THE BOUNCE FAILED. THE DEBT GROWS. Thats was a week that was. ⭐️ CPI, PPI and import prices all came in hotter than expected. ⭐️ Nasdaq lost 4.5% this week. CoreWeave lost 25.2%. ⭐️ Government bonds caught a safety bid while Washington reported another $2tn annual deficit. ⭐️ Europe outperformed. Japan’s higher borrowing costs remain a global risk. ⭐️ Brent finished near $110. ⭐️ Ukraine’s satellite restrictions exposed the cost of depending on infrastructure somebody else controls. 📉 STOCKS — DEAD CAT BOUNCE Weekly moves: Nasdaq: −4.5% S&P 500: −1.9% Russell 2000: −3.0% Dow: +0.7%. The Dow held up while technology and smaller companies took the damage. Money is becoming more selective about which earnings—and which balance sheets—it trusts. VIX finished at 19.99, up roughly 35% over the week, after reaching 22.31 on Friday. Protection is getting more expensive. 🔥 INFLATION. THE PROBLEM IS STILL HERE CPI: 3.7% annually, with core prices up 0.3% monthly. PPI: 6.3% annually, up 1.3% in September alone. Producer energy prices jumped 10.8%. Strip out food, energy and trade services, and prices were still 5% higher annually. Import prices: +1.1% monthly against 0.8% expected, and +8.1% annually. Those figures exclude tariffs. Duties add another cost, which businesses absorb in margins or pass through to customers. Energy, imported goods, tariffs and financing costs. Businesses are being squeezed from several directions. 🥇 GOLD. I STILL LIKE IT Gold sold off after CPI as traders priced a tougher Fed. It then recovered, trading around $4,165–$4,167 late Friday, although still roughly 0.7% lower over the week. My view: gold around $4,145 looks like a gift over the longer term. The market’s first reaction was that the Fed would fight harder. My concern is how far behind the problem it remains. Higher rates can squeeze demand. They cannot reopen Hormuz, remove tariffs or make Washington balance its books. They also increase the cost of refinancing debt. 🤖 AI DEMAND DOESN’T PAY THE INTEREST BILL CoreWeave closed at $61.39: −11.9% on Friday. −25.2% over the week. Thursday’s 5.9% bounce disappeared the following day. Dell lost approximately 23% over the week, showing how the pressure reaches equipment suppliers. CoreWeave bond yields traded above 15% during the week. Its five-year CDS spread passed 1,100bp on Thursday. Oracle’s default protection also reached record levels. These are reported levels during the week, rather than Friday closing quotes. Funding costs ↑ → project returns ↓ → refinancing harder → capex delayed → supplier earnings at risk. AI adoption can keep growing while investors lose money. The equipment, electricity and debt still have to be paid for. Revenue backlogs are useful. Cash flow determines whether the financing works. 🤖 ANTHROPIC GROWTH UP, VALUATION UNDER PRESSURE Anthropic reportedly told investors Q3 revenue reached $16.8 bn, up 45% quarter on quarter, with an adjusted profit. Strong growth, but slower than Q2’s more-than-doubling. Some investors are now discussing $1.5 tn, against earlier expectations around $2 tn. That is 25% lower, though no IPO price has been agreed. Still no public S-1 located. The filing was confidential; reported prospectus details and private investor presentations are what we have so far. “Adjusted profit” needs the adjustments. Revenue needs margins, cash flow and spending commitments alongside it. At trillion-dollar valuations, even 45% quarterly growth can disappoint. That tells you how much perfection was already priced in. My guess is that the numbers are shit (for a $2t val) and they will delay using a safety excuse. 🏦 US BONDS A SAFETY BID APPEARED BUT THERE IS STILL A MONSTER BORROWING PROBLEM US 10-year: approximately 5.09%, down around 16bp over the week. US 30-year: 5.44%, also down around 16bp. Investors bought Treasuries as they cut equity risk. My view is that this relief will struggle against the scale of borrowing still ahead. Friday’s fiscal figures: $5.40tn collected. $7.40tn spent. $1.992tn annual budget deficit. $1.36tn gross interest costs, equivalent to roughly 25% of federal receipts. Total federal debt above >$40tn. Washington must finance that spending gap alongside refinancing maturing debt. Older, cheaper borrowing rolling into higher rates adds pressure to the interest bill. Spending grew 6%. Receipts grew 3%. The gap widened despite record revenues. This is a debt spiral and the credit-card binge mentality continues. 