Here’s a preview of what we’ll cover this week: 

• Macro: Resilient Consumer Spending, Investor Sentiment Collapse, Tether’s Treasury Surge, Is Tariff Inflation Transitionary?, GWIM Cash Allocation

• Market: Sailing vs Rowing, CLO Equity Mispricing, Value Index Illusion, S&P at Crossroads, Long/Short Ratio Collapse, Retail Sales Slump, Tech Rebound Signal, Market Cycle Maturity, RSP Outperforms SPY, Market Recovery Signals, Long Mexico - Short Canada, BYD’s Charging Breakthrough, BYD’s Megafactory. 

• AI: The UAE’s $1.4 Trillion Bet on America, China’s Uncapped PhD Salaries, NVIDIA’s AI Powerhouse, Google: AI Image Editing, DC AI Policies, Is NVIDIA Winning Washington?, The Hidden Risk in AI Infrastructure, AI Can Hack

Lumida in Spotlight

Ram, CEO Lumida Wealth, was invited to join the Bits and Bips podcast this week, where he challenged the recession narrative and shared why he believes the market bottom is in. The discussion spans macro, crypto, and catalysts for the next Bitcoin rally.

Thank you Kashyap Sriram for the praise in your interview!

Kashyap Sriram is a Dubai-based discretionary trader with expertise in commodities, crypto, and macroeconomics. He writes a popular trading newsletter and previously covered markets at The Dollar Vigilante.

For more high-signal updates, follow us on: 

X | Telegram | Youtube | TikTok | News | Ram’s X 

Interested in our investment strategies? Schedule a call to learn how we can help you navigate the markets.

Ram was also featured on Real Vision this week, where he shared early insights on liquidity flows, credit markets, and what's next for risk assets.

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Take a look at these covers from the Economist - one near the high, and one recently.

The S&P closed higher on the week after 5 consecutive downweeks.

Analysts have also lowered their earnings estimates in lockstep over the last 5 weeks.

So much for the random walk hypothesis.

We noted last week that markets on a pure technical basis were due for a bounce. Any positive newsflow would be enough to trigger a rally.

And, we had that with Powell noting that tariff policy - while currently unclear - will likely become “transitory”. Powell is testing to see if we learned our lesson about the word 'transitory'. Did we? 

On Monday of this week, I was on the Bps + Bits podcast this Monday making the point that (i) a recession is unlikely [Watch Full Video], and that (ii) we have a change in market character.

Notice that out of the last 5 days, markets have closed higher than the open, for example.

We are now at levels where the S&P 500 is oversold versus nearly all other assets. 

And the Eurozone and China sold-off at the end of this week suggesting a rotation back into U.S. equities.

We believe buying names like Google and Meta given their high quality earnings, earnings growth, and valuations is a pretty good idea here. Google is at the ‘screaming bargain’ level where Meta is now an attractive bargain.

Lowering the 10-Year?

One of the questions out there is - does Bessent and the admin want to wreck equity markets to lower the ten-year to enable the US government to refinance its debt?

The U.S. Treasury has an extraordinary amount of short-term debt that it must roll-over each year. 

(Why former Secretary Janet Yellen did not issue 30 or 50 year bonds when the 10-year rate was at 1.5% is mind boggling. It is true Bessent inherited a mess.)

We believe the answer is a strong ‘No.’

The argument is that the global economy took out a lot of debt, including 5 year money, in the middle of Covid at extremely low rates. That money is coming due.

Debt is never paid back. Debt is refinanced. Therefore, a significant margin call is coming due and it’s in the interest of the administration to lower the 10-year to enable refinancing.

This is really a flawed logic.

The key to enable refinancing of debt is to encourage a stable capital markets environment that enables the assets that the debt is financing to maintain their equity values.

Extraordinary wealth has been generated since the Covid era in equities and home values. A policy environment that enables individuals and firms to access capital markets, tap liquidity, and refinance would enable markets to get over the debt maturity humps that are coming due.

A lower ten-year would certainly lower interest expense. But, a market that is priced for recession means capital markets and bank lending are shut off for all but the most credit worthy borrowers who never really have a risk of refinancing their liabilities.

