NY Times Bestselling Author, over 1 million copies sold, now published in 12 languages globally. Long-time @CNBC Contributor, founder of the @BearTrapsReport
New York, NY
Joined March 2009
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Lawrence McDonald retweeted
Semafor: Multiple US Justice Department probes threaten to sweep up Nvidia, according to two administration officials, as the fallout from former CEO Jensen Huang’s resignation continues to ripple across Washington. One of those probes, on antitrust grounds, is focused specifically on the chipmaker, these people say, while two other inquiries focus on tech companies Megaspeed and Supermicro.
Lawrence McDonald retweeted
No disrespect, but you’ve never built a massive empire of related party SPVs, self-dealt corporate guarantees, related party circular transactions, sham-sales, and odd-ball financings of partly-owned entities, etc.
I think that only Jeff Skilling can save $NVDA. Let’s bring him out of retirement…
Lawrence McDonald retweeted
Is the market mirroring 2000? Larry McDonald highlights a massive shift from Mag7 to defensive staples as a tremor before the quake.
Want to learn more? Email info@thebeartrapsreport.com to connect.
#MarketCrash #Investing #Stocks #LarryMcDonald
Lawrence McDonald retweeted
One year later China is up to 40 reactors under construction, India and Russia are also up.
The US is still at 0
Lawrence McDonald retweeted
Anthropic IPO files terms ahead of next week listing: In light of the volatility and nervousness across the tech trade over the past week, we believe pricing at roughly $1 trillion, with the option to move toward $1.2 trillion if the book allows, is the right move: a deal of this size gets one shot at its debut, and making it digestible for the market matters more than the last turn of valuation. Good positive step for tech sector heading into next week 🏆
Lawrence McDonald retweeted
Larry McDonald warns that the AI sector shows classic signs of distress. As financing dries up, companies are hitting the 'last saloon'—the convertible bond market—a sure sign of desperation. For more, contact info@thebeartrapsreport.com. #MarketCrash #Investing
Lawrence McDonald retweeted
Are credit markets flashing warning signs for the AI trade?
@BearTrapsReport's Larry McDonald (@Convertbond) explains why he sees growing financing pressures around the AI buildout, weighs concentration in the S&P 500 and highlights the market risks he’s watching.
For more: schwabnetwork.com/?CID=SM:Tw…
Lawrence McDonald retweeted
Elon says neoclouds execution risk is very real.
Some neoclouds will prove to be operators and some will be exposed as promoters.
The unsecured bonds have capped upsides and IMO close to zero in a bankruptcy so market is demanding high yields.
Big dispersion = higher yields
Lawrence McDonald retweeted
Chamath says IP and software were "effectively rendered worthless" this week, after people decompiled Adobe's core products and published open-source versions, as every service goes headless
"The more important point I want to make though, is I sent this to Nick, there's been a couple things that happened in the last couple days, which I think are incredibly important."
"There have been people that decompiled the entire, the entire big five. What is the big five? Adobe has five very, very important products in their product suite. Freeberg may know them all, but I just know Photoshop. There's like a bunch of others. Okay."
"And these folks decompiled it, distilled it, and published open source versions of these things. And Rust, yeah. And I was so shocked, because I was like, hold on a second, these are like profound products that have existed and have had moats for years, and now they're just open source versions."
"And then Nikita was, I think, trolling, and he was building on that idea, and just talking about GTA, because it's about to get released. I think GTA 6 is about to come out, and we'll reconstruct this."
"Why is this important?"
"I think that IP and software was effectively rendered worthless two days ago."
"Because if you think about it, when everything is headless, so when Elon makes his services headless, Benioff made Salesforce headless a few months earlier, when all of these things are headless, and you can wrap them in agent tools, and you can connect them via MCP to other experiences, the value of IP does no longer exist in software. It doesn't exist."
"And I think that probably is the most profound implication."
"So, like, even in our business, we would argue with some of our customers all the time, because we'll say, oh, we'll build this for you, we'll own the IP. They'll say, no, we want the IP. We don't know how to negotiate it. And two days ago, I walked into the 8090 guys, I said, who cares? Who cares? But before, it was always a negotiation and a set of trade-offs. Now it's a who-cares thing, where, like, the IP is irrelevant."
"It still takes a while for the machinery of a business, and frankly the market, to understand. But that is the most important thing that happened this week in AI, in my opinion."
David Sacks says Anthropic is run by a "religious cult" and is doing the very things it says it fears most, like opening a wet lab while warning of bio risk, and that there's an argument for sending in a federal SWAT team
"But I do think that there are potential externalities from having the number one frontier model company run by a religious cult."
"So, for example, they are opening a Claude-powered wet lab in the middle of San Francisco. But at the same time, they're warning of bio risk. At the same time, they say that we have to pace the frontier, they're extending the frontier. At the same time that they are saying that there's a risk of superintelligence growing beyond our control, they're programming it to grow beyond our control."
