Two weeks ago, AI was going to wipe out humanity. Now, 88% of the species will survive. Amazing improvement!

Podcast: Rising Yields, Fragile Tech, and Correction Risks $SPX Listen here: financialsense.com/podcast/2…

BREAKING: Brent crude oil prices rise above $107/barrel after the Houthis say they attacked a Saudi Arabian military site. US oil prices are now back above $95/barrel.

I sat down earlier this week with Cris Sheridan of Financial Sense to discuss my recent report on "The AI Trade". I broke down my concerns about enterprise adoption rates, unit economics, and buildout constraints. This year will see roughly $200 billion in enterprise AI spend. By best estimates, that number must reach $2.5 trillion to offset AI CAPEX, more than the tech sector's combined revenue currently. Enterprise AI usage is still plagued by model weaknesses, from hallucination to agentic token burn to a bias to please. Meanwhile, domestic and Chinese competition is compromising pricing power. And the buildout faces seemingly intractable supply chain, labor, and electricity limitations alongside an intensifying political backlash. You can read the executive summary of my report on "The AI Trade" here: sageroadresearch.com/product… You can listen to a few minutes of the interview here: financialsense.com/podcast/2…

WSJ: "The AI build-out is on track to become the biggest economic bet in US history, dwarfing investments made to fund other huge US infrastructure projects such as the railroads, the highway system and the plumbing for the internet. Investment in data centers and related AI infrastructure is projected to total $10.3t from 2025 to 2032, according to new estimates by economist Stijn van Nieuwerburgh. That is a staggering 3.6% of GDP a year, on average. Never before has the US economy been so dependent on the build-out of a single industry." Deeply concerning given how deeply AI spending is now woven into the US and global economy and how many threats remain that could derail expectations of AI ROI on any reasonable timeline. For just a snapshot overview of the AI vulnerability, here are some stats from my report on "The AI Trade" (sageroadresearch.com/product…): "To put some numerical context to AI bubble warnings, in our December report on “GenAI & Productivity”, we cited a calculation by former IMF Chief Economist Gita Gopinath: “A market correction of the same magnitude as the dotcom crash could wipe out over $20t in wealth for American households, equivalent to ~70% of American GDP in 2024.” She also calculated that foreign investors would lose ~$15t. She made those calculations in late 2025 and given how AI-trade concentration has increased since, undoubtedly those numbers are now greater. AI investment now accounts for 25% of US GDP growth and 8% of total GDP, exceeding the dotcom-bubble’s peak of 6.5% of GDP. The value of AI-linked firms has climbed ~$27t in the past three years, equivalent to 36% of the value of the entire US stock market. As a result, the five biggest companies in the S&P 500 now account for ~30% of the indexes’ total market cap, up seven percentage points versus five years ago. And AI-driven concentration is not just a US equity phenomenon—the top 10 firms in the MSCI Emerging Markets Index account for 41% of its total market cap, with just three semiconductor manufacturers making up 29%. Then there’s the debt picture: roughly a quarter of US gross investment-grade debt issuance this year has come from AI-related companies. And the venture capital picture: over the past 12 months, AI companies have received roughly two-thirds of all US venture capital dollars." History does not lend confidence about AI's path forward. As the FT wrote in late June, recapping findings of a BIS study: “Historical episodes of investment booms provide ‘instructive parallels’—among them the expansion of canals in the 1830s, railways in Britain in the 1840s and the dotcom boom of the late 1990s. These all had one key feature in common, a genuine technological breakthrough that attracted capital in excess of what commercial returns could ultimately justify.” WSJ link: wsj.com/economy/the-ai-build…

The world isn't running out of oil. It's running out of places to turn it into diesel. Crude is actually cheaper than it was in 2022, with Brent around $99 a barrel versus roughly $123 at that year's peak. Yet diesel just hit an all-time record. Of the $2.25 jump in U.S. diesel prices since February, just 68 cents came from crude. The refining margin alone added an estimated $1.71, with other components offsetting part of the increase. The wars didn't take out the oil fields, they took out the refineries. Damage and disruption in the Middle East and Russia, plus China holding back its own refiners, have knocked roughly 5 million barrels a day of refining capacity offline. The Gulf hit is the big one, with around three times more diesel supply lost there than in Russia. That's after Gulf states spent a decade building giant refineries and overtaking North America as the world's top diesel exporter. Meanwhile the West went the other way. Western oil companies haven't built a major new refinery in decades, more than a dozen have closed across the U.S. and Europe since 2015, and Britain went from 9 refineries at the start of the century to just 4. U.S. refineries have been running in the high 90s, leaving very little room to push harder, while restarting old plants or building new ones takes years. The usual emergency fix won't help much either. America's Strategic Petroleum Reserve holds crude, not diesel. And some available capacity is stuck for political reasons too. A Lukoil refinery in Romania remains idle while its proposed sale to Carlyle crawls through Washington approvals. For decades the energy security question was who controls the oil. Turns out it's who can actually refine it. Sources: WSJ, Agricultural Economics, OilPrice, Business Standard / Writer: Julie

BREAKING: U.S. 10-year yield surges above 5.04% for the first time since 2007.

