The conspiracy theory that Trump is crashing the economy to bring down interest rates to refinance the national debt is complete nonsense! The U.S. is currently paying an average interest rate of about 3.3% on its $36 trillion national debt. That’s already lower than where market rates are today (the 10-year Treasury is yielding around 4% and the 30-year is closer to 4.4%). So for this plan to even begin to make sense, interest rates would need to plunge well below current levels, down to 2% or 3%. And even if that happened, it wouldn’t be some game-changing win. Yes, over time, some of the debt matures and gets rolled over. Refinancing that portion at lower rates (3% instead of 5%) could help around the edges. But you can’t just call up America’s creditors and refinance the entire $36 trillion like it’s a mortgage. That’s not how any of this works. Most of the national debt is in short-term Treasury bills and notes that are constantly rolling over. Even if rates fall, you’d still be refinancing gradually, over time, as debt matures, not in one big bang. And you definitely can’t shift all that short-term debt into 30-year bonds. The demand just isn’t there. Long-term Treasuries (those maturing in 20 to 30 years) make up only about 17% of the total market. Try cramming trillions into that, and you’d blow up the bond market. Right now, Treasury bills (which mature in less than a year) make up about 22% of U.S. debt. Treasury notes (2–10 year maturities) make up around 51%. Each part of the bond market has its own supply and demand dynamics. Bills are basically cash-like instruments; they don’t have interest rate risk and their prices barely move. That’s a big reason there’s always strong demand for them. You can’t simply shift a huge chunk of short-term debt into long-term bonds. Those carry a lot of interest rate risk, and the pool of buyers is different (mostly pension funds and insurance companies). If the Treasury tried to flood the market with long-term bonds, demand might not keep up, which would actually push long-term rates even higher. We’re already seeing some of that. Despite rising recession fears, 30-year bond yields haven’t dropped much, suggesting limited demand at those durations. Now, at the margins, the Treasury can and does tweak the debt mix…maybe shifting a little from bills to notes, or notes to bonds. But it’s a balancing act, not something you can radically change overnight.

The trade war continues because the egomaniac who started it needs Xi to call him first so he can say he "won." Totally normal way to run an economy

TSLA market cap versus S&P 500 energy sector market cap

Republicans went from pro free markets to pro command economy in 8 years

That’s true, but we also have to keep in mind that the proportion of the debt that’s currently in the form of T-bills will stay in the form of T-bills, and the proportion of the debt that’s in the form of notes will stay as notes (chart attached to illustrate how the mix usually doesn’t change all that much). Bills (with maturities under 1 year) are close to floating-rate debt—they reset quickly. So their rates will go down if the Fed cuts, but they’ll shoot right back up if and when rates rebound. Notes (2–10 years) and bonds (20–30 years) can be locked in for longer, so you can benefit from lower rates for longer using those. But my point was that this is something you can do at the margins, not in some big, dramatic way. Sure, it’d be nice to refinance some debt at 3% instead of 5%. That saves some money. But you’re not going to turn the 22% of the debt that’s in T-bills (low risk, cash equivalent) into 30-year debt (high risk, big price fluctuations) at some rock-bottom rate. Which is what I think some of the “3D chess” people were arguing. And in any case, slowing the economy dramatically to try to lower interest costs could backfire in a big way. A recession means people lose jobs, businesses go under, and tax revenue falls. That drives deficits up and pushes the debt even higher (see chart)

Lamo. Trump really thinks he can hold out longer than Xi?

This post is missing important context. Nvidia's total sales have risen fivefold over the past two years and doubled over the past year due to torrid demand worldwide for GPUs

Exactly. And to add a bit of context, Alphabet, Microsoft, Amazon, Meta, and Oracle spent a combined $250B in capex in 2024 and are expected to increase that more than $300B this year. Of that, Oracle spent $10B in 2024 and is expected to increase that to $16B in 2025 (source BofA)

Nathan Lambert estimates the total cost of DeepSeek AI for a year of operations is $500M-$1B+ He adds that "the success here is that they’re relevant among American technology companies spending what is approaching or surpassing $10B per year on AI models"

Things were good before they were bad. So let’s make sure they’re never good so they can’t go bad. 4D Chess.