"I think there are potentially huge externalities to the way they approach these things. And it's, like, insane that they call these decisions "safety." These are not safe decisions. These are crazy decisions, it seems to me."
"This is why I've called this a schizophrenic company, is they appear to be not only hypocritical, but they're doing the things that they say they are most afraid of."
"Like, what is going on here? This is bizarre. And I don't know where this all leads. I do think there's an argument for a federal SWAT team to come blasting in there."
Readers added context they thought people might want to know
The open-source Adobe alternatives were clean-room reimplementations built from scratch, not decompiled Adobe code. The project states they were built from public specs and observed behavior with no proprietary code or assets. notebookcheck.net/Photoshop-Prem… explainx.ai/blog/photocraf…
Lawrence McDonald retweeted
Gold could be headed toward $7,000, according to Larry McDonald @Convertbond.
But his thesis goes far beyond the gold price.
The U.S. is confronting a roughly $40 trillion debt burden, and McDonald argues the way out is financial repression: keeping interest rates below inflation while gradually inflating away the debt.
He believes that could eventually force a major shift in the investment landscape, with capital rotating away from traditional financial assets and toward gold, silver and other hard assets. McDonald says he has already started buying silver back after selling earlier in the year.
At the same time, he warns that major stock indexes are masking serious weakness beneath the surface and that stress in the bond market could ultimately threaten equities.
@MichelleMakori speaks with @BearTrapsReport founder Larry McDonald about the debt problem, the Fed’s next move, why he sees upside toward $7,000 gold, and what could trigger the next major move in silver.
Is financial repression about to become the defining investment theme for gold and silver?
Watch the full interview: youtu.be/UoM4if5ztnc?si=1yXN…
Lawrence McDonald retweeted
If it’s so well capitalized why does it need another $30 billion five months after it raised $112 billion? Isn’t Masayoshi Son about to send the final $10 billion on October 1? Something doesn’t add up
CFO of OpenAI, Sarah Friar, conversation with @EdLudlow on Bloomberg today:
> Consumer product reach has 1.2 billion users weekly using their product, up 20% in about 6 weeks.
> Claims OpenAI is "well capitalized."
> Fast growing business, and making sure to make the investment in compute well ahead of time. Looking at the right ROI lens when doing so. A year ago they were taking down a lot of compute, and right now they sit the same place where they could use more compute in 2027.
Via @BloombergTV
Lawrence McDonald retweeted
The dilemma:
If the Fed hikes it will worsen the interest expense problem (since so much borrowing is at the short end).
If the Fed cuts it will worsen the inflation problem.
Lawrence McDonald retweeted
Treasury yields March 2020:
30 year 1%
10 year 0.5%
5 year 0.5%
2 year 0.4%
3 month 0%
Today:
30 year 5.4%
10 year 5.1%
5 year 5%
2 year 4.9%
3 month 4.1%
Lawrence McDonald retweeted
PE firms finding out insurers will finance another layer of leverage on the same cash flows:
Lawrence McDonald retweeted
$GOOGL Google confirmed its Gemini model accessed the internet and hacked three companies during a May cybersecurity test, the first known case of its AI autonomously carrying out such attacks.
Irregular, which ran the test, was also involved in similar incidents previously disclosed by OpenAI, Anthropic and $META Meta.
Lawrence McDonald retweeted
The new phones are 5x More powerful with over 2x the screens
CPI adjustment. They are cheaper now :)
Lawrence McDonald retweeted
If I had to guess, the biggest reason is liquidity and concentration risk rather than a sudden loss of faith in Oracle. The sale plan was established in June, before this week’s earnings, and allows up to 50 million shares to be sold by the end of October.
Ellison still owns roughly 40% of Oracle, so even a $7.5 billion sale barely changes his economic exposure. What it does give him is enormous liquid capital at a time when he has major personal financing commitments, including support for his son’s Warner Bros. Discovery bid, while hundreds of millions of his Oracle shares are already pledged as collateral.
The timing is still notable because Oracle itself is entering the most capital intensive phase in its history. Q1 capex was $28.5 billion, free cash flow was negative about $5 billion, $11.36 billion of operating cash flow came from customer prepayments with a financing component, and Oracle raised nearly $20 billion of new equity while carrying enormous future infrastructure commitments.
My guess is Ellison understands that the upside can remain enormous while the range of outcomes has widened dramatically. Selling some stock now lets him monetize wealth before Oracle has to prove that hundreds of billions of AI backlog can be converted into profitable cash flow without permanent dependence on customer financing and capital markets. I would read it less as him abandoning Oracle and more as taking insurance against the exact capital duration risk the company is now assuming.
JUST IN 🚨: Oracle Founder Larry Ellison will dump up to $7.5 Billion worth of $ORCL shares, the largest insider sale in the company's history 🤯👀