Bessent knows this. As far as we can tell, Mr. Bessent is the Wizard of Oz and has a clear eyed view of the trade-offs involved.

Trump may be shooting from the hip with instincts.

The bottom line: fade the idea that the administration seeks to talk the United States into a recession.

That doesn’t mean the admin doesn’t want to front-load what it perceives as ‘medicine’. But the reality is any recession would significantly hurt government revenues and exacerbate the very deficits the admin seeks to reign in.

The best bear case is that valuations are higher that earnings growth and multiples justify. That’s legitimate. 

It argues for positioning in areas with more attractive valuations and earnings growth as we’ve noted in our prior newsletters, which we won’t re-hash here.

Notably, financials and healthcare have done relatively well.

Incidentally, consumer linked themes have been absolutely thrashed over the last 5 weeks. If you believe the Death of the U.S. Consumer is greatly exaggerated, then buying these names is a high beta way to ride the exit out of the correction.

Here are some names we bought recently.

• PARA (Paramount Global) - Produces and distributes entertainment content like movies, TV shows, and streaming services for consumers.

• PYPL (PayPal Holdings, Inc.) - Offers digital payment solutions for consumers and merchants worldwide.

• GM (General Motors Company) - Designs and manufactures vehicles for consumer transportation.
  

• DG (Dollar General Corporation) - Operates discount retail stores offering affordable consumer goods.

• DAL (Delta Air Lines, Inc.) & UAL (United Airlines Holdings, Inc.) - Provide air travel services for consumers and businesses globally.

• HPP (Hudson Pacific Properties, Inc.) - Owns and manages office and studio properties, indirectly supporting consumer entertainment industries like film and TV production.

Note: We have no problem cutting these names should they not work.

The key dates markets are looking forward to are April 2nd when tariffs kick in.

It’s quite possible we can get a re-test as we approach that date. However, we believe the lows are in.

Why?

Trump two Sundays ago had a meeting with Maria Bartiromo where he did not rule out a recession. Bessent discussed the need for a ‘detox’. 

Together, this talk created a loss of confidence. Over the next 4 days, millions of Americans sold their stock and panicked. That week accelerated pessimism and a right-size of positioning and created an intermediate bottom in our view.

(It’s worth noting that positioning isn’t perfectly clean. The glass is half-full but there are still pockets of over-positioning according to CFTC futures data although it has come off of egregious levels.)

The other elements of the bear case are the over-valuation we have cited in stocks like Costco and others. 

We first wrote about this last month in the ‘Bubble in Quality’ which seems to have coincided with the ending of these various bubbles.

We believe checking on the health of these names each week is crucial to understanding how Mr. Market unfolds.

We do maintain the view that those are bubble stocks and should be avoided (e.g., positioning matters). However, we would also note that after the Dot Com bust in March and April of 2000, there was also a significant recovery rally through the summer.

Nasdaq 2000

The ‘buy the dip’ mentality is strong. We were never fans of Tesla - but check out how many people are buying the dip on this over-valued meme stock. 

Retail investors have not given up the fight.

Our base case expectation is that we are due for a technical bounce supported by flows and a strong earnings season that kicks off in April.

Investors have rotated a significant amount out of U.S. assets and could be forced into a performance chase.

Notice the USD JPY is firming up. This FX ratio also bottomed around the most recently lows. This metric shows foreign demand for U.S. assets. It has stabilized.

USD JPY

It’s true there are compelling bargains in international stocks - UK financials and energy, Mexico, Brazil, China, and South Korea. 

But, technically nearly all of these markets are overbought and are pulling back as we speak.

In our January newsletter we remarked that foreign investors crowded into U.S. stocks leaving their home markets cheap and the U.S. dollar strong:

“Trump has an America First agenda. Elon, leader of Tesla, is at Mar a La Go. The whole world effectively went long on the United States … leaving their home markets cheap.” - Lumida Ledger (25th Jan '25)

Well, that pendulum is coming full circle.

(Incidentally, a market we are not excited about is India. India is about as expensive as the S&P 500 and is in a bear market. Valuations matter.)

Retail Trading

The North Star we come back to again and again is the Growth to Value rotation hypothesis. It’s playing out and leaving expensive names prone to significant corrections.