It certainly validates Meta's strategy as well

Even if you take Deepseek's accomplishments at face value, lower costs for running AI models are bullish for most of the Mag-7. It might be negative for $NVDA, but it's positive for $META and $MSFT. They might be overspending now, but they can stop at anytime and their margins will go up

The panic surrounding DeepSeek kind of reminds me of what happened a couple years ago when China’s largest chip maker, the Semiconductor Manufacturing International Corporation (SMIC), was found to have manufactured 7 nm chips for Huawei. That discovery shocked the world and triggered a wave of concern about China’s technological capabilities. Is it a similar story in this case? Are people overreacting about DeepSeek the same way they did with SMIC before the full picture emerged?

On Friday, $NVDA had the biggest weighting in the S&P 500 at 6.8%. Today's 17% decline in the stock means that it accounts for approximately 1.1 percentage points of the 1.92 percentage point decline in the broad stock market index.

That Pablos Escobars—very great guy, very smart man. Treated very unfairly. Ran a business, a big one, very successful. I binge-watched Narcos. Like no one’s ever binge-watched before

The conspiracy theory that Trump is crashing the economy to bring down interest rates to refinance the national debt is complete nonsense! The U.S. is currently paying an average interest rate of about 3.3% on its $36 trillion national debt. That’s already lower than where market rates are today (the 10-year Treasury is yielding around 4% and the 30-year is closer to 4.4%). So for this plan to even begin to make sense, interest rates would need to plunge well below current levels, down to 2% or 3%. And even if that happened, it wouldn’t be some game-changing win. Yes, over time, some of the debt matures and gets rolled over.  Refinancing that portion at lower rates (3% instead of 5%) could help around the edges. But you can’t just call up America’s creditors and refinance the entire $36 trillion like it’s a mortgage.  That’s not how any of this works. Most of the national debt is in short-term Treasury bills and notes that are constantly rolling over.  Even if rates fall, you’d still be refinancing gradually, over time, as debt matures, not in one big bang. And you definitely can’t shift all that short-term debt into 30-year bonds. The demand just isn’t there.  Long-term Treasuries (those maturing in 20 to 30 years) make up only about 17% of the total market. Try cramming trillions into that, and you’d blow up the bond market. Right now, Treasury bills (which mature in less than a year) make up about 22% of U.S. debt. Treasury notes (2–10 year maturities) make up around 51%. Each part of the bond market has its own supply and demand dynamics. Bills are basically cash-like instruments; they don’t have interest rate risk and their prices barely move. That’s a big reason there’s always strong demand for them. You can’t simply shift a huge chunk of short-term debt into long-term bonds.  Those carry a lot of interest rate risk, and the pool of buyers is different (mostly pension funds and insurance companies).  If the Treasury tried to flood the market with long-term bonds, demand might not keep up, which would actually push long-term rates even higher. We’re already seeing some of that. Despite rising recession fears, 30-year bond yields haven’t dropped much, suggesting limited demand at those durations. Now, at the margins, the Treasury can and does tweak the debt mix…maybe shifting a little from bills to notes, or notes to bonds. But it’s a balancing act, not something you can radically change overnight.

The S&P 500 is currently in its 11th-worst uninterrupted decline since 1940. Over the past four trading sessions, the index has dropped 12.1%. Here are the other instances of large, continuous drawdowns and what happened next

$TSLA is such a fascinating battleground. On one side, you have the pro-Elon camp—investors who keep buying up the stock, not because of Tesla’s current EV business, but because of their near-religious belief that Elon Musk will deliver a future of robotaxis, humanoid robots, and other groundbreaking technologies. To them, Tesla isn’t just a car company; it’s a bet on the future. On the other side, you have the anti-Elon forces. Many of them can’t—or won’t—express their skepticism through the stock itself because shorting Tesla is incredibly risky, even riskier than going long. Instead, they’ve turned to boycotts, and in some cases, even intimidation tactics to pressure others into boycotting—contributing to declining sales in Tesla’s core automotive business. So who wins? The true believers are betting on Tesla’s future business lines. They don’t care about the core EV business as much, but it’s that core business that is foundational to everything else—and it’s under immense pressure. If the anti-Elon forces manage to break that foundation, does the whole vision come crashing down? Or can Elon and his company quickly pivot to the next big thing—like robotaxis, which are supposedly launching this year—and prove the skeptics wrong?

