The presumption that the Fed raising short-term rates reduces inflation is predicated on the belief that higher rates reduce demand and investment. But what if higher rates don’t reduce demand and investment because the demand for intelligence and energy is unaffected by higher rates because winning the race for super intelligence has a near infinite ROI and the demand for compute will remain incalculable. Why won’t higher rates at this unique moment in history therefore lead to more inflation as interest costs are embedded in everything? And the problem is compounded as the more the Fed raises rates, the more inflation we will have and the more the Fed will need to raise rates further and so on. But what if the old models don’t apply to the current paradigm and the Fed is wrong? I think the Fed might have just made a mistake. Am I right or am I wrong?

🦔Oracle sent a force majeure notice on Project Jupiter, its AI data center in New Mexico built for the $400 billion Stargate deal with OpenAI. The campus needs a 17-mile gas pipeline to power its Bloom Energy fuel cells. New Mexico denied the pipeline permits twice. Oracle wants the right to delay payments if the site misses its 2028 opening. $18 billion in project loans are at 89 to 91 cents on the dollar. ORCL fell 5%. My Take Force majeure is for earthquakes and wars. Oracle filed one over a gas permit they got denied twice. A company with $167 billion in debt and a junk-adjacent credit rating just told its development partner it might not pay on time. I think Oracle's balance sheet is worse than the market has priced in, and this notice is the first public admission. Twenty banks lent $18 billion for this project and they can't move the debt. Santander and Jefferies are stuck with more than they planned to hold. That loan assumed Oracle's backlog converts to revenue on schedule, but half the backlog is OpenAI, a company that burns cash faster than it earns it. SemiAnalysis has first power at this site in 2029. The banks underwrote 2028. I think the AI infrastructure bet cracks here first, in the loan market, before it ever shows up in stock prices, and the banks who funded the construction are the ones left with the bill. Hedgie🤗

Reshorting the Indices: @thestreetpro Early Monday Morning Index Shorts * At 615AM... Shorted the following: * $SPY $766.81 * $QQQ  $728.43 @tomkeene