If an AI Crash Happens, It Will Be 5x Worse Than Dot-Com Bubble Popping
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If an AI Crash Happens, It Will Be 5x Worse Than Dot-Com Bubble Popping
In this episode of Macro, Micro and Small Cap News, we examine two major macro developments pointing to aggressive financial engineering.
First, US national debt crosses $40 trillion, pushing 30-year Treasury yields to near 20-year highs. We break down the US Treasury's bond buyback programme and why funding it with short-term T-bills introduces severe rollover risk into the financial system.
Second, we analyze the AI earnings bubble and circular funding structures involving Nvidia, hyperscalers, and neocloud providers like CoreWeave. We explore what happens if commercial AI monetization continues to lag behind massive infrastructure capex.
We also cover market movements in Gold and Bitcoin, followed by company research on UK-listed small caps: gaming publisher Everplay (EVPL) following the launch of Hell Let Loose: Vietnam, and SaaS provider Cerillion (CER).
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Macro Story 1: US National Debt Crosses $40 Trillion
Contextualizing $40 trillion: servicing costs exceeding $1 trillion annually and debt reaching roughly 120% of US GDP.
Surging 30-year Treasury yields reaching ~5.3% and the impact on borrowing costs.
US Treasury bond buyback expansion funded via short-term T-bills and the resulting rollover risk.
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Macro Story 2: The AI Earnings Bubble & Circular Deals
The divergence between massive capex spend on data centers/GPUs and realized end-user software revenues.
Hyperscaler cash flow pressures in the race for market dominance.
Case study of circular vendor financing structures, accounting useful life vs. debt maturities, and index concentration risks.
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Market Movements: Commodities & Crypto
Spiking bond yields driving Gold’s rally.
Bitcoin price strength, short liquidations, and US administration commentary regarding digital asset purchases.
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Small-Cap Stock Research
Everplay (EVPL): Early SteamDB concurrent user data and estimated gross unit sales for Hell Let Loose: Vietnam, alongside its importance to H2 2026 weighting.
Cerillion (CER): Review of H1 performance, the £42.5m Omantel contract, an expanding back-order book (£56m+), £31m cash position with zero debt, and moving average technicals.
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