UNFTR Weekly Roundup

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Max Notes

Flying Blind and Naked

Wall Street has never had more money, more data, or more computing power. More algorithmic trading infrastructure. More PhDs per square foot of office space. And it has absolutely no idea what it’s doing.

The investment philosophy governing the highest levels of global finance right now can be summarized as: throw everything at the wall, charge a fee, and call it a thesis. The press releases are full of strategic confidence. The analyst notes are dense with conviction. But look at the actual behavior—the companies getting bought, the debt being issued, the valuations being assigned—and what you see is a financial system that has talked itself into a story it can’t stress-test.

To illustrate this point, let’s pull together seemingly disparate threads to paint an abstract and frankly incoherent picture of the financialized economy. Accenture, Strategy Inc., SpaceX, the Big Four tech giants, and a Chinese AI company called DeepSeek that Wall Street would prefer you not pay attention to. Each is a data point in a picture that, when you step back, looks more like a Jackson Pollock than an impressionist work.

Let’s start with Accenture, the Schrödinger’s stock. Accenture just had one of the best quarters of its corporate life. Record bookings—$22.1 billion in Q2 alone. Forty-one clients with more than $100 million in quarterly bookings, also a record. One hundred and four large deals of $100 million or more year to date, up 13$%. Q3 revenue of $18.7 billion, up 6%. Free cash flow of $3.6 billion per quarter. Bing, bang, boom. They have 700,000 employees. And now they have partnerships with OpenAI and Anthropic. By any traditional metric, this is a company at the peak of its operational power.

The stock is down more than 50% this year.

Wall Street is selling Accenture for two reasons, and here’s where it gets genuinely confounding. Reason one: DOGE gutted federal contracts. Accenture Federal Services represented about 8% of global revenue and roughly 16% of Americas revenue. Thanks Elon! That’s gone now, or going. Painful, but manageable. But that’s not what’s driving a 50% haircut.

Reason two is that investors think agentic AI is going to make Accenture obsolete. That all the consulting work—the digital transformation projects, the enterprise software implementations, the IT managed services—is going to be automated away. The machines are coming for the people who deploy the machines.

Here’s what kills me. Wall Street is simultaneously betting that Accenture will successfully deploy AI for its enterprise clients—which is why those record bookings exist—and betting that this success will make Accenture itself worthless. The glass isn’t half full or half empty. It’s overflowing or bone dry.

If Accenture succeeds, it automates its own service delivery and shrinks the business. If it fails, it proves the whole thing doesn’t work, crashing the broader AI thesis. Either way, the stock gets punished, earnings be damned.

Then there’s crypto. A guy named Michael Saylor built a religion. Strategy Inc. (formerly MicroStrategy) reoriented its entire corporate identity around one non-negotiable conviction: buy Bitcoin, hold Bitcoin, never sell Bitcoin, and the rest will sort itself out. Maximalism as business strategy. Audacious, ridiculous, and for a while spectacularly effective.

Now he’s thinking about selling.

The company holds $51 billion in Bitcoin. But the blended book value of its holdings has dropped below parity. The financing advantage that made the whole scheme work—issuing debt and equity at a premium over the underlying asset, using the spread to buy more Bitcoin—has evaporated. Preferred stock is trading below its $100 par value. The company is now reportedly contemplating selling up to $1.25 billion in Bitcoin to preserve liquidity. Doing the thing that the company was built around never doing. Makes sense.

But there’s a wrinkle, and it’s probably why Saylor can’t believe this is even happening. In any previous bull market environment—stock market near all-time highs, Wall Street awash in cash, institutional money looking for yield—this is exactly the moment when speculative assets catch fire. FOMO drives crypto. That’s the pattern. That is not what’s happening here.

Instead of flowing into speculative assets, the money is flowing into AI and, apparently, space. Bitcoin’s FOMO moment should be right now, and it isn’t arriving. In other words, Wall Street has a new speculative darling. I’ll give you a hint. It’s South African by origin, hates democracy, is known to give Nazi salutes when it’s really excited and just went public with a company built on lies. Did you guess?

