Monday was a decent squeeze day, with the Semiconductor Index surging 6.9% - led by a 13.3% gain at AMD, 11.4% at Applied Materials, and 10.4% at LAM Research. The Nasdaq100 rose 3.4%, with MAG7 somewhat lagging (up 2.5%). Ominously, Nvidia dropped 4.3% in Monday trading.
Tuesday was notably devoid of fun and games. October Consumer Prices rose a stronger-than-expected 0.4%, solidifying the likelihood of a December rate hike. Even before the CPI release, Fed Governor Waller had risen from the wrong side of the bed (in London).
November 10 – Bloomberg (Enda Curran): “Federal Reserve Governor Christopher Waller… said he supports an interest-rate hike in December, and warned that if inflation continues to accelerate he would support a half-percentage-point increase to protect the central bank's credibility… Describing the economy as strong and the labor market as stable, Waller said inflation remains too high. He then hinged his policy prescription on consumer price inflation data for October… ‘If, as I expect, the monthly rate of inflation improves in October, I am leaning toward supporting an increase in our policy rate of 25 bps,’ Waller said… ‘But if the October CPI inflation data out later today are similar to the past two monthly readings — with core CPI inflation around 0.3% or even higher — then a stronger policy move may be needed," he said. ‘In that case, I believe a 50 bps hike in the policy rate should be considered at the December meeting.’”
Markets don’t want to even consider the possibility of 50 bps. The rates market this week raised expectations for the December policy rate by 16 bps to 4.16% - implying 100% probability for a 25 bps hike next month – with 10% likelihood of 50 bps.
Recoil Week was good for tech stocks and global equities more generally. It was bad for fragile bond markets. Two-year Treasury yields surged 18 bps Tuesday, with a 36-bps spike for the week to a six-week high of 4.87%. Ten-year Treasury yields surged 11 bps Tuesday and 29 bps for the week – to a one-month high of 5.15%.
Those shorting Treasuries to hedge corporate debt positions are having a dickens of a time’. High yield spreads to Treasuries ended October at 340 bps, had dropped to 324 bps by November 4th, and then surged back to 340 bps by November 5th. With Treasury yields spiking this week, spreads narrowed all the way back to 316 bps to end the week.
Technology bonds were somewhat caught in the middle, bolstered by bullish technology stock sentiment – while facing headwinds from surging Treasury yields.
For the most part, it was back to fun and games on Wednesday. “CoreWeave Quiets Doubts Over AI Business with Upbeat Outlook.” CoreWeave’s stock surged 24.7% Wednesday, a rough session for the 74 million share short position. CoreWeave yields (’32) sank 145 bps to 13.51% - closing the week down 95 bps at 14.27%. Keep in mind that CoreWeave yields ended June at 8.82%. The Semiconductor Index surged 5.7% in Wednesday trading.
The All’s Clear has not been sounded for technology debt. Recoil Week was notably unconstructive for Oracle bonds. Despite an 8% jump in Oracle’s stock, the company’s yields (’36) surged 21 bps this week to a record 8.10% (6.04% on June 29th). Meta yields traded to a record 6.32% Thursday, closing the week up 11 bps at 6.29% (5.27% on June 29th). Microsoft yields jumped 18 bps this week to 5.45% (4.75% on June 29th), while Google (’36) yields surged 21 bps to 5.86%. SpaceX yields (’36) traded to a record 7.68% Thursday, closing the week up eight bps at 7.66%.
It may not have been “the big one,” but Thursday’s quake was still earthshaking. Whether it was a “blue wave” aftershock or a continuation of the recent swarm, the ground has been rocking way too violently. Fragilities are mounting throughout scores of structures.
November 12 – Bloomberg: “The fall of Nvidia Corp. Chief Executive Officer Jensen Huang has removed the industry’s most prominent opponent of US chip controls, setting up a showdown over potential new curbs that could accelerate China’s drive for semiconductor self-sufficiency. Huang’s exit… smooths the way for lawmakers and the US Commerce Department to choke off China’s access to computing power through smuggling and other workarounds. Those measures, if enacted, risk provoking Beijing to retaliate and shattering a fragile truce reached by Donald Trump and Xi Jinping over their cordial summits.”
I’ve too often regretted not having a large “smart people doing really dumb things” corkboard. This week would have required moving things around to ensure Jenson’s photo (escorted by Chinese mistress) adorned the coveted center position (surrounded by fellow knuckleheads).
The airwaves were full of analysis of Nvidia’s attractive stock valuation. The stock price is not interesting. And I’ll assume the company maintains their dominant position in AI chips, at least for a few years. As the “Godfather of AI,” the company will undoubtedly miss Jenson’s expertise and incredible marketing acumen.
Interestingly, Nvidia CDS dropped 12 bps this week to 129 bps. Seems reasonable to assume this move was associated with expectations for a company that will now be less willing to pursue Jenson Huang’s aggressive industry financing arrangements.
November 13 – Axios (Ina Fried and Bradley Olson): “The AI boom without Jensen Huang will test a hard truth: Even if the tech world has grown somewhat less reliant on Nvidia’s chips, it remains highly dependent on its checkbook. With rival chips maturing and recent software breakthroughs, the tech ecosystem has achieved what would’ve seemed impossible a year ago: a viable path around Nvidia. But replacing a CEO willing to bankroll startups, backstop billions in cloud debt and aggressively fund rivals to the AI giants will be much harder… The company’s checkbook will be far more difficult to replicate than its computing power… Nvidia has made $530 billion of off-balance-sheet commitments and guarantees, including to buy memory and backstops for data centers and certain companies building them… Smaller cloud providers, often called neoclouds, as well as a vast array of startups all over the world, have lost perhaps their most enthusiastic champion. Nvidia will remain a formidable competitor, but it will almost certainly become less aggressive about startup funding, acquisitions and backstops, tempering its efforts to spread exposure among institutional investors in ways that some critics said resembled the mortgage bubble.”
Nvidia will now operate under intense scrutiny. Who knew what and when? Did the company flaunt rules to accommodate billions of sales to Singapore-based MegaSpeed? Was MegaSpeed a mere tip of the iceberg? Were there efforts to mask questionable transactions in Singapore and elsewhere? How aggressive was the accounting? Shenanigans? Just how big of a schmuck was the real Jenson Huang?
November 12 – Wall Street Journal (Anissa Gardizy and Robbie Whelan): “Jensen Huang summoned his top finance executives to his office this summer. The AI economy, backstopped by Nvidia’s increasingly outrageous bets, was teetering, and Huang wanted to make sure they were getting it right. Over the course of the meeting, he proceeded to tear into the woman who is now taking over for him as Nvidia CEO. Colette Kress was ‘a deer in the headlights,’ he said… He had summoned Kress and his senior finance team to diagnose a ballooning problem: Nvidia was in talks to provide billions of dollars of guarantees to companies that couldn’t afford its chips. That included deals led by Huang’s son-in-law, Nico Caprez, who had been offering upstart cloud providers and data-center developers financing in the hopes of turning them into long-term customers. Huang had launched a dealmaking spree and was now starting to question whether it had gone too far…”
All eyes will be on interim CEO Colette Kress. “She has questioned some of Jenson Huang’s dealmaking.”
“She has challenged Huang on several decisions, including a $250bn deal to support data centre developments for OpenAI, according to two people familiar... Nvidia ultimately agreed to provide a $100bn backstop with an option to provide the remainder over time.” FT (Rafe Rosner-Uddin), November 12, 2026
There are so many facets to this unfolding scandal. But Nvidia’s “central bank to AI” label foretells industry troubles ahead. Jenson Huang ran the entire operation like few others. Chair Huang – “The AI Maestro.” “Circular financing.” Exceptionally aggressive vendor financing for scores of unproven “neoclouds” and AI stalwarts (i.e., OpenAI) alike. There are estimates of industry equity investments approaching $100 billion (will a much more cautious Nvidia reconsider its $10 billion commitment to Anthropic’s IPO?). Such an inauspicious juncture for AI to lose its central bank.
I suspect Colette Kress and other Nvidia management will want to come clean. And I’m just assuming a steady drumbeat of Jenson Huang revelations. This historic Bubble and arms race has been unprecedented. I assume things will be worse than my worst case. To be sure, Huang will have plenty of company in having pushed risk-taking and leverage to precarious extremes.
Thursday’s earthquake could not have had worse timing. If the Democrats didn’t already have enough to investigate… Public backlash against data centers and corruption. Significant cracks are already surfacing in AI-related finance (not to mention “private Credit”). De-risking/deleveraging has gathered momentum.
My thoughts this week returned to an article from last month, “Billions in Nvidia Chips Collecting Dust in Amazon Warehouses as AI ‘Paperweight’ Problem Goes Mainstream” (zero hedge 10/20). The article highlighted research suggesting billions worth of racks of Nvidia’s chips were staged in unopened containers awaiting data center completions. It all sounded so late-cycle accident-in-the-making crazy. Someone had financed enormous quantities of depreciating chips – chips whose prices remained incredibly inflated from distorted supply and demand dynamics.
And if Nvidia now tightens its financing arrangements, while Washington cracks down hard on export controls – it seems the risk of major upheaval should be taken seriously. Nvidia’s stock was down 12.7% this week. Tough environment to function as “central bank to AI.” This story will likely unfold over months.
But who am I to throw cold water on Recoil Week? Stocks certainly trade as if AI is too big to fail. Jenson was Mr. Bigstuff until the guillotine dropped Thursday. It’s just that these ominous weeks have been coming fast and frequent. It’s near impossible to differentiate aftershocks from additional quakes from different fault lines. A major two-day outage at Microsoft. Then, Friday, an unusual nationwide FAA ground stop. Trillions of AI spending as an absolute national priority (at the expense of so much, including infrastructure spending) seem more ridiculous by the week.
And as another wild week concludes, it seems that de-risking/deleveraging and fragile liquidity were the untold story. Treasuries wacked. AI debt wacked. MBS bludgeoned. And there was crypto, with bitcoin sinking almost 11% to trade below $68,000. Gold was slammed 4.7% this week, as silver sank 6.6%. It looks like serious hedge fund performance issues to me.
November 12 – Wall Street Journal (Peggy Noonan): “First, see the Jensen Huang scandal for what it is. It is potentially Teapot Dome-size, Watergate-size. Second, it is important it not be misunderstood as a merely personal story, a private matter. It isn’t a buzzy tale about a leather-jacketed titan who made a romantic misstep. It is a story about our national security, and it carries implications in all aspects of U.S. defense and cybersecurity. It is a story about an administration’s failure to take responsibility and stop harm, for reasons that are mysterious. And of course it is about a successful top-level espionage operation carried out against America by its foremost world challenger, China.”
November 13 – CNBC (Kevin Breuninger and Lim Hui Jie): “Treasury Secretary Scott Bessent… said his department and others in the Trump administration have long supported imposing restrictions on Megaspeed, the company at the center of former Nvidia CEO Jensen Huang’s spy-sex scandal. But the Commerce Department is in charge ‘and you will have to ask them about their internal processes,’ Bessent told CNBC… The Cabinet secretary’s comments hinting at disunity within the administration followed an Axios report that Bessent… had asked Commerce Secretary Howard Lutnick why he has resisted implementing export controls, especially on Megaspeed. Lutnick has ‘repeatedly stood in the way’ of cracking down on companies suspected of diverting Nvidia’s advanced AI chips to China, Axios reported.”
November 12 – Wall Street Journal (Tim Higgins): “The inevitability—the invincibility—of Big Tech felt diminished Thursday with Jensen Huang’s ouster from the company he founded and built into the backbone of the AI boom. As his power slipped away at Nvidia, the court of tech royalty was being dealt an uncomfortable truth about their new place in the world: Big Tech isn’t so big anymore nor, perhaps, so unbeholden. In the span of a little more than a week, the titans lost their grip on political power in Washington, D.C., followed by one of their biggest stars.”
For the Week:
The S&P500 rallied 2.5% (up 10.5% y-t-d), and the Dow rose 2.1% (up 8.9%). The Utilities gained 1.7% (up 6.0%). The Banks recovered 2.9% (up 6.8%), and the Broker/Dealers rose 2.4% (up 9.6%). The Transports surged 4.1% (up 18.6%). The S&P 400 Midcaps gained 2.2% (up 12.4%), and the small cap Russell 2000 increased 1.3% (up 12.4%). The Nasdaq100 recovered 3.5% (up 10.7%). The Semiconductors rallied 8.1% (up 43.2%). The Biotechs rose 2.0% (up 32.2%). With bullion sliding $192, the HUI gold index sank 7.6% (down 2.9%).