Were you paying attention? It was absolute chaos, just like today. Only he had capable people on his economic team to rein him in. It was easy to see what would happen without those guardrails

For context, Biden was +15% during this point in his term, while Trump 1.0 was -6%. Both proceeded to get much more unpopular over time

Yann LeCun of Meta said it well

He’s saying China is selling us $1 trillion worth of overpriced pencils. Makes total sense if you’re doing math on a napkin at Mar-a-Lago

This is the guy who launched Trump coin days before his inauguration. The “Golden Age of Grift” and “crime is legal” memes were pretty accurate

When the inflation kicks in. If there's one thing we found out over the last few years, it's that voters absolutely hate rising prices

It could be a backdoor way to invest in xAI (which is probably has a $100B valuation right now). X owns 25% of xAI so that's worth $25B right there.

Why do people always ignore 2022? Sure, this could be worse, but the new generation of retail investors just went through a bear market in which the Fed hiked rates from zero to 5% in 18 months. It's not like they've only seen up markets.

Even if Trump installs a “shadow Fed Chair” or eventually, a new official Fed chair, a big question is whether the rest of the FOMC plays along. One dove at the top doesn’t guarantee a dovish pivot, especially if inflation flares up again

He just validates what Trump already believes about trade

Kind of convenient that this chart cuts off in October, right before a 20% drawdown. See below for the full year performance of S&P 500 in 2018

"I will bring prices down on day 1" - Guess he was talking about stock prices

Makes sense, but this is also about much more than just the markets. The blowback will be even bigger once it hits main street (layoffs, rising prices) . And that’ll come even if the markets stabilize temporarily

Yeah, certain nft shoes can only be used for walking, others for jogging, others for running, and others for any speed.

Don't get scammed by the fake $IVANKA coin. Wait to get scammed by the real one

The TradFi version: 1. Deposit USD into your brokerage account 2. Buy HYG (5.5% APR) 3. Borrow USD on margin (2.5% APR) 4. Buy house

Bro it’s a 1.4% weight. It could go to zero and hardly make a dent on the index

Almost at the insane valuation $NET traded at during the 2020-21 SaaS bubble. Though NET peaked at a $70B market cap versus PLTR at $235B+ Meanwhile, SNOW peaked at 100x forward sales with a $120B market cap. So things could always get crazier

That'd actually make it more like gold, because gold itself is not a good inflation hedge, unless you're talking about multidecade periods

It's reasonable to be worried, but changing long-term investment plans based on politics is usually a mistake

BREAKING NEWS: Analyst fails at predicting short-term price movements.

International stocks are ripping higher. German stocks are back to all-time highs following a brief dip in April in response to Trump's "reciprocal tariffs" announcement. $EWG is up 24% YTD, sharply outperforming $SPY, which is down a little under 6%. International stocks as a whole ( $VXUS ) have also recovered and are up 8% on the year

Tough choice

$NVDA with a 6.8% weighting in the S&P 500 is taking 120 basis points off the index today. $AVGO with a 2.2% weighting is taking 40 basis points off. In other words, the S&P 500 (currently down 1.6%) would be unchanged without those two stocks!

It could be a backdoor way to invest in xAI (which is probably has a $100B valuation right now). X owns 25% of xAI so that's worth $25B right there.

I got to sit in on a fantastic panel on ESG yesterday moderated by @EricBalchunas. Lots of great points made. See the recap here: etf.com/sections/features-an…

Your dad should start charging royalties for that line!

