★ Priority · 8
‘Why I Left the Left.’ Plus. . .
PRIORITYThe Free Press
- Democratic operatives and working-class supporters are defecting to Republicans, signaling a structural shift in the party's traditional coalition.
- Democrats have lost trust among working-class voters who feel abandoned by the party's progressive wing and policy priorities.
- With midterms approaching and the progressive wing ascendant, this realignment has become increasingly consequential for Democratic viability.
💬 New thread from PauloMacro
PRIORITYPauloMacro’s Substack
- China's DRAM chipmaker CXMT IPO'd and rallied 6x+ as Chinese firms target crowded-out market segments (auto/mobile chips) displaced by AI GPU demand.
- Crude fell $5 despite Saudi refinery fires and Houthi escalation, reflecting market timing mismatches and risk-off sentiment.
- Historical pattern suggests Chinese market entry often erodes profitability; competitors should anticipate margin pressure in mid-market semiconductor segments.
💬 New thread from HFI Research
PRIORITYHFI Research
- High short positioning in Brent suggests future sell-offs will be shallower, limiting downside opportunity on headlines.
- Trump administration unlikely to accept Iranian control of Strait of Hormuz, suggesting geopolitical resolution remains distant despite current peace signals.
- Energy trader positioning strategy: exit August BNO calls on next escalation; sell half of Jan 2027 calls; wait for high-certainty oil-math exhaustion before re-sizing.
A Semi-Theory of Almost Everything
PRIORITYMichael W. Green from Yes, I give a fig... thoughts on markets from Michael Green
- Philadelphia Semiconductor Index rose 88% in Q2 2026 at 60% annualized volatility, driven partly by measurable behavioral changes in levered product holders.
- Micron gained 230% over three months while Nvidia only managed 15% despite being the center of AI trade, suggesting concentration in semiconductor gains.
- Structural changes in market plumbing—how levered investors behave and large price-insensitive capital flows—can explain outsized moves and may replicate in other markets.
hedging is for gardeners
PRIORITYKris Abdelmessih from moontower: a stoner dad explains options trading to his kids
- Substack's new Pangram integration can detect AI-generated content in posts with reasonable accuracy.
- Author manages subscription overload (140 Substacks) by using scheduled jobs and Claude-Gmail integration to systematically extract value from distributions.
- Post discusses retail options trading behavior and the concept of hedging with a casual, accessible tone.
The Key Question on AI * - Part II
PRIORITYLe Shrub from Reminiscences of a Shrub Operator
- Critical unresolved question: if OpenAI or Anthropic fail, what happens to their $300 billion compute backlog commitments with hyperscalers?
- Bull argument that hyperscalers can simply redirect compute to other AI companies or internal use is dismissed as weak thinking that doesn't address the scale of capital commitment.
- Warren Buffett's recent $10 billion Google investment amid Nasdaq decline could represent peak FOMO for AI trade, similar to classic market tops marked by legendary investor entry.
The Ideological Rape of New York City
PRIORITYEve Barlow from Blacklisted
- ICC arrest warrant for Netanyahu championed by figures including Amal Clooney and Sadiq Khan, despite issuing prosecutor's documented sexual misconduct findings.
- Critics argue progressive leaders defend ICC process while overlooking prosecutorial credibility issues and the legitimacy of Israel's security operations.
- Pattern of antizionism reflected in NYC governance and street violence targeting Jewish citizens, according to author's analysis.
Ferg’s Finds
PRIORITYFerg from Trader Ferg
- The AI boom is being priced as a technology cycle when its actual mechanics resemble a credit-driven real estate cycle with 2008-like structural risks.
- AI infrastructure—data centers, entitled land, debt financing, and take-or-pay leases—exhibits properties of real estate development rather than software businesses.
- Real estate cycles typically break when demand growth decelerates against fixed supply built during the boom, not when demand collapses entirely.
