Technology

Ooo I know this one! I won’t give out any spoilers.

So how would a (by now inevitable) government bailout not trigger an untenable treasury yield?

Free enterprise, privatize profits, socialize the losses

Is the bailout going to be because of national security or is it going to be a to big to fail situation.

Well now, that looks familiar. Rats leaving a sinking ship.

I'd love it if it was packaged up into securities and credit rating agencies gave those securities an A+++ would buy again rating so my wallstreet-managed 401k knows where to steal my money.

If theres one thing the US stock market has, its plenty of clueless bagholders with more money than common sense.

Like when they underwrote the twitter purchase debt....

It's about time for the ultra-wealthy to create another 2007 so they can wrench the last bits of wealth off anyone who isn't already a $100Ms-billionaire.

Oh NO! We NEED to Raise Taxes to PAY for these things OTHERWISE who's going to Take Our Jobs while Poisoning Our Water while Killing Our Children while making Subpar Fruit Videos?

-US Politicians!

It's happening!!! Bubble pop is happening!!! article is underplaying it.

Coreweave debt pushed towards 16% yield today. The worst of the AI clusterfuck. Oracle, 2nd worse, move to 8% which is still absurdly low, but was holding 6% a week ago.

Main headline, yes the big banks are selling off debt to losertards. At a discount. Insurance companies are the losertards chasing yield, but have big losses today.

Nvidia, the circular financing backstop for the bubble, signaled today that it is just waiting for bankruptcies to swoop in instead of propping up the fraud. Bond/share holders will get crushed, and bubble dead, but still Nvidia will drive rampocalypse if the datacenters are still alllowed.

they shouldve known like 1-2 years ago.

That is on top of the $18 billion in bonds it sold in a single day last September

That's $6.57 trillion in annualized debt using AI bubble math.

I work in commercial real estate. This is a normal common practice in commercial real estate. They honestly do this for pretty much every type of real estate and for as many as they can.

They securitize it in portfolios and sell off interest in those payments to others. They intentionally mix and match properties in portfolios so if one fails, there is less risk to the whole thing.

I've seen fast food restaurants, malls, airports, billboards, cell towers, hollywood studios, aerospace firms, law firms, hotels, apartments, everything. And yes, also data centers

Probably related to the now three Oracle data center that can’t get electricity.

Wisconsin passed a law that fast tracking large projects requires a high credit rating or collateral, to pay secure costs for building the power plants needed for the data center. In July Oracle’s debt rating was downgraded to near junk levels.

That means Oracle can no longer get Wisconsin to supply power to the data center so it’s a $15 billion dollar paper weight. Thats putting even further downward pressure on their credit rating and ability to secure loans to meet their $500B in obligations.

Now Oracle’s New Mexico data center is stuck due to contract issues with water and gas turbines, so they can’t move foreward. Oracle has a 9% interest rate on the loans to build that, then they raise 2% after construction, because their credit rating is dogshit. So now Oracle is claiming force majeur to get out of their increased debt obligations, which you can imagine, is killing interest in lending to them.

In Texas they just blocked new grid hookups over political backlash to skyrocketing electricity prices. That killed another Oracle expansion they just canceled, and another one is trucking in gas for gas turbines as an alternative to the electrical grid, which you might imagine is expensive.

Which brings us to now. The banks are looking at local opposition blocking these projects (local action is working), states are blocking them to avoid getting voted out, hardware costs are shooting up, and the assets backing these loans are too small for so much investment.

So the level of risk no longer works.

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My personal theory is that Oracle is a sacrificial lamb. It’s a dead end tech company that lives on licensing fees, and they’ve fucked themselves on these expansions. They’re failing at being a hyper-scaler as margins decrease.

I bet we see someone take Oracle private when their stock collapses, freeing the board of fiduciary duty to the stakeholders with a payout. This move is critical because it blocks other hyperscalers from putting in an offer to acquire their assets to shore up debt.

OpenAI will acquire the now private Oracle through a special funding round and buy up their hardware for pennies on the dollar. This will absolve them of the debt obligations Oracle has to OpenAI that have killed their credit ($500b), and stabilizes the Oracle balance sheet.

OpenAI will write this down and offer Oracle’s creditors equity stakes in lieu of cash, and will have acquired all their next gen hardware far cheaper than their competitors.

This might even fuck over Nvidia, the incestuous funders of the AI circlejerk. If Oracle gets to write off their GPU debts then Nvidia loses a fuck ton of sales, tanking their stock price — they take that OpenAI equity offer and look like they’re playing the game. OpenAI wants to build their own chips anyways, just look at jalapeño.

Buckle up kids. It’s gonna be a fun ride.

Wait until they bundle the debt.