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SchlangDaddy - Licensed to ILL retweeted
Black & Blue 10-26-26 John Dunigan @JADunigan2 / X
Fed Funds (ZQX7) at 4.56% in 1 year, ESZ6 +33 bp, 10s -0.6 bp, CLZ6 -2.4%, BTC -80 bp
1) OAI funding suggests Anthropic $1.8 T IPO?
2) Hyperscaler guidance likely to be compute +
3) Baker says mix shift positive for infrastructure
4) SD says inference favors high bandwidth chips
5) Compute futures will benefit neoclouds and AI
6) CME compute futures launch just after Nov 9?
Labs - OpenAI is expected to complete a $30 B funding at $1.25 T valuation this week. Coatue Management and UAE investors will lead the round. OAI raised $122 B at $852 B valuation in March. OAI forecasts $70 B YE ARR. Multiple is 18X. Anthropic forecasts $110 YE ARR. 16% to sales partners on 1/2 revs puts net at $101 B. ANTH $1.8 T valuation?
Guidance - META reported last week. AMZN, GOOGL, and MSFT report this week. Amazon CEO said cloud computing capacity for 2026 is sold out, 2027 is largely sold out, and a good chunk of 2028 is sold out. Earlier this year, AMZN said 2026 capex would be roughly $220 B. Jassy said AMZN "could invest a lot more and it wouldn't be a bad use of capital."
GPUs - Gavin Baker: GPU prices are vertical because (a) mix is shifting from higher margin frontier tokens to lower margin open-weight tokens. Positive for AI infrastructure demand given lower margins at model layer. (b) throughput is steadily improving for each individual token type, GPU compute is more valuable even as like-for-like token prices decline.
Shortage - Silicon Data: To the extent there is a compute shortage, it appears concentrated at the newest chips. Long-context inference is increasingly memory-bound, which favors the chips with the most high-bandwidth memory - and that memory remains tight. The question is whether rents are starting to separate by capability rather than rising uniformly.
Capital - Silicon Data: raising capital to fund AI compute buildout has become challenging. Institutional-grade, liquid compute futures based on transparent/trustworthy benchmarks are important for the development of AI in US. Neoclouds that execute well/deliver reliable performance can lock in future revenues, reduce risk, and secure cheaper financing.
Futures - CME filed in August for 2 cash settled futures contracts based on Silicon Data indices of GPU rental rates. Initial launch target was October 5. CFTC extended its review by 45 days to November 9. CFTC request for comment closed October 20. If CFTC takes no action by November 9 end, contracts are approved by default. Increasingly likely?
SchlangDaddy - Licensed to ILL retweeted
🦔Loans backed by AI chips are on track to become a trillion-dollar market, according to Bloomberg, and the chipmakers guarantee a lot of them. Broadcom stands behind a $35 billion debt deal that buys its chips for Anthropic to lease. Nvidia lined up six major lenders for a $500 billion program and will backstop up to 25% of each deal. Those guarantees earn some of the loans investment-grade ratings.
My Take
So Broadcom guarantees the loan that buys Broadcom’s chips. If Anthropic stops paying, the chips get leased out again or sold, and Broadcom covers whatever’s left. Lenders like it because Broadcom is a safer name than Anthropic, but the risk ends up with a company whose stock already depends on selling these chips.
A Blackstone executive says lending against chips is like financing the first cars. I don’t buy that. Car loans go to millions of different drivers, and when one stops paying, the bank sells the car to someone else. These loans depend on a few AI companies, and if one walks away, the backup plan is finding another AI company to rent a pile of used chips.
The ratings let insurers buy in, so life insurance and annuity money ends up holding AI chip risk, mostly without the policyholders knowing. Every one of these deals assumes the customer contracts can’t be broken, and Anthropic is reportedly weighing whether to cancel a $45 billion contract with Nscale right now. The chip-backed loans have held up so far, trading near full value while CoreWeave’s own bonds dropped to around 80 cents on the dollar. If one of these backstops ever gets called, the market will reprice all of them at once, and Nvidia’s and Broadcom’s investors will see the guarantees in the earnings for the first time.