Three-month Treasury bill rates ended the week at 4.1226%. Two-year government yields surged 36 bps to 4.87% (up 139bps y-t-d). Five-year T-note yields jumped 33 bps to 4.98% (up 125bps). Ten-year Treasury yields rose 29 bps to 5.15% (up 98bps). Long bond yields jumped 21 bps to 5.48% (up 63bps). Benchmark Fannie Mae MBS yields surged 35 bps to 6.32% (up 127bps).
Italian 10-year yields rose nine bps to 4.42% (up 87bps y-t-d). Greek 10-year yields jumped 15 bps to 4.26% (up 82bps). Spain's 10-year yields gained 11 bps to 3.94% (up 65bps). German bund yields rose 12 bps to 3.38% (up 52bps). French yields surged 16 bps to 4.92% (up 136bps). The French to German 10-year bond spread widened about four to 154 bps. U.K. 10-year gilt yields jumped 18 bps to 5.34% (up 86bps). U.K.’s FTSE equities index recovered 2.0% (up 14.8% y-t-d).
Japan’s Nikkei 225 Equities Index rallied 6.5% (up 21.5% y-t-d). Japan’s 10-year “JGB” yields surged 22 bps to 2.87% (up 81bps y-t-d). France’s CAC40 rose 2.8% (up 2.7%). The German DAX equities index surged 3.6% (up 9.2%). Spain’s IBEX 35 equities index recovered 3.4% (up 15.7%). Italy’s FTSE MIB index jumped 3.6% (up 15.4%). EM equities were mostly higher. Brazil’s Bovespa gained 2.2% (up 6.9%), while Mexico’s Bolsa index slipped 0.3% (up 10.6%). South Korea’s Kospi rallied 4.6% (up 25.5%). India’s Sensex equities index increased 0.7% (down 4.3%). China’s Shanghai Exchange Index declined 0.4% (down 8.4%). Turkey’s Borsa Istanbul National 100 index gained 3.1% (up 5.2%).
Federal Reserve Credit last week increased $5.9 billion to $6.707 TN, with a 48-week expansion of $217 billion. Fed Credit was down $2.182 TN from the June 22, 2022, peak. Since the September 11, 2019 restart of QE, Fed Credit has expanded $2.981 TN, or 80%. Fed Credit inflated $3.897 TN, or 139%, since November 7, 2012 (731 weeks). Elsewhere, NY Fed holdings for foreign owners of Treasury, Agency Debt dropped $191 billion last week to $2.801 TN - the low back to July 2010. “Custody holdings” were down $238 billion y-o-y, or 8.6%.
Total money market fund assets (MMFA) retreated $35.5 billion to $7.980 TN. MMFA were up $443 billion, or 5.9%, y-o-y - having ballooned a historic $3.348 TN, or 72%, since October 26, 2022.
Total Commercial Paper added $4.2 billion to $1.508 TN - the high back to 2009. CP increased $192 billion, or 14.6%, y-o-y.
Freddie Mac 30-year fixed mortgage rates declined seven bps to 7.11% (up 87bps y-o-y). Fifteen-year rates fell 12 bps to 6.45% (up 96bps). Bankrate’s survey of jumbo mortgage borrowing costs had the 30-year fixed rate down two bps to 7.32% (up 86bps).
Currency Watch:
November 8 – Wall Street Journal (Megumi Fujikawa): “Japan spent a record $50 billion in one day during July to prop up the yen, underscoring an aggressive intervention campaign that included rare joint action with the U.S. Ministry of Finance data… showed that Tokyo bought a total of 15.399 trillion yen, equivalent to $97.16 billion, in July and August. It deployed about half of that on July 30 alone, spending 7.976 trillion yen. The sum exceeded the amount spent in April and May…”
For the week, the U.S. Dollar Index gained 1.1% to 103.412 (up 5.2% y-t-d). On the upside, the South Korean won increased 2.0%, and the Mexican peso gained 0.4%. On the downside, the Brazilian real declined 2.6%, the South African rand 2.3%, the Swiss franc 2.2%, the Swedish krona 1.8%, the Australian dollar 1.4%, the Norwegian krone 1.2%, the euro 1.1%, the British pound 1.1%, the Canadian dollar 1.0%, the Japanese yen 0.8%, the Singapore dollar 0.5%, and the New Zealand dollar 0.4%. China's (onshore) renminbi added 0.04% versus the dollar (up 4.74% y-t-d).
Commodities Watch:
The Bloomberg Commodities Index slipped 0.9% (up 21.7% y-t-d). Spot Gold dropped 4.7% to $3,884 (down 10.1%). Silver sank 6.6% to $48.74 (down 32.2%). WTI Crude declined $1.38, or 1.5%, to $88.56 (up 54%). Gasoline fell 4.8% (up 53%), while Natural Gas rallied 7.6% to $3.23 (down 12%). Copper declined 1.3% (up 9%). Wheat increased 0.7% (up 20%), while Corn gained 0.8% (up 1%). Bitcoin sank $8,150 or 10.8%, to $67,570 (down 22.9%).
Market Instability Watch:
November 8 – Bloomberg (Shuli Ren): “In a recent letter to investors, Paul Singer’s Elliott Investment Management predicted a substantial bear market ahead. There might be an abrupt change from fear of missing out, or FOMO, to fear of getting obliterated, or FOGO, the $80 billion manager wrote. While known for doom-and-gloom commentary, Elliott’s warnings of a ‘self-reinforcing unwind’ of the bull market were nonetheless being played out last week. As hedge funds limp into the year end, bargain hunters would be wise to sit on the sidelines.”
November 10 – Bloomberg (Bernard Goyder): “Investors enjoying a golden era for the equity dispersion trade should be braced for pain if the market shifts suddenly… ‘The dispersion trade is a ticking time bomb,’ Will Bartlett, chief executive officer of Parallax Volatility Advisers, said… ‘It’s just a function of when it actually blows up.’ The traditional dispersion trade involves a bet that a basket of stocks or an index like the S&P 500 will remain calm, while the individual stocks within the index swing more widely and in different directions. It’s a strategy that has proved popular with portfolio managers at multi-strategy investment firms this year as correlations between stocks sank. ‘There are a lot of people trading this with no experience in what it looks like when it goes south,’ said Bartlett.”
U.S. Credit Trouble Watch:
November 10 – CNBC (Jessica Dickler): “Americans are increasingly turning to credit cards as financial pressures mount… Collectively, credit card balances climbed by $22 billion in the third quarter to a record $1.29 trillion, according to the Federal Reserve Bank of New York’s latest household debt report... Balances are up 4.2% from a year earlier. Total household debt, including mortgages, auto loans and student loans, also expanded by $334 billion for the July-to-September period to a record $19.1 trillion. ‘Overall debt has been growing,’ the New York Fed researchers said… ‘This does reflect financial hardship out there.’”
November 10 – CBS News (Megan Cerullo): “More Americans are tumbling seriously into debt as prices and the overall cost of living continue to rise. Roughly 24% of people with a credit record are behind on medical bills, student debt, or auto or retail loans, according to a new analysis from the Urban Institute, a nonpartisan think tank. The median balance owed: $2,913. In communities of color, 30% of people are behind on payments, with a median debt in collection of $3,009.”
November 10 – Reuters (Michael S. Derby): “The overall level of troubled borrowing in the US economy rose modestly in the third quarter but did not appear to signal a notable deterioration in credit quality, a report from the Federal Reserve Bank of New York said… Loans that were in some form of trouble stood at 5% during the third quarter, up three-tenths of a percentage point from the second quarter… The report said student loans that were more than 90 days past due stood at 10.9% of borrowing in the sector during the third quarter, compared with 10.6% in the second quarter. Total household debt was up 1.8%, or $334 billion, to $19.1 trillion in the third quarter relative to the second quarter… Mortgage borrowing continued to represent the lion’s share of the cumulative debt burden, with the sector up by $257 billion to $13.4 trillion amid a rise in new home-related borrowing.”
November 10 – CNBC (Sarah Agostino): “Homeowners tapped their home equity lines of credit in the third quarter at the highest rate in more than two decades, according to a new Federal Reserve Bank of New York report on household debt... Balances on HELOCs jumped by $23 billion during the three months ending Sept. 30, the largest increase since 2005. That brings the outstanding amount owed to $481 billion… This also marks the 18th consecutive quarterly increase. HELOC balances peaked at roughly $714 billion in the first quarter of 2009, according to a 2015 New York Fed report.”
November 11 – Bloomberg (Jeannine Amodeo): “CoreWeave Inc. plans to raise at least $4 billion through an investment-grade loan offering after the AI computing supplier boosted its annual sales forecast, easing investor concerns about its debt-laden business. Morgan Stanley and Mitsubishi UFJ Financial Group Inc. are leading the potential financing, which would be syndicated to investors in phases…”
Global Credit Bubble Watch:
November 12 – Yahoo Finance (Brian Sozzi): “Anthropic shouldn’t count on bond king Jeffrey Gundlach buying into its inevitable debt issuances to support its AI future. ‘I wouldn’t touch it,’ the outspoken DoubleLine founder said… ‘Anthropic is angling for an investment-grade rating. I think that if they get an investment-grade rating, the rating agency that gives it to them should be investigated because there’s no way that they deserve an investment-grade rating.’”
Global Credit and Crisis Watch:
November 11 – Bloomberg (Carolina Wilson): “Fitch Ratings placed Paraguay’s credit rating on watch for a potential downgrade…, citing risks to the nation’s finances and economy from a banking crisis that toppled President Santiago Peña and rattled investors. The ratings company placed a negative label on Paraguay’s BB+ long-term foreign-currency debt, removing its previous positive outlook… The move follows the collapse of Ueno Bank, the South American country’s sixth-largest lender, which was seized by regulators earlier this month after its capital fell below required levels.”
Leveraged Speculation Watch:
November 10 – Bloomberg (Bei Hu): “Global equity hedge funds cut risk at the steepest rate in more than a decade through the first week of November as a widespread unwind gathered steam, Morgan Stanley prime brokers wrote… The gross market value of long-short stock funds declined 10.7% since late June, they wrote. The figure shows the scale of the pullback among global investors, who have been hit hard by a rout in artificial intelligence stocks that gathered steam following the recent US mid-term elections.”
November 10 – Bloomberg (Nishant Kumar and Liza Tetley): “Chris Rokos’ macro hedge fund lost 4.9% last month, joining a cohort of big name peers losing money as a series of shocks roiled financial markets. The decline trimmed the fund’s year-to-date gains to about 8%... Rokos Capital Management… manages about $22 billion…”
November 10 – Bloomberg (Natalia Kniazhevich): “Last week’s rout in US stocks may have flushed out some concentration excess in the markets, but it didn’t eliminate it entirely. Global macro hedge funds, which trade products such as equity indexes and exchange-traded funds, have barely reduced their equity exposure as the S&P 500 Index posted its worst week since 2025, data compiled by Goldman Sachs… prime brokerage show. At the same time, retail investors and hedge funds focused on individual stocks headed for exits. Positioning leaves macro investors, which primarily express their views through equity indexes, futures and swaps, as a potential source of pressure if sentiment deteriorates amid a busy two-week stretch on Wall Street.”
November 12 – Bloomberg (Laura Noonan): “The Financial Stability Board is preparing to launch a consultation on how to gather data on hedge funds’ leveraged bond bets, after early efforts to foster transparency were frustrated by different definitions and restrictions on the cross-border flow of information. Chaired by Bank of England boss Andrew Bailey, the FSB’s Non-Bank Data Task Force had hoped to deliver a report on data challenges related to leveraged bets on sovereign bond markets by ‘mid-2026’… That date has come and gone, and the potential fallout from the so-called basis trade has been replaced by AI as regulators’ most immediate concern.”
AI Bubble Watch:
November 12 – Axios (Zachary Basu): “Jensen Huang’s departure from Nvidia has plunged the AI industry into uncharted territory — a corporate earthquake that dwarfs even the chaos unleashed by Sam Altman’s temporary firing from OpenAI in 2023. Nvidia is the backbone of the global AI economy, with its chips, investments and financial guarantees sustaining an entire ecosystem of companies worth trillions of dollars. At the center of that vast financial flywheel is Huang, who spent 33 years making himself synonymous with Nvidia — and Nvidia synonymous with the AI revolution. ‘This is no ordinary CEO. This is no ordinary company. This is no ordinary sector. This is no ordinary time,’ economist Mohamed El-Erian wrote on X, warning of contagion across the AI industry.”