Markets · 11
AI’s $700 Billion Question
Andrew Sarna
- Alphabet's capex guidance increased to $205B for 2026, raising concerns about ROI absorption capacity as combined Big Tech capex could exceed $725B annually.
- For the first time, Alphabet posted negative quarterly free cash flow despite revenue beats, reflecting investor concern over AI spending payoff timelines.
- Companies beating earnings are not being rewarded with stock appreciation—a rare occurrence marking investor skepticism on tech valuations and capital efficiency.
The Bar Is High
AP Research
- Nasdaq 100 fell 1.6% amid concerns over AI capex sustainability and weakening valuations for hyperscaler mega-caps.
- Hedge funds sold US tech at record pace over 8 weeks; SOX index tracking worst month since June 2022 as sentiment deteriorates.
- Alphabet's negative FCF and guidance hikes signal market shift: tolerance for AI spending without near-term profitability proof is narrowing sharply.
[Chart] The Big Bad Bond Bear
Callum Thomas from Topdown Charts Professional
- Bonds in 6-year bear market with long-term treasuries down 50% from peak; even 20-year holders see flat-to-negative returns after inflation.
- Bonds are unloved (bearish consensus), undervalued (cheap indicators), and underallocated (allocations at 25-year lows)—a major contrarian setup.
- This represents one of the largest potential reversal opportunities across asset classes despite macro headwinds still pending.
Mythic Atlas Report: Issue 04
Mythic Market Research from Mythic’s Substack
- Markets are in Stage 4 Constructive with full allocation and price above the ten-month line, with risk-on positioning at 60% diffusion outside the U.S.
- Month-end economic data releases (personal income, outlays, and U-Mich sentiment) will occur in the final 30 hours of the month and could significantly refresh the Consumer block indicator.
- The Consumer panel is the weakest block at 33% positive and closest to flipping, with potential to provide a domestic-demand floor to the current model.
SOMETIMES THE FORWARD-DISCOUNTING MACHINES DOESN'T CARE ABOUT YOUR EPS CHART
PAIDKevin Muir from The MacroTourist
- Stock markets are forward-discounting mechanisms that do not simply follow earnings; rising EPS does not guarantee rising stock prices.
- Historical precedent shows that stocks can decline sharply even as NTM (Next Twelve Months) EPS continues rising, as occurred in early 2022 when stocks fell 24.5% despite rising earnings.
- Market participants often overlook that earnings growth is already priced in, and shifts in market sentiment or discount rates can cause decoupling between earnings and stock performance.
The Cash Machine
Nick Nemeth from Mispriced Assets
- Mark Walter's Guggenheim Baseball Management uses complex corporate structures to funnel $587M of annuity customer money into the Dodgers' media company as supposedly arm's-length loans.
- Retirement savings from Ohio and Indiana residents, sold on safety promises, are lodged in Delaware Life and Clear Spring Life insurance companies controlled by Walter, then loaned to his own sports network.
- The arrangement obscures the connection between the lender (owner's insurance company) and borrower (owner's baseball network) by filing them as unaffiliated third-party transactions.
SpaceX, Adding It Up: The Cost of Not Beginning
Cape Fear Advisors
- SpaceX's June 2026 IPO at $135/share valued the company at $1.79 trillion, but stock fell to $115.07 by late July, raising questions about post-offering fundamentals.
- Post-offering filings include a stock-settled Cursor acquisition and refinancing, but no major repricing events or positive catalysts justify the original valuation.
- The analysis tracks whether new corporate actions and filings align with the initial IPO thesis rather than predicting near-term price movements.
The Week Ahead 7/26/26
Eliant
- Week saw momentum factor rebound early but geopolitical tensions over Middle East pushed oil higher and 10Y yields to 4.7%.
- Nasdaq declined 160bps after 200bps early-week gain, while Dow held up better due to energy strength; S&P fell 0.6% and Dow dropped 0.4%.
- FOMC decision expected to hold steady Wednesday, though oil spike raises speculation of a rate hike; PCE inflation data follows Thursday.
