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Friday August 14, 2026
Real analysis below.
Here is the most relevant analysis of current market conditions.
AGI is the road runner. AI is Wil E. Coyote. And Nvidia is the ACME Corporation. Nvidia keeps selling better gadgets to OpenAI, Grok, and Anthropic only for AGI to be always just out of reach. As is profitability.
Bugs Bunny is profitability. The Bull is economic reality. The anvil is lack of price discovery. Burry et al are shorting this market but running into the same problem every time.
Daffy Duck is the average accredited investor who is over confident. The Trap Door is oil, the AI bubble, treasury market, Japan interest situation. No one is paying attention to what else could be under foot in the private markets.
The book is Elon Musk’s take on reality. Tom is Elon. Self driving, space exploration, hyperloop, AGI are all Jerry mouse.
I could go on. Cartoons were meant to teach children how to grow up and not arrive at adulthood as a pants-less cartoon idiot.
Here are the risks to the market.
1 - OpenAI implodes.
OpenAI is the DCEU (DC Studios on film) and takes out Softbank by failing to IPO. DC has tried and failed numerous times to take on Marvel. Anthropic is obviously the MCU here.
It should have no issue getting listed and raising capital in an IPO. But then what? How does Softbank et all get their money out of OpenAI? Odds are it doesn’t. If Japan starts to hike rates this will trap Softbank into a debt spiral.
Sam Altman is a oversized kid who doesn’t believe in gravity and has jumped out of an airplane without a parachute. Currently, he is tied to Softbank and Microsoft. So just flapping around in the wind but have you seen the biceps of Mayoshi Son and Satya Nadella? Not much chance to bring Sam back to safety. Only Microsoft has a knife to cut the rope.
We own Anthropic through an SPV.
2 - China claims AGI first or similar.
This would blow up the entire AI narrative. Not just OpenAI. Anthropic has a chance to become the Google of code assistants. Which still isn’t going to be a trillion dollar business but might keep them afloat long enough. But, if China surpasses the US (which it likely will by the end of the year) then the entire ecosystem will collapse in on itself. I don’t think there are any highly leveraged players to buy the dip this time since Situational Awareness proved that still isn’t a viable market strategy.
You may think China beating the US is impossible. But, they don’t have to. China can just claim it and take the US market out. In the geopolitical chess game this might be China’s moment. The US is already boxed into a corner because of what we’ve done in the Middle East.
3 - The Strategic Petroleum Reserve starts to gurgle.
The US is car on the highway on empty. The SPR is that two gallon buffer manufacturers have build in. When the car starts to cough the US will be stranded on the side of the road.
The entire strategy of this administration is to stay moving until the election. There is no service station ahead regardless of what the roadside signs say.
China likely is sitting on a year of reserves left. The US maybe has 6 weeks.
4 - Iran manages to sink a tanker in the Strait.
This seems very unlikely. I don’t even think Iran wants to do this. The leaders over there seem quite happy to play victim with the next administration.
But, a third party might. If this happens the US Treasury market will go haywire.
5 - The US Treasury market goes haywire anyways.
Historically, 5% yields are average. But, not for a country running a debt to GDP ratio greater than 1. Though I don’t see where people would put their money it the ten year creeps up to 5.5% or 6.0% there will be a flash crash if not a true crash. Europe is falling apart. Africa is … Africa. Japan and Korea are not long term bets because of the aging population. Everything in Australia actively wants to kill you.
Where would you go to invest all the excess money sloshing around?
The Administration has to calm the markets which means taking away Trump’s cell phone. At least until the election.
6 - The trap door. Japan hikes rates.
This is such a bad scenario for the US that Bessent used his best penmanship to write a note about it on a napkin. The had the treasury try (and fail) to manipulate the Yen last week. I don’t even need an AI to generate this cartoon.
At this point, if you own stocks you must be crazy. So I bought QQQ 0.00%↑ Calls for next week. Because cartoons are fun to watch. Still rotating out of positions as they move.
I still think we have some time. I agree the US and AI have run off the cliff but Wil E Coyote does hang around for quite awhile before falling.
And we all know what happens to Bugs Bunny when everything looks absolutely terrible.
Reality loses.
—AJ