News and my thoughts from the past week (22Dec25)
More than $61 billion has flowed into the data center market so far this year. Hyperscalers are increasingly turning to outside capital in the form of debt to fund the energy-intensive infrastructure. S&P Global expects demand to continue to grow next year, despite high valuations and funding concerns leaving investor worried about a bubble. - CNBC
JAPAN TO SELL $530 BILLION OF U.S. STOCKS TO STABILIZE THE ECONOMY. JGB 10-YEAR YIELD RISES TO 2%, HIGHEST LEVEL SINCE THE DOT-COM BUBBLE IN 1999. BEARISH NEWS FOR GLOBAL MARKETS. - X user OxNobler
Morgan Stanley declares the end of the US recession and eyes early-cycle gains in 2026 - The Edge Singapore
China now has a record 3.75 terawatts of power generation capacity. That capacity has doubled over the last 8 years. This is nearly 3 TIMES more than the US, which has ~1.30 terawatts of capacity. Furthermore, China has 34 nuclear reactors under construction, more than the next 9 countries combined. Nearly 200 other reactors are planned or proposed. At the same time, there are currently no large commercial nuclear reactors under construction in the US. The US must act now to keep up with China. - X user The Kobeissi Letter
Honda to temporarily shut down factories in China and Japan because of chip shortage — disruption caused by fallout from on-going conflict within Nexperia - Tom’s Hardware
EU will *borrow* €90 billion and give it as a *loan* to Ukraine, which was the poorest nation in Europe even before the war began. The only way for Ukraine to pay the debt in the future is to sell its assets - agricultural land, minerals etc. - X user SL Kanthan.
Nonbanks/NDFI are no longer in the shadow, they are the out in the open - unregulated, unsupervised and unhinged. U.S. banks have $1.2T of exposure to nonbanks. Nonbanks now represent 51% of global financial assets. - X user Unicus
“The non-bank financial sector's share of global assets grew to 51%, or $256.8 trillion, last year and expanded at double the rate of the traditional banking industry, the Financial Stability Board said on Tuesday. Non-bank financial intermediaries involved in what is commonly referred to as the "shadow banking" sector include money market funds, hedge funds, private credit providers, pension funds and insurers among others. The sector's rapid expansion is a growing priority for regulators, who worry about its lack of transparency and the risk problems there could endanger broader financial markets.” - Reuters
Imports to busiest US seaport tumble 11.5% in November as tariffs bite, port executive says - Reuters
Margin Debt as a % of M2 Money Supply jumps to highest level since the Global Financial Crisis - BarChart
Tom Lee, fresh off a new hair cut, out on CNBC says watch out for a potential 10-15% SPX drop in the first half of 2026.
Hedge fund holdings of sovereign debt are up to a record $7 trillion. The majority of holdings are currently US Treasuries, totaling $4.2 trillion, or ~60% of the total. Hedge funds' exposure to US public debt has TRIPLED since 2018. As federal debt surges, regulatory constraints have limited banks from expanding their holdings as fast as hedge funds. As a consequence, this has raised the risk of rapid-fire sales of government bonds during market crises, when hedge funds need to raise cash quickly, as seen 2008 and 2020. The financial system has never been more leveraged. - X user The Kobeissi Letter
Fed Chair Powell says. "We can raise and lower interest rates, but we don't really have the tools to address a secular housing shortage, structural housing shortage." - Stock Market News
Elon Musk: The fundamental weakness of Western civilization is the empathy exploit. “There's a guy who posts on the internet who's great, Gad Saad, and he talks about basically suicidal empathy. There's so much empathy that you actually suicide yourself. So we've got civilizational suicidal empathy going on. I believe in empathy. I think you should care about other people, but you need to have empathy for civilization as a whole and not commit to a civilizational suicide. The fundamental weakness of Western civilization is empathy. The empathy exploit. They're exploiting a bug in Western civilization, which is the empathy response. I think empathy is good, but you need to think it through and not just be programmed like a robot. Its weaponized empathy is the issue.” (Joe Rogan Podcast)
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