In Tokyo, overnight, Masayoshi Son just did what he does best — sell high, dream higher.
SoftBank offloaded its entire $5.83 billion Nvidia stake to bankroll an even bigger gamble: tens of billions in OpenAI.
Son insists this is his next Vision Fund moment.
OpenAI’s swelling valuation doubled SoftBank’s profit last quarter. He may have sold the pickaxe factory, but he’s betting the mine still goes deeper.
Meanwhile in Menlo Park, the exodus continues. Yann LeCun — the so-called “Godfather of AI” — is reportedly packing up his neural nets after Meta shifted from grand research to “ship something now.”
Mark Zuckerberg hired Scale AI’s wunderkind Alexandr Wang to chase “artificial superintelligence,” which is Silicon Valley code for please catch OpenAI before it eats our lunch.
The result: one godfather out, one boy genius in, and an HR department whispering the word succession in lowercase letters.
AI’s Hidden Leverage Problem
We don’t have a horse in this race. So… a lot of the reviews we do of the financial press are for entertainment purposes only, with an asterisk next to caveat emptor in the fine print.
The part Wall Street hopes you’re too dazzled to notice: AI companies are financing their boom with off-balance-sheet debt — a trick older than Enron but dressed in a hoodie.
Our thanks to Global Markets Investor for doing a lot of the heavy lifting while trying to track these crazy debt-fueled in the nether regions of the S&P 500. (Source: Morgan Stanley; BoA Global; Global Markets Investor)
Meta quietly parked $30 billion of AI infrastructure debt into special purpose vehicles (SPVs), entities designed to hold liabilities where the sunlight can’t reach.
Morgan Stanley engineered the deal with Blue Owl Capital, so half of Meta’s $60 billion data center splurge doesn’t technically exist on its books.
Elon Musk’s xAI is borrowing $20 billion through a similar SPV just to rent Nvidia chips for five years — meaning the company itself owes nothing, but someone does.
UBS estimates AI-related debt is piling up at $100 billion a quarter, while Morgan Stanley sees private credit demand topping $800 billion by 2028.
Google is even backstopping crypto miners’ data center debt with credit derivatives. We’ve gone full circle: 2008’s mortgage-backed chaos reborn as GPU-backed obligations. Only this time, the collateral depreciates faster than your phone battery.
It’s a boom financed with invisible leverage — and like all invisible things on Wall Street, it won’t stay hidden forever.
The Shutdown Waltz
It’s Day 43 of America’s latest self-inflicted wound, and the House votes today to reopen the government. Eight Democrats already defected Monday night in the Senate, crossing the aisle to pass a temporary funding bill that now heads to President Trump’s desk.
Democrats are furious that their main demand — extending federal healthcare subsidies — vanished from the final deal. “There was never a path forward,” one senator sighed, as if narrating the country’s group therapy session.
In the House, Hakeem Jeffries (D, NY) has promised to keep up the fight and keep the government closed.
Trump, meanwhile, will host a dinner tonight at the White House for Wall Street’s finest — Jamie Dimon, Larry Fink, David Solomon — the kind of table where small talk comes with a Super PAC.
The guest list suggests less reconciliation than realignment: big business, meet populism, your new awkward dinner companion.
Grounded Nation
Airports remain a mess. Private jets are grounded at twelve major hubs, commercial flights are cut by 4% and rising, and 2,300 flights were canceled yesterday.
Air traffic controllers are exhausted, unpaid, and understandably uninterested in patriotic martyrdom. Delays are likely even after the government shutdown ends.
Meanwhile, Americans are rediscovering the romance of rail travel. Thanksgiving bus and train bookings are up 12% this year, a number not seen since the Carter administration’s gas lines. Sometimes history rhymes in diesel fumes.
We’re considering using Amtrak ourselves to and from Burlington, VT, before and after the Thanksgiving holiday. That or drive. The brain-dead cohorts in Washington are leaving us with relatively few options.
SNAP Judgment
Forty-two million Americans rely on SNAP benefits, nearly 40% of them children. We still can’t get over the absurd number that is greater than the entire population of our neighboring nation to the North.
