SILVER and GOLD

BearTrapsReport Nov 6, 2025, and WMT/TGT Chart

BearTrapsReport Oct 31, 2025, and MCD/CMG Chart

In the much discussed “K-Shaped economy,” lower- and middle-class consumers are becoming more budget conscious and continue to tighten their belts.  Even wealthy consumers are showing signs of trading down.

CMG CEO Scott Boatwright (on low/middle-income cohorts): Consumers earning < $100K (40% of base) "have further pulled back their spending... We're not losing that customer. They're just coming less often," citing unemployment, student loans, and real wage stagnation.

META and GOOGLE sell $47B Bonds in a few days

Meta generated close to $55B in free cash flow in 2024; now the street expects $16B in FCF (Free Cash Flow) in 2026! Capex (Capital Expenditure) (overdosing moved from $37B to $110B over the same period). Clearly, there is a significant problem here. Investors were told 6-9 months ago that free cash flow would fund the AI capex party. NOW, companies like Meta are admitting to the harsh reality! They must sell far more bonds and take on far more debt than investors were led to believe.

Craig Shapiro, credit analyst with BearTrapsReport, believes "The AI debt cycle is really gonna crowd out all other corporate sectors' access to debt markets.  Spreads are way too tight for non-AI sectors that had benefited from the lack of overall corporate credit supply (bonds). Now they have an issue. Should start to see HY spreads (High Yield bond risk premium) widen more now, probably for Mortgages as well, especially since AI threatens labor markets and the ability to repay. AI is eating the world.'

Michael Burry is credited with having been one of a few who identified and profited from the mortgage melt-down in 2008.  He recently made a big splash with his bets against Nvidia and Palantir.  In the chart to the right,  Michael (X handle Cassandra Unchained) lays out the bear case for many of the tech darlings.  He claims that these firms are changing how they depreciate servers and semiconductor chips.  By claiming a longer depreciation schedule, these firms can show greater profitability.  As we have all witnessed over the past few years, technology usually needs to be replaced more quickly rather than a longer product cycle.  Who knows….but it sure will be interesting.  Consider Meta (Facebook) cash flow situation from above.

“And more people are certainly noticing. Important people, such as Goldman's head of Delta One trading, Rich Privorotsky, who dedicated an entire section to the Nvidia "transaction" in his morning note, titled appropriately enough, Circular reference?

‘Markets were largely sideways, led early by a resurgence in Apple, with the rest of the tape struggling to hold gains… until the Nvidia–OpenAI headline hit. Reuters reports a structure where Nvidia invests up to $100bn for non voting shares, and OpenAI uses the cash to buy Nvidia chips, with a plan to deploy of what could be at least 10GW of Nvidia systems. 

NVDA ripped higher… TSMC +3%/rest of AI supply chain higher and Oracle popped on the read through that it likely builds a big chunk of the compute.

Ok definitely not old enough (Tyler wasn’t old enough but I am) to have been around trading during the tech bubble and multiples are nowhere near that point in time... That said, vendor financing was a feature of that era and when the telecom equipment makers (Cisco, Lucent, Nortel, etc.) extended loans, equity investments, or credit guarantees to their customers who then used the cash/credit to buy back the equipment… well suffice it to say, it did not end well for anyone. 

And guess what, this time won't be any different. The only question is when 5 Reported by Tyler Durben of Zerohedge

What might you want to put under the Christmas Tree
We are often asked what to invest in.  Ultimately, folks are asking what do you think will appreciate in the near term.  NOTE...We do not have a crystal ball.  However, we do have more than a few thoughts.

As of Nov 12, 2025, the total value of the largest 100 companies in the Nasdaq was a colossal 31.6T.  In contrast, the white line shows the value of the entire global energy company complex at 2.8T.   The forward set-up is spectacular. In Q4, everyone wants technology on the pad at year-end; they want to show they own the AI winners like MU equity above. Above all, everyone wants to avoid a 2025 tax event!!!

November 2021 to December 2022

QQQ Big Tech: -31%

XLE Energy: +71%

The current setup is eerily similar to November 2021. Big tech topped out that month, and as you can see above, that year, the $20T in the Nasdaq 100 was down near $12T by late 2022; the capital had to go somewhere, and it flowed like a white water river into energy stocks. Today, we have $31.6T in the Nasdaq 100. If just $3T leaves the NDX in January (avoids the 2025 tax event) and moves into energy, the XLE (Exxon, Chevron, etc.) names double.