terms of what's going on. You can change
[2:18] whatever you want in it, but the main
[2:19] point of it was uh people been asking
[2:22] for a while. This is the location for
[2:24] those of you who haven't found the site
[2:26] because you're looking in a variety of
[2:27] different places. It is ai.22v
[2:30] research.com.
[2:32] Uh or anything on 22v that has AI macro
[2:36] nexus, which is all my research and
[2:38] everything that's there. So, let's get
[2:40] right to it.
[2:42] Uh
[2:42] obviously Sunday night, every night now
[2:45] is a uh an event. Uh I remember it was
[2:48] like that during 2008.
[2:51] Uh so, as long as the Strait of Hormuz
[2:54] is closed,
[2:56] uh every day that passes is an enormous
[2:59] amount of oil that's off.
[3:01] We opened around 120. Uh
[3:04] to say I had panic text messages all day
[3:07] Sunday.
[3:08] Uh some of them calling for the end of
[3:10] the world. We obviously didn't have the
[3:12] end of the world. We're not going to
[3:13] have the end of the world. This will
[3:15] pass at some point. The question that
[3:17] really comes is how disruptive is it
[3:19] going to be uh really to earnings and to
[3:21] the economy and the longer that we sit
[3:24] up here and every
[3:26] it really does extend cuz you're talking
[3:28] about a lot of oil that's not able to
[3:30] get through that is not there. Um and
[3:33] you know, they tried everything this
[3:35] week, a release, a historic release of
[3:37] the barrels.
[3:38] And yet, we still saw prices move higher
[3:42] after that. So, insane range and
[3:44] basically ended up kind of where the
[3:46] first print was, believe it or not, for
[3:49] WTI. Um gas at the pump continues to
[3:53] move higher approaching 370. I showed
[3:56] last week when we were at 350 that 370
[3:59] was already the futures. Well, now the
[4:01] futures are all the way up here at four.
[4:03] Um, so we still have to go. This is
[4:06] overlaid with CPI year-over-year. So, we
[4:09] are going to see a significant rise in
[4:11] uh in CPI.
[4:13] Uh and I'll show you, you know, where
[4:15] that's fitting in. This is the future.
[4:17] So, this is the second
[4:19] uh contract of the RBOB futures for the
[4:22] unleaded gas. And you can see that, you
[4:24] know, the red line here is gas at the
[4:25] pump. Here's where we closed last week
[4:28] up around four uh dollars a gallon. So,
[4:31] we still have more to go. And this is
[4:33] not just in gas at the pump, which you
[4:36] can see here. Uh and you see it for
[4:38] every different region. You've got lines
[4:41] building in China, all kinds of stuff.
[4:43] So, this is a a global issue, which is
[4:45] why it will hurt the economy. Everyone
[4:48] has a different sensitivity depending on
[4:50] uh the strategic petroleum reserves they
[4:52] have, but also how much they're
[4:53] importing uh and how much they can
[4:55] control prices. So, here's jet fuel. Um
[4:59] I mean,
[5:00] you know, airline stocks have fallen
[5:01] significantly.
[5:03] I think people are still hoping that
[5:04] this just turns around and goes down. Um
[5:07] I'll go through some of the podcasts
[5:09] that I listened to this week with
[5:10] people. Rather than focus on where it is
[5:12] today, you really want to spend more
[5:14] time on how long is it going to be
[5:15] elevated? That's going to be the impact
[5:17] on things. And again, as I go through
[5:19] this, uh oil was not the story three
[5:22] weeks ago or four weeks ago when I
[5:24] started really highlighting the risk
[5:25] that was showing up in credit and credit
[5:27] spreads and also in turbulence.
[5:29] Um Canterwitz is just kind of
[5:33] highlighting what I think is the hope
[5:35] out there by everyone, which is that um
[5:38] you know,
[5:39] until oil drops below 70 when the
[5:41] straight is back in business,
[5:43] I Again, eventually we're we're to get
[5:45] there. We always do. Um the question is
[5:48] how long is it going to take? And during
[5:50] that period that things are
[5:53] higher and we're seeing much higher
[5:55] inflation prints, we're seeing a
[5:57] slowdown in activity,
[5:59] uh, what happens to private credit, what
[6:01] happens to financial stocks, what
[6:03] happens to the other parts that were
[6:05] already falling beforehand. This is not
[6:07] just one issue. Um,
[6:10] Marko Papic in Geopolitical Cousins,
[6:13] this is the one, uh, right off the bat
[6:15] that I want to recommend for you guys.
[6:16] Marko's a friend. We spoke on Friday.
[6:19] Uh, we're going to try to do some things
[6:20] together in the future, uh, just because
[6:23] we have a mutual respect for each other,
[6:24] but also, uh, I think Marko is, uh, one
[6:27] of the more creative geo-macro people,
[6:29] uh, in terms of his thought process.
[6:31] He's a great historian, but I think he
[6:32] did a good job in this and so this one
[6:35] brings in Ed Richardson, who's a
[6:36] shipping and tanker tanker expert. And
[6:40] he makes an interesting point and rather
[6:41] than again get into when are we going to
[6:43] drop below 70 again and then the S&P can
[6:45] go higher. I don't want you guys leaving
[6:47] this thinking that's the way to think
[6:48] about it. Obviously, anything that
[6:51] suggests that a ceasefire is in play,
[6:53] you're going to see oil knee-jerk come
[6:55] down. We saw that last week on other
[6:57] things that went on. Uh, the real thing
[7:00] is what's going to happen to earnings in
[7:02] the economy. The longer we sit at these
[7:04] levels, this is not a minor move in
[7:06] those prices that you saw,
[7:08] uh, and it's not a minor move in
[7:09] inflation. So, we've taken out rate
[7:12] cuts. We're looking at rate hikes. All
[7:14] of these things matter, uh, and these
[7:16] are not temporary shifts where you can
[7:17] just fade them. Uh, particularly when
[7:19] we've had this lack of correlation,
[7:21] which I'll go through, between rates and
[7:23] equities. So, what he says that's
[7:25] interesting is
[7:27] they've been hit, meaning shipping has
[7:29] been hit by one disruption after another
[7:31] since COVID. Port congestion,
[7:34] uh, the Evergiven blockage, Panama
[7:36] contra-
[7:37] canal drought, sanctions on
[7:39] He's basically saying we've been
[7:41] desensitized to geopolitical shocks and
[7:43] we always assume that they're going to
[7:45] fade quickly and then just go back and I
[7:47] think that is absolutely true. I think
[7:48] Taco is a part of that, too. Everyone
[7:51] just assumes that this just turns around
[7:52] the other way.
[7:55] The other issue is what he just points
[7:57] out. Hormuz is arguably the most
[7:58] dangerous choke point in the world.
[8:01] And I think that's what we've seen is
[8:02] it's not just a question of how
[8:04] desensitized people are. The complacency
[8:08] to the the potential of us being there
[8:10] for uh more than a month, 2 months in
[8:12] terms of having prices elevated and
[8:14] things offline.