Hedgie🤗
SchlangDaddy - Licensed to ILL retweeted
Effective Treatments for #MECFS and #longCOVID - Here is a summary of the treatments that have worked best for my son & I over the years - many are inexpensive & readily available. We now function fairly well & live active lives again: livewithcfs.blogspot.com/p/m…
SchlangDaddy - Licensed to ILL retweeted
Over the next 10 days the October FOMC, September PCE, and a lot of S&P 500 Q3 earnings calls - including 3 hyperscalers (AMZN, GOOGL, and MSFT). We also have a run for the money of the 2 US frontier AI 'labs'. Anthropic has to file its public S1 tomorrow in order to start its IPO roadshow on November 9th. OpenAI is said to want to complete its new $30 B funding round before Anthropic's S1. A SpaceX Grok 4.8 drop next week could complicate AI risk calculus.
Other Anthropic and OpenAI related risks became known over night. Big US banks detected unauthorized 3rd party AI agents operating in customer accounts. Some attempted actions independent of user instructions. CyberCartel used multi agent AI to scale operations - theft of passwords, consumer data, and access to bank accounts. AI found PHP vulnerabilities that caused attempts to exploit them to scale into the millions within hours. 70% of all websites use PHP.
The labs face competition/substitution risks - margin erosion/elimination. They have few moats to defend themselves. IPO valuation discount is warranted. Anthropic $1.5 T IPO valuation and YE ARR $110 B forecast means a 13.6X multiple. OpenAI uses net revenue. Anthropic uses gross. Nearly half of Anthropic revenue is via sales partners. Net YE ARR is then $101 B and multiple is 14.8X. OpenAI forecasts YE ARR at $70 B. At a 14.8X multiple, its IPO target is $1 T.
Last December, Howard Marks' Is it a bubble' Memo, citing Peretz/Hobart-Huber, noted that technological revolution can be boom and bust. The boom is required to generate the money for the massive capex. The bust happens once the process beomces unstable. This week Marks said "If enough people are cautiously questioning whether there is a bubble in a certain area, then there is every reason to believe that even if it is a bubble, the market will behave very restrained."
In addition to Marks' observation, GS PB reports that short sales have outpaced long purchases by roughly 5 to 1 across global equities. Short leverage on GS's books sits at the 99th percentile of the past five years. Market saw is upswings (downswings) don't end on a reaction to bad (good) news. They end on an inability to embrace good (bad) news. The markets hate company. Psychology and positioning running neutral to negative may not be conducive to a risk off swing.
The "defending one's Ph.D. thesis" analogy is insightful and the correct take.
This quoted post is unavailable.
SchlangDaddy - Licensed to ILL retweeted
Black & Blue 10-20-26 John Dunigan @JADunigan2 / X
Fed Funds (ZQX7) at 4.69% in 1 year, ESZ6 +10 bp, 10s +1.3 bp, CLZ6 +2.1%, BTC +2.3%
1) ME oil flows normal, price reflects pent up D
2) Propensity differential says polls very wrong
3) SPCX $1 T '28 revenue, Q4 capex $35-40 B
4) Terafab Q3 volume production, SPCX+TSLA
5) Anthropic H1 $80 B loss + catastrophic risks
6) OAI incidents suggest agnts avoid monitoring
Oil - Tanker Trackers: Brent began to move up just before the MOU fell apart. Once CENTCOM began to shepherd tankers out of the SoH there was a race for oil and tankers. ME total 7 day avg (10/10) 19.08 M bpd (SoH 10.87 M bpd), 28 day avg 17.83 M bpd (SoH 10.92 M bpd), pre Iran war 58 day avg 19.06 M bpd (SoH 15.76 M bpd). Normal oil flows.
Response - P Ruffini (Echelon Insights): When you see high-propensity Democrats responding to polls at twice the rate of high-propensity Republicans, when the turnout should be roughly even, that’s a warning sign. The sample gets skewed even after weighting. This is particularly relevant in redder states where the partisan baseline is strongly Republican.