November 8 – CNBC (Kif Leswing and Kamaron McNair): “Nvidia has opened an investigation into co-founder and CEO Jensen Huang’s relationship with a businesswoman who intelligence agencies say is a Chinese spy. U.S. intelligence agencies have expressed concerns that the woman, Alice Huang, who is affiliated with a cloud company and an Nvidia customer called Megaspeed, has been passing information to Beijing… Huang told Nvidia staff… he had an affair with the woman and that Nvidia’s board of directors had opened an independent investigation into the spying allegations. ‘I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did… I am deeply sorry.’”
November 11 – CNBC (Matt Peterson): “The swirl of sex-and-spying allegations around Nvidia CEO Jensen Huang is raising a worrying question: Could trouble at the chipmaker spread through the tightly connected financial network Nvidia has built to support the artificial intelligence boom? Serious problems with Nvidia could do far-reaching economic and financial damage. The company has made hundreds of billions of dollars in financial commitments to other firms to help the industry grow, earning it the nickname the ‘central bank of AI.’ The Federal Reserve and other financial institutions are closely watching the AI buildout to monitor for the possibility that an unexpected event could destabilize the global financial system.”
November 9 – Bloomberg (Catherine Thorbecke): “No American argued harder for selling artificial-intelligence chips to China than Nvidia Corp.’s chief executive, Jensen Huang. His recurring advocacy previously could be easily explained by run-of-the-mill self-interest, with billions of dollars at stake. Now, that explanation has suddenly gotten a lot murkier. Whether he was wrong or right in what he believed, everything that Huang has spent nearly every public appearance pitching in recent years has gone out the window after reports that he had an affair with a woman US intelligence officials suspect of being a Chinese spy.”
November 9 – Bloomberg (Ian King): “The office of Nvidia Corp.’s Jensen Huang has an unusual setup: The chief executive officer sits at an enormous oval desk facing his lieutenants, with room for more employees in stadium seating behind them. The arrangement — created as part of Nvidia’s headquarters in Santa Clara, California — is purpose-built to suit how Huang runs the company. Every major decision flows through him, and he weighs in on even the most minute aspects of the business. Huang has about 60 direct reports, far more than the average tech leader, and they send him emails with ‘top five things’ that he reads and responds to at all hours. Though it’s not uncommon to see cultlike tech CEOs who obsess over details, Huang is in a class of his own. He has led the business since its very beginning 33 years ago…”
November 10 – Wall Street Journal (Berber Jin): “OpenAI grew revenue by roughly 50% to $10 billion from the second to the third quarter, but continued to report heavy operating losses… The company shared its latest results with investors…, just as Anthropic was preparing to mount its much-anticipated IPO next week. The maker of Claude recently disclosed that its revenue rose to $17 billion in the third quarter while reporting a smaller operating loss of $567 million during that period. The numbers show that OpenAI is accelerating revenue growth but still has a long way to go to match its rival’s sales and operating efficiency. The company grew revenue by only 18% in the second quarter compared with the first…”
November 11 – Wall Street Journal (Noah Higgins-Dunn and Amrith Ramkumar): “Three states—Texas, Ohio and Georgia—account for more than 40% of all planned data-center capacity combined. All three of those states saw strong voter pushback against data centers and artificial intelligence in the recent midterm elections… Now, investors and AI companies are waiting to see what kind of policies newly elected Democrats will enact to curtail upcoming data-center construction projects, which approached $100 billion in private spending as of September.”
November 10 – Yahoo Finance (Jake Conley): “The Democrats’ stunning victories in the Lone Star state have thrown the future of one of America’s most business-friendly states into question, raising uncertainty over everything from data centers and energy pipelines to Elon Musk’s sprawling infrastructure investments. Arguably the biggest question for Texas will be the future of the state’s data center boom, as investors and developers looking for wide swaths of land and an abundant power supply have found both in spades… Texas is expected to account for roughly 30% of the US data center capacity planned to come online by 2028, and about a quarter of that expected to be online by 2030, according to… SemiAnalysis.”
November 9 – Bloomberg (Michelle Cheng): “Data center builders may face significantly higher borrowing costs when billions of dollars in debt comes due in the months ahead, a byproduct of rising benchmark US yields that threatens to make financing the AI industry’s expansion that much more expensive. Some $13.4 billion of outstanding fixed-rate, dollar-denominated debt is expected to mature 2027, according to… BloombergNEF. If that debt were fully refinanced based on prevailing Treasury yields as of October 2026, developers would face a 2.85 percentage-point surge in the interest rates on their debt — increasing expenses by at least $380 million…”
November 9 – Bloomberg (Dana Hull and Julian Hast): “SpaceX plans to construct, own and operate a gas-fired power plant and super-compute facility at its company town in Starbase, Texas… The estimated investment for the initial phase of the project is $24 billion. The city commissioner will consider the approval of a tax abatement and development agreement at a Dec. 9 meeting. The proposal is the latest sign that CEO Elon Musk is seeking to vertically integrate SpaceX’s value chain for natural gas, the primary power-plant fuel that data center developers are using to get the facilities up and running. SpaceX is also looking to fuel some of its rocket launches with a super-chilled and purified form of the gas.”
November 10 – Reuters (Tatiana Bautzer): “Banks worldwide are trying to curb the soaring cost of AI agents as spending on the tokens that power them could easily reach 20% of total labor costs, according to McKinsey’s Global Banking Annual Review. Responsibility for controlling AI-related spending has shifted to new teams that some banks call AI FinOps. Initially, banks sought to rein in costs with systems that directed employees to different AI models based on the complexity of their queries. ‘But those models are ineffective when AI agents are working, because they communicate with each other and tokens quickly add up,’ said Vik Sohoni, a senior partner at McKinsey… As a result, banks are becoming more selective about where they deploy agentic AI, focusing on areas with the strongest expected returns.”
November 11 – Bloomberg (Allison McNeely and Dani Burger): “Sixth Street Partners Chief Executive Officer Alan Waxman said he sees growing signs of upheaval in the artificial intelligence boom… The amount of capital spending on AI is unprecedented ‘and no one truly understands the unit economics because they keep evolving,’ Waxman said… ‘It’s hard for us to think about, at least on the credit side. On the equity side, it’s a little bit different.’ …Sixth Street is concerned about the rapid expansion of credit in the sector, along with ‘speculative fervor or animal spirits or FOMO,’ and it’s starting to see signs of disruption, such as banks looking to sell construction loans... Lenders have pulled back from financing AI infrastructure projects amid growing concern about risks in the sector.”
November 11 – Bloomberg (Coco Liu): “A board member for the largest public pension plan in the US has raised concerns about its AI investments, saying the growing backlash against data centers can hit asset values and returns. ‘There is a concern about stranded assets’ as community pushback leads to permitting delays that can undermine the economics of AI data centers, said Mullissa Willette, who helps oversee investment strategy for the California Public Employees’ Retirement System. ‘Social cohesion risk, as I call it, is a really important, often overlooked aspect of making investment decisions,’ Willette… said…”
November 9 – Financial Times (David Keohane): “SoftBank has slumped to its first quarterly loss in almost two years after taking a charge tied to its ambitious US data centre push as founder Masayoshi Son’s vast AI bet comes under increasing strain. The unexpected ¥1.1tn ($7bn) loss for the three months to September fell well short of the ¥84bn profit expected by analysts and underlines how Son’s aggressive wager on AI has linked the Japanese group’s fortunes to the technology. In a sign of the hurdles facing the AI industry, SoftBank said… the $3.7bn writedown reflected ‘the evolving requirements of its existing and planned projects’, adding that it related to ‘non-refundable advance payments’ the company had made to secure equipment to generate power for data centre projects.”
Iran War Watch:
November 12 – Reuters (Jana Choukeir and Elwely Elwelly): “Four oil tankers were hit by explosions in the Strait of Hormuz, Iran’s military said on Thursday, adding that the vessels had ignored warnings and entered what it considers restricted areas of the strategic waterway. Tankers are still facing attacks across the strait, despite a rebound in traffic and expectations of a de-escalation in the war between the United States and Iran that have been reflected in falling oil prices.”
Trump Administration Watch:
November 12 – Wall Street Journal (Natalie Andrews and Alexander Ward): “President Trump said… the U.S. didn’t need a deal with Iran and would prefer Vice President JD Vance, who has taken the lead in negotiations, work on investigating American cities run by Democrats. ‘I have asked Vice President Vance to focus his complete and total attention on the Massive Corruption and Crime taking place in Democrat run Cities and States throughout the U.S.,’ Trump posted... ‘We don’t need a deal with Iran. Those days have long since passed. We’ve got their money, Hundreds of Billions of Dollars, and we’ve got their Strait!’ The move comes as Vance had opened a communications channel with Mohsen Rezaei, the hard-line secretary of Iran’s top security body, and considered face-to-face talks with him.”
November 9 – Axios (Barak Ravid): “President Trump said… a renewed military campaign against Iran is ‘quite unlikely’ and ‘doesn’t seem to be necessary.’ Trump stopped short of saying the war was over… Trump made his comments less than a week after conceding that the war was one of the reasons Republicans lost the midterm elections. The president in recent days has been weighing three options: launch new strikes, continue to strangle Iran's regime economically, or cut a deal that includes significant concessions to the Iranians. Trump signaled on Monday that he’s going with the strangle strategy for now.”
November 9 – Reuters (Courtney Rozen and Kanishka Singh): “US President Donald Trump’s close relationship with Nvidia CEO Jensen Huang came under renewed scrutiny…, after the company said its board was investigating whether the tech executive has been the target of a foreign intelligence effort. Huang is one of Trump's closest allies in Silicon Valley, and the relationship between the two dates to at least 2025. Over the past two years, he has repeatedly voiced support for the administration's agenda and become a regular presence in Washington as Nvidia sought to sell advanced chips to the Chinese market.”
November 9 – New York Times (Ana Swanson and Devlin Barrett): “Investigators at the Commerce Department were deep into a monthslong investigation of a Singaporean company that they suspected of smuggling Nvidia’s artificial intelligence chips into China when their work came to a sudden halt late last year. The investigation centered on Megaspeed, a data center company led by an executive who U.S. officials now believe to be a Chinese spy who had a relationship with Nvidia’s chief executive, Jensen Huang. But the case was abruptly transferred to the Justice Department last year. The shift came after Commerce Department investigators working on the case received an email from Nvidia’s general counsel seeking information about the inquiry into Megaspeed.”
November 8 – New York Times (Maggie Haberman, Jonathan Swan, Julian E. Barnes and Tripp Mickle): “Secretary of State Marco Rubio oversaw the drafting of the highly classified memo this past spring warning top Trump administration officials that Nvidia’s chief executive, Jensen Huang, was in a close relationship with a Chinese spy… The document was based on classified intelligence from electronic surveillance of Alice Huang, a Chinese citizen who was a senior executive at a Singapore-based company that was buying Nvidia’s advanced artificial intelligence chips and being investigated for illegally smuggling them into China. U.S. officials had concluded that Ms. Huang was in a close relationship with the Nvidia chief… and that she had been recruited to spy by China’s top intelligence agency…”
November 11 – Axios (Maria Curi and Marc Caputo): “Treasury Secretary Scott Bessent confronted Commerce Secretary Howard Lutnick over a failure to place Nvidia customer Megaspeed on a list of companies that pose national security concerns, sources familiar told Axios. The Commerce Department oversees the export of sensitive U.S. technologies and Lutnick’s actions — or lack thereof — are increasingly under scrutiny following revelations that Nvidia CEO Jensen Huang had an affair with Megaspeed employee and suspected Chinese spy Alice Huang. At a White House Situation Room meeting on Thursday after the midterm elections, Bessent pressed Lutnick on why Megaspeed had not been added to the Commerce Department’s entity list, to which Lutnick responded he would ‘look into it.’ Commerce Undersecretary Jeff Kessler also was repeatedly warned about Megaspeed in deputy meetings.”