[8:16] Uh Jeff Curry gave an interview on
[8:17] Bloomberg. Uh I've highlighted Jeff
[8:19] Curry a lot on here and regardless of
[8:22] your, you know, views on Jeff Curry
[8:24] because he's constantly or most of the
[8:26] time bullish on on commodities at least
[8:29] since COVID, he has been right uh in
[8:31] terms of supply demand, maybe not the
[8:33] timing of everything, but he talked a
[8:35] lot about what's going on and he did
[8:38] talk about a couple things that are
[8:40] interesting. I'm not going to go, you
[8:41] know, uh go through everything. But he
[8:44] did bring this up which is and then
[8:46] we've seen this already going on in in
[8:48] memory. Uh you're going to see this
[8:50] consistently over the course of the next
[8:51] decade which is this hoarding behavior.
[8:54] When countries and consumers stockpile
[8:56] oil, demand artificially increases. In
[8:58] the 1970s oil crisis, hoarding added
[9:01] roughly 2 million barrels per day. Even
[9:03] if there's a day where things are
[9:05] better, I don't think people are going
[9:06] to have um
[9:08] comfort that this is just going to go
[9:10] away. And when you have places like
[9:12] Japan and South Korea that are
[9:13] stockpiling fuel
[9:16] and you've got lines in China, I just
[9:18] think that the underlying price for oil
[9:22] at this stage will probably stay higher
[9:24] because this disruption is in such an
[9:26] important place
[9:28] and because we were already in a
[9:30] hoarding mentality of commodities
[9:32] because of what you seen in some of the
[9:33] parabolic moves.
[9:35] Uh on Friday, uh the US
[9:38] went at Karg. Karg Island. So, which
[9:42] again, as you read through it over the
[9:43] weekend,
[9:44] uh, you see how important it is. So,
[9:47] all of that's there. And I think what
[9:49] Warren Pies, um, sent out this week,
[9:52] just as the week went on, uh, this is
[9:55] the curve. So, this just shows that it's
[9:58] starting to be built into these, uh,
[10:00] each one of these is a longer, uh,
[10:02] duration. So, right here, in terms of
[10:05] the the discount there was, this was
[10:07] being viewed through the 10th as a
[10:10] short-term disruption. And then as the
[10:12] week went up, we saw all of the back-end
[10:14] contracts start to go up more than the
[10:16] front month. So, you started to get a
[10:18] scenario where
[10:21] as Felix put it, in the curve is now
[10:23] taking this much more seriously. So,
[10:25] again, by the end of the week, we had
[10:28] the oil market saying this is probably
[10:29] going to, uh, have elevated prices for
[10:32] longer.
[10:33] We also saw the same thing in the TIPS
[10:35] market. So, this is now one-year
[10:37] inflation expectations in terms of the
[10:39] TIPS break even went from down at two
[10:42] and change all the way up to 4.7. That's
[10:44] one year.
[10:47] You can see where, uh, we have,
[10:50] uh, all of the blue dots here. This is
[10:53] two-year yields across the globe. And
[10:55] basically, this is taking the
[10:56] three-month range. So, every single part
[10:59] of the world has now built in that we're
[11:01] going to have higher rates.
[11:03] Uh, so again, when you're looking at the
[11:05] equity market, if inflation's moving
[11:08] higher, we know that historically has
[11:09] not been good. We watched what happened
[11:11] with oil prices back in 2022, and the
[11:15] fact that they stayed elevated all the
[11:17] way into June, when we And that's when
[11:19] CPI basically peaked.
[11:22] Uh,
[11:22] the question is how long is this going
[11:24] to stay here? If oil stays, you know,
[11:26] higher than 90 for a period of three
[11:27] months, then we're probably going to
[11:29] have to continue to move two-year rates
[11:31] and tenure rates this point. Tenure
[11:33] rates, again, same type of thing in
[11:35] terms of the the movement. So,
[11:38] uh you're you're getting this whole
[11:40] scenario that everything is being moved
[11:42] up uh across the globe in terms of
[11:45] yields.
[11:47] So, inflation expectations and then
[11:49] pricing. We don't even have one cut
[11:50] built in before the end of the year now.
[11:52] We're close, but we don't even have one.
[11:54] And then in Europe, uh we've seen one of
[11:57] the largest falls in in front uh in six
[12:00] the contract for your Ibor out to
[12:01] December, but this is the rolling
[12:03] sixth-month contract. Uh so, again, a
[12:06] big fall. And you go back and look, this
[12:08] was the QE days when front rates even
[12:11] went negative. Since then, this is the
[12:14] period post-COVID where we get these
[12:16] shocks and they have an impact. And the
[12:18] market has not responded well when we've
[12:20] seen rates kind of move higher, even if
[12:21] it's only for a period of 3 months. Uh
[12:24] this draw uh had moved up significantly
[12:28] uh the move index. So, we saw a 16-point
[12:31] jump in one day in rates fall. Uh that
[12:33] was the biggest move since during
[12:36] uh 24
[12:38] uh in September.
[12:40] So, we saw rates fall shoot higher.
[12:42] Here's rates fall relative to the OAS
[12:45] for IG. So, we did see spreads widening
[12:48] in terms of the cash bond market.
[12:50] And uh this is the sixth contract of the
[12:53] VIX, which I've said repeatedly. I said
[12:55] it this week on the subscriber webinar
[12:57] that I expect this to get up to 30
[13:00] before this is done. Um because of
[13:02] private credit and because of the
[13:04] turbulence that we were seeing way
[13:06] before oil, which I'll go through. But
[13:08] if you add oil on top of it, uh I don't
[13:11] think people should uh should fade this.
[13:13] Um I think uh Charlie McGillicut uh had
[13:17] a good note out this week in terms of
[13:19] the pieces that I saw. And again, it
[13:21] gets back into inflation volatility. If
[13:23] we start to build in the possibility
[13:27] that we're going to have a of inflation
[13:28] ball. And that's it. It's the
[13:30] possibility we have to continue to move
[13:33] multiple compression into
[13:37] the S&P 500. This year to me was about
[13:39] multiple compression. I've said
[13:41] repeatedly, I think GDP is going to be
[13:43] fine. I think our earnings are going to
[13:44] be good. Um I think in both cases we're
[13:47] going to see it even with oil sitting up
[13:49] here at 90. I still think nominal GDP
[13:51] will be strong. The AI trade is going to
[13:53] continue. There will be fears along the
[13:56] AI trade, but I thought this will be a
[13:58] multiple compression year where best
[13:59] case scenario,
[14:01] uh you know, we'd we'd go up, uh you
[14:04] know, whatever, close to close to flat,
[14:06] up a little bit, and most of the
[14:08] multiple compression will be happening
[14:09] in technology. The global market would
[14:11] outperform, and the reason is
[14:14] everything that we're seeing. The
[14:15] disruption from AI, the unwind of the
[14:18] credit uh situation from private credit,
[14:20] the fact that the labor market is going
[14:22] to worsen this year as the AI fear as
[14:25] the AI reality comes in with the agentic
[14:27] AI, and now what you've done is thrown
[14:29] inflation or oil up and inflation ball
[14:31] back into the equation. It's a very
[14:33] different world than when we started the
[14:35] year. So, if people are telling you
[14:36] everything's the same and they're saying
[14:37] just step in and buy it, this is just
[14:39] like last year, remember Liberation Day
[14:41] was self-created, and then it was
[14:44] quickly turned around the other
[14:45] direction, giving the market time to
[14:47] prepare for it. Right now, we don't have
[14:49] that time. This kind of came out of
[14:51] nowhere, and as I highlighted, this is
[14:53] the end of the year. So, this is
[14:55] December of of last year. JP Morgan said
[14:57] gross leverage at a 5-year high. Goldman
[15:00] showed global gross leverage at
[15:02] 285, so the same level as JP Morgan.