That’s right! SpaceX went public. $75 billion IPO—the largest in history. But while all the attention was on the stock price, 11 days after the IPO Elon did another thing. SpaceX issued $25 billion in senior unsecured notes—originally targeting $20 billion but upsized because demand came in at $89 billion. Brand new debt to mostly repay the $20 billion bridge loan SpaceX took out when it acquired xAI. And just like that, Elon paid for Twitter.

Now don’t think for one second the other tech giants are just going to sit back and let Elon hoover up all that debt and equity from Wall Street. No, no, no. Meta, Alphabet, Amazon and Microsoft have all gotten in on the bond market action. Yes, the most cash-generative companies in human history are going to the bond market to fund another round of eye-popping infrastructure investments. Collectively, they are planning to spend approximately $725 billion in capital expenditures through 2026.

All told, the AI-related investment-grade bond issuance this year will run in the neighborhood of $140 billion. And they’re going to need every penny of it, because analysts project that the five primary hyperscalers will add nearly $2 trillion in AI-related assets to their balance sheets by 2030.

You’d think someone, or everyone, would be asking a fairly simple question: If AI is going to generate the returns everyone claims, why are the most profitable companies on earth borrowing money to fund it?

Let’s work through it because there are some logical reasoning problems to tackle.

First: AI is not making companies more productive or profitable. A recent Reuters investigation found that businesses are actively switching to cheaper AI alternatives because the bills are eating them alive. There’s a phenomenon now called “tokenmaxxing”—treating AI consumption as a proxy for productivity, with predictable results. Gartner projects that AI coding costs will surpass the average developer’s salary by 2028, and three-quarters of executives report rising tech budgets, with nearly half projecting double-digit jumps. An AI officer quoted in the investigation said that open-source models are “90% as good at 10% of the price.” So the premium product isn’t ten times better. It’s just ten times more expensive.

Second: The data centers will be obsolete before they’re finished. Construction timelines for large data centers run two to three years. AI hardware and architecture are iterating faster than that. TechTarget has reported that data center designs could be obsolete by the time construction begins. Electricity demand from data centers is projected to double by 2030. AI-ready capacity is growing at a 33% compound annual growth rate—meaning whatever you build today is underpowered before the paint dries. The capital-intensive buildout phase doesn’t happen once. It happens again and again, every cycle.

Third: Energy is a hard ceiling, not a soft constraint. The AI buildout requires electricity on a scale that does not currently exist. The rest of the world is switching to renewables to manage costs and hedge supply chains. The current administration has effectively frozen large-scale domestic renewable development. While also managing the largest oil price disruption in modern history through tariff chaos and geopolitical destabilization. High energy costs are now structurally embedded in the American economy. This is not a short-term problem. It is a permanent ceiling on AI expansion in the United States.

Fourth: China is winning, and we’ve decided that means we can’t talk about it. The four most popular AI models on OpenRouter—which is the most widely used AI model routing platform—are all Chinese. DeepSeek is number one. Chinese models are priced at as little as 18¢ per million tokens, against an average of $4 for the top American models. China’s AI capabilities, which analysts once estimated were more than a year behind U.S. capabilities, are now roughly four months behind, and closing. If China decides to truly open its AI market globally, it doesn’t eat our lunch. It eats the whole cafeteria.

Circulating the Cash or Circling the Bowl?

Money is circling through Wall Street at velocity, with fees extracted at every rotation. Bond issuances. IPO commissions. Refinancing charges. Bridge loans. Secondary offerings. New debt issued to retire old debt. Infrastructure built to be replaced. Billions deployed into technology that isn’t yet delivering measurable productivity gains, priced at multiples that assume it eventually will, powered by an energy grid that structurally cannot support the buildout, and increasingly outcompeted by a country we’ve decided to treat as an existential enemy rather than a cautionary market signal.

The whole thing is a toilet bowl in slow motion. It looks like it’s moving with purpose. There’s a lot of momentum. But the direction of travel is fixed.