November 12 – Bloomberg (Chris Strohm): “The Justice Department is probing Alice Huang, the woman US officials suspect as a possible spy targeting the ousted head of Nvidia Corp., over whether entities linked to her were involved in efforts to smuggle products made by Super Micro Computer Inc. to China, according a person familiar…”
November 12 – Bloomberg (Courtney Subramanian): “President Donald Trump gave a vote of confidence to Commerce Secretary Howard Lutnick, despite reports about his department’s lax efforts to prevent China from obtaining Nvidia Corp.’s advanced artificial intelligence chips. The White House backed Lutnick on Thursday soon after Jensen Huang was ousted as Nvidia’s chief executive officer following revelations he had an extramarital affair with a suspected Chinese spy. The incident intensified scrutiny of his close relationship with Trump and dealings with the administration.”
Constitution Watch:
November 8 – Axios (Andrew Pantazi): “Attorney General Todd Blanche refused… to rule out prosecuting Democratic lawmakers who say they'll investigate Trump officials, a day after President Trump ordered the Justice Department to probe lawmakers. The confrontation threatens a constitutional crisis over the separation of powers: Trump is ordering prosecutors to go after lawmakers in a potential effort to hamper Congress’ power to hold the executive branch accountable… Trump accused Democrats of threatening administration officials and Republican donors with investigations and impeachment. ‘This is extortion at the highest level, and they should be held accountable for this,’ Trump wrote.”
November 13 – Associated Press (Eric Tucker and Alanna Durkin Richer): “The Justice Department has functioned for nearly two years as an extension of the White House, unchecked by a Republican-controlled Congress as it pursued investigations into President Donald Trump’s enemies, fired waves of career employees and defended administration stances that judges across the country repeatedly deemed legally dubious. Now, sweeping Democratic gains in Congress have shifted the balance of power in Washington, teeing up an onslaught of expected investigations into those actions and others as well as scrutiny from the majority party that the current Justice Department had until now managed to skirt. The department has, at least publicly, appeared unbowed by the altered landscape.”
Ukraine War Watch:
November 10 – Reuters: “Renewed Ukrainian drone attacks on Russian oil refineries since late October have reduced Russia’s oil refining capacity by about 30%, two industry sources said. Ukraine’s attacks on Russian oil refineries add to Moscow’s difficulties in addressing domestic fuel shortages as it ships diesel to international markets under an export deal with US President Donald Trump. Ukraine has stepped up strikes on Russian refineries since the end of October, when a ceasefire on attacks on energy facilities that Trump announced between Kyiv and Moscow failed to take hold.”
Taiwan Watch:
November 12 – Reuters (Ben Blanchard and Yimou Lee): “The tide of history cannot be stopped, Chinese President Xi Jinping said…, while urging peaceful ‘reunification’ with Taiwan and making no mention of using force, though he still drew a firm rebuff from Taipei… Resolving the Taiwan question is an ‘unwavering historical mission’ of China’s Communist Party, Xi said in a speech in Beijing's Great Hall of the People. ‘The tide of history cannot be stopped,’ Xi added. ‘The complete reunification of the motherland must be realised, and it will certainly be realised.’”
November 12 – Reuters (Yimou Lee and Ben Blanchard): “China carried out a large, unannounced military exercise across the western Pacific and around Taiwan in early November, in what officials in Taipei have described as a campaign of ‘silent intimidation’ aimed at pressuring Taiwan and other governments before major international meetings. A senior Taiwan security official… said China’s military and coast guard had at one point massed more than 100 vessels in the region early this month, conducting drills that included simulated attacks on other militaries and cities including Taiwan’s.”
New World (Dis)Order Watch:
November 9 – Associated Press: “France… blamed Iran for last month’s cyberattack on supermarket refrigerators, summoned the Iranian ambassador and said it would seek European sanctions against those responsible for the attack. The Oct. 12 attack sent refrigerator temperatures soaring, affecting about 700 of the country’s 10,000 supermarkets… The French Foreign Ministry condemned the attack ‘in the strongest possible terms’… ‘This is an attack of unprecedented scale and aggressiveness,’ Barrot said. ‘It is the first large-scale cyberattack aimed at sabotage on French soil, and it represents a major threat to our national interests and the security of the French people. That is why it will not go unanswered.’”
November 11 – Wall Street Journal (Yaroslav Trofimov): “Technological advances making ballistic missiles cheaper and more precise have allowed Iran and the Houthis of Yemen to strike foes across the Middle East. The development and spread of these weapons, once the preserve of nuclear superpowers, mean that military doctrines around the globe will need profound change—fast. Along with the drone revolution unfolding in Ukraine, this transformation has strategic implications worldwide… Thanks to advances in ballistic missiles, ‘even nonstate actors are able to operate at significant ranges, redefining what the deep battle space is,’ said retired British Air Marshal Martin Sampson… ‘Everything that is fixed is a target now.’”
Global Bubble Watch:
November 10 – Bloomberg (Bailey Lipschultz): “Anthropic PBC and some of its shareholders are seeking to raise as much as $90.4 billion in an IPO and private placement, in a bid to make history as the first frontier artificial intelligence lab to go public and exceed the size of SpaceX’s record-setting first-time share sale. The Claude chatbot maker is seeking as much as $64.4 billion in its initial public offering for $70 to $78 each… Anthropic is offering 801.4 million shares, while backers are selling 23.6 million shares. The offering also includes a private placement set to raise $26 billion in aggregate, to Advanced Micro Devices Inc., Broadcom Inc., Alphabet Inc.’s Google, Micron Technology Inc., Microsoft Corp., Nvidia Corp. and Taiwan Semiconductor Manufacturing…”
November 11 – Wall Street Journal (E.B. Solomont): “Amid a flurry of megadeals in Palm Beach, Fla., a roughly 1.4-acre estate with a dock on the Intracoastal Waterway is going on the market for $75 million. The property was the longtime home of the late cable-television mogul Theodore ‘Ted’ Baum… who purchased the home for about $7 million in 2000… In elite enclaves like Palm Beach, buyers are purchasing property to tear it down. ‘Normally at that price level, people want to create something that suits their needs,’ said listing agent Dana Koch of the Corcoran Group. Koch said the ultraluxury market in Palm Beach is ‘flying’ and that the price is justified by the property’s size and recent sales. ‘To find yourself over an acre is rare,’ he said.”
Inflation Watch:
November 10 – CNBC (Jeff Cox): “Costs for goods and services rose more than expected in October, providing fresh warning signs for the Federal Reserve in its fight to lower inflation. The consumer price index… increased a seasonally adjusted 0.4% for the month… Stripping out volatile food and energy, so-called core CPI increased 0.3% against the forecast for a 0.2% gain. The headline CPI had increased 0.6% in September while core was up 0.3%... Though gasoline prices have been falling in recent weeks, the energy index rose 0.7% and the gasoline index was up 1%... Food costs accelerated 0.5%, pushed higher by increases of 1% for snacks, 0.9% for beef and 0.5% for meats, poultry, fish and eggs. Transportation services jumped 0.8%. New vehicle prices increased 0.2% but used cars and trucks fell 1.2%. Shelter costs were higher by 0.3%...”
November 13 – Associated Press (Christopher Rubaber): “The… producer price index… rose 0.3% from September to October, down from a 1.4% jump in the previous month. Yet compared with a year earlier, it climbed 6.5%, up from 6.3% in September and the biggest increase since November 2022… A year ago, wholesale inflation was just 3.1%. Excluding the volatile food and energy categories, core prices also rose 0.3% from September to October, down from 0.7% a month earlier. On a yearly basis, they rose 5%...”
November 10 – Bloomberg (Reade Pickert and Aidan Williams): “More than a third of US small-business owners plan to increase prices in the coming months, the most in more than four years, pointing to persistent inflationary headwinds. The net share of firms who plan to raise prices in the next three months climbed to 37% in October, according to… the National Federation of Independent Business... The small-business optimism index was little changed at 97.8. The group’s uncertainty index, while still elevated, matched the lowest level of President Donald Trump’s second term. And more firms reported the health of their business as either good or excellent.”
November 10 – Bloomberg (David Welch): “New-vehicle prices rose faster than overall inflation in October to a record of $51,109 on average, showing how automakers remain willing to sacrifice sales volume to grow profit margins. Average transaction prices rose 2.1% from a year ago… Automakers are charging more and consumers continue to buy expensive, high-margin vehicles such as full-sized pickups and SUVs. The average new-car price published by automakers increased 2.4% year over year to $52,933, Cox said, citing data from Kelley Blue Book.”
November 11 – New York Times (Ivan Penn): “Home heating costs are expected to rise more than 7% on average across the country this winter, putting further strain on households that have been struggling with rising energy costs for many months. A new report by the National Energy Assistance Directors Association… warned that the disruptions caused by the war with Iran has contributed to high heating costs… The typical household that uses oil — almost five million nationwide — could pay as much as 70% more than last winter or about $2,977 for the season.”
November 10 – Bloomberg (Aidan Williams and Anna Edney): “Baby food and formula prices surged by the most on record last month, exacerbating the financial burden facing families with young children. US prices for baby food and formula rose 5.1% in October, according to Bureau of Labor Statistics data... The costs of a variety of essentials, including other groceries, car insurance, day care, rent and electricity also increased in the month.”
Federal Reserve Watch:
November 13 – Reuters (Doina Chiacu, Katharine Jackson and Howard Schneider): “US Treasury Secretary Scott Bessent said… the Federal Reserve should not hike rates because of inflation driven by an ‘energy supply shock’ tied to the Iran war… ‘I think the Fed should understand that this is an energy supply shock,’ while the underlying US economy is very strong, Bessent said... ‘So I think that to hike too much into an energy supply shock when it’s coming down, these are very noisy numbers... You know, the Fed’s supposed to look into the future, not look in the rearview mirror.’”
November 12 – American Banker (Kyle Campbell): “Federal Reserve Gov. Michael Barr… said the current effort to reform regulatory policies in banking and securities markets are coinciding with an uptick in high-risk activity. ‘The worry I have is that we’re deregulating at a time [when] we’re in this risk-on environment,’ Barr said. ‘That is a recipe for bad things to happen. Not today, and maybe not tomorrow, but when you look out over time — maybe it’s in three years or five years — the resilience of the financial system starts to weaken, and people have forgotten you can have a financial crisis and you can get problems in the system.’”
November 10 – Bloomberg (Enda Curran): “Federal Reserve Governor Christopher Waller… said he supports an interest-rate hike in December, and warned that if inflation continues to accelerate he would support a half-percentage-point increase to protect the central bank's credibility… Describing the economy as strong and the labor market as stable, Waller said inflation remains too high. He then hinged his policy prescription on consumer price inflation data for October… ‘If, as I expect, the monthly rate of inflation improves in October, I am leaning toward supporting an increase in our policy rate of 25 bps,’ Waller said… ‘But if the October CPI inflation data out later today are similar to the past two monthly readings — with core CPI inflation around 0.3% or even higher — then a stronger policy move may be needed," he said. "In that case, I believe a 50 bps hike in the policy rate should be considered at the December meeting.’”
November 9 – Bloomberg (Enda Curran and Aidan Williams): “Federal Reserve Bank of Richmond President Tom Barkin signaled robust demand and stubbornly high inflation mean interest rates will need to go higher, though he cautioned that any hikes will need to be done at a careful pace… Barkin described corporate profits as remarkable and noted that consumers continue to spend in an economy experiencing a record streak of unemployment at or below 4.5%... ‘The appropriate direction of monetary policy is relatively straightforward,’ Barkin said… ‘However, risks to the demand outlook remain easy to envision. Because of that, it is wise to move policy with care.’”
November 12 – Bloomberg (Maria Eloisa Capurro): “Federal Reserve Bank of Cleveland President Beth Hammack reiterated her view that higher interest rates are needed to combat inflation amid demand pressures driven by investments into artificial intelligence. ‘My expectations are that we need to move to a restrictive stance of policy to help bring inflation back down to that 2% objective, which is critically important,’ Hammack said... ‘If we don’t, I worry that an inflationary mindset could start taking hold.’”
November 9 – Bloomberg (Catarina Saraiva): “Federal Reserve Bank of Chicago President Austan Goolsbee said policymakers need to tackle a potential overheating in the economy from the artificial intelligence build-out and a broadening of inflation pressures. ‘We’ve got to come to terms with this cost side and inflation side failure in the mandate,’ Goolsbee said… ‘And now this stuff with the AI data center build-out is, to my eye, starting to look more just like old-fashioned demand overheating,’ he added, noting that central banks typically need to respond to overheating in an ‘aggressive’ way.”
