dstriddy

Full Time Speculator | Honky Tonker | Markets & Mayhem

[HOUSTON FOOD BLOGGER @EricEatsHTX]

Love seeing all these pickleball places close

[dstriddy @dstriddy]

@kewlshrek You can swim in the piss pool. Did you know it’s a natural spring bro?

[dstriddy @dstriddy]

@PaulSkallas It’s just an SV angle on grift.
“Look how little he cares about his clothes, he’s obviously a genius”

[dstriddy @dstriddy]

Sometimes the market just isn't going to pay you.

[Luke Cannon @lukecannon727]

The cashier at Home Depot just asked me if I wanted to round up to support the SpaceX IPO

[dstriddy @dstriddy]

@signulll Extraction. Same as ever.

[dstriddy @dstriddy]

#12

[Brandon Carl @brandonjcarl]

Documenting the headwinds I now see for AI.

It won't seem like it, but I love AI and am long-term positive. But when "math doesn't math" I take note.

1. The core thesis for foundation model lab investment has been high upfront investment made worthwhile by significant long-term profits.

2. These are capital intensive businesses and the compute commitments are very high relative to revenue and require strong growth over long time periods. The "leverage" (commitments versus revenue) is extremely high.

3. The fundamentals are not as positive as they previously were:
• Input costs are higher (commodities, chips, power)
• Interest rates are higher
• Competition is more intense
• Scaling Laws are now problematic: exponential costs/power cannot continue

4. Forecasting compute spend is challenging and high risk due to (a) revenue uncertainty and (b) algorithm uncertainty

5. Revenue growth appears to be slowing. The technology is valuable, but ROI is proving to be more expensive and take longer than anticipated.

6. The future is likely "different models for different use cases" with the lower end of the market being highly competitive.

7. Core use cases such as agentic software engineering are likely to need approaches beyond next-token prediction. They are Σ₂ᴾ complexity problems requiring multi-objective optimization and likely a combination of Transformers and other methods.

8. Current forecasts in memory makers are built largely on quadratic attention. That will not persist: we are already seeing work from DeepSeek, Minimax and Nvidia that can cut RAM needs by 80% or more.

9. This means semiconductor valuations are substantially overinflated and will go through the traditional glut versus shortage cycle.

10. For foundation model providers: lower costs with competitive differentiation is good. However, lower costs with a lack of differentiation would mean lower revenues. This makes it harder to (a) service commitments and (b) pay back investors.

11. Leverage is substantially higher than in previous cycles, evidenced by leveraged ETFs, call option activity and margin loans. Korea is particularly susceptible.

12. 0DTE options create a profile that has stronger parallels to portfolio insurance and 1987 than any other point I can remember.

13. The combination of exponential increases in call activity coupled with the ties of semiconductors to structured products means there is a non-trivial systemic risk to the financial system.

14. Implied earnings growth rates are inconsistent with other periods in history.

15. Macroeconomically we cannot and should not fund exponential cost increases. History has shown us repeatedly that there are better ways (see Quick Sort and Simplex).

16. Significant supply is hitting the market via IPOs.

––

Taken together: costs and competition are increasing while revenue growth is likely slowing. Valuations are fragile and prone to technology disruptions that are already here. Systemic financial market risk is extremely high.

[Silicon Valley Fodder @Playerinthgame]

When will people understand that this predatory pricing model will always be true of anything coming out of Silicon Valley? It is literally their only model. 1. Operate at a loss so everyone signs up 2. Wipe out competitors 3. Slam users with profane monopolistic costs

[dstriddy @dstriddy]

@moorehn Everywhere is like this now

[CoinDesk @CoinDesk]

NEW: JPMorgan CEO Jamie Dimon escalated his opposition to stablecoin rewards under the Clarity Act:

“The banks will not accept it.”

@HeleneBraunn reports.

[dstriddy @dstriddy]

@yonann dude has a glitch in his brain

[dstriddy @dstriddy]

@backlessdress26 go to a nice hotel bar first or find a bar where you can play pool with someone. Chat up the bartender. Tip well.

[Reuben Rodriguez @ReubenR80027912]

As I’ve noted: every billionaire is retarded. If sh*t hits the fan, Argentinians will just kill him & take his stuff. If you had $20B you should build a compound in Appalachia, subsidize the ~5,000 ppl in town via a make work company that loses $20M/yr

THOSE ppl will defend you

[dstriddy @dstriddy]

@sourceryy @MollySOShea @Lead_Bank @jackiereses Willful ignorance

[*Walter Bloomberg @DeItaone]

🚨 U.S. AND IRAN REACH DEAL BUT NEED TRUMP'S FINAL APPROVAL, OFFICIALS SAY -AXIOS

[dstriddy @dstriddy]

@Jackkk Goldman did this for him.

[dstriddy @dstriddy]

@PaulSkallas All you need is in house counsel. HR is a gaggle of hall monitors.

[John Carter @martianwyrdlord]

The mass liquidation of HR is one of the fix-everything switches.

[dstriddy @dstriddy]

@colarion Best thing I’ve read in a long time.

[Colarion @colarion]

There's a guy on $ubstack named Shitty Situations with a banger post for anyone in credit; all the ways people lie to you and credit can blow up in your face.

Some of my favorites: