For the AI buildout to pay off, Americans will eventually have to spend about 9% of GDP a year on AI services. Sit with that number. That is roughly what the entire country spends on food. A Columbia paper presented at Brookings estimates AI revenue would need to hit $3.5 trillion by 2032, about 8.8% of GDP, to justify what is being committed today. That is bigger than any investment boom in US history, and 7 times what Americans spend on phone, streaming, and internet combined. Now look at computers. Prices fell for 50 straight years, but business spending on them as a share of GDP plateaued in the 1980s and never climbed again. Cheaper and better did not mean an ever-larger slice of the economy. AI will almost certainly raise productivity. Whether it delivers the revenue investors are pricing is another matter. That gap is what the buildout is underpricing.

"Despite the prophecies that the war in Iran would plunge the U.S. into a recession, the evidence is that America’s economic animal spirits are alive and well," per WSJ

Strategic Petroleum Reserve falls to lowest level since 1982 🚨

🦔Carlyle Group put out a white paper yesterday warning that private credit's rush into AI infrastructure financing could repeat the same concentration mistake the industry made with software. They estimate about $1 trillion in private credit may be needed to underwrite AI compute buildouts. That's more than half of all assets currently managed by private credit funds. Broader forecasts put total AI infrastructure spending above $5 trillion through 2030, and most of the deal structures being used haven't survived a single downturn. My Take I've been saying some version of this for a while. The software lending playbook looked bulletproof until it wasn't. Subscription revenue, recurring contracts, low churn. Lenders stacked into it from 2020 to 2022 and then generative AI showed up and suddenly half those portfolios had obsolescence risk that wasn't priced. Now those loans are struggling to refinance and some funds are getting hit with redemption requests. AI infrastructure is the same trade with worse collateral. A data center is a physical building full of chips that depreciate on a curve we cannot model yet. A GPU-backed loan sounds secured until the next architecture ships and your collateral drops 40% in resale value. Carlyle's guy Jenkins said seven or eight counterparties make up most of the underlying financings he's seeing. Seven or eight. So you've got a trillion dollars in potential exposure funneling through a handful of names, backed by assets with no stress-test history, in a sector where the profit layer hasn't even been identified yet. Carlyle isn't saying don't lend. They're saying set exposure caps and know your counterparty. If you're in a private credit fund, ask your manager how much AI infrastructure exposure they've taken on, you'll learn a lot from how fast they answer. Hedgie🤗

1.93 million Americans have been jobless for 27+ weeks, which represents the 3rd-highest share since the Great Recession, per YF

Lumber on track for its lowest closing price since October 2024 📉 📉 Timberrrrrrrrrrrrrrrrrrrr

10 year back at 5.298

🔴 ⚠️ BREAKING: TOKYO CPI OVERALL ACTUAL 2.7% (FORECAST 2.5%, PREVIOUS 1.9%) $MACRO

you can pump stocks, you can reinvest in the same companies, but where is any new innovation. It is just the same headlines every day now

UKMTO has received a third-party report of a tanker being stuck by an unknown projectile while transiting the Strait of Hormuz, resulting in a fire. #MacroEdge

The top 1% of U.S. households own over 31% of the nation's wealth, surpassing the total wealth held by the entire middle class (the middle 60%), per CBS

Fed's Kashkari: We will do what we need to get inflation to the goal

something else happened then

Seems high

Selling off into the EOQ EOM seems kinda strange

We went in the last week from high rates are bad to high rates dont matter to high rates will pump stocks in 3 days. Bi-polar economy it seems

*BIGGEST US GRID SUSPENDS PLAN FOR NEW DATA CENTER POWER AUCTION

10-year yield surpasses 5.3% #MacroEdge

Looks like the bond market realized they changed how PCE is measured.

Surge pricing hits McDonald's