Weekly S&P500 ChartStorm - 26 July 2026
Callum Thomas (Weekly S&P500 #ChartStorm)
- Mag-7 and S&P 493 have peaked with technical risk of lower highs and lower lows forming a downtrend if key support levels break.
- Market sentiment shifted distinctly negative this week amid geopolitical tensions, rising rates, and AI/capex concerns despite expensive valuations and low cash.
- Retail trading behavior and seasonal patterns suggest potential market turbulence ahead with multiple technical warning signals across cap-weighted and equal-weighted indices.
What Google Didn't Say, and on Its Record Isn't Likely To
Cape Fear Advisors
- Alphabet reported record $112.2B quarterly profit, but $99B derived from unrealized gains on equity holdings rather than cash operations.
- Free cash flow was negative $5.9B despite record earnings, with capex ($44.9B) exceeding operating cash flow ($39.1B) and full-year budget raised to $195-205B.
- Reported profit significantly overstates actual economic cash generation and operational performance due to mark-to-market accounting.
Big Short Charts...
Garrett Baldwin
- Markets are in negative momentum, requiring disciplined adherence to risk management rules to avoid catastrophic losses.
- Wall Street's perverse incentive structures—where profit is decoupled from risk outcomes—remain unchanged since the 2008 financial crisis.
- UBS's recent proposal to repackage low-quality assets demonstrates the financial industry's enduring appetite for regulatory arbitrage and opacity.
Macro · 11
AI Emigrates to Shanghai But Isn't Taking Your Job After All
Jeremy McKeown from Hypernormal Times & In The Company of Mavericks
- US-Iran tensions briefly eased over weekend; Brent crude fell 7% below $90 as market sold fear trade and Treasuries rallied.
- Houthi attacks on Saudi ports and fresh mining claims suggest ceasefire may lack regional buy-in, leaving geopolitical risk unresolved.
- Fed faces awkward Wednesday meeting after oil spike inflation narrative reversed; rate hike expectations pulled back amid peace signals.
Weekly Macro Note: FOMC Week, Asia Bounce?, Takes Two to TACO, Crude Roadmap, & More
MacroEdge Research
- FOMC week is critical with the new Fed chair Warsh's policy direction determining market direction; sideways ranges expected until guidance clarity emerges.
- Middle East tensions (Houthi refinery attacks and strait traffic) are influencing near-term market volatility and energy considerations.
- The second half of the year presents a binary outcome: either a final rally before the Fed hikes due to inflation, or continued sideways intervention through midterms with risk of the AI/data center/momentum trade losing steam.
Walk in the Pines #407
PAIDPinecone Weekly Brief
- Weekly digest includes curated charts and a stoic Marcus Aurelius quote on gratitude and avoiding overvaluation of possessions.
- Notable reads feature Financial Times analysis on 'financial candyfloss' and the return of monetarism in policy discussions.
- Curated podcast recommendations include Founders, Monetary Matters with Russell Clark, and Macro Hive discussions on monetary policy trends.
The Funeral
Macro Musings by Danny D
- Central banks (Fed, BOE, BOJ) face 'funeral' of dovish era and must decide whether to hike rates preemptively or risk bond and currency market punishment.
- Iran used prior ceasefire to sell oil and rebuild missiles; low U.S. interceptor stocks may embolden further demands and threaten comprehensive deal durability.
- Key data this week includes durable goods, CPI, PCE, GDP, and employment; month-end trading combined with geopolitical risk creates heightened volatility environment.
The Ancient 8.
Damped Spring 101
- Investors should evaluate three key dimensions: growth, inflation, and relative value of fiat cash versus assets.
- Asset prices reflect consensus expectations about future monetary and fiscal conditions; opportunities arise from divergences between expectations and outcomes.
- A diversified portfolio of assets is highly likely to outperform cash over the long term due to the risk premium demanded by savers.
A Macro Pilgrim's Ledger | July 26, 2026
Santiago Capital Research
- Oil war pushed Brent above $100 for the first time since spring on escalating Middle East tensions, with WTI climbing 11% to ~$90.
