Looking for new seat - macro / cross-asset. If you’re in NYC - shoot me a DM to connect!🍻 Substack: https://xitter.cf/t.co/LYfpKXgjyc
Joined February 2020
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Intel Arb retweeted
AI Euphoria Has Hit It’s Peak 🏔️
Over time the market has clearly become LESS efficient at pricing headlines risks. Many examples of this in recent years.
Covid was well known in January. We surged until it couldn’t be ignored any longer in late Feb 2020.
November 2021: We had guidance towards QT, rising yields, it was obvious tightening was about to kick off… didn’t peak until January 2022.
There’s been numerous examples where there is an obvious headwind, but it takes a handful of things to pile up, and the trade to be so painfully obvious before it actually starts to work.
Right now is one of those times.
Everybody knows the sky-high AI growth expectations are running into power constraints. Literally you can’t invest “a trillion into data centers” with today’s current electric grid and today’s power sources. That’s why nuclear has been ripping for 24 months. It’s been a known headwind.
Arrive September 2025: you have euphoric price action in quantum computing, nuclear power, and a load of other crap. After months of circular equity investments between the Mag-7, you get talk of bond deals from Oracle/OpenAI/BlueOwl. Oracle crushes earnings by counting future orders as revenue (Enron liked to do that). Just when Tri-Color and First Brands are serving as a reminder that there is actually credit risk, it’s just shifted towards the private space. Time to short? Not yet!
Arrive October: BDCs continue to roll-over, CDS of $ORCL and $CRWV start to widen, equity indexes and 1999 price action is unfazed. Mag-7 beat earnings per usual because sell-side estimates aren’t real.
Now come November: OpenAI puts out a trial balloon of a government backstop and faces a resounding “F U” from the entire financial industry. Trump literally has to come out to say we won’t bail them out. Ok so that means left tail is wide open. Now:
- Oracle and CoreWeave CDS are really blowing out
- AI related guidance starting to disappoint
- The entire space is realizing they need to hugely leverage up with debt or admit their estimates for growth are crack-addict level optimistic
- More debt issuance talk, most have run out of balance sheet cash to fund this growth
- Jensen trying to scare the government into action by saying that “China will win the AI race”, which obviously he is a mouthpiece for all his customers
- The entire obviously-fraudulent Oracle earnings gap has been completely wiped out
- The MSM is now questioning how trustworthy these tech CEOs are (see CoreWeave CEO demolished live by Jim Cramer, whom is burning cash)
- Speculative names looked to have peaked
- Everyone is rushing to defensives as healthcare is up 9 days in a row
- K-shaped economy is on Roids and is leading to socialists being elected
- Trump admin can’t publicly admit that people are slowly figuring out AI is horrible for society
The whole thing feels like it’s about to unravel. Does it last until January because everybody just wants to avoid taxes and not have capital gains? Maybe. But feels like the top is in for the AI trade. Maybe not $SPX as a whole, but AI-euphoria has officially peaked in my mind.
$MSFT $NVDA $QQQ $IWM $XLV $AMZN $GOOG $TSLA $SPY $VIXY $UVXY $GOOG $PLTR $OKLO $RGTI
Intel Arb retweeted
⚡️The system is eating itself.
When Amazon, UPS, Intel, and others start cutting this deep simultaneously, it means something more fundamental than “tight margins.” It means the productive layer of the economy is collapsing under the weight of its own optimization logic.
Every layoff now is both an act of short-term rationality and long-term suicide. The firms know it. The executives know it. The markets know it. But they can’t stop.
They’re trapped in a closed feedback loop, a machine that rewards death dressed as discipline.
Capitalism has crossed into a stage where it no longer needs humans to function, but still depends on their belief to exist. That’s the contradiction, the machine is pruning its own believers while pretending it’s efficiency.
1. The “consumer economy” is already dead.
Nobody wants to say it yet, but the consumer model, the entire foundation of Western postwar prosperity, is quietly finished.