#Space is being weaponized, #oil is heading to $150, and the world’s geopolitical red lines are being crossed one by one — is your portfolio ready? 🚀🛢🔥 @TheMacroButler is back on the @FinancialSense_ Podcast for a wide-ranging deep dive into the fault lines that will define the second half of 2026 and beyond. He connects the geopolitical dots the consensus keeps ignoring: 🚀 The weaponization of space — with the Pentagon now openly admitting on-orbit weapons, the arms race has added a third dimension, and the strategic implications for markets are only beginning. 🛢 $150 oil — why the diesel crack spread at record highs, two closed chokepoints, an SPR at a 40-year low, and a war cycle with no off-ramp are pointing crude far higher than the consensus dares forecast. ⚔️ Geopolitical red lines — from Hormuz to the Black Sea to Taiwan, the map of escalation is expanding, and every crossed line reprices risk the market hasn’t yet absorbed. 🥇 Where the smart money shelters — gold, silver, energy producers, and the hard assets that thrive when paper promises break. Zero hopium. Zero soft landings. Just the macro playbook history keeps validating. 🎧 Listen to the full conversation on the Financial Sense Podcast now. themacrobutler.substack.com/…

Thanks to Cris Sheridan from @FinancialSense_ , @TheMacroButler thesis just became an anthem — and it hits harder than any research note. 🎵🥇🔥 “Red Lines in the Sky” takes everything the consensus refuses to price in and sets it to a big, anthemic hook: the weaponization of space, $150 oil knocking at the door, rare-earth chokepoints, and the one truth Wall Street keeps forgetting — you can print the money, but you can’t print grain. This is the whole macro playbook in a tune: 🚀 Three powers drawing borders in the satellite night — the arms race that’s gone orbital. 🛢 Black gold running high — energy shortages feeding an inflation no rate hike can touch. 🥇 Measure that mountain in barrels, measure that mountain in gold — because a record-high ticker means nothing if it buys less down here on Earth. 🏛 “What if the bonds don’t hold? What if the cash runs cold?” — the sovereign debt crisis, in one devastating line. Stocks can rise while the street gets squeezed. A record high won’t fill your needs. Look past the glow — what can you carry when the numbers go? Just the truth, with a beat you can’t unhear. 🎧 Listen to “Red Lines in the Sky” now — and ask yourself: who pays for the power when the powers collide? 👇 themacrobutler.substack.com/…

BREAKING: Copper futures surge to their highest level on record, now up another +22% this year. This puts copper prices up over +70% since January 2025.

BREAKING: US diesel prices hit another fresh record high of $6.45/gallon, now up 40 cents over the last week. This puts diesel prices up +$1.00/gallon over the last month and +84% since January. In California, the average price of diesel is up to $8.40/gallon, the highest ever recorded average sales price in the US. Market expectations for an October rate hike have hit a new high.

BREAKING: The Federal Reserve unanimously raised interest rates by a quarter percentage point and penciled in an additional hike later this year. Follow our coverage for live updates ⤵️ bloomberg.com/news/live-blog…

JUST IN: Chinese robots have begun building other Chinese robots, as a new factory capable of producing 1 humanoid every 10 minutes comes online.

CHART OF THE DAY: The cost of hiring an oil tanker on the industry’s benchmark trade (Middle East to the Far East) route has topped $1 million a day for the first time -- a year ago, it was less than $100,000 a day. h/t @alexlongley1

AI vs. Advisors: When AI Research Meets Human Judgment $SPY financialsense.com/podcast/2…

Saudi Arabia's Petroline was just struck and has been shut down. This pipeline carries oil from eastern fields out to the Red Sea and is one of the main ways to bypass the Strait of Hormuz. Regardless of who claims responsibility, Iran has made it clear that no oil will leave the region unless they allow it. #saudiarabia #crudeoil #geopolitics

Jim Welsh: Why I'm Raising Cash @JimWelshMacro $SPX #oil $TLT $GLD financialsense.com/podcast/2…

“My favorite inflation index is the import/export price index, because it doesn't have adjustments... based upon these, the purest of the inflation measures, inflation is actually running at about 7%. No wonder consumer sentiment is at such a depressed level.” Jeff Gundlach

Breaking: Saudi Arabia shut down a crucial pipeline that allowed oil exports to circumvent the Strait of Hormuz, saying it had been attacked multiple times on.wsj.com/4yT1JLB

This Week’s Market Wrap: $100 Oil, 5% Yields, and Increasing Odds for Fed Hike $USO $TLT $ORCL financialsense.com/podcast/2…