I watch markets, create content about them, and build top trading & investing tech with @merchantseven
NYC 🏃♂️SF
Joined January 2010
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Stef retweeted
Blackstone created an AI chief investment officer, which is trained on 14 years of the PE firm’s internal deal memos and debates.
Every potential new Blackstone investment requires reading of two memos now: a deal team memo and one from AI CIO (it doesn’t have a vote, though).
Stef retweeted
Vibe coded my parents' TV this afternoon!
It was showing a sponsored ad before you could even get to Netflix.
Gave Claude Code the model number, it found the TV on wifi, removed 25 Xiaomi packages and wrote a new launcher.
Looks like an Apple TV now lol
Stef retweeted
Math checks out as a solid ballpark.
At ~81, $1M buys roughly $1.235M face value. The 9.625% coupon on that generates about $119k per year in cash.
Over 4 years that totals ~$476k—nearly half the initial outlay recovered via coupons alone (assuming payments continue).
Backlog near $130B after the Q3 adds supports the demand side.
Stef retweeted
Tesla VP of Hardware Engineering Lars Moravy explains to Hagerty how the Roadster borrows SpaceX cold gas thrusters to make 0 to 60 possible in 0.55 seconds.
Truly insane:
▫️ 200L carbon-over wrapped pressure vessel
behind seat holds nitrogen at 10,000 PSI
▫️cold gas thrusters push out 80 kN of thrust (equivalent to a single fighter jet engine)
▫️Tesla went with nitrogen because “it just seemed wrong to put fuel into a car” (air is ~80% nitrogen, fair enough)
▫️thrusters same system satellites use to move in space (eg. the “psh psh psh" from Apollo 13 film)
▫️currently takes 6 to 7 hours to refill all nitrogen but Tesla working for it to be 30 minutes
▫️uses leg actuators from Optimus robot to manage downforce on wing
***
Full 25-min episode with Henry Catchpole here: youtu.be/22rvpUecLts?si=jtwK…
Stef retweeted
BREAKING: OpenAI is warning its employees to watch out for spies, especially romantic ones, per WSJ
The company has cautioned staff that someone trying to seduce them may likely be a “honeypot."
Even strangers approaching them in everyday places could be gathering info.
Stef retweeted
Boomer value stock investors: “Tesla is overvalued. Look at their EPS compared to their closest comps, Ford and General Motors”
Tesla:
Stef retweeted
Good Will Hunting GPU Edition
Ep. 2: My Boy's Wicked Smaht
Ben Affleck reveals he writes Python, understands convolutional neural networks, worked extensively with GPUs, and used his celebrity status to get private looks at Google and OpenAI’s video models
“I’ve always been kind of into computers since I was young. Then, when film started to move from analog film to digital, I became more interested in that aspect of it. The visual-effects workflow for many years has included machine learning, so I can write pretty shitty Python scripts and stuff like that.
“With convolutional neural networks, which were the precursors to what the transformer can do, which is much more computation simultaneously, you would do things like look at what’s called a tensor. That’s the numerical translation of a visual image in numbers, like the batch number, the frame number and the red, green and blue values of each pixel in each frame. It’s just that simple. That numeric is called a tensor.
“You’d use a convolutional neural network to identify patterns that reveal what’s called edge detection or feature extraction, which is identifying patterns well enough to know, this is where the window ledge is, so we can more easily take the green-screen image out and replace it with something.
“That was familiar to me early on because, prior to Artists Equity, I had a small visual-effects company. I’ve worked with GPUs a lot too. The visual-effects guys said, ‘Hey, you should see. There are a couple: Google and this other company, OpenAI, are doing really interesting stuff with transformers in video.’
“I’ve learned that I can actually just call up and go, ‘Hey, it’s Ben Affleck. Can I come see what you’re doing?’ Sometimes people say yes, to my astonishment.”
Stef retweeted
Readers added context they thought people might want to know
The video is an animation by artist R.J. (@RJ16848519) from his Screen Time series, shared here without credit.
x.com/rektober/statu…
x.com/connoissurreal…
x.com/kikanicolela/s…
Stef retweeted
This reminds me of Cullen’s quote in our upcoming Both Sides of Coin book. We go over the runaway national debt and how the effects are just beginning to be felt but.. debt to GDP may not the best metric to use in gauging how worried you should be. This is why we called book ‘Both Sides’ bc we lay out all perspectives- let reader be the jury. So excited for book to come out bc everyday I see a new debate on here that we cover in full in the book. @JSeyff
Almost every response to this was "but debt to GDP is high!". It turns out that the debt to GDP research has no reliably predictive value for developed world sovereigns. And it wasn't even the causal factor of defaults for the nations that the cited research reported.
See my newest research piece here:
ria.disciplinefunds.com/2026…
Stef retweeted
Here’s an example of an apples to apples metric - federal expenditures as a % of GDP. We know big govt spending can cause big inflation. That’s the lesson from Covid. The level of federal spending as a % of GDP is higher than historical average, but a Covid style federal govt spending driven inflation is not in the cards here.