No wonder software stocks which carry 50 to 100x forward earnings have gone nowhere.

Atlassian (Team) is at the same price as it was in Q1 ‘22 despite growing revenue and earnings because of the forces of multiple compression.

TEAM NTM P/E Ratio

One argument why we may not get a correction as severe as the Q4 ‘18 trade war correction of 19% is liquidity.

Simply put, there’s a boatload of money in the system now due to the excess liquidity and stimulus from the Covid era.

Back in October 2022, the bottom of the bear market, we noticed that U.S. equity markets bottomed before getting back to historical trough multiples typically seen at the end of a bear market.

When we see a datapoint that doesn’t fit our mental model we file it away and re-visit it and try to evolve our mental model.

We believe that retail trading and the rise of Robin Hood and Covid-era stimulus has changed the behavior and dynamics of financial markets.

Isn’t this why we see hyper accelerated markets?

Moves that would ordinarily take 1 year to make - such as Dell rallying double-digits in a 4 month time frame last year - are getting done rapidly.

Bitcoin achieved a new cycle high before the halving. That never happened before.

People have forgotten that the average annual return on U.S. common stock is around 8 to 11%.

We can also see it in our daily chart reviews.

Markets are incredibly technically driven. We noted last week, that based on technicals including charts, markets were due for a bounce - regardless of fundamentals - and here is the bounce.

TradingView and influencer-based trading and X / Twitter are technologies undoubtedly playing a role in all of this.

It’s one of the reasons we are focused on studying ‘Animal Spirits’ - the behavior of retail traders and their impact on asset prices.

Many of the historical factor models that you’d learn in school are behaving in new ways. It’s not about ‘good’ or ‘bad’. 

The modern practitioner must adapt to circumstances.

That includes, unfortunately, having a higher turnover to adapt to the increased frequency of short-term opportunities as markets exhibit more volatility.

Another example of this retail trader dynamic is the Q4 animal spirits pump.

I was interviewed on Yahoo Finance in October and was asked about Tesla. I made two points there: (1) Tesla is massively over-valued, (2) BUT, Tesla can rally anyway simply because of Q4 animal spirits, (3) Elon would alienate a left-leaning EV buyer base, and (4) a collapse in new orders would hurt the stock. [Watch Full Video]

At different times of the year, Animal Spirits stocks have been the absolute worst basket of stocks (from Jan thru Sep ‘24) and also the best basket of stocks (from Oct thru end of December).

This dynamic makes investing complicated for an old-school approach. 

Sometimes it does make sense to own these animal spirit names during these short-lived, often seasonal bursts in the mob behavior.

Yesterday, we noticed strength in animal spirit stocks like Palantir and Robinhood. 

This supports the idea that we’ll get a rally to near all-time highs. After that, we’ll need to re-assess.

It seems likely to us that we’ll be at or near all-time highs by mid-summer. (There is volatility between now and earnings season).

Be sure to reach out to our Senior Advisor [email protected] for more about Lumida’s services.

Resilient Consumer Spending

Bank of America CEO says Consumers continue to worry about money, but continue to spend.  

The Death of the US Consumer is greatly exaggerated. 

No recession folks. 

Just news flow anxiety, and bad weather.

Talking about resilience in consumer spending, here are a couple of consumer-centric ideas which projected the strength of the consumer in their recent earnings. 

United Airlines (UAL)

• Management Commentary:

  • "United served a record 174 million customers in 2024, with the busiest December in history, averaging 511,000 passengers a day—demand continues to be strong across all cabins." Scott Kirby, CEO (Q4 2024)

  • "Premium revenues grew 7% year-over-year, and Basic Economy revenue surged 25%, showing consumers are willing to spend on both luxury and value options." Andrew Nocella, EVP and Chief Commercial Officer (Q4 2024)

• Key Insights:

  • Broad Spending Strength: Premium revenue up 7% and Basic Economy up 25% reflect resilient sentiment across income levels. Luxury travelers splurge, while budget-conscious consumers opt for value, sustaining air travel momentum

  • Corporate Confidence: A 12% rise in corporate revenues suggests business travel is rebounding, reinforcing positive consumer and economic sentiment into February/March

