Markets are having themselves a moody little week.
The Dow’s off 1%, the S&P 500’s down 2%, and the Nasdaq — where the AI darlings dance — has stumbled nearly 4%.
Even the refuge assets are catching cold: gold glitters less, and bitcoin, ever the high-strung teenager of finance, is down nearly 8%.
At the moment, traders aren’t sure what to make of it all.
Trump’s tariffs are under review at the Supreme Court, Zohran Mamdani’s socialist experiment is about to begin in New York City, and the AI trade — Wall Street’s favorite bedtime story — is between plot twists.
While we wait for a pervasive narrative to emerge, let’s take a look at a few stories that will no doubt be tomorrow’s headlines.
The Market That Ate the Economy
Despite the wobble, stocks are still up 36% since April’s panic lows.
The U.S. market has outgrown its britches — again. The Buffett Indicator — that simple ratio of market cap to GDP — has blown past 200%, meaning American equities are now worth more than twice the American economy itself.
Warren Buffett, who once advised us all to “be greedy when others are fearful,” has apparently found no one fearful enough to buy from. Berkshire Hathaway’s cash pile has climbed to a record $382 billion, mostly in short-term Treasurys.
“Stocks are behaving like it’s 1999,” notes Financial Times columnist John Plender, “but with better PowerPoints.” And ChatGPT as an interpreter.
Optimism, of course, is an essential American virtue. But as the Baltimorean HL Mencken once said, “For every complex problem there is an answer that is clear, simple, and wrong.”
AI may be the latest of these.
The Microchip Era — and Its Eventual Undoing
We are deep in what might be called the Microchip Era — a techno-industrial revolution promising to inject artificial intelligence into everything from traffic lights to theology.
The patron saint of this new faith is Jensen Huang, CEO of Nvidia Corp., which is now valued at $5 trillion and worshipped as the engine of the digital age.
At Nvidia’s AI conference last week, Jensen Huang strutted across the Washington stage like a leather-jacketed John the Baptist, heralding the arrival of the “AI century.”
He even thanked President Trump for “bringing chip fabrication back to America” through tariffs and energy policies that favor domestic production.
Each of Nvidia’s new data-center chips contains 208 billion transistors and costs about $30,000 — a bargain, if your hobby is simulating God.
Millions of them, lashed together, power “hyperscale” computers like Colossus 2 in Memphis, Tennessee, which fuels Elon Musk’s xAI empire.
But even as this AI buildout accelerates, the seeds of its disruption are already being sown.
George Gilder — ever the prophet of creative destruction — reminds us that the age of the microchip is approaching its natural limit. The wafer, he argues, will replace the chip much as the chip replaced the vacuum tube.
In Gilder’s telling, wafer-scale technology — single, monolithic computing surfaces rather than thousands of tiny chips — will render the Nvidia model obsolete.
“The end of the chip,” he writes, “will be the beginning of the computer as organism.” The next industrial revolution won’t be about packing more transistors into a chip — it’ll be about replacing chips altogether.
The irony is delicious.
Just as the U.S. government spends $200 billion to secure domestic chip production under the Chips Act, physics itself is preparing to make the chip an artifact.
The Extreme Machine from ASML — at $380 million apiece, the world’s most complicated camera — has already hit the “reticle limit.” Beyond that, light speed becomes the bottleneck. AI’s future may depend less on chips than on new materials and architectures we haven’t yet imagined.
So yes, we’re building factories for yesterday’s miracle. But take heart: that’s the American way. If you play your cards right, you can get rich in the meantime.
The Headlines of Tomorrow
And while we wait for the next “market narrative” to take hold — AI, tariffs, shutdowns, socialism, or something involving TikTok, stablecoins or resurgent Treasury yields —it helps to zoom out.
The ticker tape is just noise after all; a scorekeeper for investors’ hopes and dreams. The real action is in what we might call the deep time of money and power.
We’re working on some deeper research we have dubbed metacycles for lack of a better starting point. Grey Swan contributor Mark Jeftovic is our copilot on the adventure.
Every few centuries, the tectonic plates of monetary, political, and technological order slip at once. The result isn’t business-cycle turbulence — it’s a regime quake. Each wave of decentralization breeds an equal and opposite recoil of control. Empires fragment; bureaucracies metastasize. Currencies collapse; governments reinvent themselves as asset managers.
The pendulum that once swung between liberty and order now swings between sovereign networks and state capitalism. It’s what Daniel Bell once called political meritocracy — and what Jeffrey Towson now describes as the rise of Mr. Government, the sequel to Adam Smith’s Mr. Market.
Towson’s point, dressed in modern garb, is simple: the invisible hand has been replaced by the algorithmic hand of policy. Across the G20, fiscal fusion and industrial planning have crowded out price discovery. The White House, the Fed, and the Treasury now operate like a single investment committee — blending monetary engineering with moral theater. The market no longer moves on earnings or innovation, but on alignment with power.