This reminds me of Cullen’s quote in our upcoming Both Sides of Coin book. We go over the runaway national debt and how the effects are just beginning to be felt but.. debt to GDP may not the best metric to use in gauging how worried you should be. This is why we called book ‘Both Sides’ bc we lay out all perspectives- let reader be the jury. So excited for book to come out bc everyday I see a new debate on here that we cover in full in the book. @JSeyff
Stef retweeted
Yesterday's discussion about US debt topping $40T and debt to GDP approaching 130% brought out a lot of default fears. So I wrote a short paper on it (link below). The quick version is that 130% isn't a cliff for a country that issues its own currency, and the nuance matters for anyone consuming in USD, holding cash equivalents or govt bonds.
Start with the balance sheet. Federal debt held by the public is about $35T. US household net worth is about $196T, roughly 6x GDP and 5x the federal debt. And a big chunk of that wealth is the federal debt itself, sitting in portfolios as safe savings. Federal debt is large, but the asset side of the ledger is massively larger and is the main thing that allows such large govt debts in the first place. The uniquely wealthy and productive asset side is what makes the USA very different from almost every other country in the world.
Now the mechanics. The government funds its spending by taxing and borrowing from the wealthiest economy that ever existed. That's a massive collateral and revenue stream supporting the debt. And unlike a household or Greece, it can create the currency its debt is in. So the real risk to a bondholder isn't getting stiffed in nominal terms. It's getting paid back in dollars that buy less. Hyperbolic narratives about default gloss over the balance sheet AND the mechanics that make the USA unique.
But debt to income is high and rising, Cullen! Of course it is. That risk is real and should be measured with nuance, not panic. But the historical utility of debt to GDP ratios as a predictor of default is mixed at best and useless at worst.
History backs this up. About half of all sovereign defaults since 1970 happened with external debt below 60% of GNP. The UK hit 252% in 1946 and never defaulted on its own currency debt. And we all know the Japan story. Hyperinflations are driven by collapsing output and debts owed in foreign currencies, not by crossing a debt ratio. And the popular "51 of 52 countries defaulted above 130%" stat comes from a report that counts inflation and devaluation as "default." Its own examples list wars, revolutions, droughts and export collapses as the causes, and the actual missed payments were on foreign currency, gold standard or euro debt. Debt to GDP wasn't even the causal factor! And those causal factors aren't what the USA faces today. It doesn't borrow in a foreign currency and it isn't losing a world war.
The bigger risk isn't default or hyperinflation. It's that aging, inequality and technology keep dragging on growth and prices, pushing debt higher as the govt fills an inequality gap the private sector won't. That leaves a fragile economy with sticky inflation that's exposed to disinflationary shocks.
The distinction is important, and hyperbole doesn't help anyone untangle the risks. For portfolios, default hits all bonds, but persistent above-target inflation hits long bonds the most. So the question isn't whether to own USD or Treasuries. It's how much duration you own, matched to real liabilities, and how to diversify around that for the inflation protection long-term T-bonds can't provide.
Full paper:
ria.disciplinefunds.com/2026…
Stef retweeted
Will 5.0% be the ceiling for the nominal Treasury yield? Maybe not, but for bond investors the risk-reward math has gotten considerably better. The 5% yield provides such a good cushion that if the 10-year yield were to fall 100 bps, an investor would make 11.9%, while only losing 1.9% if the yield were to rise to 6%.
Stef retweeted
bond convexity and bond math more broadly is crazy man:
"The 5% yield provides such a good cushion that if the 10-year yield were to fall 100 bps, an investor would make 11.9%, while only losing 1.9% if the yield were to rise to 6%."
Will 5.0% be the ceiling for the nominal Treasury yield? Maybe not, but for bond investors the risk-reward math has gotten considerably better. The 5% yield provides such a good cushion that if the 10-year yield were to fall 100 bps, an investor would make 11.9%, while only losing 1.9% if the yield were to rise to 6%.
Stef retweeted
Let's put this in balance sheet terms because a lot of this talk is just a fallacy of composition in which the sovereign debt crisis crowd only looks at the debt side of things and ignores the fact that the asset side has also boomed.
There is no balance sheet in the world that is healthier than the aggregate US economy's. It's not even close. Here's a chart of household and non-profit net worth relative to public debt. The reason the public debt isn't a worry is because the total assets of the private sector are gigantic and growing fast. The reason rates haven't changed much in the last 20 years is because the balance sheet the US government taxes has remained incredibly strong.
Lots of scary talk in bonds these days, but it's mostly recency bias. Since 1960 the 10 year yield has averaged 5.8%. We're at 5% - below average. If you'd fallen asleep 20 years ago and woke up today you'd think nothing happened in the bond market the entire time.
Ignore all the sovereign debt crisis talk. Inflation expectations are adjusting to something more historically normalized. Carry on.
Stef retweeted
Lots of scary talk in bonds these days, but it's mostly recency bias. Since 1960 the 10 year yield has averaged 5.8%. We're at 5% - below average. If you'd fallen asleep 20 years ago and woke up today you'd think nothing happened in the bond market the entire time.
Ignore all the sovereign debt crisis talk. Inflation expectations are adjusting to something more historically normalized. Carry on.