With the shutdown dragging on, benefits were delayed, and tempers flared. Critics accuse the administration of cruelty; defenders call it discipline. Somewhere between those poles lies the modern American compromise: one side weaponizes compassion, the other austerity.
The real scandal is structural. No restaurant, no carwash, no small-town bank could close for six weeks and still expect loyal customers. Yet government does — and gets reelected. When markets fail, they get liquidated. When elected officials fail, they still get paid.
The 50-Year Mortgage: FDR Meets ARMs
President Trump’s latest brainstorm is a 50-year mortgage — half a century to pay off your house and maybe your grandchildren’s therapy bills.
The pitch: cheaper monthly payments. The reality: twice the total interest, slower equity building, and a financial time capsule that assumes your lender still exists in 2075.
Trump compared it to FDR’s New Deal 30-year mortgage, posting a photo of himself beside Roosevelt as if to remind us that history repeats, sometimes as parody. Regulators are already sweating; Redfin’s economists warn it could push home prices higher.
“Not a big deal,” Trump told Fox News. Like all Trump statements in the press, this one will have to find a legal precedent to get momentum.
There’s also a proposal floating around X, that would allow mortgage holders to keep their rates locked in even when they sell and buy a new house. How would that work for banks, who make the balance of their money off mortgage originations? Nobody can quite say yet.
These spaghetti-against-the-wall ideas are meant to thaw a frozen housing market. And combat a disturbing demographic trend:
After holding steady for over 20 years, the age of first-time homebuyers has surged with rising interest rates and high home prices. (source: National Association of Realtors; Bloomberg)
Private Markets, Public Folly
If this year’s government drama taught us anything, it’s that markets solve what bureaucrats break.
Imagine your local diner shutting down for six weeks because management couldn’t agree on a menu — and then demanding applause for reopening. Yet Washington does exactly that.
When governments stall, innovation accelerates elsewhere. Which brings us to the private sector’s most hopeful story: digital money built for adults.
Stablecoins like USDC, backed by cash and Treasurys, are paving the way for faster, apolitical transactions. The Federal Reserve’s October Payments Innovation Conference confirmed it: the U.S. is now building the regulatory framework to make digital dollars mainstream.
In the early days of Bitcoin, Satoshi Nakamoto’s “Peer-to-Peer Electronic Cash System” served as a guide for bypassing gatekeepers.
Today’s tokenization takes that blueprint and scales it: turning assets — homes, art, even loans — into digital tokens that trade instantly, securely, and without middlemen.
It’s capitalism on caffeine, and it’s coming faster than the government can regulate. We’ve written a rather long lead covering this Dollar 2.0 trend for the November issue of the Grey Swan Investment Bulletin.
If you’re a paid-up member you’ll be receiving your copy as soon as we get it pushed through production. If you’re not a paid-up and you’d like to, see our convenient review of benefits here.
It Could Be Worse
On this day in 1969, journalist Seymour Hersh filed a story that cracked the shell of American innocence.
His report on the My Lai Massacre revealed that U.S. soldiers had killed hundreds of unarmed Vietnamese civilians — men, women, children — during a 1968 “search and destroy” mission in the hamlets of Son My.
Lieutenant William Calley, the officer in charge, was charged with 109 counts of premeditated murder. The Army’s original internal investigation had found nothing amiss; it took a reporter and a conscience to prove otherwise.
It was a story that forced the nation to look in the mirror — and discover it had blood on its hands.
So yes, the government is dysfunctional. Congress can’t balance a checkbook, the Fed is a hall of mirrors, and Silicon Valley is borrowing like there’s no tomorrow. But at least, for now, the drones are trained on data centers, not villages.
Perspective helps.
History reminds us that things can always get worse — and sometimes, knowing the details is the first step toward preventing it from happening.
For all the knuckleheads who are trying to relive their glory days protesting the Vietnam War by protesting ICE… you may want to check your premise and remobolize your axioms.
~ Addison
P.S.: Grey Swan Live! Join us Thursday, Nov. 13 at 2 p.m. ET for The Lasting Impact of the Government Shutdown on Markets with Andrew Zatlin — Bloomberg’s top economic forecaster and one of the few people in America who can read the data and still sleep at night.
If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.