6099. Karen haircut and the eyes

Pricing in all the BTC that will be dumped on the market when President Newsom enters office in 2029

Reminder: Congress can stop this at any time. The courts can stop this at any time

Approving a spot bitcoin ETF wouldn’t affect the SEC’s lawsuit against Coinbase. That has to do w/ listing securities. Different issue (and bitcoin isn’t a security, even in Gensler’s eyes)

There’s no 5D chess. He just wants it all: lower taxes, fewer regulations, stronger growth, lower rates and inflation, a shrinking trade deficit, more U.S. manufacturing, and lower government spending and deficits. The fact that some of these goals contradict each other is not a factor in his equation.

$NVDA has contributed about 2% to the S&P 500's return this year. That's about a quarter of the index's 8% gain. Here are the five stocks that contributed the most to the S&P 500's return in each of the past five years.

Wild guess: it'll hit the bottom of the previous trading range (~$130) before retesting the lows

$NVDA accounted for half of the S&P 500's loss yesterday, today's it accounts for half of its gain

Economists are estimating +2.2% growth for Q1. The Atlanta Fed model could be distorted due to a surge in gold imports. See the attached note from Fisher Investments

How come people are surprised every time an algo unstablecoin implodes?

DeepSeek made some clever, maybe even groundbreaking, improvements to large language model architecture. The cost of LLMs will likely fall because of that. But that was already the trend: model costs have fallen significantly; this just accelerates that. And if that’s the case, then it’s actually a positive for AI adoption. Why then is there so much panic in the air? One reason is the geopolitical angle—the “China has caught up to the U.S. in AI despite restrictions on U.S. chip exports” narrative. This remains to be seen. Some might recall that there was a similar level of hand-wringing when SMIC (China’s biggest chip fab) manufactured 7 nm chips for Huawei a couple of years ago. “How did they do that despite U.S. export controls? China has caught up!” a lot of people thought. But upon further inspection, it turns out that the process behind those chips was far less advanced and far more expensive than initially thought. China did not, in fact, catch up to TSMC. Now, obviously, chip manufacturing and LLMs are different. It’s harder to replicate the entire chip manufacturing supply chain than to develop AI models (or so I’m told). But it’s still true that people often panic about things before the full picture has emerged. The second angle to all this is the impact on the market for AI chips. “If DeepSeek can create a model on par with OpenAI’s o1 at one-tenth the cost, why bother buying Nvidia’s Blackwell chips?” Hence, the 16% slide in shares of $NVDA. There are a few ways to look at this. First, there are reports that DeepSeek used a lot more resources than the $5.5 million training number suggests. AI researcher Nathan Lambert says that “tracking the compute used for a project just off the final pretraining run is a very unhelpful [and deceptive] way to estimate actual cost,” while adding that “the CapEx on [DeepSeek’s] GPUs themselves, at least for H100s, is probably over $1B (based on a market price of $30K for a single H100).” Lambert estimates that the cost of a year of operations for DeepSeek AI is probably “closer to $500M (or even $1B+) [rather than] the $5.5M numbers tossed around.” Still, he acknowledges that that’s a success considering they are “relevant in an industry where American tech giants are spending what is approaching or surpassing $10B per year on AI models.” OK, so the $5.5 million number is misleading, but DeepSeek is still pretty dang efficient. That point, I think, you have to concede. But why would DeepSeek efficiently using the hardware available to them be a negative for the chip industry (let alone the Mag-7 outside of Nvidia)? “You can now use fewer Nvidia GPUs to accomplish the same thing.” You could have said the same thing about any generation of Nvidia chips. Hopper was more efficient than Ampere. You could accomplish the same thing with fewer Hopper GPUs than Ampere GPUs. But that didn’t stop companies from buying many more H100 chips than A100 chips, leading to much more powerful AI models. The same will likely be true of the Hopper to Blackwell evolution. That’s why I don’t think the DeepSeek developments are negative for Nvidia. I think they could certainly dent sentiment on the stock and feed the narrative that was already festering even before DeepSeek arrived on the scene— that AI capex was out of control, hyperscalers will cut back, etc. (still no evidence of that but the worries aren’t going away). For Nvidia, I think the more concerning narrative isn’t DeepSeek making AI more affordable. It’s the slowing of traditional scaling laws (more data and more powerful computers equals better models). This could be a data issue (we’re running out of data to feed the models) that will be solved with synthetic data and other techniques. But while improvements from pre-scaling slow down, other dimensions of scaling seem to be just getting started, like inference scaling (time test compute). That could be an issue for Nvidia to the extent their dominance isn’t as firm in inference as it is in training. This is the whole “Nvidia’s customers are building custom chips with Broadcom/Marvell and that will hurt Nvidia narrative.” I think that is a legitimate concern, especially with Nvidia sitting on sky-high profit margins. So, that’s the bigger issue for me with the stock, not DeepSeek. If anything, DeepSeek is good for the AI chip industry overall. Demand for AI will explode, leading to more demand for chips—whether to be GPUs or custom AI chips. And for the rest of the Mag-7? Great news. Cheaper AI means they can deliver better products without killing their margins.

