@RandPaul Yes, but the FBI also stated fairly early in the pandemic that they suspected the virus came from the Wuhan lab, given that cell phone records showed no one at the lab just prior to and at the onset of the breakout in the streets
@madelksta@rcwhalen@Kathleen_Hays@FAOEcon Of course, rolling LT dated trsy into short term is extremely dangerous because it increases rollover risk, accelerates the coming interest‑expense crisis (as short‑term rates remain elevated), and makes the U.S. fiscal position more fragile, not less.
@madelksta@rcwhalen@Kathleen_Hays@FAOEcon The single largest chunk of Trsy debt now sits in 90‑day T‑bills, and that is a direct result of years of artificially suppressed interest rates by the Federal Reserve. It's the fiscal equivalent of Novocain, because it hides the true cost of debt from policymakers.
The AI Bubble---Enron Redux or the Mother Of All Financial Circle Jerks.
by George Noble
The Noble Update
NVIDIA IS BUYING ITS OWN CHIPS AND CALLING IT REVENUE
And your retirement account is secretly holding the bag.
This scheme is literally straight out of the Enron playbook...
In January 2026, a special purpose vehicle called Valor Compute Infrastructure was created with one purpose:
Buy Nvidia's chips so Nvidia could book the sale as revenue.
Valor raised $5.4 billion and purchased over 100,000 of Nvidia's GB200 GPUs.
But $1.9 billion of that money came FROM Nvidia itself.
Nvidia invested $1.9 billion into the shell company, then sold that same shell company $5.4 billion worth of its own chips and booked every dollar as revenue.
It's the Girl Scout whose dad bought all the cookies and then she wins the sales contest because Dad was the customer. Except this Girl Scout is a trillion-dollar company and the cookie sale is $5.4 billion.
But it gets MUCH worse:
The remaining $3.5 billion in financing came from Apollo Global Management. Apollo structured the debt, packaged it into securities, and then sold those securities to Athene.
And guess who Athene is? Apollo's OWN insurance subsidiary. The one that sells fixed annuities to American retirees as safe, conservative retirement products.
Follow the chain:
Nvidia funds a shell company with $1.9 billion. The shell company buys $5.4 billion in Nvidia chips. Apollo finances the remaining $3.5 billion. Apollo sells the debt to its own insurance arm. That insurance arm packages it into annuity products and sells them to retirees who think they're buying something safe.
The retirees have no idea that their retirement savings are now backed by 100,000 computer chips sitting in some data center that will be worth pennies on the dollar in three years.
Now look at what's happening inside Athene:
$74.2 billion in US reserves but $217 billion in assets have been shifted to a Bermuda-based captive insurer, outside normal US regulatory oversight.
$103 billion of that portfolio (roughly 35%) is classified as Level 3 assets. That means there is no observable market price.
These assets are valued by internal models, not by actual markets.
And sitting on top of all those unpriced assets? 16.6x leverage.
If you're getting flashbacks to 2008, you should be.
Back then it was mortgages bundled into securities that nobody understood, sold to investors who had no idea what they were holding, rated as safe by agencies that never looked under the hood.
Today it's GPU-backed securities. Computer chips bundled into structured credit instruments, routed through an offshore insurance subsidiary, and sold to you as a retirement product.
The collateral is 100,000 GPUs leased to a single customer through an xAI subsidiary. If xAI stops making lease payments for any reason - financial distress, a pivot in strategy, anything - the entire structure unravels.
And Nvidia releases new architectures every year, so each generation delivers dramatically more compute per watt. A 5 year lease on technology that's obsolete in 2 years creates a mismatch that should terrify every annuity holder in America.
Every single step in this chain is technically legal. The SPV is legal, the lease is legal, Nvidia's equity stake is legal, the securitization is legal, and the Bermuda transfer is legal.
But legality and legitimacy are not the same thing.
I've seen every trick Wall Street has ever pulled in my 45 years of doing this.
And what I'm looking at right now is a pipeline that takes AI infrastructure risk, launders it through 8 layers of financial engineering, and deposits it in the retirement accounts of Americans who never agreed to fund Elon Musk's data centers.
In 2008 it was mortgage-backed securities.
In 2026 it's GPU-backed securities.
@RonDeSantis Congress has lost its way, using the cover of the Donald's huge excess spending bills to evade responsibility for the expanding debt crisis heading our way. Time to call out those who voted for more deficit spending without any valid way to pay for the spending.
Incomes not keeping pace with inflation has been the persistent economic issue for tens of millions of Americans for quite some time.
When Congress borrows trillions and runs massive deficits, it is still an effective tax increase — it just comes in the form of higher prices.
@DavidRMalpass We can add rising productivity to the list, as the NY Fed's Open Market operations is shut and the Fed defers to true market forces via the discount window. That will assure a fair market for one and all, not just the NY Fed favoring more equity market speculation with excess $.
@steve_hanke You can blame the Fed for adding way too much liquidity. The Fed speaks lip service, not transparency. Time to shout the insane Federal Open Market operations at the NY Fed and force the Fed to defer to the discount window.
A thought
In the 1950s to the 1970s, information channels were so scarce that even the most studious investor, reading the same New York Times as everyone else on the morning commute, inevitably absorbed the same narrative, producing classic groupthink.
Today, I fear we might be recreating that exact dynamic at digital speed: millions of users generate daily AI briefings with near-identical prompts fed into overlapping models, receiving essentially the same market summaries, signals, and conclusions.
The result? A new era of synchronized thinking, just like 50–70 years ago, when alpha generation was far higher precisely because consensus created exploitable edges.
Independent thinkers who step outside the AI echo chamber will soon regain that same advantage.
Active stock-picking is poised for a comeback.
----
The era of Google searches, circa 2005 to 2024, was always ad hoc, so they never produced groupthink on the level we saw in the 1950s, and may see again.
(AI image of what I'm arguing)
@rcwhalen@POTUS Agree. Powell apparently couched the problem and made the problem worse by instituting a policy of "ample liquidity," a back-door form of monetary central planning that is the root of systemic inflation. He said one thing on the 2% goal; did another in reality. Double speak.
@DeItaone Yes, but the current Fed funds rate may not be the big problem; the huge excess liquidity in the system due to the Fed's nearly 40 years of (pro-inflationary) over supply of credit creation IS the big problem - the proof being too much inflation over time, i.e., systemic inflate.
@PeterSchiff Risk appetite is high on account of the Fed's silly "ample liquidity" policy, whereby the NY Fed pushes endless piles of cash into Wall Street every day, most of which ends up as speculation in stocks. When the Fed stops the insanity, equity markets will return to historical PEs