Brian Judge
@realbrianjudge.bsky.social
Director of the Program on Finance and Democracy at UC Berkeley. Read my book about Finance and Democracy: https://cup.columbia.edu/book/democracy-in-default/9780231213998
“Like it? Well, I don't see why I oughtn't to like it. Does a boy get a chance to [insure speculative loans backed by collateral my company makes] every day?”
Nvidia turns to insurers to spread the risk of AI build-out
World’s largest listed company looks for new ways to draw Wall Street deeper into the financing of the AI boom
ft.com
"Having raised $122bn in March, it is on track to exhaust that cash in 2028...According to some investors, the delay is also motivated by fears about how the public markets might receive the heavily lossmaking company."
OpenAI expects to burn $280bn by 2030
AI start-up has projected deeply negative cash flows as it invests in infrastructure and faces price pressures
ft.com
REMINDER: Newsom vetoed SB1047 that would have imposed a duty of care and a baseline set of safety requirements on AI companies. The failure to enact even a minimum set of AI regulations belongs to Sacramento as much as Washington. So much for the California Effect...
gov.ca.gov
Fears of mass joblessness or human extinction offer OpenAI and @anthropic.com a good reason to restrain spending without conceding that further model improvements might prove uneconomical, Brian Judge explains. bit.ly/4r9cp5P
AI Firms’ Self-Serving Warnings
Brian Judge sees calls for a “pause” on development as a way to hype AI’s profit potential and reduce development costs.
bit.ly
The vast majority of private credit going to AI is provided by institutional investors: pension funds, insurance companies, and university endowments. What happens if investment returns disappoint? asks @ucberkeleyofficial.bsky.social @b-eichengreen.bsky.social. bit.ly/3SztTvC
After the AI Bubble Bursts
Barry Eichengreen warns that opacity prevails in the private debt markets that investors and policymakers need to watch.
bit.ly
terrific essay by Stefano Sgambati in @phenomenalworld.bsky.social "...a Trump administration politically aligned with private markets and alternative finance that now finds itself using the state’s fiscal capacities to manage the market for its own liabilities."
Stefano Sgambati | Private Leverage, Public Costs
How hedge fund speculation destabilized the bond market
phenomenalworld.org
"Achieving an investment-grade rating from Fitch, Moody’s and S&P...would open the door to pension funds, insurers and other institutional investors that take far more limited positions in riskier speculative-grade debt."
Anthropic and OpenAI bankers push for top-tier credit ratings post-IPO
Investment-grade designation would unlock cheaper financing for AI labs and their infrastructure partners
ft.com
looking forward to the inevitable industry white paper: "the market" is the original form of superintelligence and American prosperity depends on insulating both from political interference
Mark Zuckerberg said a national AI regulator was a flawed idea in a secret call with President Trump
The Trump administration is now considering both a FINRA-style approach and David Sacks’ industry-led approach as potential paths forward.
politico.com
New podcast! Glad to be on Odd Lots again from Jackson Hole. Thanks Joe and Tracy! We spoke about the Fed and its new Chair, US inflation, Treasuries and the US Treasury, AI impact on the macroeconomy, AI impact on economists, and what makes for dissent in central banks youtube.com/playlist?lis...
Odd Lots (Audio)
YouTube video by Bloomberg Podcasts
youtube.com
this was a lot of fun. i’m very grateful to Jorge Fontevecchia for the invitation and the terrific questions!
Brian Judge: “La financiarización no fue consecuencia del neoliberalismo, sino el aparato que lo instaló”
Doctor en Ciencia Política por la Universidad de California, Berkeley, donde dirige la investigación del Programa de Finanzas y Democracia, y exinvestigador en políticas públicas del Centro de Intelig...
perfil.com
The post-mortem of the OpenAI/HuggingFace incident betrays the complete and utter failure of AI regulation in the US: frontier AI models can autonomously launch sophisticated cyberattacks and the only response is a voluntary review from two independent* AI safety nonprofits.
Brief independent investigation of agents’ behavior, reasoning and collaboration in the OpenAI / Hugging Face hacking incident
Two METR staff members and a Redwood Research contractor investigated an incident in which OpenAI agents coordinated a multi-day hack of Hugging Face on a shared unsanctioned message board.
metr.org
today is a good day to revisit @benbraun.eurosky.social in @ripejournal.bsky.social in 2016 on the perils of central bankers speaking to "two audiences that, ultimately, are also two constituencies with diverging interests."