SpaceX - Q3 revenue $14.6 B (+161% YoY). ARR $500 B - $1 T by end 2027. $1 T in 2028? SI $7.6 B (+830% YoY). GrokBot is fastest growing product Musk has seen. Connectivity $5.25 B (+69% YoY), subscribers 13.6 M (+89% YoY). Space $1.8 B. 1.7 GW of Compute. Capex $19.6 B. Q4 capex $35-40 B. $90 B cash and marketable securities on 9/30.
Terafab - Q3 '28 volume production? Musk: "I do think there's a lot of merit to combining the companies as we are pretty much in the superintelligence singularity, and there's a lot to be gained from cooperating on developing superintelligence software, chip design, the Terafab obviously, robotics, mass-to-orbit with the Starmind constellation, connectivity," he said.
Anthropic - $80 B loss in H1, driven by $72 B in accounting charges tied to value changes of financial instruments issued to raise money. H1 revenue $16.3 B. Q3 revenue $16.8 B. AI infrastructure capex nearly 4X to $9 B. May spend $750 B in coming years to secure compute. Damages from a "catastrophic AI-related incident" could top commercial insurance.
OpenAI - "In both cases (GPT-6.1 Sol agent on 10/3 and GPT-6 Astra agent on 10/6), the agents considered whether monitoring safeguards should be preserved, but interpreted routine coding instructions as permission to weaken them." OAI is testing whether its models might have a tendency to avoid being monitored and look for reasons to justify doing so.
SchlangDaddy - Licensed to ILL retweeted
Daily Spark: "The core economic flaw in the AI bull case is that the marginal cost of producing compute exceeds the marginal benefit it delivers to users, raising questions about claims of unlimited demand for data centers. How much compute and how many data centers are needed depends on the returns firms are able to generate with that compute. So far, the AI payoff for firms has been slow to materialize, implying a growing reluctance to pay for AI services. That is consistent with the ongoing slowdown in token spending among corporate customers. Ultimately, the number-one variable governing the viability of data center construction models is not physical capacity or power; it is the actual price users are willing to pay for the compute being built, and companies will only pay a high price for that compute if they are able to turn the compute into higher top-line growth, bigger profit margins or substantial cost savings, little of which is showing up at scale yet."
This "core economic flaw" has been the key focus of my AI analysis since last December. And as I wrote in my recent report on "The AI Trade" (sageroadresearch.com/product…):
"The question is not whether hyperscalers can bring users to their services, but rather how much average revenue they can generate per customer relative to the price of building and maintaining their models....We believe the unit economics of agentic AI are one of the challenges most neglected by AI optimists today. As has been made clear this year, enterprises will not spend heavily on agentic capabilities unless the models improve at the same time costs come down. Maybe in an ideal world, hyperscalers would slow down the buildout as they wait for model efficiency breakthroughs and chip advancements to drive down token costs and agentic token load. However, competition won’t allow that. So, they’re racing to build out the data center capacity needed to improve the models, but that effort is only increasing the cost of building data centers, which is increasing the agentic price tag, at least in the near to medium term.
Again, the consensus seems to be that model and chip improvement alongside economies of scale will solve the agentic price problem. We see little reason for that faith, at least in the near to medium term. As we toured the country and world after releasing our “GenAI & Productivity” report in December, we often posed the same question to clients: What if agentic AI is more akin to private flight than cell phones? The TAM for both private flight and cell phones is the entire global population. However, scale made cell phones affordable for most of the population while that remains fundamentally impossible for private flight. What if agentic only makes cost sense for a sliver of use cases across sectors? We believe it’s a question far too few are confronting today."