🇨🇳 CHINA EXPORT BOOM, DOMESTIC STRAIN Shanghai Composite: 3,716 | −2.6% over the week. Hang Seng: 24,187 | −0.1%. Friday’s rebound did little to repair mainland losses. September exports surged 36.3% annually, against 25.5% expected. Imports rose 31%, versus 24.5% expected. The monthly trade surplus reached a record $133.5 bn, taking the first nine months to $938.1 bn. AI-related equipment and semiconductor shipments were major contributors. Part of the export surge reflects higher chip prices, so headline export growth overstates the increase in physical volumes. The domestic picture is much weaker. Producer inflation accelerated to 5%, above 4.5% expected. Consumer inflation was only 0.9%, below the 1% forecast. Factories face rising energy and commodity costs while weak household demand limits their ability to pass those costs on. That puts margins under pressure. 💴 THE YUAN AND CAPITAL FLOWS The yuan traded around 6.69 per dollar on Friday, near its strongest since January 2023 and heading for a third consecutive weekly gain. Strong exports are supporting the currency despite domestic weakness. Beijing also pledged further financial-market opening, wider international use of yuan bonds as collateral and stronger offshore yuan markets. This is relevant to diversification away from dollar assets, although it does not establish that the dollar is losing reserve-currency status. China is exposed to the same AI spending cycle supporting US technology. If financing pressure slows global data-centre investment, Chinese equipment suppliers feel it too. 🇯🇵 JAPAN CHEAP FUNDING IS GETTING LESS CHEAP Japan’s 10-year yield finished around 2.94%, down 7.9bp over the week. The 30-year finished at 4.01%, down 5.7bp. Japanese bonds rallied too, but the BOJ’s policy rate is now 1.25%. Several brokerages expect another increase in December, while Ueda warned about inflation overshooting its target. Higher domestic yields can encourage Japanese investors to keep more capital at home. More expensive yen funding also squeezes leveraged carry trades. That matters well beyond Japan. 🇪🇺 EUROPE BETTER EQUITIES, SAME INFLATION CONSTRAINT STOXX 600 finished at 644.74, gaining more than 2% over the week. Strong results helped Europe outperform the concentrated US technology trade. But eurozone inflation remained 3.8%. The ECB has raised rates 50bp this year, taking its deposit rate to 2.50%, with another December increase priced in. Germany’s 10-year yield was around 3.42% late Friday. Europe’s stronger equity performance does not remove its financing constraints. 🛢️ OIL — STILL FEEDING INFLATION Brent settled at $109.86, up 3.72% on Friday, as Middle East supply risks kept prices elevated. That feeds into freight, manufacturing and household bills. It also makes it harder for central banks to support weakening economies without risking another inflation surge. 🛰️ STARLINK / STARSHIELD — WHO CONTROLS THE SWITCH? Ukraine says its military Starshield connections were cut when terminals travelled above roughly 160 km/h, disrupting drone operations. Negotiations to remove the restriction continued on Friday. This concerns the speed at which terminals move. Musk says the US government controls Starshield; Trump denied ordering the restrictions. Responsibility remains unresolved. Critical infrastructure comes with political and counterparty risk when another party can restrict access. For Europe, sovereign communications capacity has a very practical value. 👀 NEXT WEEK: 19–23 OCTOBER 📊 Data Mon: China GDP (4.4% expected vs 4.3% prior), industrial production and retail sales; Canada CPI. Tue: UK jobs/wages; China loan prime rates; US housing starts, permits and pending sales. Wed: UK CPI. Thu: US jobless claims. Fri: Japan CPI; UK retail sales; US/UK/eurozone flash manufacturing and services PMIs; final Michigan sentiment and inflation expectations. 🏦 US auctions Mon: $95bn 13-week + $82bn 26-week bills. Tue: $95bn 6-week bills. Wed: $13bn 20-year bond reopening. Thu: $26bn new 5-year TIPS. $311bn announced, plus scheduled 17-, 4- and 8-week bills. Gross issuance includes refinancing. 🇯🇵 Japan Tue: ¥700bn 20-year JGBs. Thu: ¥500bn liquidity-enhancement reopening auction. 🇪🇺 Europe Tue: UK 2036 conventional gilt; German green bonds. Thu: UK 2031 index-linked gilt. Watch the 20-year auction for sustained demand, TIPS for inflation protection, and Friday’s data for rising prices alongside weakening growth.