- Nasdaq fell 2.1% as Tesla and Alphabet were punished post-earnings; S&P 500 slipped 0.6% while Dow held best, down just 0.4% on energy strength.
- Bond market began bracing for Fed rate hikes rather than cuts for the first time in months amid crude rally and revised AI spending outlook.
The Week That Was, The Week that Is: Growth Holds On, Pricing Pressure Remains
Global Macro Method
- Weekly market decline reflected valuation reset rather than recession signal, with US employment, high-yield credit, and broader economy remaining resilient.
- Damage concentrated in duration-sensitive assets (megacap tech, long-duration credit) as rising real yields forced cost-of-capital repricing amid resilient activity and oil shock.
- Coming week's Fed meeting, GDP/inflation data, S&P 500 earnings, and BoE/BoJ decisions will determine if this was temporary correction or start of something more consequential.
The Future Costs of Current Suppression
Michael Howell from Capital Wars
- Late investment cycle signals are accumulating including flattening yield curves, strong commodities, and positive economic surprises alongside weakening global liquidity.
- US Treasury 10-year yields are breaking out driven by rising rate expectations while term premia remain flat, signaling investor demand for safety.
- Several central banks appear to be curtailing liquidity impulses, contributing to weakness in liquidity-sensitive assets including cryptocurrencies.
Redeye Macro Note: A Look at a Closed Hormuz & the Bab, Saturday TACOs - Will it Continue?
MacroEdge Research
- Strait of Hormuz and Bab strait closures are affecting global oil supplies and contributing to consumer economic harm in developed economies.
- Oil prices returning to levels that threaten the political viability of current US administration ahead of midterm elections, potentially creating policy pressure.
- Technical analysis suggests current oil price pause may be short-lived given ongoing geopolitical tensions and supply constraints.
Weekly Intelligence Brief: A System Running Out of Slack
Capital Flows
- Weekly Intelligence Brief synthesizes structural economic changes across major economies rather than short-term price movements.
- Focus on underlying causes and mechanisms driving macro outcomes, with implications for economic evolution.
The Bosphorus Bid
The Blind Squirrel
- Turkey's emergence as a high-growth emerging market in the 1990s attracted international investment banking interest and business travel from major global institutions.
- The country's geographic and cultural position as a bridge between Europe and Asia created both appeal and complexity for dealmaking and institutional building.
- Investment banking operations in emerging markets during the pre-digital era operated with distinct operational challenges and informational constraints compared to developed markets.
Politics · 11
Jihadism Arrives In Berlin
John Aziz
- An Islamist jihadist attacked Berlin's Pride celebrations with a van, killing one and injuring many; German Interior Minister identified it as terrorism.
- The author critiques media avoidance of naming the ideology behind the attack, noting outlets describe it as 'hate' or 'extremism' while obscuring the jihadist motivation.
- Islamist attacks across non-Muslim countries follow a strategic pattern: use fear to provoke populations toward religious conversion and territorial conquest.
There is nothing surprising about the Berlin pride attack
Jonathan Sacerdoti
- Berlin Pride attack suspect is identified as a known Islamist, consistent with years of vehicle-ramming tactics used by Islamic extremists.
- Islamist terrorism has long targeted symbols of Western values including LGBTQ+ events, freedom of expression, and cultural celebration.
- Author criticizes mainstream media for being 'surprised' by the attack despite the well-documented pattern of Islamist targeting of pride events and Western values.
Collapse of the Blood Libels
Andrew Fox from Fox On War
- Author argues that major allegations of Israeli genocide in Gaza—including Lancet studies, AirWars reports, and NGO conclusions—are fraudulent and built on changed definitions.
- Mainstream media outlets failed to report on the collapse of the 'great indictment of Israel' despite years of coverage promoting allegations as settled fact.
- Claims that South Africa and Iran weaponized the genocide convention, undermining its credibility for addressing actual future genocides.
