🚨 SOFTBANK'S DEBT CRISIS IS GROWING. It is now down -25% in just the last 7 trading sessions. The biggest concern is its exposure to AI. As of June 2026, it held $164 Billion in debt, much of it used to finance its AI investments. The interest costs for this is already at $2 Billion, up 95% from Q1. In September, it raised another $11 Billion at interest rates as high as 9.75%, adding $1 Billion in annual interest. Investors are now panicking over whether these massive costs will ever translate into actual profits. SoftBank’s 5-year default insurance (CDS) shot up by 24 basis points to 424 bps. This makes it a similar story to what happened to Oracle’s 5Y CDS (288 bps) and CoreWeave’s CDS (1,100bps). Higher US inflation and Fed rate hike fears are adding even more pressure. Any corrections in AI valuations could hurt its investments and make it difficult to repay such large debt.

Kevin Warsh just spoke at the IMF-World Bank annual meetings in Bangkok. Here are the most important things he said: 1. He refused to signal whether the Fed will raise interest rates again at its October 27–28 meeting. 2. He said the Fed will assess the situation at its October and December meetings before deciding its next moves. 3. He defended September's rate hike as necessary to deliver price stability and reduce monetary accommodation. 4. Warsh gave no assurance that the Fed is done raising interest rates this year. 5. Described AI as potentially the most consequential change to the US and global economies. 6. He warned that AI's short-term impact on employment remains uncertain. 7. He said the transition to a more productive economy driven by AI could be bumpy. 8. Warsh highlighted how the AI boom is driving investment and creating price pressures. His remarks came after US inflation data came in higher than expected, keeping the possibility of another rate hike in focus.