[15:04] Morgan Stanley said gross leverage for
[15:05] US hedge funds was only higher 1% of the
[15:08] time during the last 15 years. We are
[15:10] seeing leverage around historical highs
[15:12] on our books.
[15:13] And then UBS jumped in with the same
[15:14] thing. So, that's where we started the
[15:16] year, and it makes sense. Everyone
[15:17] expected this to be a great year for
[15:19] earnings, a great year for global
[15:21] earnings cuz revisions were going
[15:22] higher. PMIs were being built in to go
[15:24] higher.
[15:25] GDP was going to get a surge because of
[15:27] the one big beautiful bill.
[15:30] Again, when you have sentiment that
[15:31] strong and you have leverage coming off
[15:33] of time where
[15:35] we really didn't have much turbulence,
[15:37] um,
[15:38] you end up in a difficult situation. So,
[15:40] the systematic community for CTAs is
[15:42] definitely getting closer. We closed
[15:44] below some of the medium-term levels, so
[15:46] we've definitely seen this come down.
[15:48] This was from March 10th uh on Tuesday,
[15:51] but I think we still have a lot of room
[15:54] for the CTA community to come down.
[15:56] I want to make sure you guys continue to
[15:58] focus on this because I really think
[16:00] people are forgetting about it, and I
[16:02] don't want anyone who's watching my
[16:03] videos to forget about this. Um, I think
[16:06] economists are missing the boat on this.
[16:08] I think this is an obvious trend. This
[16:10] is the year-over-year employment, the
[16:12] white line. We're at zero. No jobs
[16:15] created. Now, this is all payrolls. So,
[16:18] this includes healthcare. Without
[16:19] healthcare, this is a big negative
[16:21] number. Healthcare is not going to be
[16:22] replaced by AI. The AI jobs disruption
[16:26] is happening. This is nominal GDP. So,
[16:29] you can go back over the course of the
[16:31] last 40 years and just see the
[16:33] relationship between nominal GDP and
[16:36] year-over-year payrolls. Well, this is
[16:38] broken down. It does matter for the
[16:40] K-shaped economy, especially when you
[16:43] move oil prices higher. Just to make
[16:45] sure that people see the other end of
[16:46] the side cuz we had all these software
[16:48] engineering job openings and people
[16:50] getting excited saying that that
[16:53] I Again, guys, like
[16:55] the job situation has been
[16:57] deteriorating, and just because the
[16:59] unemployment rate is not shooting
[17:00] higher, which I don't think will happen,
[17:03] doesn't mean that if someone loses their
[17:04] job in finance job openings, which are
[17:07] coming down, which I would argue are the
[17:08] most important for the economy, because
[17:11] if job openings in finance are going
[17:13] down in knowledge workers, this is not
[17:14] only important, but this is all college
[17:16] educated.
[17:18] We're collapsing. So, if someone loses
[17:20] their job here and now all of a sudden
[17:22] they're riding for Uber and they're
[17:24] working at Whole Foods and they have a
[17:26] college education,
[17:28] that doesn't mean that just because jobs
[17:31] you know, people aren't getting fired or
[17:33] they're not claiming insurance. There
[17:36] are jobs out there. We have a labor
[17:38] shortage, but it doesn't mean people are
[17:40] underemployed and
[17:43] upset about it. AI agents could push
[17:45] grad unemployment past 30%. This is the
[17:48] CEO of ServiceNow who knows something
[17:50] about AI.
[17:52] Meta
[17:54] this morning, Saturday,
[17:57] I'm going to get more into Meta for a
[17:58] while at the end. Reportedly talking
[18:01] about 20%
[18:03] of the company.
[18:04] This is a cash issue. The reason this is
[18:07] important,
[18:09] this is going to be growing across
[18:12] the market in my opinion.
[18:15] AI costs are increasing. When you see
[18:17] memory charts that look like that, when
[18:18] you start seeing the hardware shortages,
[18:20] the CPU shortages, the optical fiber
[18:23] everything that's going on is going to
[18:25] lead to higher and higher costs for AI,
[18:28] especially since a lot of the frontier
[18:30] model companies
[18:31] can't get the data centers built in
[18:33] time. So, they're raising price because
[18:34] they don't have enough capacity for
[18:36] everyone that's in. It's going to lead
[18:38] to more AI cost and the way to pay for
[18:40] that
[18:41] is with labor.
[18:43] Warren Pies, another great chart. AI's
[18:45] impact on the labor market is no longer
[18:47] theoretical. What he did here is go
[18:49] through and take 30 industries that are
[18:52] AI exposed. That's this line.
[18:55] And then 30 industries that are non-AI
[18:57] exposed. So, a lot of this is going to
[18:59] be healthcare, but it's also going to be
[19:00] the driving jobs and things like that
[19:02] that are not replaced as of yet by
[19:05] humanoids or autonomous vehicles. So,
[19:07] what you have here, this is the gap
[19:09] between the two
[19:11] in terms of how much they moved away.
[19:14] So, again,
[19:16] you have to look at this. AI is having
[19:18] an impact on jobs, and it's having it on
[19:21] a lot of college-educated jobs. It's
[19:23] having an impact on graduates. It is
[19:25] definitely helping to have consumer
[19:27] confidence be at lower levels,
[19:29] but this is before the agentic world,
[19:31] and that's the thing I want to make
[19:32] sure. If there's one thing that everyone
[19:34] has screwed up,
[19:36] it is the exponential nature of the
[19:38] progress of AI, how fast it accelerates.
[19:42] How many people missed the Micron trade?
[19:44] How many people missed the Nvidia trade?
[19:45] How many people missed the Corning
[19:47] trade? How many people When this stuff
[19:49] goes higher, the dollars are massive,
[19:51] and the moves are exponential. We are
[19:54] entering the agentic world now, which
[19:56] means job losses are going to worsen
[19:58] from here. You have to start
[20:00] extrapolating
[20:01] things that are moving
[20:03] faster and farther than they ever had.
[20:05] So, this is what I want to make sure
[20:07] that I start to fit in. So, this is the
[20:09] red line here is the S&P.
[20:12] The white line here is the financial
[20:13] stocks, guys. So, when, you know, if we
[20:15] go back to Cantwell's talking about oil,
[20:17] a lot of people are starting to talk
[20:19] about it. He didn't do this. He's just
[20:20] saying that right now,
[20:22] oil is driving the market, which is
[20:24] true.