Bread Financial Holdings (BFH)

• Management Commentary:

  • "Consumer spending remained resilient in the fourth quarter, with co-brand credit card programs driving a 3% increase in average loans to $18.2 billion." David Stark, CFO (Q4 2024)

  • "Despite economic pressures, our customers continue to prioritize spending with trusted retail partners, reflected in stable payment rates and a 15% year-over-year increase in direct-to-consumer deposits." Ralph Andretta, CEO (Q4 2024)

    Key Insights:

    • Steady Spending: The 3% loan growth to $18.2 billion, tied to co-brand retail and travel cards, shows consumers are still spending on discretionary and essential items, a trend likely persisting into February/March

    • Financial Stability: A 15% increase in direct-to-consumer deposits signals consumer trust and financial planning, suggesting sentiment remains intact despite inflation or tighter credit conditions

    • Disciplined Behavior: Stable payment rates indicate consumers are managing credit responsibly, supporting a balanced spending outlook for early 2025

Hudson Pacific Properties, Inc. (HPP)

• Management Commentary:

  • "In 2024, we ended the year with office leasing nearly 20% higher compared to the prior year, comprising more than 2.0 million square feet of activity. Importantly, our leasing pipeline is currently more than 2.0 million square feet." Victor Coleman, CEO (Q4 Earnings)

  • "Consumer spending through our platform remains robust… AI-related leasing as well as broader in-office mandates from major employers continue to drive companies to evaluate the need for additional space." Victor Coleman, CEO (Q4 Earnings)

• Key Insights:

  • Strong Tenant Demand: A 20% increase in office leasing (2.0M+ square feet) and a 2.0M square foot pipeline signal robust spending by tech and media tenants, likely extending into February/March 2025 and beyond, driven by AI and return-to-office trends

  • Positive Sentiment: Demand for high-quality office space, fueled by major employers (For example, Google, Netflix), reflects tenant confidence in physical workspaces, supporting intact sentiment among corporate clients.

Trends for UAL, HPP, BFH in February/March 2025 

• Consumer Spending Intact: UAL’s travel demand (174M passengers) and BFH’s loan growth (3% to $18.2B) show consumers spending on experiences and retail, a trend holding into March. HPP’s 20% leasing increase (2.0M+ sq ft) and robust pipeline (2.0M sq ft) show sustained tenant spending on office space
  

• Sentiment Resilience: UAL’s premium/Basic Economy gains and BFH’s deposit surge (15%) indicate confidence across segments, despite economic pressures and bad investor sentiment
  

• Stock Divergence: UAL’s 9.3% two-week drop reflects travel-specific headwinds (government travel decline), while BFH’s 2.7% gain aligns with stable consumer finance metrics. Both stocks look like their lows are behind them and are now in an uptrend. HPP also had a recent 2.2% uptick showing some resilience tied to fundamentals

Investor Sentiment Collapse

Tether's Treasury Surge

We believe dollar-backed stablecoins can provide a material source of liquidity, and advance U.S. dollar hegemony. We’ll be interviewing our friend and professor Austin Campbell on this topic for more:

Is Tariff Inflation Transitionary? 

The Fed has lowered growth expectations and increased inflation expectations.

Crucially, Powell also said they would cut in the face of recession evidence despite elevated inflation.

GWIM Cash Allocation 

Last week we noted we wanted to see the BAML Fund Manager Survey.

Notably, the cash levels of investors increased by the typical change seen which marks the end of a correction.

The fly in the ointment is that cash levels still remain near the lows as you can see in the chart below.

No one wants to own bonds.

Corrections occur when the stock market expects a recession that doesn’t occur. We see evidence of slower growth. We don’t see a recession.

Sailing vs Rowing

Sometimes markets let you sail. 

That means you own a few themes, and ride the waves of earnings growth, disinflation, and multiple expansion. 

That’s sailing. You get exposure to the wind and sail. 

Then there is rowing. 

The wind and water is turbulent and choppy. 

The sails don’t propel you because you have multiple compression and policy volatility. 

In that case, you get out and row. 

This market requires rowing. 

Last Friday markets were oversold. 

Two days later markets arrived overbought.  