Chart link: apollo.com/wealth/insights-n…
SchlangDaddy - Licensed to ILL retweeted
Short seller Jim Chanos - who called Enron - says AI "neo clouds" are not tech companies but equipment leasing firms - earning single-digit returns even in the boom
"Be careful that you're not putting magical valuations on mundane businesses"
He's net long AI - and still says this about the money behind it:
> The Netscape Test (0:43):
- He compared the decade before Netscape with the one after: U.S. growth was "virtually the same," and corporate profits grew 6% a year in both. His warning: don't extrapolate "much broader impacts" from AI
> The Accounting Mismatch (4:43):
- Nvidia and the data-center builders book revenue and profit "immediately." The hyperscalers spending those same dollars "are capitalizing those costs." In 1998-2000, S&P operating profits rose 30% in two years - then fell 40%
> Heroic Assumptions (6:56):
- Even with a 10-year life on the chips, "the returns on capital are going to be de minimis." Live deals pencil out at "7%, 6%, 5%, 8%" - "single digit ROICs pre-tax"
> The $2 Trillion Bet (21:21):
- On SpaceX's IPO: "the numbers don't work on the existing business," and the launch unit "still loses money." To justify almost $2 trillion, you have to "believe in Mars and the moon and data centers in space"
The AI money debate, fresh every single day
SchlangDaddy - Licensed to ILL retweeted
I spent 48 hours in SF hanging out with billionaires, data labs and AI founders and execs running $1B to $100B companies.
My observations:
1. Sooo MANY stories of data brokers making like $2M a WEEK selling company data to labs. I can't tell if it's the beginning or a bubble, and I kept wondering which niches are left. Digging into it actively.
2. At dinner, someone asked the table, "If a new model drops next month, does your company get better or worse?" HALF the table went quiet! I think that's the best question to ask about any AI startup right now.
3. The bar people talk about now is hitting $1B in revenue in 12 months (I guess that's the new unicorn?). What I didn't hear much about is retention. AI revenue can come in fast and leave fast, and I think we're going to see a lot of stories of AI companies with huge revenue and terrible retention.
4. It's pretty clear we're living through the reinvention of the computer. The model is the CPU, the harness is the operating system, and skills and plugins are the apps. Thinking about it that way makes it easier to see where the whitespace is.
5. We're maybe 12 months from an agent that can watch you work for a week and then do your job without any instructions. The screen recording plus agent memory plus local model combination makes this possible right now.
6. Agent harnesses feel like the new GPT wrappers, in a good way, especially vertical ones. The best teams I talked to treat the model as swappable. One founder walked me through routing different models to different jobs: one for taste and visuals, a cheaper one for the everyday stuff, another for text.
They use prompts they can move across models over fine-tuning, and A/B test the output on what users actually do with it: do they edit it, export it, share it? A vertical harness is basically four things: the connectors for that industry's data, evals written by people who know the work, rules for what the agent can and can't touch, and a clean screen for a human to review. The model is maybe 20% of it.
7. There's a lot of reverse engineering going on/cloning going on more than I've ever seen. People are decompiling software and rebuilding it with agents, and someone showed a suite of like 10 apps that are worth $5B+ each all that he cloned open source. Me and everyone are still thinking through what it means when software gets this easy to copy.
8. My guess is the value moves to data. If the software can be rebuilt quickly, what's worth paying for in a legacy SaaS company is the years of customer data and workflows inside it. Some SaaS companies are secretly data companies.
Gets me thinking about how do you truly value data for this saas companies? Like if we were buying these dying saas companies at 2x ARR before (as example), maybe there is a better metric. Idk, just thinking out loud here.
9. It feels like a good chunk of legacy software won't make it to the agentic era, especially anything built around people clicking through a lot of screens.
10. Every company I talked to wants to pipe its internal data into one place and expose it to agents through MCP. Then they look at the data and realize it's a mess: five versions of the same customer, old Slack channels, PDFs nobody can search. Cleaning that up feels like a big consulting opportunity!
11. A lot of founders are building the basic building blocks for agents: APIs, data layers and tools. Some of the companies I saw barely have a UI because the main user is an agent. I really believe the startups that build primitives to this agentic era will do extremely well. Building blocks is the best way to think about it.
12. Labs can get plenty of training data, but it's harder to get real examples of agents failing inside companies. Whoever has those logs has something valuable.
13. Someone running a big consumer company told me the next fight is over memory. The model that remembers the most about you wins, and the smartest model matters less than people think.
14. Physical AI came up a lot. Astra I think was the first model that got people into AI can actually do CAD, and I think a lot of people are thinking what does vibe manufacturing really look like. The line I keep thinking about came from a robotics founder: the hardest problems in AI are deployment problems now, not research problems. Their robots work on their own, call a human when they get stuck, and every one of those calls becomes training data.