When Andrew Ross Sorkin gets his next book deal he’ll be writing the definitive updated account of this crash. The thesis will likely be that all of these signs were visible and readable, in plain text, in SEC filings, in earnings calls and Reuters investigations and Gartner reports. That nobody missed them through ignorance. They looked past them because the fees were too good.

Other things I’m obsessing over…

• Stephen Miller can barely contain his glee over closing the border to asylum seekers, and can’t wait to end birthright citizenship. He’s masturbatory over it. When this administration is finally over, the one thing that I’ll never get over is how a guy the Nazis would have delighted in murdering could be so infatuated with Nazism.
  
  
• This viral TMZ clip of Dr. Oz and Dean-the-worst-Superman Cain talking about the massive crowd at the America 250 Fair will be immortal.
  
  
• For the roundup of Supreme Court rulings make sure to head over to SCOTUSblog.com. There you can learn about how it is letting mail-in ballots be counted after Election Day like every fucking election ever in the past, how it won’t hear the sexual abuse appeal Trump filed so he still has to pay Jean Carroll $5 million (shoulda been a billion) dollars, and how Lisa Cook can’t be fired by Trump over at the Federal Reserve because the law prohibits it, and the Supreme Court does law shit so that’s good. Then you can read about how they also gave the President the ability to fire literally anyone but Lisa Cook. The court giveth and it taketh away. Hold your breath for Birthright Citizenship, likely due out today.
  
  
• Zohran Mamdani notched another win with the passage of one and two year lease rent freezes in rent stabilized housing. Donald Trump was suitably impressed by the measure saying the buildings will soon turn into ghettos, everyone will leave New York and it will spread across the country like an “uncontrollable form of cancer” that will take the country down to “strictly Third World.”

-Max

Killer Left Take of the Week

KLTW goes to Krystal Ball who eviscerates the Democratic establishment argument that Democratic Socialists should stay out of the Democratic Party. She does it quickly and handily by first pointing to the true constituents that matter and then calling out their hypocrisy on third parties. It’s a thing of beauty and all you need to memorize when confronted with this shallow and hollow talking point.

Watch: “I’M DONE!” Carville, Dem Elites CRASH OUT, Demand Dem Divorce

Chart of the Week

Don’t like the numbers? Just change the math. There…Fixed it!

Inflation is cooling. And if it isn’t, we’ll make sure it does. On paper. That’s what’s happening behind the scenes with an impending methodology change to the way we calculate inflation. Before we get there, let’s look at where things stand under the same old boring measurements.

Source: MacroMicro

Holy fuck, not good. No wonder they’re revising the methodology. The BEA released May 2026 Personal Income and Outlays data last week and headline PCE came in at +0.4% month-over-month, +4.1% year-over-year. Core PCE—that’s stripping out food and energy—was +0.3% month-over-month, +3.4% year-over-year. Remember the Fed’s target is 2%. We are not close to the Fed’s target. In fact, April’s numbers were identical—0.4% headline, 0.3% core—so there is no improvement to report.

We are running in place. The only way to suggest things are cooling is by turning the paper upside down.

Of course, inflation matters most relative to purchasing power, so let’s hit the other side of the equation. In May both personal income and spending were up .7%. Hmm. Pretty robust figures until you look at the composition. A big chunk of it was farm income driven by American Relief Act payments—government transfers. Private wages are in there too, but as we always point out, this is for the private chunk of the labor force which is 84% of 61%. So half of us.

And what happened to all that income? People spent it. Almost all of it. Services were up $94.3 billion, goods up $61.8 billion. Real PCE—spending adjusted for inflation—came in at +0.3% month-over-month. Positive, technically. But here’s what gets me about that number: people are spending faster, earning a little more, and the saving rate is sitting at 3%. The consumer is still burning through whatever cushion they had left, financing normal life with the fiscal equivalent of running on fumes.

Now for the sleight of hand.