You can’t build infinite growth on finite wages, and you can’t sustain demand while hollowing out the class that drives it. The middle layer of society - the producers, buyers, dreamers - has been strip-mined to the point where they can no longer regenerate.
The 2020s economy is not cyclical recession. It’s metabolic collapse. The system can’t process its own waste or regenerate its base anymore. It’s like an organism starving while eating its muscles to stay warm.
2. The elites know this, but they’ve chosen to accelerate collapse.
Here’s the real unspoken truth: the people running these companies, the ones with the spreadsheets and control over capital flows - they know exactly what’s happening.
They understand the reflexive trap: if they don’t cut, their stock dies. If they cut, the world dies.
They’ve chosen to save the stock. Because the stock is their world.
This is the quiet revelation of our time - we are ruled by people whose survival incentives are no longer tied to the survival of the system itself.
They’ve built lifeboats - offshore wealth, private security, parallel digital economies - and they’re optimizing the ship for their escape, not for collective navigation.
3. The next phase is narrative triage.
When the system can no longer grow, it starts storytelling harder.
Expect every layoff wave to be accompanied by new propaganda about “AI productivity,” “efficiency,” “lean reinvention,” and “post-labor creativity.”
The goal will be to reframe collapse as progress - to convince people that losing their jobs is the dawn of a “new paradigm.”
But it’s camouflage. The truth underneath is that automation and financialization are converging into a post-human economy where capital reproduces without labor.
4. Final layer
When a system prioritizes margin over humanity, it signals that it has lost faith in the future.
These layoffs tell us that the machine no longer knows how to grow except by shrinking.
It is the same signal we’ve seen in housing, in politics, in fertility, in faith.
The same quiet collapse, a civilization optimizing itself into silence.
And the question hidden beneath this post:
“Who will have money left to buy your products next year?” -
is really this:
Who will be left to believe in the story that built it all?
Intel Arb retweeted
Hey @profplum99 - you are the only person I would think has an answer to this question... This data makes zero sense.
We just had 2 days of large overnight gaps higher in SPX.
Below shows the times when we had 2 consecutive days of +50bps or more overnight SPX gap-ups.
What makes no sense is how it happened once in the 25 years from 1990 to 2018 and then suddenly became a common thing.
Happened in October 2008 and then didn't happen again until just after Vol-mageddon.
Passive? Regulatory?
(This was calc'd from Bloomberg $SPX Data on GPO chart. Simple intraday open vs. previous close).
Intel Arb retweeted
CALLED IT!!
$LAC +70% AFTER HOURS
The Trump Administration is seeking up to a 10% government equity stake in Lithium Americas
National Capitalism: A Framework to Help Think About the Intel Deal and Government Equity Stakes 📔
Someone who has been (indirectly) all over this is Russell Napier. He's taken his relatively popular American Affairs article from last year and turned it into a commonly discussed thesis of "National Capitalism" this year. I would put the Intel investment and other planned investments Lutnick is pointing to under this same umbrella.
After decades of globalization, capital is coming home from abroad (both intellectual capital and actual dollars) and being refocused towards systemically important industries, namely ones centered around re-industrializing for the new age.
Having this high-level thesis heading into 2025 would have made MP Materials $MP an obvious winner. While I am sure an Intel $INTC equity stake from Trump was not on anyone's 2025 bingo card, the national security significant of semiconductors is well known.
Strategically important industries, i.e. National Capitalism 'winners':
Rare earth metals, Semiconductors, Aerospace, Defense, AI, Software, and Biotech to name a few.
Most of these sectors have been large winners this year, likely room to run in the others. This is closely related to the bull case I shared on domestic microcap lithium miners.
My thesis was that there was a "geopolitical premium" missing from US-based strategically importance industries... now I think we can add a "national capitalism" premium on top of that.