November 10 – Reuters (Ann Saphir): “The US central bank needs to deliver at least two more quarter-percentage-point interest rate increases to bring down inflation, and may need to do so promptly to keep broadening price pressures from getting baked into the economy, Dallas Federal Reserve President Lorie Logan said… ‘It remains clear to me, given the current outlook, that the FOMC needs to implement at least two more 25-bps rate increases,’ Logan said... ‘Excess inflation is unacceptable.’”
November 10 – Bloomberg (Maria Eloisa Capurro): “Federal Reserve Bank of Philadelphia President Anna Paulson said she favors a gradual pace for interest-rate increases, adding that wage pressures have been limited and inflation expectations remain consistent with the central bank’s 2% target. ‘For now, further gradual tightening seems appropriate,’ Paulson said… ‘I would want to act more quickly if inflation expectations drift up, if wage pressures build or if underlying inflation moves higher,’ she added. ‘Right now, that’s not what I’m seeing.’”
November 10 – Yahoo Finance (Jennifer Schonberger): “Federal Reserve governor Michelle Bowman said… that inflation is showing signs of broadening and suggested raising interest rates further to slow the pace of price increases. ‘Inflation pressures have persisted for longer than I had hoped and have shown recent signs of broadening,’ Bowman said… At the same time, she noted job market conditions appear to be firming. ‘This indicates that there is still work to do to bring inflation closer to 2%,’ she said. She is also monitoring volatility in the markets to see how financial conditions influence the economic outlook.”
U.S. Economic Bubble Watch:
November 12 – Associated Press (Paul Wiseman): “More Americans applied for unemployment benefits last week, but jobless claims remain at historically low levels, layoffs are rare and most workers enjoy unusual job security… Jobless claims ticked up to 200,000 last week from a revised 191,000 the week before, coming in higher than the 195,000 economists had forecast…”
November 11 – CNBC (Diana Olick): “Mortgage rates fell for four straight weeks… Applications for a mortgage to purchase a home rose 8% for the week but were 18% lower year over year… Applications to refinance a home loan rose 5% last week from the previous week but were still 57% lower than the same week one year ago.”
November 12 – Associated Press (Alex Veiga): “Sales of previously occupied U.S. homes slumped in October to their slowest pace in more than 16 years as mortgage rates climbed sharply… Existing home sales fell 5.5% last month from September to a seasonally adjusted annual rate of 3.75 million units… That’s the slowest annual sales pace since August 2010, when the market was still reeling from the late-2000s U.S. housing crash. Sales sank 8.8% compared with October last year… ‘It is just a tough market for buyers and sellers,’ said Lawrence Yun, NAR’s chief economist.”
November 9 – CNBC (Diana Olick): “Homebuyers continue to retreat, but sellers are still digging in, refusing to cut prices or give up. As a result, September’s frozen housing market is now October’s frozen and increasingly bloated market. Active inventory in October hit 183,500 homes, up 7.4% year-over-year… That is the fastest annual growth in eight months. Active listings have been rising each month since February. This is despite the fact that new listings are actually falling, down 7.5% from October 2025.”
China Watch:
November 9 – CNBC (Anniek Bao): “China’s trade surplus topped $1 trillion this year with two months to spare, at a time when partner countries have been raising concerns over Beijing’s exports that have been undercutting local industries. For the 10 months through October, the surplus reached $1.04 trillion, compared with a record $1.2 trillion for the full year 2025, when it crossed the $1 trillion mark for the first time… That milestone came as calls from trading partners have grown louder for Beijing to boost domestic demand and balance its economy.”
November 8 – Reuters (Qiaoyi Li, Shuyan Wang and Ryan Woo): “China’s producer inflation accelerated to its fastest rate in nearly 4-1/2 years in October as higher global oil prices raised manufacturing costs, even as consumer inflation cooled amid weak domestic demand… The producer price index climbed 5.7% last month from a year earlier…, higher than both the 5.0% increase in September and a… forecast of a 5.3% rise. It was the largest annual rise since June 2022…”
Central Bank Watch:
November 12 – Bloomberg (Laura Noonan): “Private credit and stablecoins could become systemic risks before they achieve systemic size, Bank of England governor Andrew Bailey warned…, signaling that global policymakers should continue to be vigilant on those corners of global finance. ‘Some ask why we keep looking at private credit when it is not large enough to move the global financial system,’ said Bailey, speaking in his capacity as chair of the Financial Stability Board. ‘The answer is interconnectedness. It may not move the system alone, but it could be one domino in a chain reaction.’”
November 10 – Bloomberg (Mark Schroers): “European Central Bank Governing Council member Joachim Nagel said there’s a strong case to raise interest rates next month and to start constricting the economy to tame inflation… The Bundesbank chief said that consumer-price gains are ‘too high,’ and emphasized how the upcoming decision will guide officials with new forecasts that encompass 2029 for the first time. ‘It seems to be a rather obvious outcome that we have to do something on top of what we did already,’ Nagel said... ‘With these new numbers, we will have clarity.’”
Japan Watch:
November 9 – Reuters (Leika Kihara): “Some Bank of Japan policymakers called for speeding up the pace of interest rate hikes as underlying inflation reached the central bank’s 2% target, a summary of opinions from its October meeting showed, bolstering the case for near-term tightening. The central bank should deliver the next rate hike ‘without becoming overly cautious,’ one member was quoted as saying… But several members warned against being too hasty due to soft consumption and uncertainty about the sustainability of AI demand… ‘The effects of past rate hikes have yet to materialise and financial conditions remain accommodative,’ one member was quoted as saying. ‘Japan is in a new phase where the BOJ needs to step up the pace of bringing its policy rate to neutral.’”
Social, Political, Environmental, Cybersecurity Instability Watch:
November 11 – Bloomberg (Ilena Peng and Lauren Rosenthal): “The New World screwworm has made a comeback in the US after months of relatively muted cases, thanks in large part to milder temperatures and humidity that are encouraging the deadly livestock parasite’s activity. More than 40 cases of screwworm have been confirmed so far in November, already making it the worst month since the pest first appeared in Texas earlier this year…”
The S&P500 rallied 2.5% (up 10.5% y-t-d), and the Dow rose 2.1% (up 8.9%). The Utilities gained 1.7% (up 6.0%). The Banks recovered 2.9% (up 6.8%), and the Broker/Dealers rose 2.4% (up 9.6%). The Transports surged 4.1% (up 18.6%). The S&P 400 Midcaps gained 2.2% (up 12.4%), and the small cap Russell 2000 increased 1.3% (up 12.4%). The Nasdaq100 recovered 3.5% (up 10.7%). The Semiconductors rallied 8.1% (up 43.2%). The Biotechs rose 2.0% (up 32.2%). With bullion sliding $192, the HUI gold index sank 7.6% (down 2.9%).
Three-month Treasury bill rates ended the week at 4.1226%. Two-year government yields surged 36 bps to 4.87% (up 139bps y-t-d). Five-year T-note yields jumped 33 bps to 4.98% (up 125bps). Ten-year Treasury yields rose 29 bps to 5.15% (up 98bps). Long bond yields jumped 21 bps to 5.48% (up 63bps). Benchmark Fannie Mae MBS yields surged 35 bps to 6.32% (up 127bps).
Italian 10-year yields rose nine bps to 4.42% (up 87bps y-t-d). Greek 10-year yields jumped 15 bps to 4.26% (up 82bps). Spain's 10-year yields gained 11 bps to 3.94% (up 65bps). German bund yields rose 12 bps to 3.38% (up 52bps). French yields surged 16 bps to 4.92% (up 136bps). The French to German 10-year bond spread widened about four to 154 bps. U.K. 10-year gilt yields jumped 18 bps to 5.34% (up 86bps). U.K.’s FTSE equities index recovered 2.0% (up 14.8% y-t-d).
Japan’s Nikkei 225 Equities Index rallied 6.5% (up 21.5% y-t-d). Japan’s 10-year “JGB” yields surged 22 bps to 2.87% (up 81bps y-t-d). France’s CAC40 rose 2.8% (up 2.7%). The German DAX equities index surged 3.6% (up 9.2%). Spain’s IBEX 35 equities index recovered 3.4% (up 15.7%). Italy’s FTSE MIB index jumped 3.6% (up 15.4%). EM equities were mostly higher. Brazil’s Bovespa gained 2.2% (up 6.9%), while Mexico’s Bolsa index slipped 0.3% (up 10.6%). South Korea’s Kospi rallied 4.6% (up 25.5%). India’s Sensex equities index increased 0.7% (down 4.3%). China’s Shanghai Exchange Index declined 0.4% (down 8.4%). Turkey’s Borsa Istanbul National 100 index gained 3.1% (up 5.2%).
Federal Reserve Credit last week increased $5.9 billion to $6.707 TN, with a 48-week expansion of $217 billion. Fed Credit was down $2.182 TN from the June 22, 2022, peak. Since the September 11, 2019 restart of QE, Fed Credit has expanded $2.981 TN, or 80%. Fed Credit inflated $3.897 TN, or 139%, since November 7, 2012 (731 weeks). Elsewhere, NY Fed holdings for foreign owners of Treasury, Agency Debt dropped $191 billion last week to $2.801 TN - the low back to July 2010. “Custody holdings” were down $238 billion y-o-y, or 8.6%.
Total money market fund assets (MMFA) retreated $35.5 billion to $7.980 TN. MMFA were up $443 billion, or 5.9%, y-o-y - having ballooned a historic $3.348 TN, or 72%, since October 26, 2022.
Total Commercial Paper added $4.2 billion to $1.508 TN - the high back to 2009. CP increased $192 billion, or 14.6%, y-o-y.
Freddie Mac 30-year fixed mortgage rates declined seven bps to 7.11% (up 87bps y-o-y). Fifteen-year rates fell 12 bps to 6.45% (up 96bps). Bankrate’s survey of jumbo mortgage borrowing costs had the 30-year fixed rate down two bps to 7.32% (up 86bps).
Currency Watch:
November 8 – Wall Street Journal (Megumi Fujikawa): “Japan spent a record $50 billion in one day during July to prop up the yen, underscoring an aggressive intervention campaign that included rare joint action with the U.S. Ministry of Finance data… showed that Tokyo bought a total of 15.399 trillion yen, equivalent to $97.16 billion, in July and August. It deployed about half of that on July 30 alone, spending 7.976 trillion yen. The sum exceeded the amount spent in April and May…”
For the week, the U.S. Dollar Index gained 1.1% to 103.412 (up 5.2% y-t-d). On the upside, the South Korean won increased 2.0%, and the Mexican peso gained 0.4%. On the downside, the Brazilian real declined 2.6%, the South African rand 2.3%, the Swiss franc 2.2%, the Swedish krona 1.8%, the Australian dollar 1.4%, the Norwegian krone 1.2%, the euro 1.1%, the British pound 1.1%, the Canadian dollar 1.0%, the Japanese yen 0.8%, the Singapore dollar 0.5%, and the New Zealand dollar 0.4%. China's (onshore) renminbi added 0.04% versus the dollar (up 4.74% y-t-d).
Commodities Watch:
The Bloomberg Commodities Index slipped 0.9% (up 21.7% y-t-d). Spot Gold dropped 4.7% to $3,884 (down 10.1%). Silver sank 6.6% to $48.74 (down 32.2%). WTI Crude declined $1.38, or 1.5%, to $88.56 (up 54%). Gasoline fell 4.8% (up 53%), while Natural Gas rallied 7.6% to $3.23 (down 12%). Copper declined 1.3% (up 9%). Wheat increased 0.7% (up 20%), while Corn gained 0.8% (up 1%). Bitcoin sank $8,150 or 10.8%, to $67,570 (down 22.9%).
Market Instability Watch:
November 8 – Bloomberg (Shuli Ren): “In a recent letter to investors, Paul Singer’s Elliott Investment Management predicted a substantial bear market ahead. There might be an abrupt change from fear of missing out, or FOMO, to fear of getting obliterated, or FOGO, the $80 billion manager wrote. While known for doom-and-gloom commentary, Elliott’s warnings of a ‘self-reinforcing unwind’ of the bull market were nonetheless being played out last week. As hedge funds limp into the year end, bargain hunters would be wise to sit on the sidelines.”