Matching the rhythm of the market (eg, trimming on rallies, buying on dips) enables more alpha capture. 

Sailing is so much more fun - and easier. 

Pick themes and leaders in the themes and go. 

But, from what I am looking at, the conditions for Rowing are likely to be intact for a few more weeks.

I expect by earnings season in mid April we can get back to sailing.

April 2nd tariffs date is on everyone’s calendar and may be over anticipated so perhaps sooner.

I was pleased to see cash levels in the BAML FMS increased at a level consistent with the end of a correction today.

Still, the level of cash % is low vs history, but the rate of change in cash is bullish.

Mixed bag.

Wish to stay ahead of the market? Subscribe to our insights and schedule a call to re-align your portfolio.

CLO Equity Mispricing

What is the most mispriced asset class in equity markets?

CLO equity. 

This category sold off significantly in the last several weeks despite no credit deterioration.

We bought ECC—owning the equity tranche of CLO AAA securities. 

Note: the underlyings of these tranches are highly illiquid. 

What is the most mispriced asset class in equity markets?

CLO equity.

This category sold off significantly in the last several weeks despite no credit deterioration. It’s a head-scratcher—why are investors hammering CLO equity when the underlying credit fundamentals remain solid? 

Let’s dive into the details and unpack why this asset class is undervalued as of March 2025.

First, what’s a CLO? A Collateralized Loan Obligation (CLO) is a single security backed by a pool of debt—specifically, leveraged loans issued to companies, often below investment grade. 

These CLOs are sliced into tranches, like a financial layer cake, with varying risk-reward profiles. (See Margot Robbie’s performance in The Wolf of Wall Street)

Unlike Residential Mortgage Backed Securities (RMBS), CLOs consist of pools of leveraged loans issued to corporations, typically below investment grade, such as bank debt used for leveraged buyouts, mergers, or refinancing, rather than residential mortgages.

The AAA tranches sit at the top, offering safety and lower yields, while the equity tranche—our focus here—is the riskiest slice, sitting at the bottom. It absorbs losses first but also captures the upside if the underlying loans perform well. 

CLOs are actively managed, with managers buying and selling loans to optimize returns, making them dynamic in the credit universe.

Now, let’s talk bank debt and leveraged loans. 

Bank debt, in this context, refers to the secured loans CLOs hold—senior in a company’s capital structure, meaning they have first dibs on assets if the company experiences risk. 

Leveraged loans are these bank debts extended to companies with high debt levels or poor credit histories, typically rated BB, B, or CCC. 

They’re floating-rate instruments, tied to benchmarks like SOFR, which have been a boon in the “higher for longer” rate environment of recent years. 

But they’re also risky—default rates can spike if economic conditions sour, though as of early 2025, they’re holding steady at around 2–3% (per S&P and Moody’s), well below the historical average of 2.67%.

So, why CLO equity? 

We bought ECC—Eagle Point Credit Company Inc.—which owns the equity tranche of CLO AAA securities. 

ECC is a closed-end fund trading on the NYSE, laser-focused on CLO equity and junior debt tranches. 

Its portfolio is stuffed with these high-risk, high-reward pieces, delivering a forward dividend yield of 21.19% because of liquidity issues in the CLO market.

Yet, ECC’s stock price sits around $7.70, trading at a discount to its net asset value (NAV) of over $10.

That discount—driven by mark-to-market volatility and market sentiment—has deepened in recent weeks, with ECC’s NAV reportedly down 10+ points and prices dropping 5–10% (per the CIO commentary you shared). 

But here’s the kicker: there’s no significant credit deterioration. Default rates are low, recoveries are holding up, and the leveraged loan market’s fundamentals haven’t crumbled.

The sell-off? It’s an overreaction, plain and simple. Investors are spooked by a rotation from floating-rate assets (like CLOs) to fixed-rate securities, betting on Fed rate cuts in 2025 (as your friend’s CIO noted). 

But CLO equity isn’t directly tied to that shift—it’s all about credit risk, not fixed vs. floating demand. The underlying leveraged loans are illiquid, sure, but that illiquidity is a feature, not a bug, for long-term holders like us that are providing liquidity to a dislocated market. 