Higher demand for TIPS --> lower real interest rate --> higher “expected inflation” rate assuming yields on nominal bonds aren't impacted. Though I guess demand for TIPS might not necessarily go up if nominal Treasuries get similar tax benefits.

Joe can you tell me what the article is about, I don’t read

Big rotation in the stock market under the surface today: the 200 bps difference between the daily return of SPY and RSP is the largest since 2020. RSP was up only 5.5% year-to-date versus 18.9% for SPY at the close of Wednesday; the gap has narrowed to 17.9% versus 6.7% today.

Google is the riskiest (potential disruption to search), which is reflected in its valuation, which is the lowest among the group. But that also means it has the most valuation upside -if- it can successfully navigate the AI transition. Meta arguably has the most optionality (VR, AR glasses, new types of AI-generated content, AI business/infrastructure services) and a proven track record of growing the core social media business while successfully navigating strong competitive headwinds (Snap, TikTok) Microsoft is the most diversified (numerous enterprise software business lines, gaming, cloud), etc. making it the safest from that perspective. It's a steady grower but doesn't have any clear catalysts to accelerate the story Amazon is in a similar boat--pretty diversified but more closely tied to the consumer on the retail side. Nothing on the horizon that really captures the imagination (maybe something in robotics?), but should be a steady grower that rises with the AI tide

Looking forward to seeing what happens when U.S. AI companies incorporate DeepSeek’s architectural innovations into their models and train them on 250,000 Blackwell clusters

It first hit these levels in June 2024, so it's been flat for 7-8 months. The pullback hasn't been huge in the grand scheme of things (-21% from the all time highs), but the flattening out of the stock feels bad relative to rocket ship ride the stock was on from 2023 to mid-2024.

The S&P 500 fell 25% peak to trough over nine months in 2022 as inflation and interest rates skyrocketed due to Covid. It was a global phenomenon, with both international and U.S. stocks tumbling This time, the S&P has plunged 17% in six weeks due to a self-inflicted policy shock. U.S. stocks are sharply underperforming their international counterparts w/ $SPY down ~14% ytd versus a loss of ~2.5% for $VXUS (global ex US) and a 5% gain for $EZU (Europe stocks)

There are 56 million millionaires in the world, but only 113 Kevins. Do the math

The disconnect comes from people reading way too much into short-term market moves. The market almost always bounces after the waterfall-type declines we saw in April. Whether the rally sticks or not depends on how the fundamentals of the economy and corporate profits evolve from here (which, of course, are tied closely to Trump's trade policies). You're going to get a much better read on what the market actually "thinks" in the coming months. I bet there will be much less of a "disconnect" between the headlines and stock prices six months from now (whether good or bad)

I'm not seeing it. Hasn't been much of a headwind

That's true (though AAVE also has risk). The point is you can get collateralized loans on most securities in TradFi, not just HYG. Though with the innovation/composability of crypto, I expect it will eventually blow away anything you can do in traditional finance

Down 1.7% feels like up after what we saw last week

In 2020, the 10 stocks that contributed the most to the S&P 500's return accounted for 70% of the gains and represented 26% of the market cap (2.7x). Today, the top 10 accounts for 82% of the gains and 30% of the market cap (2.8x).

