The clearest 11 minutes I have heard on why the AI capex boom may not pay off. @ChrisBloomstran at the Zurich Project on the depreciation wall, ~$650B of off-balance-sheet SPV debt, and the circular financing between Nvidia, OpenAI, and the hyperscalers.

The 2000 dollar is worth 51 cents today. Almost half its purchasing power gone in one generation. This is why nominal charts are misleading. Stocks at record highs. Wages up. House prices up. But the unit you measure everything in keeps shrinking.

The world just paid $2 trillion for a rocket company that lost $4.9 billion last year. And the rockets are not why it lost the money. They are the only part making any. SpaceX went public Friday, the largest IPO in history. Up 19%, a $2 trillion valuation, Elon Musk the first trillionaire. Then you open the filing. Three businesses sit inside it. Starlink, the satellites, brought in $11.4 billion, 61% of all revenue, and $4.4 billion in profit. It is the only piece that earns a dollar. The rockets that land themselves run a small loss reinvesting in Starship. And the AI arm, Grok plus the app once called Twitter, folded in this February, lost $6.4 billion in a single year on $12.7 billion of spending. Read that again. The satellites pay for everything. The AI loses more than the satellites make. And the AI is the part the market fell in love with. It gets bolder. The prospectus claims a total market of $28.5 trillion, the largest any company has ever put in a filing. Larger than the GDP of the United States. That is the number underwriting a $2 trillion price tag built on a division bleeding $6 billion a year. Now the structure. About 4% of the company trades. That sliver sets the price for all of it. Musk is locked up for 366 days and holds roughly 80% of the votes. The public bought a company they cannot steer, priced on the one segment losing the most. This is the whole year in one ticker. The profit is satellites. The story is AI. The market bought the story. The rockets were never the risk. The risk is a $2 trillion price resting on the one bet that has yet to make a cent.

60 million barrels of oil have exited the US Strategic Petroleum Reserve in the last 8 weeks, exceeding the draws from the Gulf War, the 2000 winter supply scare, the 2011 Libya reaction and even the 2022 pace. With energy comprising 3.5% of the S&P 500, the typical investor has more in Amazon than they do this entire sector. The US cannot perpetually fill the gap from lost Hormuz barrels.

META IS AN ABSOLUTE MESS INSIDE RIGHT NOW Wired just dropped an exclusive, and the details are wild. This week someone interrupted a livestreamed Meta meeting, open to thousands of employees, with an expletive-filled rant about "being the company's bitch." They told the presenters to find a specific Meta AI executive and "tell him that he's a piece of shit." A presenter covered their face with their hands. Employees in the chat called the start "spicy." Here is what's behind it. Meta's AI restructuring cut 8,000 jobs last month, 10% of the company. The same restructuring feeds a unit called Applied AI, where 6,500 engineers and product managers have been drafted in waves since April. There is no application process. You get selected, and your options are join or leave the company. Members call themselves "draftees." The new job: writing puzzles and coding problems to train Meta's AI models, two tasks a week. People hired to build apps for billions of users now assemble training data for hundreds of AI scientists. "It's literally the gulag," one employee told WIRED. "You have zero purpose in life all of a sudden, you barely interact with anyone, you just have these tasks every week." Another: "Most people find the work soul-crushing." At the same time, Meta started recording US employees' clicks and keystrokes to generate more AI training data. Over 1,600 employees signed a petition demanding it stop. The concession: employees can pause the tracking for up to 30 minutes. Zuckerberg's response came in an internal memo Friday: "We've made mistakes and will almost certainly make more." He repeated his promise of no more mass layoffs this year. His fixes: limits on the manager ratios Meta had deliberately pushed to 50-to-1 on some teams, bigger budgets for team events, a hackathon next month, and assigned desks by the end of the year. That same memo says Meta's north star is "to be the best place for the most talented people in the world to make an impact." The most talented people in the world are writing puzzles for a model and asking permission to pause the keystroke logger. META declined to comment.

Comedy - Someday this will be criminal? COREWEAVE JOINS NASDAQ-100 AS AI COMPUTE FLOWS ENTER THE INDEX MACHINE $CRWV Neg Free cash flow next year, year after? 2026: -$25B 2027: -$21B *now add profit less Anthropic, OpenAI, SpaceX, -$45B free cash flow combined in 2026.

Your 401K is heavily invested in AI and tech IPOs, which are historically the most expensive sectors. With SpaceX potentially going public at $1.8 trillion, it highlights the dark side of passive investing. #Investing #401K #TechBubble Email: info@thebeartrapsreport.com

This is incredible, SpaceX early investors will be able to sell 20% of $SPCX shares after the Q2 earnings report on June 30th. There's also a performance-based trigger where investors can sell an additional 10% of stock if the stock trades 30% above IPO price for 5 days after earnings June 30th. The lockup structure also allows investors to sell in increments of 7% after 70, 90, 105, 120 and 135 days after IPO. The remainder unlocks after 180 days. This one of the greatest wealth transfers I've ever seen from retail to early investors. No wonder they changed the rules to rush it into the indices after only 15 days (July 3rd). When that happens, retirement funds and passive ETFs will be forced to buy SpaceX precisely when the unlocks hit and early investors are able to begin dumping their shares. Is this the most corrupt IPO in history?

Is the massive $5.4 trillion AI spend actually setting us up for a financial crisis? Larry breaks down why data centers might break the power grid and your wallet. Watch now. #AI #Economy #Tech Full video soon on our YouTube Channel Email us at info@thebeartrapsreport.com

SCOOP: Meta plans to clamp down on skyrocketing AI costs inside the company by imposing limits on employees’ token usage, the company told staff in a memo on Tuesday, just weeks after it pushed them to adopt AI tools in their work.

President Trump says he’s exploring ways to give the public a stake in leading AI companies. The plan remains vague, but experts say if and how it develops could have massive consequences. Here are a few forms the plan could take: wapo.st/4orDOi8

A peace deal is actually bearish for the markets. Since March 30th, the US stock market has been up almost 20% without a peace deal. During that timeframe, the Strait of Hormuz was also mostly closed. Still markets pumped because the US and Iran announced 20 peace deals. Once an actual deal happens, this "imminent peace deal" trick will no longer work. Investors will start focusing on rising inflation, oil supply shocks, extreme stock market valuations, etc. This could cause markets to dump, and there won't be any peace deal announcement to stop it.

⚡️BREAKING Iran’s Foreign Minister on State TV explaining the upcoming the Deal: "The situation in the Strait of Hormuz and Iran’s frozen assets are all part of the upcoming deal Payment of fees are required to use the Strait of Hormuz As part of the deal and the ceasefire in Lebanon, Israel will withdraw from Lebanon If these and other obligations are not met, negotiations on a Final Deal will not take place"

JUST IN: Meta plans to crack down on skyrocketing AI costs by imposing limits on employe usage