[20:25] But, what I want to show you is this
[20:27] weakness in financials was happening way
[20:29] before oil. The S&P 500 was here when
[20:33] this broke the 200-day moving average.
[20:35] Now, you've extended this even further,
[20:37] and the 200-day moving average is
[20:39] turning down. I've highlighted
[20:41] repeatedly, I did on the webinar, the
[20:43] two webinars I did, how bad it is when
[20:46] financials are below the 200-day moving
[20:47] average, and how bad it is when the
[20:49] 200-day moving average is turning down.
[20:51] So, I want to go back to when this all
[20:53] occurred, and just remind you that we
[20:55] also have had turbulence since February
[20:58] 3rd. So, I updated the turbulence model
[21:01] this week. I posted an X
[21:04] um that it went into crisis mode. I
[21:07] showed everyone on the webinar this week
[21:09] for the subscribers where it was and
[21:11] what went on and that was on Wednesday.
[21:14] We're at a point where we've had so many
[21:16] turbulent days that
[21:18] you have to understand asset vol is
[21:20] increasing. And that's the main point
[21:22] that comes from the turbulence model is
[21:24] asset volatility is increasing
[21:26] significantly. Remember this measure of
[21:28] turbulence. Everyone forgets this, but
[21:30] this was on February 12th when we were
[21:33] seeing stocks gap down. This is not
[21:35] about oil, guys. Oil had barely moved at
[21:37] that point. And here's what we had. 115
[21:40] stocks in the S&P 500 had declined 7% or
[21:43] more in a single day over an 8-day
[21:46] session. 115 of the 500. Last time we
[21:49] saw anything like that where we were
[21:51] near the all-time highs was back in
[21:53] dot-com.
[21:54] This is not something to fade and just
[21:56] say this is all related to oil. Here's
[21:59] where oil was during my turbulence
[22:00] model, right there. Here's where it was
[22:02] during the time where we were getting
[22:03] what I just showed you.
[22:05] Financials broke the 200-day moving
[22:07] average in here.
[22:09] Do not get caught in the belief that
[22:11] once oil goes uh goes back down for any
[22:15] amount of time that that means that
[22:16] everything is going to be stable. Just
[22:18] look at these charts and how brutal they
[22:20] are. This is private equity. This is
[22:22] Blue Owl. This is Jefferies. This is
[22:24] salesforce.com.
[22:27] Don't forget these.
[22:29] This means something is going on and to
[22:31] me, this is not a bearish the year is
[22:34] going to be horrible. I do not believe
[22:35] private credit as we go through this is
[22:37] going to be in this uh mindset, but I do
[22:41] think people are going to get scared of
[22:42] it and I think the Fed and the central
[22:43] or the or the Treasury and/or are going
[22:46] to have to do something because I've
[22:48] never seen in my career a credit
[22:49] situation that is deteriorating at this
[22:52] kind of pace that just ends on its own.
[22:54] There always needs to be some sort of
[22:56] liquidity facility and this is during an
[22:58] election year. So, as credit worsens and
[23:00] retail is trapped. Just remember this.
[23:02] So,
[23:05] Joe and Tracy from Bloomberg, the 2008
[23:08] meme continues to grow and people are
[23:10] starting to talk about this more and
[23:11] more. Hartnett talked about it. It's
[23:13] starting to look like it. That's because
[23:15] when we started when we were seeing
[23:17] financials basically go through the same
[23:20] thing or a similar thing that we're
[23:21] seeing with these credit funds
[23:24] in terms of the private credit funds,
[23:26] uh we also had oil heading up to $155.
[23:30] Okay, it's different this time, but
[23:32] there's a little bit of rhyme that's
[23:33] going on. And again, this chart shows
[23:36] you how bad it is in terms of just how
[23:38] far it is gone. And again,
[23:41] this was not the case at the beginning
[23:43] of the year. So, at the beginning of the
[23:44] year, son, this is all accelerating not
[23:47] because of oil.
[23:49] It's just financials and it's not just
[23:51] inside the private equity names. Now, to
[23:54] show you how
[23:56] I'd say irregular it is for this to
[23:58] happen, for the first time in more than
[24:00] 30 years, financials have been in a 10%
[24:03] plus correction while the S&P wasn't
[24:05] even in a pullback yet. I think a
[24:06] pullback is defined by a 5% fall.
[24:09] Uh but that, you know, we only in the
[24:11] entire last 100 years, I think there
[24:13] were about eight that have occurred.
[24:15] This week, Cliffwater
[24:17] had redemptions to 14. They only gave
[24:19] back seven.
[24:22] Morgan Stanley had requests for only 10
[24:26] for 10.9, I think. Think they gave back
[24:28] five. I don't remember what the exact
[24:30] number is. Um then later, JP Morgan
[24:33] restricts private credit lending and it
[24:35] marks down loans.
[24:38] Back leverage is another pain point for
[24:40] funds, meaning the back leverage is
[24:42] where the banks are supplying some
[24:44] things before. JP Morgan's decision to
[24:46] curb some lending has the industry on
[24:47] high alert about threats to back
[24:49] leverage. This is what was going on in
[24:50] '08, guys. This was happening more for
[24:53] um margin requirements for hedge funds
[24:55] while the banks were under pressure.
[24:57] Uh when you start seeing the banks not
[25:01] provide kind of the back leverage or the
[25:03] ability for them to be there, you end up
[25:05] in a very dangerous situation,
[25:06] particularly when they start marking
[25:08] down the loans on their end. What ends
[25:09] up happening in a deleveraging event
[25:11] where credit is getting hit is when you
[25:13] can't sell something because there's no
[25:15] liquidity for it, you go sell what you
[25:17] can. And just remember when Blue Owl
[25:19] announced that it sold 1.4 billion
[25:22] dollars worth of loans at 99.7 cents.
[25:26] I think if they would have sold them at
[25:27] 85 cents, there actually may have been
[25:30] a little bit more hope. But when you're
[25:31] selling things at 99.7, you assume
[25:34] you're selling good stuff that people
[25:35] will buy and they won't buy the other
[25:37] stuff.
[25:38] And the more that you sell that stuff,
[25:39] then the other things just continue to
[25:41] go down because eventually you will need
[25:43] to do or those funds will have it. So
[25:44] here are the numbers in terms of the
[25:46] exposures to private debt. And again,
[25:49] this is not a systemic number. The
[25:51] private credit situation to me can be
[25:53] controlled, but
[25:55] it's going to take a liquidity to stop
[25:57] this trend, especially if I'm right
[25:59] about what's happening with the AI
[26:00] disruption. Deutsche Bank came out, said
[26:03] they had 30 billion exposure private
[26:05] credit, and the stock was down 5%, and
[26:07] this is not new news. They've disclosed
[26:09] this in prior years.
[26:11] Goldman,
[26:13] someone you don't think about involved
[26:14] in this. Well, they were down they're
[26:15] 20% off the highs now. They closed below
[26:17] the 200-day moving average. So this is
[26:19] entering a period where each one of
[26:21] these this was the European crisis. This
[26:23] was the oil crisis.
[26:25] We needed Draghi to do something. We
[26:27] needed the US Shanghai Accord to happen.