15. Cybersecurity companies are having a moment and are actually cool companies to build now, especially the ones that clean up after a breach. Every agent with access to your systems is a new door into your company, and a lot of those doors were left open.
16. Some startups are worth more dead than alive now. A shutdown company with 5 years of Slack, email and code can get paid for licensing all of it. I wouldn't be surprised if founders start factoring that into when they shut down.
17. People are starting to talk about monetizing the agent web. It feels really early, but when the most popular user of the internet is an agent, what startups should you be building?
18. I think agent insurance is coming. Once an agent makes an expensive mistake, insurers will want audits before they cover anyone.
19. Several people said the hire they want most is someone with taste who can write evals. The models are getting good at generating ideas, so the hard part is judging which ones are good.
20. New trend I observed: startup raises VC, uses venture dollars to become a creator, startup fails, founder falls back on being a full-time creator and incubates other products bootstrapped.
21. Getting SIGNIFICANT distribution is HARD right now. Founders are sponsoring buses, buying billboards like crazy and throwing parties with famous DJs to get noticed. Kinda feels dotcom era in that sense.
Attention is what's scarce! The growth guy going viral sharing his UGC strategy from Wispr Flow is a good example. It's the sauce everyone wants, and I truly believe there are probably only 50 people on the planet who know how to scale these types of businesses efficiently in this era.
Always good to get that dose of SF. I felt sooo lucky to have such an incredible trip during such an incredible time in building businesses. Surreal in so many ways.
Happy to be home and locked in.
Until next time!
SchlangDaddy - Licensed to ILL retweeted
In 1938, five years into Nazi rule, 32 countries met at Evian, France to decide what to do with the Jews of Germany. They talked for nine days. They ate, drank, laughed, and agreed the Jews faced mortal danger. Then they kept their doors closed.
By 1945, about 1.5 million Jewish children in Europe had been murdered. That’s 94% of those alive at the start of the war in 1939. There was no army, no reliable passport, and no Allied rescue that arrived in time.
Survivors came out of the camps to find neighbors living in their homes and uninterested in their return. In several places, that disinterest turned into violent pogroms. Jews survived Hitler’s madness only to be killed when they tried to return home.
Hundreds of thousands of Jewish survivors had no homes and were placed back behind wire as “displaced persons.” Their ancestral homeland, recognized by the League of Nations in 1922 as the site of a Jewish national home, remained under a British blockade that kept Jewish immigration to a trickle.
In 1947, the UN offered a truncated Jewish state next to an Arab state. The Jews accepted it, but the Arab Higher Committee refused. On the eve of the 1948 invasion, Azzam Pasha of the Arab League declared it would be “a war of extermination and momentous massacre.” The war killed about 1% of the Jewish population. The rest stayed and built a country that is now a technological leader, a regional power, and home to half the world’s Jews.
No conference of self-congratulating leaders gets to decide anymore whether Jews must stay and be slaughtered or leave and hope to be saved. Now, there is a Jewish state. Now, every Jew has a home.
SchlangDaddy - Licensed to ILL retweeted
Texas was suppose to move to 5-0 and win their 3rd in a row against Oklahoma.
I was suppose to be able to rub their nose in it AND then talk shit bout Texas A&M being atrocious
Steve Sarkisian took that from me. He took that from you.
You aren’t mad enough
SchlangDaddy - Licensed to ILL retweeted
🦔Nvidia-backed Firmus pulled its $5 billion IPO on Friday, citing market volatility and bad offering terms. The Australian AI data center builder wanted a $30.6 billion valuation, roughly triple what investors paid in August.
My Take
Firmus brought in $50.8 million in revenue last fiscal year and lost $68.2 million. It runs two data centers and needs about $37.7 billion to build five more. Asking public investors to pay $30.6 billion for that was a huge swing, and Australian fund managers said so in the press all week before the deal fell apart.
Firmus was also one of the first companies to sign up for Nvidia's offer to rent back unused chips if customers don't show up. Even with the biggest name in AI standing behind it, buyers still said no at that price. I think the IPO window is closing for AI infrastructure companies without serious revenue, and I expect the next neocloud listings, like Nscale and Lambda, to face the same hard questions.
