Narrative Focus

Tracking the red-headed stepchild of the financial services industry

[Fabio @zugmanfabio]

Root canal with no Novocaine is easy. Try listening to a Sequoia partner talk for 10 minutes while pretending any of it is true.

[Narrative Focus @narrativeviews]

@BadIdeaGuyJohn1 @realalexwiggin @firesidealpha That’s why I said cyber/tech underwriter - tech E&O covers financial loss and liability derived from a tech product or service, but thanks for the lesson…

[Narrative Focus @narrativeviews]

@realalexwiggin @firesidealpha Hahahaha you are giving insurers WAY too much credit here, I have not met a single cyber/tech underwriter that knows how to code - 90% don’t know what a kernel is

[Narrative Focus @narrativeviews]

@NegativeAlp Serious question, why would that not be insanely concerning? Both OAI/Anth rip through billions of funding like it’s nothing and neither are profitable. Isn’t this basically the @edzitron bear case? NVidia is supposed to be the one company looking stable in this whole trade

[Narrative Focus @narrativeviews]

@rev_cap Liability, if you’re in the US frontier labs are not legally held liable for their output as of today. Regulation is getting past in Europe that puts the onus on the labs for LLM output. If something goes wrong a client wants recourse, there’s a huge insurance ecosystem around it

[Narrative Focus @narrativeviews]

@boxing_alba @bavingaker @edzitron The point he’s making (poorly) is that demand is coming from two labs already considerably unprofitable (at least OpenAI is and it’s reasonable to assume anthropic) who are burning billions a year, and now Chinese models costing a tenth as much have entered the chat.

[Narrative Focus @narrativeviews]

Layer in a potential price war, or even just a slight reduction in market share to Chinese models and this is catastrophic for the US frontier labs. If they do engage in a price war they just lose even more per user, and if they don’t they lose users entirely.

[Narrative Focus @narrativeviews]

I get that the loudest voices of this argument are the Gary Marcus’s and zitrons of the world and they are annoying - but how is this not the primary driver of markets right now. US frontier models are ALREADY massively unprofitable AND they’re already subsidizing token costs!

[RiskReversal Media @RiskReversal]

"The Achilles heel of this whole story... is if something bad happens to Anthropic and OpenAI... open weight models are much cheaper... if they start really taking a lot of market share, and it sounds like from what I'm hearing, that they're starting to. You could have a big price war, and then then we have a problem"

🎙️ @realsteveeisman on Fast Money last night

[Narrative Focus @narrativeviews]

Very much top of the cycle behavior

[Hunterbrook @hntrbrkmedia]

NEW: America's largest mortgage lender made a giant $27.5 billion bet that interest rates would go down.

The bet failed. Last week $UWMC suspended its dividend and signed an emergency rescue with the distressed situations desk at Oaktree.

[Narrative Focus @narrativeviews]

@matthewqueen84 Munich did that while still increasing reserves and crossing a 300% solvency ratio. Discipline is right!

[Narrative Focus @narrativeviews]

Looks like Munich and the other large Reinsurers are going the fortress balance sheet method. Would expect this to hit ILS growth projects that have been explosive since Solvency II & 2017 NatCat season.

https://t.co/CvxNqux4G8

[Narrative Focus @narrativeviews]

Those Nationwide fund Insurance wrappers must be feeling real good right about now… https://t.co/DBml9PHwr6

[Narrative Focus @narrativeviews]

If you’re a CFO at a large P&C carrier, what’s your 5-10 year plan? Capital is cheap, but rates keep trending lower across nearly all lines as capacity continues to move in? Do you go all in on AI or do you try to wait for 10year to spike? Where is the alpha?