[26:30] 2019,
[26:32] believe it or not, this is when the Fed
[26:34] pivoted. So if you go look, the Fed was
[26:36] hiking and then they stopped while this
[26:38] went on. And we got COVID, massive
[26:40] liquidity facility.
[26:41] Then you have this where it ends with
[26:43] the Fed pivot here.
[26:45] This was during SVB.
[26:49] This was liberation day.
[26:51] Every one of these guys
[26:53] had some sort of help from the
[26:56] government.
[26:58] Just remember that. Every single one of
[27:00] the Goldman Sachs moves. And if I would
[27:01] have taken back further, we've been in
[27:02] the great financial crisis.
[27:05] OFR, if you want to go read a eight-page
[27:07] report on the size of it, what's going
[27:09] on. This is from this week measuring the
[27:13] counterparty exposures to private
[27:14] credit. Again, guys, this is a
[27:17] story that's growing. And I wanted to
[27:18] make sure, cuz I've talked about
[27:20] long-duration assets. This is not just
[27:21] about private credit.
[27:23] Ontario Teachers, one of the most
[27:25] sophisticated and best pension funds in
[27:27] terms of of risk out there. Um
[27:31] Their private equity was down 5.3%.
[27:36] Lowering the valuations. Just remember
[27:39] that we have not just that, we have
[27:43] a lot of different areas outside of
[27:46] private credit on long-duration assets
[27:49] that have been under pressure for a
[27:50] while.
[27:52] Um this is the thing that I'm surprised
[27:54] people aren't more concerned with at
[27:55] this point. So, ever since this broke
[27:58] away, so this is going back to the
[28:00] financial crisis. This is financials
[28:02] relative to the S&P in the white line.
[28:04] And you can see it's about to make new
[28:06] post-GFC lows.
[28:09] The yellow line
[28:11] is 10-year rates.
[28:13] So, when the Fed raised rates,
[28:16] think about all the times during here
[28:18] you've seen a Japanese 30-year yield.
[28:20] You've seen a gilt 30-year yield. You've
[28:22] seen all these bonds around the world
[28:24] and everyone's been talking about the
[28:25] end of the world, the basis trade
[28:26] unwind, and everything else. Well, here
[28:28] we have asset vol expanding. We have a
[28:31] serious credit situation that is much
[28:33] different here. This white line here,
[28:35] again, SVB.
[28:37] Rates shot higher. If rates start
[28:39] shooting higher because of inflation
[28:40] expectations at a time when we this
[28:43] time, we were creating millions of jobs
[28:45] here. We are now at zero. The K-shaped
[28:47] economy has created an issue. You cannot
[28:50] forget and put that in the context. Yes,
[28:52] we have S&P earnings growing, but again,
[28:55] we're seeing multiple compression. And
[28:57] this is why I say, this is not a minor
[28:59] thing to deal with. We have a break
[29:00] going here, and that means bonds right
[29:03] now are not a safe haven. They were
[29:05] heading down until oil went down, and
[29:07] that's the issue is right now we've got
[29:09] a situation with inflation that matters.
[29:11] Now, with all that being said,
[29:13] everything going on
[29:15] for the week, these are the returns
[29:17] around the globe. So, you had a oil
[29:19] trading in a $40 range from 85 to 120.
[29:24] And yet somehow
[29:26] things are not moving.
[29:28] So, that has people, I would say,
[29:31] hopeful.
[29:32] S&P down 1.6%. Not even a move to
[29:36] notice.
[29:37] Nasdaq, not even a new move to notice.
[29:40] Russell, not even a move to notice.
[29:43] Here's the breath. Now, we are oversold
[29:45] in breath. I highlighted in the
[29:47] subscriber thing, a model that I built
[29:49] that basically takes into account the
[29:50] VIX, the VIX curve,
[29:52] um breath, and we
[29:55] we're getting closer in breath in terms
[29:57] of the RSI. That is over getting
[29:59] oversold, but what we haven't seen is a
[30:01] capitulation day yet. So, this is the
[30:03] net breath for a given day. We finally
[30:06] got a minus 1,000. There's about 1,500
[30:09] or 1,600,
[30:11] uh
[30:12] so we're getting closer, but you can see
[30:15] how many times liberation day, when we
[30:18] usually make lows, um this was the low
[30:22] on uh the yen unwind back in the summer
[30:25] of 2024 in early August. You can go back
[30:27] over time. All the inflection points
[30:29] have historically used with a
[30:31] capitulation day, which means everything
[30:33] goes down together. We haven't had that
[30:35] yet.
[30:37] I still think that's likely to happen,
[30:39] and that's where you should be looking.
[30:41] Also, the put-call ratio,
[30:43] it's not budging. Now, I think the most
[30:46] important thing will be if oil at the
[30:48] end of this week, if the Strait of
[30:50] Hormuz is not opened by the end of this
[30:52] week,
[30:53] I'm guessing that one of the reasons
[30:55] this is down here and not moving higher,
[30:57] which is shocking. This is the 5-day
[30:59] average of the put-call ratio
[31:01] for the market.
[31:02] Um
[31:03] and I put this up to just show that
[31:05] Liberation Day, we get a spike here. Uh
[31:07] go through all of the big lows and just
[31:10] see if we get anything normally where
[31:12] you're getting some activity. We're not
[31:14] getting any activity in put-call. We've
[31:16] got triple witch this week. That may be
[31:17] the day that starts to scare the hell
[31:19] out of people. I showed this on the
[31:21] webinar subscriber this week. Factor
[31:23] vol,
[31:24] much, much higher. So, this is a a uh a
[31:27] composite of factor vols for three
[31:29] separate ones that I keep. It's overlaid
[31:31] with the S&P 500. This is a 60-day vol
[31:35] sitting up here, and this is a 60-day
[31:36] vol in the S&P. It's just not moving.
[31:39] So, this has really been isolated.
[31:42] Uh the Mag 7 broke below the 200-day
[31:45] moving average for the first time since
[31:46] there. And I just want to show you,
[31:47] like,
[31:48] it's a big deal. You're talking about
[31:50] over the last 6 years, you had one break
[31:53] during '22, horrible time for the
[31:54] market. You had another one here in
[31:56] March, horrible time for the market
[31:58] until we made the Liberation Day lows.
[32:01] Well, you got the Mag 7 uh going down.
[32:03] And take your pick. Every single one of
[32:05] them is underperforming the S&P.
[32:07] Every one of them is underperforming the
[32:09] S&P.
[32:12] The hyperscalers have been below the
[32:13] 200-day, and they're about to take out
[32:15] the lows that they just went through.
[32:17] This is where my focus is. And the
[32:20] darling for this week is Meta. So,
[32:24] the Meta chart looks horrible, but I
[32:26] just want to take you through this.
[32:28] This was a big earnings beat for Meta,
[32:31] and they basically peaked, m- got above
[32:33] it a little bit. This is the the next
[32:35] earnings report. This one was bad, stock
[32:38] sold off. Got another good one, gap
[32:40] higher. That was the high and we've
[32:42] continued to move lower. Something
[32:44] stinks in Metaville. Um
[32:46] just remember
[32:48] they went on a spending spree last year,
[32:51] $14 billion effectively for the CEO
[32:55] of Scale.
[32:56] Uh Alexander Wang.
[33:00] Don't forget, October 21st they
[33:03] announced
[33:04] their massive data center is going to be
[33:07] financed by Blue Owl through an SPV.
[33:13] Zuckerberg and Alexander Wang qua clash
[33:16] over company's AI future. So, here it
[33:18] is, the guy's hired for 6 months.
[33:20] Already seems to be some internal
[33:21] problems. Then later, Wang says,
[33:25] "Micromanaging is suffocating." This is
[33:27] later in the month.
[33:28] Then you have one of the most respected
[33:30] AI people in the world, Yann LeCun,
[33:32] who leaves,
[33:33] says there's going to be more because
[33:35] the new 29-year-old AI boss is
[33:37] inexperienced and warns of an exodus.
[33:41] Ernst & Young raised red flags on the
[33:43] data center accounting after the last
[33:46] one. You saw what happened on that. Um
[33:49] they had a big gap higher.
[33:51] Look good.
[33:53] Auditor raised red flags.
[33:56] Stock hasn't been up at that high since
[33:58] the basically the opening. Uh on the
[34:01] earnings call, I'm not going to read
[34:03] this whole thing to you, but basically
[34:05] this people were worried about this
[34:07] whole situation as it was. They're not
[34:09] liking what they're hearing, they're
[34:10] wondering what's going on in terms of
[34:12] getting these models out. They're
[34:14] spending all this money on AI compute
[34:17] and again, they're putting their balance
[34:19] sheet at issue. So, you've got a lot of
[34:22] people
[34:23] freaking out on the free cash flow
[34:24] situation.
[34:27] Meta struggles with memory shortage
[34:29] despite launching its own chips. The
[34:30] reason I bring this up is none of these
[34:32] are targeted, meaning they're not part
[34:34] of a bigger story. I'm bringing this up
[34:36] because along the path of it building a
[34:38] top, there's been a lot of stories out
[34:41] there related to the company. It's one
[34:43] of the beauties of having AI and having
[34:44] my AI agents run around and pick a topic
[34:47] and have them go through things and show
[34:50] me all the ones that are
[34:52] fitting a story that could be matching
[34:54] with the price.
[34:56] What's the narrative associated with the
[34:57] price? One thing at a time doesn't
[34:59] matter. Now this week, delayed launch.
[35:03] The Facebook parent is considering
[35:04] temporary licensing Google's Gemini
[35:06] models.
[35:08] So they've been spending all this money,
[35:09] hiring all this talent,
[35:12] and then this morning again, like I
[35:13] said, they come out and say they could
[35:14] be laying off 20% or more of the
[35:17] company.
[35:19] Uh this would be a free cash flow issue.
[35:21] Now, it's not just them, and I think as
[35:24] the year goes on, if we don't see
[35:26] adoption pick up at a faster pace, if
[35:28] the costs keep going higher and the data
[35:30] center delays continue,
[35:33] you're just running into a problem here
[35:34] with the free cash flow story. I've
[35:36] shown it before. I showed Dennis the
[35:37] Butcher's work uh with cash flow of of
[35:40] the S&P. I think this is the multiple
[35:42] compression story that people have to
[35:44] pay attention to.
[35:46] Oh, and oh, by the way, in there it
[35:47] mentioned stock-based compensation for
[35:49] these companies as well, where their
[35:51] cash isn't as good. I just think you
[35:53] have to pay attention. At the same time,
[35:55] it's an election year, and one of the
[35:57] stories that's been growing,
[36:00] and it grows daily, how much people hate
[36:02] AI in the US. And if you look around the
[36:04] globe, the US hates AI more than anyone,
[36:07] and there's a lot of reasons for it, the
[36:09] jobs, the data centers. Uh I'm going to
[36:11] keep showing Josh Wolfe Josh Wolfe. He's
[36:14] a smart guy. He's really out there
[36:16] basically on the negative side. He sent
[36:18] out a letter um that I've highlighted.
[36:21] Uh but he's talking about the massive
[36:24] build-out of The data centers may be
[36:26] overextended, and I think
[36:28] there is a legitimacy to at least
[36:30] talking about the fact that a lot of the
[36:33] data centers may not be built. And if if
[36:35] that's the case, you've got a lot of
[36:36] stranded GPUs that are out there right
[36:38] now.
[36:39] One of it is moving to localized edge
[36:42] inference, and I'm going to be doing
[36:44] more edge inference stuff because I do
[36:46] believe that that is a major investment
[36:48] side away from the GPU-centric side, and
[36:52] there's a lot of companies that I've
[36:53] highlighted in some of my work uh that I
[36:55] did and I included as the opportunities
[36:57] this week on the subscriber one.
[37:00] For those of you who have not
[37:00] subscribed, you should
[37:02] go give it a shot, go through the
[37:04] thematic ideas. I'm not only trying to
[37:05] help you make money by not blowing up
[37:08] right now as this stuff unwinds, but
[37:10] also being in a position because I think
[37:13] the second half of the year, if not the
[37:14] next 9 months, whenever this we get
[37:16] reach this point,
[37:18] I think I
[37:19] already have laid out the playbook on
[37:21] the names that I want to be involved in.
[37:22] Right now, I'm long VIX personally, but
[37:24] I'm also still long semis, I'm still
[37:26] long commodities, I'm buying more of
[37:27] those and Bitcoin. I'm waiting as well,
[37:30] and I put out a Substack on this. KKR,
[37:33] which got into this, I think, at about
[37:36] $300
[37:38] if I remember correctly,
[37:40] they're selling this at 3 billion.
[37:44] You just start looking for smart places
[37:46] that are deciding that it's time to
[37:48] sell. Amazon is out raising over 30
[37:51] billion this week. This is the euro
[37:53] portion.
[37:55] Again,
[37:56] why do people hate AI so much?
[37:59] All right.
[38:00] It was a good week for AI though. Um
[38:02] if you haven't used 5.4 yet, it's
[38:05] fantastic. Um again, I I say this about
[38:07] every model when it comes out, but I
[38:09] really do enjoy using 5.4 deep research.
[38:11] I think the work that it does is
[38:13] fantastic.
[38:14] It's benchmarking for
[38:17] GDP val is now up to, I think, 80 plus
[38:20] percent, and what that means is
[38:23] of jobs
[38:25] that it can it's it's up to GDP at 80 80
[38:28] plus percent in terms of the ability of
[38:30] replacing jobs within inside the
[38:32] knowledge work side.
[38:34] Uh it's a big week for these types of
[38:36] products, a big week. A lot of the
[38:38] companies are clearly on the enterprise
[38:40] side. I've had Anthropic brought up to
[38:41] me on multiple calls
[38:43] uh and multiple trips in terms of people
[38:46] bringing it into their firm. If you guys
[38:48] still have Chat GPT Enterprise, you have
[38:50] to beg your your your tech people to get
[38:52] you uh Claude at this point. Microsoft
[38:55] announces Copilot co-work with the help
[38:57] from Anthropic. So, think of this is
[38:59] again an AI agent. So, the agentic stuff
[39:03] is starting to build up. Google's uh
[39:04] workspace brings in CLI. This is getting
[39:08] great ratings relative to model context
[39:11] protocol, MCP for Claude. So, CLI, which
[39:14] allows you to do things between your
[39:15] docs, your Gmail, and your sheets.