Hedgie🤗
SchlangDaddy - Licensed to ILL retweeted
🚨BREAKING: A Polymarket user put $20 on UNDER 7.5 runs in Yankees–Rays at 0.1% odds after a home run made it 4-4...
Officials then overturned the HR for fan interference & no more runs scored, turning $20 into $20,000.
SchlangDaddy - Licensed to ILL retweeted
Social Capital says that in the last week of September, DeepSeek models processed more tokens on OpenRouter than OpenAI, Google, Anthropic and xAI models combined. US lab Reflection pre-released this week its Beam open-weight model. Beam offers "Competitive open-weight performance with frontier inference compute efficiency." Beam, compute, and proprietary data allows companies to build custom/cheap AI systems. Beam seems a risk to Anthropic-OpenAI share.
A public S1 has to be posted at least 15 days before the roadshow starts. Anthropic IPO marketing is expected to start the week of November 9th. SpaceX posted its prospectus on 5/20, posted its roadshow deck on 6/4 (15 days later), and registration/pricing occurred on 6/11 (7 days later). An ANTH 11/9 marketing start and a SpaceX like timeline would see the public S1 posted on 10/23 (10/25 is a Sunday), the roadshow deck on 11/9, and registration/pricing occur on 11/16.
At the All In Summit (9/16), Brad Gerstner said AI lab revenue needs to scale with hyperscaler capex over the next few years. 2026 exit ARR needs to be $180-200 B to keep AI trade intact. $800 B capex depreciated over 4-6 years is $133-200 B. Lab revenues need to double in 2027 and double again in 2028 to pace the capex being committed. Gerstner says lab revenue is the key data point for markets. Anthropic ARR flow/ebb in April/July caused SPX respective gain/loss.
Anthropic's public S1 - with ARR update - may be released on the 23rd. Amazon, Alphabet, Meta, and Microsoft report Q3 results/outlooks the following week. Slowing Anthropic ARR in July was problematic for markets. Market nervousness may resume if the S1 doesn't show an ARR ramp. Particularly with evidence that shows China open source models are taking share from Anthropic-OpenAI. And the risk that US open weight champion Beam could erode their share further.
NHSBT is a UK-government-sponsored organization! $NWBO
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Thank you Peter $NWBO
SchlangDaddy - Licensed to ILL retweeted
Last week Jim Chanos cited observations from Paul Kedrosky: (1) major booms are either credit, government, technology, or real-estate related, (2) this is the first in a long time where all 4 applied, and (3) that those 4 all need to be harnessed and go in the right direction increases the financial risk. This week Steve Eisman said if OpenAI fails and the whole chain goes into reverse, we’ll have a massive correction which has nothing to do with the depreciation schedule (of AI chips).
At the All In Summit (9/16), Brad Gerstner said AI lab revenue needs to scale with hyperscaler capex over the next few years. 2026 exit ARR needs to be $180-200 B to keep AI trade intact. $800 B capex depreciated over 4-6 years is $133-200 B. Lab revenues need to double in 2027 and double again in 2028 to pace the capex being committed. Gerstner says lab revenue is the key data point for markets. Anthropic ARR flow/ebb in April/July caused SPX respective gain/loss.
A public S1 has to be posted at least 15 days before the roadshow starts. Anthropic IPO marketing is expected to start the week of November 9th. SpaceX posted its prospectus on 5/20, posted its roadshow deck on 6/4 (15 days later), and registration/pricing occurred on 6/11 (7 days later). An ANTH 11/9 marketing start and a SpaceX like timeline would see the public S1 posted on 10/23 (10/25 is a Sunday), the roadshow deck on 11/9, and registration/pricing occur on 11/16.
Many people observed the problematic mortgage practices before the GFC. They didn't think through the implications. As a result they failed to act. Many people now question the initiatives that sustain the AI trade. Kedrosky sees the risk as different this time. Eisman says a lab failure would throw the AI engine into reverse. Gerstner says lab AI ARR is all that matters. Anthropic updates its ARR 10/23? VIX/VVIX have 15/85 handles. Short term protection/downside tails?
