Excess Returns
Buy-side fund managers work through macro and AI capex episode by episode: valuations, leverage, specific private credit risks
1:00:48Private credit's risk hides in insurance company ratings
Private credit has poured into insurance companies, much of it in affiliated investments, rated by private agencies that are systematically too generous; on correct ratings, insurers would have to hold an extra $400-500 billion of capital a year.
55:42Sports Betting Is Seeping Into Gen Z, and the Regulatory Risk Is Underestimated
Sports betting is becoming part of Gen Z's financial strategy; slow losses are harder to recover from than one big blowup, and it sits on the same platforms as financial products, with future regulatory risk widely underestimated.
1:00:01When Will the AI Bubble Burst? Watch Credit Default Swaps and Token Prices
The AI bubble will eventually burst, but current valuations are far below dot-com levels, with Nvidia at just 15x earnings. The real risk lies in credit markets, where credit default swaps have risen to historic highs, signaling a possible sharp correction ahead.
1:02:28The Fed's Credibility Breaks, and the Options Market Shrugs
The Fed's credibility cracked over a single decision not to hike, while the options market still prices Fed day like any other day — the cheapest insurance may be an illusion.
1:04:46AI Earnings Are a Bubble: Costs Deferred, Profits Front-Loaded
AI infrastructure profits are realized now, while costs are amortized into the future, constituting an earnings bubble. The stock market will peak before earnings, so investors should be wary rather than chase.