We don’t need liquidity here, and that’s a massive advantage. If mark-to-market discounts persist—driven by market panic, not fundamentals—it creates a golden opportunity. 

Wider spreads on the underlying loans mean CLO managers, including ECC’s, can reinvest at lower prices, juicing future returns for equity holders (as the CIO argued). This illiquidity shields us from forced selling, letting us ride out the storm while others panic-sell.

So, why is CLO equity mispriced? It’s the structural discount of closed-end funds like ECC, combined with temporary market jitters, not credit risk. With default rates low, yields sky-high at 21.19%, and the potential for a rebound as spreads widen, CLO equity—especially ECC—is the most mispriced asset class in equity markets right now. 

The bear case to this view is recession risk.

Value Index Illusion

Take a look at the most well known Value indices from BlackRock, Vanguard or your favorite index provider.

Like IVE, for example.

They include names like:

• Berkshire Hathaway: 26x 

• CostCo: 50x

• McDonalds: 23x

• Amazon: 30x

• Microsoft: 28x

All of these are more expensive than the S&P 500. 

These are not value stocks. 

What these asset managers have done is packed their ‘value’ indices with ‘quality’ and growth stocks. 

The problem is the quality bubble is deflating. 

The US equity markets have had the best 15 year run — ever. 

And that has caused these asset managers to smuggle in growth stocks to value indices. 

This is a sign of the Zeitgeist. 

The irony is that true value stocks with earnings growth: insurance, financials / banks, and healthcare value names are beating the S&P YTD and they are not represented in these value indices. 

It’s a kind of false advertising at the very least and it shows how much over-positioning there is in Growth stocks and indices.

Don’t get me started on Software IGV.

Curious how Lumida can optimize your portfolio? Book a complimentary consultation with our team.

Long Mexico - Short Canada?

Trump needs a strong Mexico.

1) Mexico is the closest alternative to cheap China manufacturing.

If you want to be tough on China, and keep inflation at bay, you need Mexico.

It's simply not practical to create "high paying" auto jobs and not create unproductive wage inflation when the same line job gets done in Mexico for $10K / year.

2) A strong Mexico economy means less drug trafficking.

Mexico's governance will deteriorate further without an alternative to the drug industry.

3) A strong Mexico means less illegal immigration.

Canada, on the other hand, especially domestic focused industries I expect faces the wrath of Trump.

And valuations in Canada are expensive!

4) Here are multiples for various firms in Canada:

RBC: 30x (forward PE [ ! ])

Brookfield: 175x trailing PE

(Bill Ackman owns Brookfield)

Constellation Software: 90x PE

See the attached historical NTM P/E for Canada.

We're in the upper ranges. 

5) Canada's earnings growth and profit margin forecasts are declining.

These don't appear fully reflected in stock prices.

I'm all for free trade with Canada EWC and Mexico EWW

But, between the two, Trump will favor a deal with Mexico.

Mexico YTD is up about 11%.

The worst is priced in. In the next couple of weeks, not exactly now as the DXY is posed to rally, it will be time to accumulate in Mexico.

S&P at Crossroads 

Long/Short Ratio Collapse

Want to discuss how this market volatility affects your portfolio? Book a meeting with our team for tailored insights.

Retail Sales Slump

Tech Rebound Signal

Market Cycle Maturity

RSP Outperforms SPY

Market Recovery Signals

Significant evidence correction is over. Change of character with two back-to-back up days with good volume. Would expect backfill ahead of FOMC.

Also, there are many attractive opps across many markets: UK banks, German banks, South Korea (anything), Mexico tariffs priced in, debt refinancing ideas in the US, insurance, etc. China, Brazil strong, Japan, semis.

A global risk-on rally (around value and neglected names) with growing earnings is possible. It's funded by megacap selloffs. See Tesla, for example.

I’d expect Trump to drop Mexico tariffs in April. He needs a vibrant Mexico economy to slow illegal immigration, fentanyl, and offer an alternative to China manufacturing.

Mexico is the most critical part of the tariff situation given the auto footprint and consumer spend. Canada, Eurozone, and China tariffs are not as consequential in my view. It’s really a Mexico story—and that’s good news not priced in, although EWW has quietly rallied 12% YTD. Airports in Mexico like ASR and OMAB have rallied too, btw. Forget Eurozone defense stocks.