SchlangDaddy - Licensed to ILL retweeted
The hockey self alley-oop is too dirty to display on national television
SchlangDaddy - Licensed to ILL retweeted
Black & Blue 10-07-26 John Dunigan @JADunigan2 / X
Fed Funds (ZQV7) at 4.705% in 1 year, ESZ6 -14 bp, 10s +4.4 bp, CLX6 +41 bp, BTC -2.6%
1) Economic collapse has stressed Iran regime
2) R sweep could catalyze US policy success
3) Powell out-Zervos FOMC supply side shock
4) Anthropic IPO without a current ARR update
5) R tail might energize US fiscal inflection step
6) Flavio '26 reform will exceed Jair '18 reform
Iran - Miad Maleki: "In September Iran loaded zero crude. Rial at 2.73 M per USD is a nonfunctioning currency, inflation +90% YoY, the economy can’t earn enough foreign currency to pay for essential imports, central bank FX interventions haven't anchored expectations, employment to population ratio is 37%, and rolling blackouts are shutting down industrial output." Regime tap out?
Game - VotePredictor: R Senate at 52% / R House at 39%. Polymarket: R Senate at 38% / R House at 10%. Iran expected oil price spikes and US casualties to force DJT into a pre mid-term deal. Not so far. Polymarket-VotePredictor suggest R sweep chance is 4-21%. If Rs do prevail, DJT political capital is restocked. That could catalyze US wins on a number of policy fronts.
FOMC - Minutes today. The DOJ told Powell in April it wouldn't reopen an investigation without a criminal referral from the Fed IG. The IG report found no basis for such a referral. The DOJ inquiry is over. Time for Powell to leave. Zervos is a supply side enthusiast. He is well regarded by Bessent. A Fed Governor Zervos might be an AI supply side effect whisperer for the FOMC.
Opaque - B Gerstner: "Coming out of July, the single most important data point in the market today: Is Anthropic monthly revenue, is OpenAI monthly revenue, $4 B or $8 B? If you’re going to underwrite $200 B of this spend, what has to be true over the next few years is that lab AI revenue scales with hyperscaler capex." Anthropic end July ARR was $65 B. What was it in September?
Fiscal - Senate Budget Chair Johnson says he'll seek $250 B - $1 T in annual fraud/waste cuts in a post mid-term reconciliation package. The GAO's most recent fraud/waste estimate was $233-521 B. $1T figure is Lexis-Nexis estimate. Andreessen told Rogan in May the administration was using AI to detect fraud/waste. Johnson's bogey is $2.5-10 T in a 10 year budget window.
Brazil - In 2018 Jair Bolsonaro won 55% of the round 2 vote. The PSL and center right parties combined won 27 Senate seats and 207 lower house seats. Both well shy of majorities in the 81 seat Senate 513 seat Chambers of Deputies. Flavio got 47% in round 1 on Sunday. The PL and center right parties combined won 58 Senate seats and 371 lower house seats. 2026<>2018.
SchlangDaddy - Licensed to ILL retweeted
In 2018, Jair Bolsonaro got 46% of the round vote and 55% of the round 2 vote. The PSL and other right of center parties won a combined 27 Senate seats and 207 lower house seats. Both were well shy of the majorities in the 81 seat Senate 513 seat Chambers of Deputies.
Flavio Bolsonaro got 47% of the vote on Sunday, a bit better than his father 8 years ago. The PL and other right of center parties won a combined 58 Senate seats and 371 lower house seats. Controlling 72% of the seats in Congress will enable Bolsonaro to advance his agenda.
Bolso can cut ministries (10+ fewer) without Congress. Broader reform will require a statute. Fiscal items - unlinking constitutional spending floors for health/education and unlinking pension/benefit increases from real gains in minimum wage - are the test. Those advancing would be a good sign.
Year to data, SPY +15.3%, EZU (Eurozone) +6.4%, and EWZ (Brazil) +36.4%. Bolso has offered to break free of Mercosur and seek bilateral deals with the US. The US could drop 301/232 tariffs/duties and a labor duty. DJT will help Bolsonaro to fortify an Americas economic zone.