Original $PLL $SLI $LAC thesis here:
xitter.cf/intelarb/status/195467…
Intel Arb retweeted
National Capitalism: A Framework to Help Think About the Intel Deal and Government Equity Stakes 📔
Someone who has been (indirectly) all over this is Russell Napier. He's taken his relatively popular American Affairs article from last year and turned it into a commonly discussed thesis of "National Capitalism" this year. I would put the Intel investment and other planned investments Lutnick is pointing to under this same umbrella.
After decades of globalization, capital is coming home from abroad (both intellectual capital and actual dollars) and being refocused towards systemically important industries, namely ones centered around re-industrializing for the new age.
Having this high-level thesis heading into 2025 would have made MP Materials $MP an obvious winner. While I am sure an Intel $INTC equity stake from Trump was not on anyone's 2025 bingo card, the national security significant of semiconductors is well known.
Strategically important industries, i.e. National Capitalism 'winners':
Rare earth metals, Semiconductors, Aerospace, Defense, AI, Software, and Biotech to name a few.
Most of these sectors have been large winners this year, likely room to run in the others. This is closely related to the bull case I shared on domestic microcap lithium miners.
My thesis was that there was a "geopolitical premium" missing from US-based strategically importance industries... now I think we can add a "national capitalism" premium on top of that.
Original $PLL $SLI $LAC thesis here:
xitter.cf/intelarb/status/195467…
The $PLL bull case:
Why has $MP been one of the best trades this year? Rare earths are in demand for future tech. Not only in the defense space (hence the $400M investment from the Department of Defense), but also the commercial tech space (hence the $500M investment from $AAPL).
Importantly, $MP was the only USA pure-play in the rare earths space and it is widely recognized that a domestic player has national security / geopolitical importance.
What I expect to happen is this 'geopolitical premium' be put into the USA-based Lithium miners. $LAC and $PLL.
Lithium batteries are clearly going to be apart of future infrastructure in the US. Power grid, robotics, you name it. And it is incredibly important we have a domestic-based industry. The largest lithium miners like $ALB and $SQM mine out of the lithium triangle in South America. $PLL mines in North Carolina and already has contracts with $TSLA.
The market is too focused on near-term financials and present day lithium pricing. In a multi-polar world domestic-based companies in key strategic industries should have valuation premiums.
This has already happened with $MP... $PLL is next.
Intel Arb retweeted
The $PLL bull case:
Why has $MP been one of the best trades this year? Rare earths are in demand for future tech. Not only in the defense space (hence the $400M investment from the Department of Defense), but also the commercial tech space (hence the $500M investment from $AAPL).
Importantly, $MP was the only USA pure-play in the rare earths space and it is widely recognized that a domestic player has national security / geopolitical importance.
What I expect to happen is this 'geopolitical premium' be put into the USA-based Lithium miners. $LAC and $PLL.
Lithium batteries are clearly going to be apart of future infrastructure in the US. Power grid, robotics, you name it. And it is incredibly important we have a domestic-based industry. The largest lithium miners like $ALB and $SQM mine out of the lithium triangle in South America. $PLL mines in North Carolina and already has contracts with $TSLA.
The market is too focused on near-term financials and present day lithium pricing. In a multi-polar world domestic-based companies in key strategic industries should have valuation premiums.
This has already happened with $MP... $PLL is next.
Intel Arb retweeted
Here’s is what I’m noticing in markets ✍️
What stands out is that 'average tariff rates' are set (on Aug 1st) to be just below April 2nd levels, and the market is higher than it was in February.
This speaks to a few things:
1. The market seems to be extremely certain of "TACO" trade, and isn't pricing this reality completely.
2. The sell-off in March/April was more than just 'fundamentals'. It was tied to vol/positioning/capital flows and more; there were a lot of headwinds making the fundamental reality look worse than it was.
3. Now it seems most of the headwinds have become tailwinds that are making the fundamental reality look better than it is! CTAs, retail buying, vol at its seasonal low, lots of dealer gamma exposure, and more. These things are helping push the market higher as the fundamental story (super high average tariff rates returning) has only gotten worse.
