Weekly Weigh In: Referendum in Alberta, The AI Hole and Meaning, Crypto Suspicion
Mark Carney has told Canadians that a 50%+ 1 referendum is not enough to leave Canada Quebec and Alberta MPs are pouncing on him call him an “authoritarian”. Not a good sign when both Alberta and Quebec are angry over the same thing.
Alberta’s upcoming referendum question on separation was made official Thursday, and it mirrors what Premier Danielle Smith announced last week. Smith and her cabinet issued an order in council confirming the date and format of the Oct. 19 referendum, along with the question
Option one reads: “Alberta should remain a province of Canada.”
Option two reads: “The Government of Alberta should commence the legal process required under the Canadian Constitution to hold a binding provincial referendum on whether or not Alberta should separate from Canada.”
The cabinet order also confirms, as Smith has stated, that the fall vote will not be binding. Mail-in ballots will not be allowed which is unequivocally a good thing.
So essentially this is Vote Number 1–but better than remaining in Canazuela. I suppose it’s worth questioning who can rig it better, Ottawa or Washington for the oil sands.
AI poor ROI.
Implied return on AI investment (FT / Panmure Liberum)
– Microsoft: -9.2%
– Alphabet: -15.7%
– Amazon: +7.2%
– Meta: -28.8%
– Oracle: -35.6%
And that’s assuming zero costs. In reality, GPUs depreciate, power bills run, salaries get paid. This also doesn’t consider existing balance sheet debts and wait a minute…off-balance sheet debts too.
Meta quietly start pioneering ‘shadow financing’, which allows them & others to keep AI data center debts off their balance sheets. This not only poses a massive private credit risk, but it also quietly keeps $27.3B of debt off
META’s Balance Sheet along with many other big tech names in the Nasdaq.
Vivek Garipalli, a CEO asked for $1B in AI-driven operating expenditure savings this year. The team spent $200M on tokens chasing it. What came of spending 200M was only modest customer service savings and slightly less hiring in engineering. The CEO has now ordered token costs to be dramatically slashed because the ROI isn’t there.
Meaning
Two things appear obvious to me, this is less about ROI and business fundamentals and more about something more political and changing matter of governance (similar to what I’ve wrote below about movies losing money but they’re such a mind virus of propaganda they continue to be made).
It seems that to justify these valuations and these spending plans, it would only make sense if they knew they had a government backstop because the government wanted to use these technologies to get one over Iran or China and/or we are made to believe that AI centralization of data, information and control is unequivocally a good thing and should be supported at all cost–selling the rope that you end up hanging from type of deal…In other words, I believe this is less about markets and more about an AI race/craze due to geopolitical edge.
Notwithstanding this, these companies are indeed traded publicly and we are clearly in a massive bubble in general index and equity markets. I’ve covered this with Nvidia, but that was before these amazing valuations that sound like all of the world’s wealth will be consolidated into a few companies… overnight.
I don’t wish to gamble when this bubble is going to pop.
Roman Emperor Vibes
The Trump Administration and the US Treasury Department are designing a $250 bill featuring President Trump, per the Washington Post. If this is launched, President Trump would be the first living person to appear on a US currency since 1866.
To do this as an acting President is one of the most shallow, narcissistic, feeble-minded actions a President has done. And soon we’re going to witness a UFC cage fight at the White House…
Bad Feeling
Recent crypto market commentary highlighted billion-dollar ETF outflows while Bitcoin remained surprisingly resilient. Normally you’d expect heavy ETF withdrawals to cause a larger collapse in BTC pricing, but Bitcoin has been trading in a way that has left both bulls and bears confused.
What is going on?
While encountering this… I’ve made a bank transfer to another account and it was in the other account in seconds–something that some crypto characters preach as being superior to other systems. Obviously this shouldn’t come as news, but it very much spoke to the fact that the dollar itself is a digital currency and that it’s extremely difficult to beat the banks at their own game.
I’ve wrote about this before a few times, but ultimately I don’t think cryptocurrency ends up in a good position over the long-run. Other than privacy-related cryptocurrencies and perhaps the odd cross-border transfers, their benefits are limited.