November 10 – Bloomberg (Bernard Goyder): “Investors enjoying a golden era for the equity dispersion trade should be braced for pain if the market shifts suddenly… ‘The dispersion trade is a ticking time bomb,’ Will Bartlett, chief executive officer of Parallax Volatility Advisers, said… ‘It’s just a function of when it actually blows up.’ The traditional dispersion trade involves a bet that a basket of stocks or an index like the S&P 500 will remain calm, while the individual stocks within the index swing more widely and in different directions. It’s a strategy that has proved popular with portfolio managers at multi-strategy investment firms this year as correlations between stocks sank. ‘There are a lot of people trading this with no experience in what it looks like when it goes south,’ said Bartlett.”
U.S. Credit Trouble Watch:
November 10 – CNBC (Jessica Dickler): “Americans are increasingly turning to credit cards as financial pressures mount… Collectively, credit card balances climbed by $22 billion in the third quarter to a record $1.29 trillion, according to the Federal Reserve Bank of New York’s latest household debt report... Balances are up 4.2% from a year earlier. Total household debt, including mortgages, auto loans and student loans, also expanded by $334 billion for the July-to-September period to a record $19.1 trillion. ‘Overall debt has been growing,’ the New York Fed researchers said… ‘This does reflect financial hardship out there.’”
November 10 – CBS News (Megan Cerullo): “More Americans are tumbling seriously into debt as prices and the overall cost of living continue to rise. Roughly 24% of people with a credit record are behind on medical bills, student debt, or auto or retail loans, according to a new analysis from the Urban Institute, a nonpartisan think tank. The median balance owed: $2,913. In communities of color, 30% of people are behind on payments, with a median debt in collection of $3,009.”
November 10 – Reuters (Michael S. Derby): “The overall level of troubled borrowing in the US economy rose modestly in the third quarter but did not appear to signal a notable deterioration in credit quality, a report from the Federal Reserve Bank of New York said… Loans that were in some form of trouble stood at 5% during the third quarter, up three-tenths of a percentage point from the second quarter… The report said student loans that were more than 90 days past due stood at 10.9% of borrowing in the sector during the third quarter, compared with 10.6% in the second quarter. Total household debt was up 1.8%, or $334 billion, to $19.1 trillion in the third quarter relative to the second quarter… Mortgage borrowing continued to represent the lion’s share of the cumulative debt burden, with the sector up by $257 billion to $13.4 trillion amid a rise in new home-related borrowing.”
November 10 – CNBC (Sarah Agostino): “Homeowners tapped their home equity lines of credit in the third quarter at the highest rate in more than two decades, according to a new Federal Reserve Bank of New York report on household debt... Balances on HELOCs jumped by $23 billion during the three months ending Sept. 30, the largest increase since 2005. That brings the outstanding amount owed to $481 billion… This also marks the 18th consecutive quarterly increase. HELOC balances peaked at roughly $714 billion in the first quarter of 2009, according to a 2015 New York Fed report.”
November 11 – Bloomberg (Jeannine Amodeo): “CoreWeave Inc. plans to raise at least $4 billion through an investment-grade loan offering after the AI computing supplier boosted its annual sales forecast, easing investor concerns about its debt-laden business. Morgan Stanley and Mitsubishi UFJ Financial Group Inc. are leading the potential financing, which would be syndicated to investors in phases…”
Global Credit Bubble Watch:
November 12 – Yahoo Finance (Brian Sozzi): “Anthropic shouldn’t count on bond king Jeffrey Gundlach buying into its inevitable debt issuances to support its AI future. ‘I wouldn’t touch it,’ the outspoken DoubleLine founder said… ‘Anthropic is angling for an investment-grade rating. I think that if they get an investment-grade rating, the rating agency that gives it to them should be investigated because there’s no way that they deserve an investment-grade rating.’”
Global Credit and Crisis Watch:
November 11 – Bloomberg (Carolina Wilson): “Fitch Ratings placed Paraguay’s credit rating on watch for a potential downgrade…, citing risks to the nation’s finances and economy from a banking crisis that toppled President Santiago Peña and rattled investors. The ratings company placed a negative label on Paraguay’s BB+ long-term foreign-currency debt, removing its previous positive outlook… The move follows the collapse of Ueno Bank, the South American country’s sixth-largest lender, which was seized by regulators earlier this month after its capital fell below required levels.”
Leveraged Speculation Watch:
November 10 – Bloomberg (Bei Hu): “Global equity hedge funds cut risk at the steepest rate in more than a decade through the first week of November as a widespread unwind gathered steam, Morgan Stanley prime brokers wrote… The gross market value of long-short stock funds declined 10.7% since late June, they wrote. The figure shows the scale of the pullback among global investors, who have been hit hard by a rout in artificial intelligence stocks that gathered steam following the recent US mid-term elections.”
November 10 – Bloomberg (Nishant Kumar and Liza Tetley): “Chris Rokos’ macro hedge fund lost 4.9% last month, joining a cohort of big name peers losing money as a series of shocks roiled financial markets. The decline trimmed the fund’s year-to-date gains to about 8%... Rokos Capital Management… manages about $22 billion…”
November 10 – Bloomberg (Natalia Kniazhevich): “Last week’s rout in US stocks may have flushed out some concentration excess in the markets, but it didn’t eliminate it entirely. Global macro hedge funds, which trade products such as equity indexes and exchange-traded funds, have barely reduced their equity exposure as the S&P 500 Index posted its worst week since 2025, data compiled by Goldman Sachs… prime brokerage show. At the same time, retail investors and hedge funds focused on individual stocks headed for exits. Positioning leaves macro investors, which primarily express their views through equity indexes, futures and swaps, as a potential source of pressure if sentiment deteriorates amid a busy two-week stretch on Wall Street.”
November 12 – Bloomberg (Laura Noonan): “The Financial Stability Board is preparing to launch a consultation on how to gather data on hedge funds’ leveraged bond bets, after early efforts to foster transparency were frustrated by different definitions and restrictions on the cross-border flow of information. Chaired by Bank of England boss Andrew Bailey, the FSB’s Non-Bank Data Task Force had hoped to deliver a report on data challenges related to leveraged bets on sovereign bond markets by ‘mid-2026’… That date has come and gone, and the potential fallout from the so-called basis trade has been replaced by AI as regulators’ most immediate concern.”
AI Bubble Watch:
November 12 – Axios (Zachary Basu): “Jensen Huang’s departure from Nvidia has plunged the AI industry into uncharted territory — a corporate earthquake that dwarfs even the chaos unleashed by Sam Altman’s temporary firing from OpenAI in 2023. Nvidia is the backbone of the global AI economy, with its chips, investments and financial guarantees sustaining an entire ecosystem of companies worth trillions of dollars. At the center of that vast financial flywheel is Huang, who spent 33 years making himself synonymous with Nvidia — and Nvidia synonymous with the AI revolution. ‘This is no ordinary CEO. This is no ordinary company. This is no ordinary sector. This is no ordinary time,’ economist Mohamed El-Erian wrote on X, warning of contagion across the AI industry.”
November 8 – CNBC (Kif Leswing and Kamaron McNair): “Nvidia has opened an investigation into co-founder and CEO Jensen Huang’s relationship with a businesswoman who intelligence agencies say is a Chinese spy. U.S. intelligence agencies have expressed concerns that the woman, Alice Huang, who is affiliated with a cloud company and an Nvidia customer called Megaspeed, has been passing information to Beijing… Huang told Nvidia staff… he had an affair with the woman and that Nvidia’s board of directors had opened an independent investigation into the spying allegations. ‘I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did… I am deeply sorry.’”
November 11 – CNBC (Matt Peterson): “The swirl of sex-and-spying allegations around Nvidia CEO Jensen Huang is raising a worrying question: Could trouble at the chipmaker spread through the tightly connected financial network Nvidia has built to support the artificial intelligence boom? Serious problems with Nvidia could do far-reaching economic and financial damage. The company has made hundreds of billions of dollars in financial commitments to other firms to help the industry grow, earning it the nickname the ‘central bank of AI.’ The Federal Reserve and other financial institutions are closely watching the AI buildout to monitor for the possibility that an unexpected event could destabilize the global financial system.”
November 9 – Bloomberg (Catherine Thorbecke): “No American argued harder for selling artificial-intelligence chips to China than Nvidia Corp.’s chief executive, Jensen Huang. His recurring advocacy previously could be easily explained by run-of-the-mill self-interest, with billions of dollars at stake. Now, that explanation has suddenly gotten a lot murkier. Whether he was wrong or right in what he believed, everything that Huang has spent nearly every public appearance pitching in recent years has gone out the window after reports that he had an affair with a woman US intelligence officials suspect of being a Chinese spy.”
November 9 – Bloomberg (Ian King): “The office of Nvidia Corp.’s Jensen Huang has an unusual setup: The chief executive officer sits at an enormous oval desk facing his lieutenants, with room for more employees in stadium seating behind them. The arrangement — created as part of Nvidia’s headquarters in Santa Clara, California — is purpose-built to suit how Huang runs the company. Every major decision flows through him, and he weighs in on even the most minute aspects of the business. Huang has about 60 direct reports, far more than the average tech leader, and they send him emails with ‘top five things’ that he reads and responds to at all hours. Though it’s not uncommon to see cultlike tech CEOs who obsess over details, Huang is in a class of his own. He has led the business since its very beginning 33 years ago…”
November 10 – Wall Street Journal (Berber Jin): “OpenAI grew revenue by roughly 50% to $10 billion from the second to the third quarter, but continued to report heavy operating losses… The company shared its latest results with investors…, just as Anthropic was preparing to mount its much-anticipated IPO next week. The maker of Claude recently disclosed that its revenue rose to $17 billion in the third quarter while reporting a smaller operating loss of $567 million during that period. The numbers show that OpenAI is accelerating revenue growth but still has a long way to go to match its rival’s sales and operating efficiency. The company grew revenue by only 18% in the second quarter compared with the first…”
November 11 – Wall Street Journal (Noah Higgins-Dunn and Amrith Ramkumar): “Three states—Texas, Ohio and Georgia—account for more than 40% of all planned data-center capacity combined. All three of those states saw strong voter pushback against data centers and artificial intelligence in the recent midterm elections… Now, investors and AI companies are waiting to see what kind of policies newly elected Democrats will enact to curtail upcoming data-center construction projects, which approached $100 billion in private spending as of September.”
November 10 – Yahoo Finance (Jake Conley): “The Democrats’ stunning victories in the Lone Star state have thrown the future of one of America’s most business-friendly states into question, raising uncertainty over everything from data centers and energy pipelines to Elon Musk’s sprawling infrastructure investments. Arguably the biggest question for Texas will be the future of the state’s data center boom, as investors and developers looking for wide swaths of land and an abundant power supply have found both in spades… Texas is expected to account for roughly 30% of the US data center capacity planned to come online by 2028, and about a quarter of that expected to be online by 2030, according to… SemiAnalysis.”
November 9 – Bloomberg (Michelle Cheng): “Data center builders may face significantly higher borrowing costs when billions of dollars in debt comes due in the months ahead, a byproduct of rising benchmark US yields that threatens to make financing the AI industry’s expansion that much more expensive. Some $13.4 billion of outstanding fixed-rate, dollar-denominated debt is expected to mature 2027, according to… BloombergNEF. If that debt were fully refinanced based on prevailing Treasury yields as of October 2026, developers would face a 2.85 percentage-point surge in the interest rates on their debt — increasing expenses by at least $380 million…”
November 9 – Bloomberg (Dana Hull and Julian Hast): “SpaceX plans to construct, own and operate a gas-fired power plant and super-compute facility at its company town in Starbase, Texas… The estimated investment for the initial phase of the project is $24 billion. The city commissioner will consider the approval of a tax abatement and development agreement at a Dec. 9 meeting. The proposal is the latest sign that CEO Elon Musk is seeking to vertically integrate SpaceX’s value chain for natural gas, the primary power-plant fuel that data center developers are using to get the facilities up and running. SpaceX is also looking to fuel some of its rocket launches with a super-chilled and purified form of the gas.”
November 10 – Reuters (Tatiana Bautzer): “Banks worldwide are trying to curb the soaring cost of AI agents as spending on the tokens that power them could easily reach 20% of total labor costs, according to McKinsey’s Global Banking Annual Review. Responsibility for controlling AI-related spending has shifted to new teams that some banks call AI FinOps. Initially, banks sought to rein in costs with systems that directed employees to different AI models based on the complexity of their queries. ‘But those models are ineffective when AI agents are working, because they communicate with each other and tokens quickly add up,’ said Vik Sohoni, a senior partner at McKinsey… As a result, banks are becoming more selective about where they deploy agentic AI, focusing on areas with the strongest expected returns.”