How Chicago stops voters from deciding what matters
Austin Berg | The Last Ward
- Chicago City Council finalized six non-binding referendum questions for voters, which are essentially poll questions with no legal force.
- Mayor Brandon Johnson's preferred millionaires tax question failed to make the ballot, contrasting with NYC's binding charter reform propositions.
- Chicago's non-binding referendums limit voter decision-making power compared to New York's binding structural governance changes.
Did Ukraine Make the Biggest Nuclear Mistake in History?
PAIDProf Robert Pape
- Ukraine's 1990s decision to surrender its nuclear arsenal in exchange for security assurances is now being questioned as states worldwide reassess nuclear proliferation strategies.
- Global leaders in Iran, Saudi Arabia, South Korea, Poland, and Taiwan are learning from Ukraine's experience and reconsidering whether nuclear capabilities are prudent.
- Ukraine's strategic outcome may accelerate nuclear proliferation and make preventive wars more attractive to states seeking to avoid nuclear-armed adversaries.
China Weekly Wrap: The Carrot and the Stick Edition
Panda Perspectives
- China's new offshore trust taxation guidance with 90-day amnesty represents enforcement of capital repatriation while offering a carrot-and-stick approach to wealth management.
- Beijing is leveraging strong trade surplus and recent market gains to incentivize domestic capital to stop fleeing to offshore tax havens.
- The policy signals a shift in how the government manages national savings and reflects broader rebalancing priorities away from offshore wealth concentration.
Heads I Win, Tails You Lose
The Brawl Street Journal
- China uses strategic stakes in European companies like Pirelli to create asymmetric payoff structures through dividends, board influence, and technology insights while benefiting Chinese competitors.
- Multi-dimensional geopolitical positioning allows China to win through different channels regardless of direct market outcomes, creating 'heads I win, tails you lose' scenarios.
- European governments like Italy are attempting to counter Chinese influence through mechanisms like expanded 'golden power' laws to limit control and board representation.
Iran’s Alliance With Russia Is Pulling It Into More Wars
John Aziz
- Iran's deepening military alliance with Russia in Ukraine creates unavoidable blowback, including Ukrainian attacks on Iranian vessels transporting military cargo.
- Iran cannot expect to maintain strategic cooperation with Russia in war while remaining insulated from conflict spillover and Western counter-operations.
- The alliance reflects Iran's ideological commitment to anti-Western positioning but exposes fundamental limitations of multipolar world strategy when allies face active conflict.
Mamdani Made an Empty Promise to Arrest Netanyahu. And Revealed the Problem with the Free Palestine Fervor.
Kaizen Asiedu
- Mamdani's promised arrest of Netanyahu lacks legal authority, exposing inconsistency in local politicians making unenforceable international policy commitments.
- Palestinian causes have become an ideological purity test that supersedes domestic policy focus, even at protests unrelated to international affairs.
- Single foreign conflicts increasingly dominate political discourse and flag symbolism across disparate American protests and events.
Iran has Trump exactly where it wants him
Andrew Fox from Fox On War
- Iran frames US-Iran negotiations as survival and revolutionary prestige rather than transactional deals, resisting concessions that appear weakening.
- June memorandum offering oil waivers, frozen asset unfreezing, and $300B+ reconstruction was revoked after Iranian attacks on shipping, narrowing diplomatic runway.
- Trump's pause in bombing for diplomacy presents negotiating trap where Tehran can absorb further strikes rather than accept settlement appearing disadvantageous.
Confronting Brutality Requires Brutal Honesty
Restoring the West by Ayaan Hirsi Ali
- Secretary of State Marco Rubio publicly named left-wing extremism as a major blind spot in Western counterterrorism strategy, comparable to organized Islamic terrorism.
- Left-wing extremists operate through international networks of finance and communication, targeting individuals and institutions that represent Western values.
- Western governments and media have historically downplayed left-wing violence as aberrational rather than recognizing it as a systemic threat to Western civilization.