[39:18] Perplexity takes on Claude co-work with
[39:20] Personal Computer. I'm going to show you
[39:22] something that I built with Personal
[39:23] Computer this week.
[39:25] Anthropic is in talks with PE firms,
[39:27] including Blackstone, about an
[39:29] AI-focused joint venture to sell it to
[39:31] their port companies. You're getting
[39:34] Everyone's focused on adoption.
[39:36] Uh one podcast I listened to this week,
[39:39] uh Facts and Feelings with uh Ryan
[39:41] Dietrick. Um he had Kai-Fu Lee on and
[39:44] Steve Howell. I've known or I've met uh
[39:46] Kai-Fu. Very smart guy. I was interested
[39:48] in hearing what he had to say. And I
[39:50] thought this was an interesting take,
[39:52] and this is really my um issue right now
[39:55] with anyone on the adoption side focused
[39:57] on these guys being able to get the
[39:59] revenues that they want. The timeline of
[40:01] AI adoption is determined less by the
[40:03] technology itself and more by the
[40:04] friction in the real world. Even if AI
[40:06] capabilities advance rapidly, the
[40:08] economy moves at the speed of the
[40:09] institutions, infrastructure, and human
[40:11] behavior. That's it from a nutshell.
[40:14] So, institutions
[40:17] Anytime there's an AI committee, it's
[40:19] going to take a long time to get AI
[40:21] adoption. The infrastructure, you got to
[40:23] spend a lot of money and you got to
[40:24] build out not just on the data centers
[40:26] for the cloud, but if you're going to
[40:27] have on premise to fully use the agentic
[40:30] side,
[40:31] we don't have the infrastructure and the
[40:32] cost is going higher. The human
[40:34] behavior, humans don't want to use it.
[40:35] They don't want to lose their jobs.
[40:36] That's why they hate it.
[40:38] I've witnessed this firsthand. Several
[40:40] forces create their friction and here
[40:43] they are. So again, I think this is the
[40:45] case. So there is a large gap between
[40:48] what technology can do. So what AI can
[40:50] do right now, the GDP valve says it can
[40:53] do almost every single knowledge work
[40:55] job, especially when you connect it to
[40:57] open claw or any agentic side that's
[41:00] going to be running 24 hours a day. The
[41:03] level of disruption depends on the
[41:05] relationship between technological speed
[41:08] and the and these frictions. Um if
[41:10] technology advances faster than
[41:12] institutions can adapt and I would say
[41:14] this is exactly exactly where we are.
[41:15] The disruption is severe. Companies
[41:18] cannot adjust quickly. If you don't get
[41:20] the profit margins growing rapidly,
[41:23] the question is if you have to
[41:24] overspend, will the profit margins
[41:26] actually come down? And that's normally
[41:28] what happens with technology or do you
[41:30] fire people quicker even before it goes
[41:33] through? That's what we're in.
[41:35] Uh Frontier Foundry
[41:37] uh
[41:38] wrote a good piece on this in terms of
[41:40] the build versus buy. Uh for those of
[41:42] you people who continually want to tell
[41:45] me about buying software. For value
[41:47] people that need to step in and find
[41:49] some names, I completely agree. There
[41:51] are some names in software that you can
[41:52] go buy, but as a general rule with
[41:54] software,
[41:56] I think you're going to get hurt more
[41:58] than you like.
[41:59] Open claw. This is for those of you and
[42:02] I I've had people say there's nothing to
[42:04] do with it. Um
[42:06] So when Stanford and Princeton basically
[42:09] drop lab claw and say it's a full AI
[42:12] co-scientist.
[42:14] We're not just talking about people
[42:15] sitting at home. Um learn open claw, get
[42:18] it going on your computer. China becomes
[42:20] a genetic AI's biggest lab with open
[42:22] claw stampede.
[42:24] The craze sweeps China as authorities
[42:26] seek to clamp down on the state-run
[42:29] enterprises from using it.
[42:32] Andre Karpathy came out with a new auto
[42:34] research that lets you run hundreds of
[42:36] AI experiments a night. You should read
[42:39] about this as well. Uh this just
[42:41] continues. AI power users are rapidly
[42:44] outpacing their peers. This is a very
[42:45] scary thing. AI power users, which I
[42:48] consider myself, I use this all day
[42:49] long. I can do things with it only
[42:52] because I've used it
[42:53] for so long. You're getting to the point
[42:56] where this number is growing so rapidly
[42:57] for people that just use it as an answer
[42:59] bot. That is the reason why I did the
[43:01] video series. You have to start being
[43:03] comfortable with using it for
[43:05] everything.
[43:06] Uh Lisa Su spoke at the Morgan Stanley
[43:08] conference. I wanted to include this
[43:10] this week just because it matches up for
[43:11] the subscribers with something I showed
[43:14] in terms of the advanced packaging side
[43:16] and the names. Um
[43:18] this is an important thing and I'm going
[43:19] to write a paper on this, but
[43:22] CPUs are cool again. Intel and AMD
[43:24] reporting spikes in CPU demand due to AI
[43:28] agentic AI shortages. Think about Mac
[43:31] minis. Think about all of this stuff. So
[43:33] when you get into this, this uh story
[43:35] from Tom's Hardware,
[43:37] supply shortages are starting for server
[43:39] CPUs. We're also and that's that in
[43:41] China. We're also seeing a spike in
[43:43] demand for high-end Mac Studios and Mac
[43:44] minis. I have each of those.
[43:46] Um the rise of popularity of Claude bot
[43:49] is what triggered it. Um I just bring
[43:51] that up because again, if you're not
[43:53] using it and you're just sitting there
[43:54] waiting for it to be a software tool or
[43:56] waiting for it to make sense and to have
[43:59] how you can use it,
[44:00] I'm going to repeat it again.
[44:02] Go watch my video. Put in the reps.
[44:06] Um I just wanted to show you something
[44:08] that I decided to do. So, basically,
[44:10] what I'm going to do uh with my new
[44:12] MacBook is I'm going to try and use uh
[44:16] Carpathy's open source
[44:18] uh
[44:19] GitHub
[44:21] auto research that he put out there. And
[44:23] this is basically me asking how to set
[44:26] it up with open claw to be able to run
[44:28] it. I'll be using deep seek R1.
[44:32] I just want to show you what goes on.
[44:33] Oh, this is the personal computer. So,
[44:36] this is one of my thematic baskets
[44:39] uh for the subscribers. You've seen it's
[44:41] there. I just want to show you that what
[44:42] I did was I built this in
[44:45] let's say 5 minutes in personal computer
[44:47] and perplexity. I asked it to build me a
[44:49] dashboard, which has real-time prices on
[44:51] it, has all of the technical readout on
[44:55] the names based on the formula that I
[44:57] put in.