November 11 – Bloomberg (Allison McNeely and Dani Burger): “Sixth Street Partners Chief Executive Officer Alan Waxman said he sees growing signs of upheaval in the artificial intelligence boom… The amount of capital spending on AI is unprecedented ‘and no one truly understands the unit economics because they keep evolving,’ Waxman said… ‘It’s hard for us to think about, at least on the credit side. On the equity side, it’s a little bit different.’ …Sixth Street is concerned about the rapid expansion of credit in the sector, along with ‘speculative fervor or animal spirits or FOMO,’ and it’s starting to see signs of disruption, such as banks looking to sell construction loans... Lenders have pulled back from financing AI infrastructure projects amid growing concern about risks in the sector.”
November 11 – Bloomberg (Coco Liu): “A board member for the largest public pension plan in the US has raised concerns about its AI investments, saying the growing backlash against data centers can hit asset values and returns. ‘There is a concern about stranded assets’ as community pushback leads to permitting delays that can undermine the economics of AI data centers, said Mullissa Willette, who helps oversee investment strategy for the California Public Employees’ Retirement System. ‘Social cohesion risk, as I call it, is a really important, often overlooked aspect of making investment decisions,’ Willette… said…”
November 9 – Financial Times (David Keohane): “SoftBank has slumped to its first quarterly loss in almost two years after taking a charge tied to its ambitious US data centre push as founder Masayoshi Son’s vast AI bet comes under increasing strain. The unexpected ¥1.1tn ($7bn) loss for the three months to September fell well short of the ¥84bn profit expected by analysts and underlines how Son’s aggressive wager on AI has linked the Japanese group’s fortunes to the technology. In a sign of the hurdles facing the AI industry, SoftBank said… the $3.7bn writedown reflected ‘the evolving requirements of its existing and planned projects’, adding that it related to ‘non-refundable advance payments’ the company had made to secure equipment to generate power for data centre projects.”
Iran War Watch:
November 12 – Reuters (Jana Choukeir and Elwely Elwelly): “Four oil tankers were hit by explosions in the Strait of Hormuz, Iran’s military said on Thursday, adding that the vessels had ignored warnings and entered what it considers restricted areas of the strategic waterway. Tankers are still facing attacks across the strait, despite a rebound in traffic and expectations of a de-escalation in the war between the United States and Iran that have been reflected in falling oil prices.”
Trump Administration Watch:
November 12 – Wall Street Journal (Natalie Andrews and Alexander Ward): “President Trump said… the U.S. didn’t need a deal with Iran and would prefer Vice President JD Vance, who has taken the lead in negotiations, work on investigating American cities run by Democrats. ‘I have asked Vice President Vance to focus his complete and total attention on the Massive Corruption and Crime taking place in Democrat run Cities and States throughout the U.S.,’ Trump posted... ‘We don’t need a deal with Iran. Those days have long since passed. We’ve got their money, Hundreds of Billions of Dollars, and we’ve got their Strait!’ The move comes as Vance had opened a communications channel with Mohsen Rezaei, the hard-line secretary of Iran’s top security body, and considered face-to-face talks with him.”
November 9 – Axios (Barak Ravid): “President Trump said… a renewed military campaign against Iran is ‘quite unlikely’ and ‘doesn’t seem to be necessary.’ Trump stopped short of saying the war was over… Trump made his comments less than a week after conceding that the war was one of the reasons Republicans lost the midterm elections. The president in recent days has been weighing three options: launch new strikes, continue to strangle Iran's regime economically, or cut a deal that includes significant concessions to the Iranians. Trump signaled on Monday that he’s going with the strangle strategy for now.”
November 9 – Reuters (Courtney Rozen and Kanishka Singh): “US President Donald Trump’s close relationship with Nvidia CEO Jensen Huang came under renewed scrutiny…, after the company said its board was investigating whether the tech executive has been the target of a foreign intelligence effort. Huang is one of Trump's closest allies in Silicon Valley, and the relationship between the two dates to at least 2025. Over the past two years, he has repeatedly voiced support for the administration's agenda and become a regular presence in Washington as Nvidia sought to sell advanced chips to the Chinese market.”
November 9 – New York Times (Ana Swanson and Devlin Barrett): “Investigators at the Commerce Department were deep into a monthslong investigation of a Singaporean company that they suspected of smuggling Nvidia’s artificial intelligence chips into China when their work came to a sudden halt late last year. The investigation centered on Megaspeed, a data center company led by an executive who U.S. officials now believe to be a Chinese spy who had a relationship with Nvidia’s chief executive, Jensen Huang. But the case was abruptly transferred to the Justice Department last year. The shift came after Commerce Department investigators working on the case received an email from Nvidia’s general counsel seeking information about the inquiry into Megaspeed.”
November 8 – New York Times (Maggie Haberman, Jonathan Swan, Julian E. Barnes and Tripp Mickle): “Secretary of State Marco Rubio oversaw the drafting of the highly classified memo this past spring warning top Trump administration officials that Nvidia’s chief executive, Jensen Huang, was in a close relationship with a Chinese spy… The document was based on classified intelligence from electronic surveillance of Alice Huang, a Chinese citizen who was a senior executive at a Singapore-based company that was buying Nvidia’s advanced artificial intelligence chips and being investigated for illegally smuggling them into China. U.S. officials had concluded that Ms. Huang was in a close relationship with the Nvidia chief… and that she had been recruited to spy by China’s top intelligence agency…”
November 11 – Axios (Maria Curi and Marc Caputo): “Treasury Secretary Scott Bessent confronted Commerce Secretary Howard Lutnick over a failure to place Nvidia customer Megaspeed on a list of companies that pose national security concerns, sources familiar told Axios. The Commerce Department oversees the export of sensitive U.S. technologies and Lutnick’s actions — or lack thereof — are increasingly under scrutiny following revelations that Nvidia CEO Jensen Huang had an affair with Megaspeed employee and suspected Chinese spy Alice Huang. At a White House Situation Room meeting on Thursday after the midterm elections, Bessent pressed Lutnick on why Megaspeed had not been added to the Commerce Department’s entity list, to which Lutnick responded he would ‘look into it.’ Commerce Undersecretary Jeff Kessler also was repeatedly warned about Megaspeed in deputy meetings.”
November 12 – Bloomberg (Chris Strohm): “The Justice Department is probing Alice Huang, the woman US officials suspect as a possible spy targeting the ousted head of Nvidia Corp., over whether entities linked to her were involved in efforts to smuggle products made by Super Micro Computer Inc. to China, according a person familiar…”
November 12 – Bloomberg (Courtney Subramanian): “President Donald Trump gave a vote of confidence to Commerce Secretary Howard Lutnick, despite reports about his department’s lax efforts to prevent China from obtaining Nvidia Corp.’s advanced artificial intelligence chips. The White House backed Lutnick on Thursday soon after Jensen Huang was ousted as Nvidia’s chief executive officer following revelations he had an extramarital affair with a suspected Chinese spy. The incident intensified scrutiny of his close relationship with Trump and dealings with the administration.”
Constitution Watch:
November 8 – Axios (Andrew Pantazi): “Attorney General Todd Blanche refused… to rule out prosecuting Democratic lawmakers who say they'll investigate Trump officials, a day after President Trump ordered the Justice Department to probe lawmakers. The confrontation threatens a constitutional crisis over the separation of powers: Trump is ordering prosecutors to go after lawmakers in a potential effort to hamper Congress’ power to hold the executive branch accountable… Trump accused Democrats of threatening administration officials and Republican donors with investigations and impeachment. ‘This is extortion at the highest level, and they should be held accountable for this,’ Trump wrote.”
November 13 – Associated Press (Eric Tucker and Alanna Durkin Richer): “The Justice Department has functioned for nearly two years as an extension of the White House, unchecked by a Republican-controlled Congress as it pursued investigations into President Donald Trump’s enemies, fired waves of career employees and defended administration stances that judges across the country repeatedly deemed legally dubious. Now, sweeping Democratic gains in Congress have shifted the balance of power in Washington, teeing up an onslaught of expected investigations into those actions and others as well as scrutiny from the majority party that the current Justice Department had until now managed to skirt. The department has, at least publicly, appeared unbowed by the altered landscape.”
Ukraine War Watch:
November 10 – Reuters: “Renewed Ukrainian drone attacks on Russian oil refineries since late October have reduced Russia’s oil refining capacity by about 30%, two industry sources said. Ukraine’s attacks on Russian oil refineries add to Moscow’s difficulties in addressing domestic fuel shortages as it ships diesel to international markets under an export deal with US President Donald Trump. Ukraine has stepped up strikes on Russian refineries since the end of October, when a ceasefire on attacks on energy facilities that Trump announced between Kyiv and Moscow failed to take hold.”
Taiwan Watch:
November 12 – Reuters (Ben Blanchard and Yimou Lee): “The tide of history cannot be stopped, Chinese President Xi Jinping said…, while urging peaceful ‘reunification’ with Taiwan and making no mention of using force, though he still drew a firm rebuff from Taipei… Resolving the Taiwan question is an ‘unwavering historical mission’ of China’s Communist Party, Xi said in a speech in Beijing's Great Hall of the People. ‘The tide of history cannot be stopped,’ Xi added. ‘The complete reunification of the motherland must be realised, and it will certainly be realised.’”
November 12 – Reuters (Yimou Lee and Ben Blanchard): “China carried out a large, unannounced military exercise across the western Pacific and around Taiwan in early November, in what officials in Taipei have described as a campaign of ‘silent intimidation’ aimed at pressuring Taiwan and other governments before major international meetings. A senior Taiwan security official… said China’s military and coast guard had at one point massed more than 100 vessels in the region early this month, conducting drills that included simulated attacks on other militaries and cities including Taiwan’s.”
New World (Dis)Order Watch:
November 9 – Associated Press: “France… blamed Iran for last month’s cyberattack on supermarket refrigerators, summoned the Iranian ambassador and said it would seek European sanctions against those responsible for the attack. The Oct. 12 attack sent refrigerator temperatures soaring, affecting about 700 of the country’s 10,000 supermarkets… The French Foreign Ministry condemned the attack ‘in the strongest possible terms’… ‘This is an attack of unprecedented scale and aggressiveness,’ Barrot said. ‘It is the first large-scale cyberattack aimed at sabotage on French soil, and it represents a major threat to our national interests and the security of the French people. That is why it will not go unanswered.’”
November 11 – Wall Street Journal (Yaroslav Trofimov): “Technological advances making ballistic missiles cheaper and more precise have allowed Iran and the Houthis of Yemen to strike foes across the Middle East. The development and spread of these weapons, once the preserve of nuclear superpowers, mean that military doctrines around the globe will need profound change—fast. Along with the drone revolution unfolding in Ukraine, this transformation has strategic implications worldwide… Thanks to advances in ballistic missiles, ‘even nonstate actors are able to operate at significant ranges, redefining what the deep battle space is,’ said retired British Air Marshal Martin Sampson… ‘Everything that is fixed is a target now.’”
Global Bubble Watch:
November 10 – Bloomberg (Bailey Lipschultz): “Anthropic PBC and some of its shareholders are seeking to raise as much as $90.4 billion in an IPO and private placement, in a bid to make history as the first frontier artificial intelligence lab to go public and exceed the size of SpaceX’s record-setting first-time share sale. The Claude chatbot maker is seeking as much as $64.4 billion in its initial public offering for $70 to $78 each… Anthropic is offering 801.4 million shares, while backers are selling 23.6 million shares. The offering also includes a private placement set to raise $26 billion in aggregate, to Advanced Micro Devices Inc., Broadcom Inc., Alphabet Inc.’s Google, Micron Technology Inc., Microsoft Corp., Nvidia Corp. and Taiwan Semiconductor Manufacturing…”
November 11 – Wall Street Journal (E.B. Solomont): “Amid a flurry of megadeals in Palm Beach, Fla., a roughly 1.4-acre estate with a dock on the Intracoastal Waterway is going on the market for $75 million. The property was the longtime home of the late cable-television mogul Theodore ‘Ted’ Baum… who purchased the home for about $7 million in 2000… In elite enclaves like Palm Beach, buyers are purchasing property to tear it down. ‘Normally at that price level, people want to create something that suits their needs,’ said listing agent Dana Koch of the Corcoran Group. Koch said the ultraluxury market in Palm Beach is ‘flying’ and that the price is justified by the property’s size and recent sales. ‘To find yourself over an acre is rare,’ he said.”