Look at the banks: Barclays, HSBC, DB—8x PE with double-digit EPS growth. Many are up 75% in a year like altcoins, hah.

Similarly, mortgage refinance is coming back. After QT ends and spreads tighten, we like BETR, VEL, and various banks. Insurance is cranking as well. When mortgage rates come down, so will homebuilders.

2025 might be the year of breadth expansion—domestically and internationally. People are talking about recession way too casually. No major corporation has a credit issue. It's all in CRE. Look at HPP. Loads of CRE debt. Rallied 10%. These are back-from-the-dead trades. Banks are lending again and will refi with permissive regulation (pretend and extend).

Navigating a liquidity event or asset transition? Let’s talk. Schedule a strategy session.

BYD Charging Breakthrough

BYD's Mega Factory

Ram will be speaking at Puerto Rico 2025, hosted by Uncorrelated—an event that brings together limited partners, fund managers, and service providers across the alternative investment landscape. If you're attending and would like to connect with Ram or our Senior Investment Advisor, Marc, we’d be happy to meet in person. You can also reach out ahead of the event via [email protected]

AI

The UAE’s $1.4 Trillion Bet on America

The UAE just pledged $1.4T into U.S. AI, semis, energy, and manufacturing. That’s not just capital—it’s conviction.

Gulf wealth made its fortune on oil. Now it’s rotating into digital infrastructure. That’s your tell.

This is a vote for U.S. policy, supply chains, and IP protection—over China and Europe.

Also a hedge: post-oil world, decoupling risk, and energy transition.

Winners? Nvidia, TSMC Arizona, CoreWeave, Nextracker. Anyone building AI infra or the new grid.

Sovereigns are underwriting the next industrial base. Allocators chasing Mag7 are missing the real signal.

China: Uncapped PhD Salaries For ASML Builders

That’s not R&D—that’s war footing.

They don’t want a chip tool. They want independence.

The talent arms race is on.

And the West isn’t ready.

China's Changchun Institute of Optics, Fine Mechanics, and Physics (CIOMP) is offering "uncapped" salaries to PhD researchers as the nation races to develop domestic semiconductor lithography capabilities amid escalating US technology restrictions. [Source]

NVIDIA's AI Powerhouse

Jensen’s saying: why wait for data center access when you can train models at your desk?

This is a personal AI supercomputer.
Designed for researchers, quants, and AI labs.
No sysadmin, no raised floor, no server rack.
Just plug it in and go.
H100s under your desk.

This isn’t just hardware. It's the decentralization of AI compute.

Google: AI Image Editing

Photoshop just met its replacement.

Google’s new AI model erases, relights, moves, and retouches with zero effort.

No layers. No tools. No learning curve.

What took hours now takes seconds.

99% of use cases? Gone.

DC AI Policies

The Trump administration is taking the wraps off its AI agenda—and the contrast with Biden’s approach couldn’t be sharper.

The message: safety is out, acceleration is in.
AI is now a national security policy.

Tech giants are racing to influence the White House before the March 15 deadline. Google, OpenAI, Microsoft, and others are pushing for:

• Legal protection to train on public—even copyrighted—data
  

• Preemption of state-level AI laws
  

• Massive federal investment in infrastructure and AI workforce
  

• Looser export controls to stay ahead of China
  

Axios nailed it: this is now a space race narrative.
Scale AI’s CEO is positioning the company as a de facto government partner. Microsoft wants training pipelines. Oracle may end up running TikTok.

The wildcard: how Trump handles Biden-era GPU export rules.
That’s the unforced error—penalizing U.S. firms like Nvidia and Oracle.

The White House finalizes its AI Action Plan by mid-July.
The next few months will define whether the U.S. leads or lags in the AI arms race.

Credit: Inspired by insights from Michael Parekh’s AI: Reset to Zero, RTZ #660 

Is NVIDIA Winning Washington? 

As I flagged earlier this week, dropping a $100B+ U.S. investment plan is now the price of admission in DC. Apple, TSMC, SoftBank—and now Nvidia—are all anteing up.