We’ve entered the era of what Jeftovic calls Mr. Regime — where volatility itself is political.
Davidson and Rees-Mogg saw it coming in The Sovereign Individual: as technology liberated the individual, states would resist their obsolescence with coercive re-centralization.
What we’re watching now — from China’s social-credit experiments to the Fed’s flirtation with digital currency — is exactly that recoil.
In short, while the AI boom captures the headlines, the real story may be this quiet structural inversion: from Mr. Market to Mr. Regime, from valuation to validation, from capitalism to compliance.
A scary AI brand of authoritarianism if we’re not careful.
Musk’s Trillion-Dollar Moonshot
While Jensen Huang builds brains, Elon Musk is negotiating for godhood. Tesla shareholders are expected to approve his $1 trillion compensation package — a payday so large it deserves its own zip code. Musk calls it “alignment.” Critics call it “corporate feudalism.”
Musk’s compensation package proposal from Tesla is as complex and opaque as their business strategy is to individual investors who buy the stocks… then pray it goes up. (Source: Statista.com.)
Votes around the boardroom table have been mixed: Norway’s sovereign wealth fund voted no. CalPERS voted no. The Vatican frowned. Musk, of course, tweeted that they’re “corporate terrorists.” Somewhere in Omaha, Buffett quietly counted his cash and smiled.
If approved, Musk’s plan could quintuple Tesla’s market cap and fund his humanoid robot army. “In 2018, it was hubris,” Barron’s quipped. “In 2025, it’s precedent.”
Google Takes To the Cloud(s)
Google, not to be outdone, has decided the only way to cool its overheated data centers is to launch them into space.
CEO Sundar Pichai unveiled Project Suncatcher, a plan to build solar-powered orbital data hubs — a literal interpretation of “cloud computing” to compete with Musk’s SpaceX version of the same strategy.
A test launch for Suncatcher is planned for 2027, assuming someone figures out how to stop the servers from melting under cosmic radiation.
Wired called it “the first time a tech company tried to take the phrase ‘sky-high valuations’ literally.” Jeff Bezos insists Blue Origin can do it cheaper. Musk says Starlink already does.
Brains, Bots, and Bureaucrats
Back on Earth, the frontiers of human cognition are getting a firmware update. Synchron, a Neuralink rival, raised $200 million for its Stentrode implant, allowing paralyzed patients to control devices by thought. In Shanghai, NeuroXess enabled a patient to “think” sentences onto a screen.
Combine AI, brain implants, and behavioral data, and you have a tool every bureaucrat has dreamed of — a programmable citizenry.
Zohran Mamdani, New York’s new socialist mayor, might not have phrased it that way, but his campaign was the algorithmic embodiment of it: targeted messaging, micro-segmented turnout, ideological branding as lifestyle.
Steve Bannon wants his tribe to pay attention. In an interview reposted on Yahoo! Finance yesterday, Bannon called Mamdani’s election “the Trump model from the left.” Which is to say, populism is again a full-duplex signal. And the only game in town.
Whether you identify with the red or blue tribe, your time – and bandwidth – are the goals.
The Most Excellent, Entertaining Shutdown
Washington remains unplugged.
The government shutdown is now at day 37. Some estimates say 1.2 million federal workers are unpaid or furloughed, and the economy is losing up to $30 billion a week.
The “dispute” over the Affordable Care Act subsidies is the focal point of this particular game of chicken. Polymarket, the betting site, now a 60% chance the lights come back on before Thanksgiving.
Working with Jeftovic yesterday, we calculated that the number of people on hold for SNAP benefits in the United States (~42 million) is larger than the official population of Canada (41 million). Mark’s Canadian. We had a good laugh.
Yesterday, 42% of the surge in airline delays was due to “staffing issues” in the control tower.
Last night, we found ourselves trying to explain the government shutdown to our son, Augie. He’s 22 and about to start a master’s in bioinformatics — using AI to decode complex biological systems.
In other words, he’s fluent in machine logic but still mystified by Washington’s.
His generation lives in a world of trillion-dollar valuations, trillion-transistor chips, and trillion-dollar deficits — yet he can’t buy a plane ticket without referencing a venn diagram of politicians with Trump Derangement Syndrome (TDS) v. Trump’s minions on the Hill.
“I just want to fly to Chicago,” he said, giving up. “How do I do that?” His girlfriend lives there.
It’s a fair question. When the air-traffic controllers are calling in sick, even nascent romance is a matter of federal policy.
Still, for all our bureaucratic absurdities, America always finds a way to reboot. We’ve survived pandemics, protests, power grabs, tech bubbles, and disco. We’ll survive the AI revolution, too. Probably.
~Addison
P.S.: If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.