Inflation Watch:
November 10 – CNBC (Jeff Cox): “Costs for goods and services rose more than expected in October, providing fresh warning signs for the Federal Reserve in its fight to lower inflation. The consumer price index… increased a seasonally adjusted 0.4% for the month… Stripping out volatile food and energy, so-called core CPI increased 0.3% against the forecast for a 0.2% gain. The headline CPI had increased 0.6% in September while core was up 0.3%... Though gasoline prices have been falling in recent weeks, the energy index rose 0.7% and the gasoline index was up 1%... Food costs accelerated 0.5%, pushed higher by increases of 1% for snacks, 0.9% for beef and 0.5% for meats, poultry, fish and eggs. Transportation services jumped 0.8%. New vehicle prices increased 0.2% but used cars and trucks fell 1.2%. Shelter costs were higher by 0.3%...”
November 13 – Associated Press (Christopher Rubaber): “The… producer price index… rose 0.3% from September to October, down from a 1.4% jump in the previous month. Yet compared with a year earlier, it climbed 6.5%, up from 6.3% in September and the biggest increase since November 2022… A year ago, wholesale inflation was just 3.1%. Excluding the volatile food and energy categories, core prices also rose 0.3% from September to October, down from 0.7% a month earlier. On a yearly basis, they rose 5%...”
November 10 – Bloomberg (Reade Pickert and Aidan Williams): “More than a third of US small-business owners plan to increase prices in the coming months, the most in more than four years, pointing to persistent inflationary headwinds. The net share of firms who plan to raise prices in the next three months climbed to 37% in October, according to… the National Federation of Independent Business... The small-business optimism index was little changed at 97.8. The group’s uncertainty index, while still elevated, matched the lowest level of President Donald Trump’s second term. And more firms reported the health of their business as either good or excellent.”
November 10 – Bloomberg (David Welch): “New-vehicle prices rose faster than overall inflation in October to a record of $51,109 on average, showing how automakers remain willing to sacrifice sales volume to grow profit margins. Average transaction prices rose 2.1% from a year ago… Automakers are charging more and consumers continue to buy expensive, high-margin vehicles such as full-sized pickups and SUVs. The average new-car price published by automakers increased 2.4% year over year to $52,933, Cox said, citing data from Kelley Blue Book.”
November 11 – New York Times (Ivan Penn): “Home heating costs are expected to rise more than 7% on average across the country this winter, putting further strain on households that have been struggling with rising energy costs for many months. A new report by the National Energy Assistance Directors Association… warned that the disruptions caused by the war with Iran has contributed to high heating costs… The typical household that uses oil — almost five million nationwide — could pay as much as 70% more than last winter or about $2,977 for the season.”
November 10 – Bloomberg (Aidan Williams and Anna Edney): “Baby food and formula prices surged by the most on record last month, exacerbating the financial burden facing families with young children. US prices for baby food and formula rose 5.1% in October, according to Bureau of Labor Statistics data... The costs of a variety of essentials, including other groceries, car insurance, day care, rent and electricity also increased in the month.”
Federal Reserve Watch:
November 13 – Reuters (Doina Chiacu, Katharine Jackson and Howard Schneider): “US Treasury Secretary Scott Bessent said… the Federal Reserve should not hike rates because of inflation driven by an ‘energy supply shock’ tied to the Iran war… ‘I think the Fed should understand that this is an energy supply shock,’ while the underlying US economy is very strong, Bessent said... ‘So I think that to hike too much into an energy supply shock when it’s coming down, these are very noisy numbers... You know, the Fed’s supposed to look into the future, not look in the rearview mirror.’”
November 12 – American Banker (Kyle Campbell): “Federal Reserve Gov. Michael Barr… said the current effort to reform regulatory policies in banking and securities markets are coinciding with an uptick in high-risk activity. ‘The worry I have is that we’re deregulating at a time [when] we’re in this risk-on environment,’ Barr said. ‘That is a recipe for bad things to happen. Not today, and maybe not tomorrow, but when you look out over time — maybe it’s in three years or five years — the resilience of the financial system starts to weaken, and people have forgotten you can have a financial crisis and you can get problems in the system.’”
November 10 – Bloomberg (Enda Curran): “Federal Reserve Governor Christopher Waller… said he supports an interest-rate hike in December, and warned that if inflation continues to accelerate he would support a half-percentage-point increase to protect the central bank's credibility… Describing the economy as strong and the labor market as stable, Waller said inflation remains too high. He then hinged his policy prescription on consumer price inflation data for October… ‘If, as I expect, the monthly rate of inflation improves in October, I am leaning toward supporting an increase in our policy rate of 25 bps,’ Waller said… ‘But if the October CPI inflation data out later today are similar to the past two monthly readings — with core CPI inflation around 0.3% or even higher — then a stronger policy move may be needed," he said. "In that case, I believe a 50 bps hike in the policy rate should be considered at the December meeting.’”
November 9 – Bloomberg (Enda Curran and Aidan Williams): “Federal Reserve Bank of Richmond President Tom Barkin signaled robust demand and stubbornly high inflation mean interest rates will need to go higher, though he cautioned that any hikes will need to be done at a careful pace… Barkin described corporate profits as remarkable and noted that consumers continue to spend in an economy experiencing a record streak of unemployment at or below 4.5%... ‘The appropriate direction of monetary policy is relatively straightforward,’ Barkin said… ‘However, risks to the demand outlook remain easy to envision. Because of that, it is wise to move policy with care.’”
November 12 – Bloomberg (Maria Eloisa Capurro): “Federal Reserve Bank of Cleveland President Beth Hammack reiterated her view that higher interest rates are needed to combat inflation amid demand pressures driven by investments into artificial intelligence. ‘My expectations are that we need to move to a restrictive stance of policy to help bring inflation back down to that 2% objective, which is critically important,’ Hammack said... ‘If we don’t, I worry that an inflationary mindset could start taking hold.’”
November 9 – Bloomberg (Catarina Saraiva): “Federal Reserve Bank of Chicago President Austan Goolsbee said policymakers need to tackle a potential overheating in the economy from the artificial intelligence build-out and a broadening of inflation pressures. ‘We’ve got to come to terms with this cost side and inflation side failure in the mandate,’ Goolsbee said… ‘And now this stuff with the AI data center build-out is, to my eye, starting to look more just like old-fashioned demand overheating,’ he added, noting that central banks typically need to respond to overheating in an ‘aggressive’ way.”
November 10 – Reuters (Ann Saphir): “The US central bank needs to deliver at least two more quarter-percentage-point interest rate increases to bring down inflation, and may need to do so promptly to keep broadening price pressures from getting baked into the economy, Dallas Federal Reserve President Lorie Logan said… ‘It remains clear to me, given the current outlook, that the FOMC needs to implement at least two more 25-bps rate increases,’ Logan said... ‘Excess inflation is unacceptable.’”
November 10 – Bloomberg (Maria Eloisa Capurro): “Federal Reserve Bank of Philadelphia President Anna Paulson said she favors a gradual pace for interest-rate increases, adding that wage pressures have been limited and inflation expectations remain consistent with the central bank’s 2% target. ‘For now, further gradual tightening seems appropriate,’ Paulson said… ‘I would want to act more quickly if inflation expectations drift up, if wage pressures build or if underlying inflation moves higher,’ she added. ‘Right now, that’s not what I’m seeing.’”
November 10 – Yahoo Finance (Jennifer Schonberger): “Federal Reserve governor Michelle Bowman said… that inflation is showing signs of broadening and suggested raising interest rates further to slow the pace of price increases. ‘Inflation pressures have persisted for longer than I had hoped and have shown recent signs of broadening,’ Bowman said… At the same time, she noted job market conditions appear to be firming. ‘This indicates that there is still work to do to bring inflation closer to 2%,’ she said. She is also monitoring volatility in the markets to see how financial conditions influence the economic outlook.”
U.S. Economic Bubble Watch:
November 12 – Associated Press (Paul Wiseman): “More Americans applied for unemployment benefits last week, but jobless claims remain at historically low levels, layoffs are rare and most workers enjoy unusual job security… Jobless claims ticked up to 200,000 last week from a revised 191,000 the week before, coming in higher than the 195,000 economists had forecast…”
November 11 – CNBC (Diana Olick): “Mortgage rates fell for four straight weeks… Applications for a mortgage to purchase a home rose 8% for the week but were 18% lower year over year… Applications to refinance a home loan rose 5% last week from the previous week but were still 57% lower than the same week one year ago.”
November 12 – Associated Press (Alex Veiga): “Sales of previously occupied U.S. homes slumped in October to their slowest pace in more than 16 years as mortgage rates climbed sharply… Existing home sales fell 5.5% last month from September to a seasonally adjusted annual rate of 3.75 million units… That’s the slowest annual sales pace since August 2010, when the market was still reeling from the late-2000s U.S. housing crash. Sales sank 8.8% compared with October last year… ‘It is just a tough market for buyers and sellers,’ said Lawrence Yun, NAR’s chief economist.”
November 9 – CNBC (Diana Olick): “Homebuyers continue to retreat, but sellers are still digging in, refusing to cut prices or give up. As a result, September’s frozen housing market is now October’s frozen and increasingly bloated market. Active inventory in October hit 183,500 homes, up 7.4% year-over-year… That is the fastest annual growth in eight months. Active listings have been rising each month since February. This is despite the fact that new listings are actually falling, down 7.5% from October 2025.”
China Watch:
November 9 – CNBC (Anniek Bao): “China’s trade surplus topped $1 trillion this year with two months to spare, at a time when partner countries have been raising concerns over Beijing’s exports that have been undercutting local industries. For the 10 months through October, the surplus reached $1.04 trillion, compared with a record $1.2 trillion for the full year 2025, when it crossed the $1 trillion mark for the first time… That milestone came as calls from trading partners have grown louder for Beijing to boost domestic demand and balance its economy.”
November 8 – Reuters (Qiaoyi Li, Shuyan Wang and Ryan Woo): “China’s producer inflation accelerated to its fastest rate in nearly 4-1/2 years in October as higher global oil prices raised manufacturing costs, even as consumer inflation cooled amid weak domestic demand… The producer price index climbed 5.7% last month from a year earlier…, higher than both the 5.0% increase in September and a… forecast of a 5.3% rise. It was the largest annual rise since June 2022…”
Central Bank Watch:
November 12 – Bloomberg (Laura Noonan): “Private credit and stablecoins could become systemic risks before they achieve systemic size, Bank of England governor Andrew Bailey warned…, signaling that global policymakers should continue to be vigilant on those corners of global finance. ‘Some ask why we keep looking at private credit when it is not large enough to move the global financial system,’ said Bailey, speaking in his capacity as chair of the Financial Stability Board. ‘The answer is interconnectedness. It may not move the system alone, but it could be one domino in a chain reaction.’”
November 10 – Bloomberg (Mark Schroers): “European Central Bank Governing Council member Joachim Nagel said there’s a strong case to raise interest rates next month and to start constricting the economy to tame inflation… The Bundesbank chief said that consumer-price gains are ‘too high,’ and emphasized how the upcoming decision will guide officials with new forecasts that encompass 2029 for the first time. ‘It seems to be a rather obvious outcome that we have to do something on top of what we did already,’ Nagel said... ‘With these new numbers, we will have clarity.’”
Japan Watch:
November 9 – Reuters (Leika Kihara): “Some Bank of Japan policymakers called for speeding up the pace of interest rate hikes as underlying inflation reached the central bank’s 2% target, a summary of opinions from its October meeting showed, bolstering the case for near-term tightening. The central bank should deliver the next rate hike ‘without becoming overly cautious,’ one member was quoted as saying… But several members warned against being too hasty due to soft consumption and uncertainty about the sustainability of AI demand… ‘The effects of past rate hikes have yet to materialise and financial conditions remain accommodative,’ one member was quoted as saying. ‘Japan is in a new phase where the BOJ needs to step up the pace of bringing its policy rate to neutral.’”
Social, Political, Environmental, Cybersecurity Instability Watch:
November 11 – Bloomberg (Ilena Peng and Lauren Rosenthal): “The New World screwworm has made a comeback in the US after months of relatively muted cases, thanks in large part to milder temperatures and humidity that are encouraging the deadly livestock parasite’s activity. More than 40 cases of screwworm have been confirmed so far in November, already making it the worst month since the pest first appeared in Texas earlier this year…”