At GTC 2025, Jensen Huang made it official:

Nvidia will spend hundreds of billions in the U.S. over the next four years.

Translation: they’re reshoring, de-risking from Taiwan, and leaning into the Trump AI-industrial complex.

Key takeaways:

• Nvidia’s U.S. supply chain now runs through TSMC and Foxconn
  

• Blackwell systems are being built domestically
  

• AI data centers (“AI factories”) need massive power—and Huang wants policy support to match
  

• Export controls are still a headwind. The May rules are the real tell
  

• Huawei is the enemy. And Huang isn’t pretending otherwise
  

On Intel: Huang is polite—but not committing. “Evaluating,” “open to packaging,” “wish them well.” 

Nvidia will wait for proof.

They’re front-footed now—playing the long game, with supply chain resilience as a national security asset.

Every major tech firm in the AI race is now making the same bet: 

Invest big in America, or risk being sidelined.

Credit: Inspired by insights from Michael Parekh’s AI: Reset to Zero, RTZ #665 

Interested in capitalizing on the AI megatrend?

Reach out — our advisors can help you position your portfolio to capture the upside.

The Hidden Risk in AI Infrastructure

AI Can Hack

Let’s not pretend otherwise.

Google DeepMind dropped a framework to assess AI-driven cyberattacks.

Here’s what that signals:

 AI can help write better phishing emails
It lowers the bar to launch a cyberattack
Open-source models make it easier for bad actors
Governments may soon treat top AI models like weapons

AI safety debates just got kinetic.

Read the original framework here. 

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Trump Remarks on Digital Asset Summit

Speaker - Donald Trump

Key Insights:

• A commitment to end the "regulatory war" on crypto and Bitcoin, including Operation Chokepoint 2.0, is emphasized.
  

• Calls for Congress to establish clear rules for stablecoins and market structure to foster innovation and stability in the crypto space.

Insights From FOMC Speech

Speaker - Jerome Powell

Key Insights:

• The U.S. economy shows solid growth, with unemployment at 4.1% and wage growth outpacing inflation sustainably. Payrolls averaged 200K/month, indicating a balanced labor market.
  

• The Federal Reserve is slowing the pace of balance sheet reduction, cutting Treasury redemption caps from $25B to $5B, without altering its monetary policy stance.
  

• The Fed remains focused on achieving maximum employment and stable prices, with inflation nearing the 2% target but still elevated.

Insights From Unchained Crypto featuring Ram

Guests - Ram Ahluwalia, Noelle Acheson, Joe Mccann, James Seyffart

Key Insights:

• A new bill, 8x larger than the 2022 infrastructure bill, signals continued government spending despite rising deficits. Auto loan interest deductions are expected to stimulate the economy.
  

• European bond yields are competing for global capital, with higher valuations and slower earnings growth raising caution for investors.
  

• CRE is undergoing a controlled demolition, with East Coast firms performing better than their West Coast counterparts. Debt issues in CRE are a bigger concern than retail bankruptcies.

Insights From Scott Bessent’s Interview With All In

Speaker - Scott Bessent | Host-  Chamath, Friedberg

Key Insights:

• Regulatory reform and government support are critical for advancing nuclear energy, particularly small modular reactors (SMRs), to address energy affordability.
  

• Standardizing building codes and increasing prefab construction can lower housing costs and accelerate development.
  

• Reforming capital charges and leverage ratios for banks could save billions annually, ensuring financial stability while reducing government costs.

Insights From NVIDIA’s GTC

Speaker - Jensen Huang

Key Insights:

• NVIDIA’s NIMS platform democratizes access to advanced reasoning models for enterprises, with major partners like Accenture and AT&T onboard.
  

• NVIDIA Dynamo, an open-source operating system for AI factories, is set to revolutionize data centers, replacing traditional OS like VMware.
  

• AI computation demands have increased 100x, driven by breakthroughs like chain-of-thought reasoning, significantly raising the cost of powering AI systems.
  

• NVIDIA is collaborating with Cisco, T-Mobile, and others to transform radio networks using AI, with $100 billion invested annually in this sector.

High Yield Laughs

Stay tuned, stay informed, and as always, stay ahead.

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