[44:58] Uh it has the recent news. It has the
[45:00] bull bear. I can click on any one of
[45:02] these and it immediately brings this up.
[45:04] This is what you can build in a matter
[45:06] This chart is live. Uh
[45:08] so, I can go to this site. I can do it
[45:10] whenever I want. I built that in
[45:12] literally 5 minutes.
[45:14] Uh open claw effect. I released this
[45:16] this week. Again, this fits in with the
[45:18] architectural side. We're moving away
[45:20] from GPUs. We're moving more towards
[45:23] CPUs and advanced packaging. This was
[45:25] again to emphasize those names and the
[45:27] names you want to be buying into any dip
[45:29] that happens here. One of them reported
[45:31] last week. Uh and again, I referenced
[45:33] that on the subscriber list. This is all
[45:35] related to this paper that went out. So,
[45:37] for those of you who are subscribers,
[45:39] these papers are what you want to read.
[45:42] And if you input these two papers along
[45:44] with the names and basically say which
[45:46] one at this point are the ones to buy
[45:49] based on the earnings commentary or
[45:50] whatever, you can go do your own work on
[45:52] it. That was the whole point of the
[45:53] video is that you can take my research,
[45:56] you can go upload it, and you can go
[45:58] through the same process I do. And if
[46:00] you want to come out with different
[46:01] names, come out with different names. If
[46:02] you want to say only show me names in
[46:04] emerging markets, only show me mid-cap,
[46:05] only show me small-cap, you can do that.
[46:08] So, I'm starting to focus my attention
[46:09] on crypto. This is the final part of the
[46:11] video for this week. Uh this I released
[46:14] on Substack, and I feel very strongly
[46:16] about it. I have waited patiently uh for
[46:19] the moment that the network effects
[46:21] would be in gear for Bitcoin, that
[46:24] Bitcoin would separate itself from
[46:25] anything built on code. With the Mag 7,
[46:28] the hyper-scalers, and the software
[46:29] names depressed for reasons that I think
[46:32] are structural, you're going to need
[46:34] growth assets. That's where Bitcoin fits
[46:36] in because the financial guardrails of
[46:38] the future are all related to the
[46:41] digital economy. And I know people don't
[46:43] understand how Bitcoin fits into that. I
[46:46] know they don't understand when I say it
[46:47] is the purest AI trade, but this is it.
[46:50] My whole thing, if you go back over my
[46:51] Substack, is that AI will destroy all
[46:54] public companies, every single one of
[46:56] them. There's not a single one in my
[46:57] mind that a decade from now won't be
[46:59] disrupted by AI. Right now, it's all
[47:01] based on code. It eventually be be based
[47:03] on humanoids, as well. It'll be based on
[47:05] quantum. Everything heading in that
[47:08] direction is getting there. So, this
[47:09] piece goes through why the private
[47:11] credit side
[47:12] is basically setting you up for Bitcoin
[47:14] because every single time that we've had
[47:16] one of those things I showed with
[47:17] Goldman Sachs, I want you to go look at
[47:19] what happened to Bitcoin in the
[47:20] following 3 months. Here is the chart of
[47:22] the financial sector, which I showed
[47:24] with the beginning to Bitcoin. So, right
[47:27] now, Bitcoin is down here. Financials
[47:29] are going. Go through all of the points.
[47:32] Fed pivot right here.
[47:35] Fed injection right here. The pivot
[47:37] here. All right, sorry. The pivot was
[47:39] here.
[47:40] You can go through all of the times in
[47:42] terms of what's gone on, and you guys
[47:44] will see that Bitcoin has moved over
[47:46] time with it. We also, on a weekly MACD,
[47:49] we're sitting there. We're now starting
[47:50] to hook up.
[47:51] All we really need
[47:53] is a move higher. Maybe it moves lower
[47:55] before because we get an unwind in the
[47:57] S&P, but it's been acting well for the
[47:59] last uh 2 weeks and that's because
[48:00] software has found a bottom at this
[48:02] point. I think the upside in software is
[48:04] limited, but I do think that Bitcoin
[48:06] will continue to trade with it. The
[48:07] Stripe annual letter came out this week.
[48:09] I highly recommend this as a read. It's
[48:12] more important than any of the financial
[48:14] companies because the financial
[48:15] companies you're looking at the old
[48:16] industrial world. For this, what you're
[48:19] getting is companies talking about how
[48:20] stablecoin payments are doubling to
[48:22] around 400 billion.
[48:25] That gets into the Bitcoin. We're
[48:26] preparing for a world of massive
[48:27] stablecoin adoption.
[48:29] Massive stablecoin adoption. The five
[48:32] levels of agentic commerce. The idea
[48:34] that your AIs will soon be buying stuff
[48:36] on your behalf. Human beings will not be
[48:38] making purchases 5 years from now.
[48:40] Agents will be doing the majority of
[48:42] them. You have to be involved and see
[48:44] what that means. It means the total
[48:46] eradication of the middleman. That's why
[48:48] when these names are falling down and
[48:50] people think that they're buys because
[48:53] you look over history and say it's
[48:54] cheap. When you start building in that 3
[48:56] years from now, 5 years from now, where
[48:58] AI will be, where stablecoins will be,
[49:00] what will go on.
[49:02] Where agents will be. You go, stablecoin
[49:04] firms big on AI agent payments that
[49:06] barely exist.
[49:08] These are all news this week. Dollar peg
[49:10] stablecoin surge to 313 billion in the
[49:12] risk off pivot amid the US Iran
[49:15] conflict. Dubai stablecoin demand is
[49:18] going parabolic. I'm in Dubai. What I'm
[49:20] seeing this week is insane. Flooded for
[49:23] this. Again,
[49:25] you just did a very different time, but
[49:26] let's leave it on this note today.
[49:28] If you don't believe me, Stan
[49:30] Druckenmiller said he expects global
[49:31] payment systems to run largely on
[49:33] stablecoins within 15 years calling them
[49:35] more efficient, faster, cheaper than the
[49:37] current infrastructure. If you go back
[49:39] to what Kai Wu said,
[49:41] the problem for the disruption is that
[49:43] all of these organizations that have
[49:44] spent
[49:46] billions of dollars on people and
[49:48] billions of dollars on old technology
[49:51] to get them to be modern and to be able
[49:53] to deal with stable coins, they have to
[49:55] fire all of the people and somehow or
[49:57] another be able to move to the
[49:59] infrastructure that is today. But, the
[50:01] problem is, as Kai-Fu said,
[50:05] the progress in AI is moving faster. So,
[50:07] the benefits go to the smaller companies
[50:09] and in particularly the startups.
[50:11] That is why I keep telling people,
[50:14] use AI every single day. Go watch my
[50:17] video how to do that every single day.
[50:19] Come up with new ideas, listen to
[50:21] things. Upload this and say, "How do I
[50:23] make money off what Stan's saying in
[50:24] here?"
[50:25] You'll be shocked at what you're able to
[50:26] do. All right, guys. I'll see you next
[50:28] week.
[50:30] Uh enjoy another uh volatile week.