Speaking to the people? Money, trust, and central bank legitimacy in the age of quantitative easing
Financial upheaval and unconventional monetary policies have made money a salient political issue. This provides a rare opportunity to study the under-appreciated role of monetary trust in the poli...
tandfonline.com
An increase in the average interest rate on U.S. public debt from today's 3.4% to ~5% would cost an additional ~$500 billion annually (1/2 a Pentagon).
Don’t draw the wrong conclusion from Treasury yields
Investors are marking up their expectations for long-run economic growth in the US
ft.com
US debt crosses $40 trillion threshold after doubling under Trump and Biden reut.rs/46aehBB
US debt crosses $40 trillion threshold after doubling under Trump and Biden
Total U.S. debt has topped $40 trillion for the first time, the Treasury Department said on Wednesday, drawing fresh warnings that a fiscal crisis is brewing as ballooning costs for social safety-net programs and interest payments far outstrip revenues held back by tax cuts.
reut.rs
Exclusive: World Liberty Financial, the Trump family’s flagship crypto venture, says its trust company has received preliminary approval from the Office of the Comptroller of the Currency to become a bank. on.wsj.com/4wyvwat
Exclusive | Trump Family’s World Liberty Financial Gets Preliminary Approval to Launch a Bank
The Office of the Comptroller of the Currency gives the flagship crypto venture a conditional approval to be a trust bank.
on.wsj.com
The professional courtesies from the Trump administration are an essential safety blanket for the NY Times' self-conception as a neutral truth-seeker. Both are deeply invested in the administration appearing as "normal" as possible. One hand washes the other.
Eric Lipton NYT@ericlipton.nytimes.com · 2mo agoOne you might find surprising. White House press secretary Karoline Leavitt & members of her team have been extremely helpful in responding to questions I raise. Regardless of public facing commentary, privately they are willing to engage and address questions. And I have appreciated that. Thank you
"The Commodity Futures Trading Commission today exercised its emergency authority in response to KalshiEX, LLC’s notification of a market emergency and ordered the exchange to continue to operate in accordance with the Commodity Exchange Act’s Core Principles."
CFTC Exercises Emergency Authority to Ensure Market Stability
The CFTC exercised its emergency authority in response to KalshiEX, LLC’s notification of a market emergency and ordered the exchange to continue to operate in accordance with the Commodity Exchange A...
cftc.gov
Axios: Warsh has told associates that before taking office, he built AI bots that ingested the collected works of economists Milton Friedman and James Tobin. He then turned to them for their insights on contemporary economic questions. [Who needs task forces?]
Important set of charts from Torsten Slok at Apollo. There's a $4 trillion hole in financial space-time that markets expect to be filled with SP493 corporates feeding jobs into the infernal machine, flowing through to AI lab margins and Mag 7 free cash flow. What are markets pricing? (1/n)
A Slower AI Payoff Would Be Everyone's Problem | The Daily Spark
Consensus expects free cash flow for the hyperscalers to more than double over the coming years, see the first chart below. Subscribe for daily updates.
apollo.com
fun fact: during the Biden administration "Trump" appeared on the front page of the New York Times more often than "Biden"
private credit got a little less private... "Unauthorized access to a portion of the NAIC’s environment was identified on June 11...the unauthorized party was able to obtain information needed to gain temporary access to certain data storage areas." /1
Security Update
content.naic.org
Most discussions of the downside risk from the ongoing AI boom have focused on the stock market, writes Brian Judge. But the bigger risk is to credit markets. bit.ly/4x5vxU7
The AI Threat to Financial Stability
Brian Judge homes in on the growing mismatch between speculative future revenues and current contractual debt obligations.
bit.ly
Judge Capital Partners IV can guarantee S&P500 minus 300bps for much less than 2 and 20.
California’s largest public pension fund just had a banner year, riding a soaring stock market to record its second consecutive double-digit annual investment return. cal.news/4b4Nfi1 📸 Rich Pedroncelli, AP
Fascinating look at how NVIDIA is putting the AI in AIG
Nvidia GPU Debt Backstop Unleashes the AI Project Trinity: Capital, Offtake and Datacenters
Over 7T AI debt by 2029, There can be no Neoclouds without the Trinity. Nvidia's Backstop Economics Explained. AI Debt Needs Quantified. Nvidia's Objective is to Broaden Compute Access, Develop AI Fin...
newsletter.semianalysis.com
"Donald Trump earned more than $1.16bn in crypto sales and memecoin royalties last year upon returning to the US presidency"
Donald Trump made more than $1bn last year in return to presidency
US president also earned hundreds of thousands of dollars from licensing of Bibles, watches and perfume
ft.com