And they're up just 25% over 4 years. The time period you measure can make a big difference!

IAU was pretty quick, but UNG took more than two months to get approval back in 2009 (and even longer to get creations resumed due to CFTC position limits) sec.gov/Archives/edgar/data/…

Trump: "The U.K. (Bitcoin) and Canada (Ether) have been ripping us off for far too long..."

On Monday, the February VIX contract jumped 112.6%, while the March contract rallied 86.8%. That translates into a weighted-average decline of 96.1% for inverse VIX ETFs―nearly a complete wipeout etf.com/sections/features-an… #vix #volatility #svxy #xiv

We've moved on to 9-digit names. Social security numbers are the next big thing

Yep. The writing has been on the wall

Good thought experiment, but growth sustainability is key and that varies significantly. Buying $WDAY in oct.2012(~19x forward sales) gave you a 23% CAGR. Buying in feb.2014 (~24x) gave you only 10%. Just 1-2 yrs of hypergrowth this way or that way can change things dramatically

$META and $MSFT commentary on AI capex in Wednesday's earnings calls will be a huge catalyst

Few people truly grasp just how lucrative TikTok has become—or the staggering amount of money its U.S. operations generate for the company. According to recently released data from Sacra, TikTok’s U.S. operations generated a massive $27 billion in revenue in 2024. That’s double what it made just two years ago. For context, this $27 billion represents nearly 80% of the revenue ByteDance—TikTok’s parent company—generated outside of China last year.

In fact, the lower the price goes, the better aligned the tokenomics are with incentivizing organic usage of the marketplace / bringing in users who believe in the team and competitive positioning of the project

After 20 years, gold ETFs collectively own 1.5% of the above-ground supply of gold (worth ~$200 billion at current prices). After 1.5 months*, bitcoin ETFs own 5% of all bitcoin supply (worth just over $60 billion at current prices)

"there's no capitulation bro"

18.4 vs 5-yr avg of 18.6 and 10-yr avg of 17

Staples are trading at the highest forward P/E since 1998 (22.7x) so there's probably not a ton of juice left in that trade. Interestingly nine of the 11 GICS sectors are outperforming the broad market this year. The steep drop in tech (-7%) and consumer discretionary (-8%) are weighing down the index

Google becomes a chatbot (already heading in that direction). The non-search business lines (YouTube, Google Cloud, subscriptions, etc.) which account for almost half the the company's revenue already, become a larger portion of the pie.

Even if it was logistically possible to buy 10 to 20 days of demand worth of crude over such a short period of time--which it's not--can you imagine the political and consumer uproar from doing that?

Polymarket odds of a ban are up, but still close to a coin flip

it's a great idea for the devs and early speculators. bad for everyone else

I suppose they could stay in dollar-denominated assets, but buy T-bills instead of notes and bonds. That would steepen the yield curve, which is what we've seen recently

That may or may not be the case eventually (the tech getting commoditized). But Uber maintaining its market power assumes GM and others are going to have autonomous vehicles soon (probably not). In the meantime, Waymo is growing extremely fast

So not all commodity producers are going up 🥲

Fun game! It was pretty challenging haha

Breakdown of Elon's current net worth ($426B) based on the Bloomberg Billionaires Index. His stake in $TSLA accounts for two-thirds of his wealth

Walk, jog or run depending on your virtual shoes haha

The premium in $MSTR has fallen back below 100%. The stock is now valued at just under 2x the value of its bitcoin holdings, down from a high of 3x in November, but up from 1x a year ago

Almost all current problems stem from inflation. That will determine everything

As far as I'm aware, ads on Roku are sold through multiple channels: by the company itself, by its publishers, and by its publishers through intermediaries. Wouldn’t be surprised if Netflix inventory is sold in multiple ways as well—both directly and through intermediaries