The longer I work in VC, the less I believe in financial models and hard analytics. And the more I believe in exceptional founders and gut feeling. The best investments rarely look reasonable in Excel.

I think one of the biggest problems with startup accelerators is that we’ve confused teaching founders how to pitch with teaching them how to build a business. Spend three months perfecting your story. Build a beautiful deck. Practice your two-minute pitch 100 times. Learn exactly which buzzwords investors want to hear. Then get on stage at Demo Day and announce you’re raising $4M. Great. But can you actually sell your product? Do you know why customers buy it? Can you explain your margins without opening a spreadsheet? I’m a big fan of accelerators. The best ones provide incredible mentorship, networks, and early capital. But we’ve created an ecosystem where some founders can explain their billion-dollar market opportunity better than they can explain their first $10,000 in revenue. Fundraising is a skill. Building a business is a completely different skill. And the two don’t always overlap. Maybe Demo Day should include five minutes of founders trying to sell their product to an actual customer. Because getting 200 VCs excited about your startup is impressive. Getting 20 customers to pay for it might be even more impressive.

Pricing in venture is totally f******. If everything can be a $TRN company then yes, the entry price is infinitely elastic. But they are not all going to be $TRN companies so sorry, price still matters. Rant over but man this is the wildest time I have seen in venture in a decade.

DEAD CAT BOUNCE. THE SELLING IS SPREADING. ⭐️ CoreWeave down nearly 12%. Yesterday’s rebound wiped out. ⭐️ IREN down 10%. Palantir down nearly 7%. ⭐️ Nasdaq down roughly 1.9%. ⭐️ Treasury yields higher. The earlier safety bid has faded. ⭐️ Brent above $109. ⭐️ Another hot inflation number — before tariffs. Stocks ↓ → funding pressure ↑ → higher energy costs squeeze margins 📉 Stocks Nasdaq: ~26,219, −1.85% S&P 500: ~7,686, −0.75% Dow: ~52,035, −0.27% Yesterday’s modest Nasdaq and S&P gains have been more than erased. Tech remains the centre of the damage, but the Dow has also lost its earlier gains. 🤖 AI + Credit CoreWeave $CRWV: $61.49, −11.77% IREN $IREN: $27.33, −10.07% Palantir $PLTR: $186.70, −6.88%. CoreWeave bounced almost 6% yesterday. Today it has lost that gain and more. Funding costs ↑ → project returns ↓ → capex harder to finance → equipment orders and earnings assumptions at risk Demand can keep growing while the economics get worse. You still have to finance the kit, power the data centres and service the debt. 📊 Inflation September import prices: +1.1% monthly +8.1% annually Non-fuel imports: +6.0% annually. These figures exclude tariffs. Import duties add another cost that businesses absorb in margins or pass to customers. Industrial production rose 0.7%, but manufacturing increased only 0.3%, while vehicle production fell 3%. Manufacturing growth across Q3 was just 0.7% annualised. Prices are running hot; factory growth is much less convincing. 🏦 Bonds / Treasury US 10-year: ~5.13%, up roughly 4bp today. The earlier bond rally has reversed. Treasury’s latest dealer questionnaire gave no explicit signal that cuts to long-dated auction sizes were imminent. Some investors had been hoping for one. Longer-term yields rose afterwards. 20-year reopening and 5-year TIPS. Shares falling. Government bonds falling. Less protection when you need it. 🛢️ Oil Brent: ~$109.33, +3.22%. The earlier dip has gone. Higher fuel costs add pressure to household spending, business margins and the inflation outlook. 👀 What Next Watch whether equities recover into the close and whether Treasury yields ease. Foreign capital-flow figures are also due, giving a lagged view of overseas demand for US assets. The AI trade is under more stress ... Japan still under massive pressure US debt spiral is getting worse and worse.

