Credit Markets Price in AI Buildout Risk

December 4, 2025 • 1 minute, 11 second read

During the 2008 meltdown, investors were able to point to credit default swaps (CDS) as a sign of trouble. A CDS essentially looks at the cost of insuring a debt. In 2008, CDS values soared as stocks tanked.

Today, CDS are back in focus, helping gauge the risk value debt raised in the AI buildout. Consider the CDS for database giant Oracle:

Turn Your Images On

Oracle CDS are soaring. (Source:Bloomberg)

Oracle shares managed to pop higher on their AI investment plans over the summer – but quickly gave back those gains as investors digested the total debt the company was taking on.

The AI buildout and its rising costs are raising more questions than answers right now. The CDS market is heating up as a sign of trouble ahead. Keep your eyes peeled!

~ Addison

P.S. Today @ 2pm EST/11am PST on Grey Swan Live! we’ll be joined by Bonner Private Research’s Dan Denning to unpack the Fed formally ending its Quantitative Tightening and planning to cut rates into inflation already at 3%.

Who’s likely to benefit from an early “Santa Rally” when the Fed cuts rates on December 10, 2025? And how you should position your overall portfolio to benefit from the economic incentives the Trump administration will put in place ahead of the 2026 midterms.

Turn Your Images On

If you have requests for new guests you’d like to see join us for Grey Swan Live!, or have any questions for our guests, send them here.

Ripple Effect

Credit Markets Price in AI Buildout Risk

Addison Wiggin

December 4, 2025 • 1 minute, 11 second read

CDS

Today, CDS are back in focus, helping gauge the risk value debt raised in the AI buildout. Consider the CDS for database giant Oracle:

Turn Your Images On

Oracle CDS are soaring. (Source:Bloomberg)

Oracle shares managed to pop higher on their AI investment plans over the summer – but quickly gave back those gains as investors digested the total debt the company was taking on.

The AI buildout and its rising costs are raising more questions than answers right now. The CDS market is heating up as a sign of trouble ahead. Keep your eyes peeled!

~ Addison

Turn Your Images On

If you have requests for new guests you’d like to see join us for Grey Swan Live!, or have any questions for our guests, send them here.

The Grand Realignment Gets Personal

January 13, 2026 • Addison Wiggin

Sunday night, Powell addressed the probe head-on in a video post — a rarity. He accused the White House of using cost overruns in the Fed’s HQ renovation as a pretext for political interference.

The White House denied involvement. But few in Washington believed it.

What followed was bipartisan condemnation of the investigation. Greenspan, Bernanke, and Yellen co-signed a blistering rebuke, warning the U.S. was starting to resemble “emerging markets with weak institutions.”

A Rising Sign of Consumer Stress

January 13, 2026 • Addison Wiggin

Estimates now indicate that the average consumer will default on a minimum payment at about a 15% rate – the highest level since a spike during the pandemic lockdown of the economy.

President Trump’s proposal over the weekend to cap credit card interest at 10% for a year won’t arrive in time to help consumers who are already missing minimum payments.

Not to fret, the other 85% of borrowers continue to spend on borrowed time. Total U.S. household debt, including mortgages, auto loans, student loans, and credit cards, reached record highs in late 2025, exceeding $18.5 trillion. This surge was driven partly by rising credit card balances, which neared their own all-time peaks due to inflation and higher interest rates.

Protest Season Amid the Grand Realignment

January 12, 2026 • Addison Wiggin

There’s an old Wall Street maxim: “Don’t fight the Fed.”

This year, you could add a Trump corollary.

A wise capital allocator doesn’t fight that storm. He doesn’t argue with it. He respects it the way sailors respect the sea: with preparation, with humility, and with a sharp eye for what breaks first.

In 2026, the things that break first are the stories. The narratives. The comfortable assumptions.

Protest Season Amid the Grand Realignment

Breaking: Government Budgets

January 12, 2026 • Addison Wiggin

Total municipal, state and federal debt service costs soared to nearly $1.5 trillion in the third quarter of 2025. Debt’s easy to accumulate when rates are low. Trouble is, you are obligated to refinance them even after rates go up.

It’s also a key reason why the Trump administration is demanding lower interest rates – even if it means reigniting inflation.

The Grand Realignment Gets Personal

January 13, 2026 • Addison Wiggin

Sunday night, Powell addressed the probe head-on in a video post — a rarity. He accused the White House of using cost overruns in the Fed’s HQ renovation as a pretext for political interference.

The White House denied involvement. But few in Washington believed it.

A Rising Sign of Consumer Stress

January 13, 2026 • Addison Wiggin

Estimates now indicate that the average consumer will default on a minimum payment at about a 15% rate – the highest level since a spike during the pandemic lockdown of the economy.

President Trump’s proposal over the weekend to cap credit card interest at 10% for a year won’t arrive in time to help consumers who are already missing minimum payments.

Protest Season Amid the Grand Realignment

January 12, 2026 • Addison Wiggin

There’s an old Wall Street maxim: “Don’t fight the Fed.”

This year, you could add a Trump corollary.

In 2026, the things that break first are the stories. The narratives. The comfortable assumptions.

Breaking: Government Budgets

January 12, 2026 • Addison Wiggin

It’s also a key reason why the Trump administration is demanding lower interest rates – even if it means reigniting inflation.