The BEA announced it’s revamping how it calculates prices for three categories: portfolio management and investment advice, legal services, and computer software and accessories. The revisions go back to 2021 and will drop officially with the September 30 annual GDP update. On its face, this sounds like technical housekeeping. But dig one level deeper and you find something that should raise some eyebrows.

For legal services, the BEA has been using Bureau of Labor Statistics data that, by the BEA’s own description, had what they called “erratic changes that cannot be corroborated.” The government agency responsible for measuring consumer prices was using inputs for legal services that couldn’t be verified. They’re not saying the data was a little noisy. They’re saying they couldn’t corroborate it.

Um. Okay. Go on.

For portfolio management, they’re shifting away from PPI deflation to an employment-based quantity extrapolator. Basically, when the stock market is booming, fees on assets under management are higher. So the old methodology characterized that as inflation. This old method was treating a rising stock market as a price increase for services. The new method doesn’t. Frankly, that’s a more accurate way to measure it, but it’s also quietly convenient timing given where inflation readings are right now.

There will be a shift in where some of the data come from in computer software, IT infrastructure and legal services. Right now, the BEA believes there is an over-reliance on CPI (Consumer Price Index) inputs so it’s going to incorporate inputs from the PPI (Producer Price Index) to balance the equation. Economists appear to be aligned with the changes in principle, and I don’t have a horse in this race necessarily. But the forecasts from JP Morgan and Goldman Sachs indicate that it could reduce core PCE down by .1% to .2%, respectively.

Again, not earth shattering but here’s my issue.

Over the next few months, as the revised data filters through, you’re going to see headlines that say inflation is coming down. Markets will price it in. Political operatives will cite it. Fed officials may even gesture toward it. And the revision will be real—the methodology change is legitimate. But cooling inflation and fixing a broken measurement are not the same thing. Prices aren’t actually lower because we recalculated them. Your rent didn’t drop. Legal fees didn’t drop. Even the stock advisory fee didn’t drop if that’s something you have to contend with. And if it is, congratulations.

Headlines

Pay Attention, Class

Recent grads are facing a shit job market. U.S. wages aren’t keeping up with inflation. Household debt is at an all time high. But don’t worry, student debt holders. The Trump administration didn’t forget about you.

From the article:

“Millions of student borrowers will see their bills significantly increase on July 1 as new regulations put in place by President Donald Trump and congressional Republicans go into effect. On that day, the Trump administration’s Repayment Assistance Plan will go into effect, replacing the Saving on a Valuable Education plan put in place in 2023 under former President Joe Biden. While Biden’s plan was designed to give breathing room to families owing student loans, the Republican plan will push many borrowers—including those making less than $10,000—to pay more.”

Daily Kos: Thanks, GOP: Student borrowers face massive bills this week

A Test of Solidarity

Frontline Jewish activists to end the occupation of Palestine make a bold play to build on recent electoral wins and back Abdul El-Sayed in Michigan.

From the article:

“It’s considered harder to elevate a more radical candidate to the Senate, where a politician has to win statewide election, than it might be in a deep-blue congressional district with a progressive electorate. But Miller said El-Sayed was a standout — in the seven years since its 2019 establishment, Jewish Voice for Peace Action had never seen a Senate candidate that seemed worth its endorsement.”

The Intercept: Abdul El-Sayed Becomes First Senate Candidate Backed by Pro-Palestine Jewish Group

Forever Fighting for Basic Rights

Native struggles in this country are never close to finished. Even when they’re over the most basic of rights. Like water.

From the article:

“The 30 federally recognized tribes with land in the Colorado River Basin are estimated to have a right to at least a quarter of the river’s flow. But there’s little incentive to hand tribes the water to which they are entitled. Their rights are the most senior on the river, meaning in times of shortage everyone else would see their water cut before the tribes. But because the tribes currently use a fraction of their water, farmers, cities and businesses are able to use the rest for free.”

ProPublica: Native American Tribes Came Together to Secure Their Rights to Colorado River Water. Four States Are Stalling the Deal.

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