GLOBAL RISK-OFF IS GETTING F'in UGLIER ⭐️ Japan and Korea are getting smashed. ⭐️ US futures are still lower after yesterday’s AI rout. ⭐️ Treasuries are catching a proper safety bid. ⭐️ The dollar is backing off as Fed hike odds ease. ⭐️ Oil is lower, but Hormuz and Saudi risk are still very real. ⭐️ TSMC is today’s big AI test. Stocks ↓ → Credit spreads ↑ → Funding harder → Treasuries catch a bid 📉 Stocks Asia has taken yesterday’s US AI sell-off and made it worse. Nikkei 225: ~64,185, -5.25% KOSPI: roughly -7% to -8% Taiwan: -3% Underneath it, the same AI/memory names are getting hammered again: Samsung -9.5% SK Hynix -11.4% SoftBank $9984 -10% Tokyo Electron -7.3% Kioxia -11.2% This follows yesterday’s US damage: Nasdaq -1.88% S&P 500 -1.11% SOX -4.3% futures are pointing lower That is the ugly bit: US AI cracks → Asia gets smashed → US futures stay soft. 🤖 AI + Credit Yesterday the selling moved beyond valuation. CoreWeave $CRWV -15% area Oracle $ORCL -8.8% Nebius $NBIS -10% Dell $DELL -11% CoreWeave’s unsecured bonds are yielding around 15%, while credit protection on AI-linked names has widened sharply. That is the mechanism to watch: Funding cost ↑ → project returns ↓ → capex delayed → equipment orders at risk → revenue/EPS assumptions ↓ Financing stress moving through the supply chain. 🏗️ Primary Market AirTrunk has delayed its planned $1.5 bn Singapore data-centre REIT IPO into 2027. Firmus already pulled its multibillion-dollar float. and Anthropic is the counterpoint to the funding stress. It reportedly told investors Q3 revenue hit about $16.8 bn, up 45% QoQ, and that it was profitable on an adjusted basis. (we know what that means) So the top-end demand (we saw AMSL results) and monetisation are clearly real. The question is whether the rest of the AI infrastructure chain can fund the capex needed to keep up. A $2t Valuation is narrative capitalism doing a lot of work to get a lot of stupid people to buy in. AI stocks ↓ → AI credit wider → IPOs delayed → funding harder That is where this becomes more than another bad week for tech. 📈 Bonds / Fed Yesterday’s hot CPI initially sent yields sharply higher. Then equities sold off hard enough that the bond market flipped. US 10Y: ~5.14% overnight, down about 4bp That is a proper safety bid. Fed hike odds have also backed away from the post-CPI spike, with the market pricing roughly 31.6% for a 25bp move at the next meeting. 💵 FX The dollar has backed away from yesterday’s 18-month high. USD/JPY: ~157.9 EUR/USD: ~1.119 The yen is stronger, but nowhere near enough yet to call this a full carry unwind. 🛢️ Oil Oil is lower this morning: Brent: $104.67, -$1.39 WTI: $94.07, -$1.02. Reuters That helps. But the physical risk has not gone away. Houthi attacks on Saudi infrastructure continue, Iran is threatening shipping through Hormuz, and two vessels have sunk in separate incidents. At the same time, higher Russian and Middle East supply is helping cap prices. So oil is lower because supply expectations have improved a bit, not because the geopolitical risk has disappeared. In fact with the MidTerms coming the Trump shit shows only option is to escalate Iran again to blame it them. 🇹🇼 TSMC This is the big AI test today. We already know revenue was strong. What matters now is: AI demand CoWoS capacity capex guidance margins any customer delays If TSMC says demand is still intact, then the market’s problem becomes very clear: Demand is not breaking. Funding is.

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