Securitising Subprime Silicon – Plus the $2 trillion deficit, an indefinite oil siege, and what it means for stocks, markets and capital.
This week's easing was cyclical. The things that hardened were structural. That's the week in a sentence.
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Markets spent five days exhaling — a soft CPI, a softer PPI, the AI trade roaring back — while quietly signing up for an indefinite oil siege, a $2 trillion deficit funded at the worst prices since before the financial crisis, and a boom in structured credit that rhymes uncomfortably with 2008. This week: the stagflation trap the Fed can't lever its way out of; Nvidia becoming "the bank of mum and dad" for the AI industry as Wall Street securitises the boom; why the market celebrated a number the Fed doesn't even target; fiscal dominance on the tape; and Japan's cheap-money anchor starting to drag. Plus the cheque-writers vs the cheque-cashers, and a British silly-season coda.
Commentary and information for serious active investors — not advice. Do your own due diligence.
Keywords: stocks, markets, capital, investing, macro, stagflation, fiscal dominance, AI bubble, Nvidia, credit spreads, core PCE, Federal Reserve, Treasury yields, Bank of Japan, oil, Strait of Hormuz.
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