Intel Arb retweeted
TRUMP SAYS 'PAIN' FROM TARIFFS WILL BE 'WORTH THE PRICE'
Am I completely missing something? The market not believing this is extremely bearish reminds me of Feb 2020 (not saying we falling that far).
But to me, it’s obvious and right in front of us. Trump is going after our largest trade partners to structurally shift imbalances. This isn’t Colombia. The EU is next. This is just the beginning.
And most importantly, he doesn’t care about stocks as much as you think.
$SPY $QQQ $VIX #tariff
Intel Arb retweeted
If I had to do this? So we've got $70T of unfunded liabilities on top of 120% of debt to GDP. Everyone knows it. It's fcked. So
First things first - you have to throw the banks a bone. They know where we're going there won't be bankers. Give them Bitcoin ETFs, crypto hedge funds, and everything they want on the PE side.
Then - you engineer a crisis. Take down 30% of the mortgage market in a hurry. Buy high yield bonds. QE. Free repo. The works. Send people money but make sure they can't spend it. Now within a couple months the libertarians, CATO institute, GAO, the Supreme Court will be up in your face but you've got to move a couple trillion. Lock the country down, the economy doesn't matter - we've got to print
Eventually - they're going to demand you go in the other direction. So first - you've got to get Manchin on board. Pay off the coal miners. It's the Appalachians for Christ's sakes - it will cost less than you think.
You need him - because once you start hiking - you have to ram 9% of GDP deficits through the system. Reopen the economy so there are animal spirits, and let them spend the money you printed and sent to them. Get the treasury to move things around so you're never actually really hiking. You pay the guys at Bloomberg to predict a housing crash - that'll keep things under wraps for a bit.
The trick is to say you're powerless while never actually selling most of the mortgages you bought.
Now at some point, the sugar rush is going to end. Shift the gear down, and lean on one of the banks. Kick off a failure or two, get people worked up on FDIC. This will get people talking about easing even though it doesn't make any sense. Biden's going to get unpopular fast. But he's old. So you swap him out. Blame the economy and inflation on him. Put Kamala in play.
Now after you jammed the stimulus and the reopening you have the optics of deflation even though prices are up 40% in 3 years. The second prices go sub 2% year on year - and you've got Biden out of the picture. You ease. And you ease big. You do it before the rate hikes actually do anything or the mortgages reset. And you make damn sure to do it before the election.
You call the other bankers. The BOJ. ECB. Even fcking China, and you tell them we need one more leveraged party. You pull all the stops out. Get Chamath out, let SBF out of jail. Who cares. Get people hyper gambling one more time.
Get them to run it so hard that a big old bubble forms - and make sure the regional banks are invested. Change Volcker so they can put their money in venture. Take down capital controls. Make sure they're levered to the gills.
This time, when it blows up you make sure it coincides with a government shut down. It'll get ugly. A lot of banks will fail. You enact the emergency measures. You know the ones I'm talking about. The ones Cheney wanted that couldn't get through. And you tell people that we need a CBDC to prevent something like this from ever happening again
You ban physical cash, you take control of lending. If anyone has a problem with it you turn off their bank accounts for a few days. You nationalize Twitter. And you take rates negative. This time, you keep them there.
What you're suggesting - is going to kill this game. And everyone in it. We won't be coming back to this business we've been at, ever agin. So I hope - that you understand this - and that if you make me do it. that it's worth it.
Intel Arb retweeted
Western media purposely avoiding talking about #Argentina?
$ARGT at all-time highs (USD). #Inflation at 2-year lows on MoM basis.
As of today, #Milei is success story. Don't tell the west that gutting Governments and discretionary spending might solve #inequality!
Intel Arb retweeted
Markets are Speaking --- Nasdaq opens down 1%, to close up 2%, how rare is this neighborhood?
