u/GoosePuzzleheaded146

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The LSE like the Nasdaq earlier announced 24-hour trading yesterday. That said, we need to read the footnote... because, it's actually 22 hours and 50 minutes.

It pauses from 18:30 to 19:00 to apply End of Day processes. Blockchain settlement, agentic AI, three centuries of infrastructure and it still has to stop and count.

That gap is the most honest thing in the announcement.

Nasdaq's going to 23 hours this year, NYSE to 22. The official reason on paper is global demand.

The real one is in the LSE's own release.... exchanges are losing retail flow to always on platforms and want it back. Makes sense to me..

What is it potentially going to cost us??most likely overnight spreads run 89bp versus 20bp in normal hours. On $10,000 that's $89 instead of $20 a $69 charge for not waiting until morning. Maybe im wrong though?? Hmm.

We do our best to be pragmatic in todays Daily Morning Brew... We take a look at why the pause was never a bug that technology finally fixed.

A professional can't sit still, reviews, committees, career risk. You can. That's the only structural edge retail has, and every extra trading hour is an invitation to spend it.

Thoughts? Who's staying up 23 hours a day to trade?

https://caffeinatedcaptial.substack.com/p/the-daily-morning-brew-we-approach

This week China released an AI model rivaling America's best, then gave it away free. (Personally not touching it for now)..

Out here in Asia everyone seems to read that as China is catching up. That misses the game IMHO..

The US strategy is scarcity... the best models, kept closed, top chips restricted. A fortress. China isn't storming it. It's making the thing inside free, which is smarter, because you can't defend a wall around something that no longer costs anything.

Steam and electricity weren't won by whoever invented them. They were won by whoever spread them widest and cheapest. Never the best lab. The widest adoption. Xi made thia clear...

The market felt it before it understood it.... chips fell into a bear market, $3.3T gone in a month, while Apple briefly became the world's most valuable company. Diffusion defined.

Today's Brew... why this is a repricing of scarcity, not the end of AI.

The lesson??? own the road, not the toll booth.

https://caffeinatedcaptial.substack.com/p/the-daily-morning-brew-guarding-the

Iran lost the war on every battlefield. It sank. Its navy is gone, its military is rubble, hundreds of billions in hardware destroyed. It wasn't close.

And this morning it moved our portfolios anyway…. Fun… right?

Oil +4%. Korea's stock market halted after falling 7%. Gold down $60. The dollar bid against everything. All because a country with no working navy pointed at a two-mile-wide strip of water and reminded the world that 20% of its oil has to physically fit through it.

That's the whole game now. You don't beat a superpower's army. You find the narrow place everything it needs flows through, and you squeeze, and you let its own hyper efficient economy panic itself into a recession. The bombs land on you. The bill lands on everyone else.

We spent thirty years making the global economy maximally efficient. Turns out maximally efficient and maximally fragile are the same sentence read from both ends.

And the strait is just the loud one. China's got rare earths. Taiwan's got the chips. The Dutch have the one machine that makes the chips. Everyone's holding a chokepoint now.

Which one worries you most?

https://caffeinatedcaptial.substack.com/p/the-daily-morning-brew-the-cheapest

Time for a rant... My sense is...Corporate America keeps its debt around 15% of the capital structure. Been drifting down for years.

​Think about what that means. The people who run actual companies, who go bankrupt when they're wrong, looked at leverage and mostly said no thanks.....

​Then the rest of us built it for them.... Should we expect that this continues on forever...

​The question now, when does it end? How does it end? Who walks away with the bag?

​Margin debt just hit a record $1.42 trillion, up 54% in a year. And that's the boring ground floor. Put a 2x ETF on top. Buy calls on the ETF. Borrow on margin to do it. Four layers of double-or-zero, all riding on the same one share, none of it touching the ground.

​The companies were too smart to build something this fragile. So we assembled it by hand out of their stock and called every new floor an innovation.

​Good for thought anyway

https://caffeinatedcaptial.substack.com/p/the-daily-morning-brew-the-cliff

Okay so it's me again. Three weeks ago I argued Beijing weaponizes chokepoints. Then that AI cracks crypto's locks. Then that Warsh won't save you.

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We are back today to take a bit of a deep dive into how everyone's favourite tech etf just got pickpocketted on Space x...

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We all know SpaceX IPO'd. Buy at $135, closes at $161. Nineteen percent before dinner, free money in plain sight. Except retail asked for $100B and got $15B. The bill was glued down and only the guest list got the solvent.

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Then the pros who got shut out just pickpocketed Cathie Wood's ETF for the pop instead.

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I wrote the whole heist below...

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https://caffeinatedcaptial.substack.com/p/the-daily-morning-brew-twenty-bucks

Space X... the final frontier of trades? Hmmm.

Imagine if you become the world’s first trillionaire on Friday, would you think the way to celebrate is realizing your $2.1T orbital empire is banned from buying a metal that melts if you hold it too long???

​SpaceX IPO’d on a beautiful story about infinite scale.. to infinity and beyond right?. The problem isn’t the valuation...it’s the plumbing of the periodic table. Space solar needs gallium. China refines 99% of it and basically blacklisted Elon. You can insource a rocket, but you can’t insource geology.

​What potentially is the better way to play this one after SPACXs 19% pop? Don’t buy the rocket. Buy Linde ($LIN) they sell the oxygen it breathes. The gas doesn't care about Beijing.

For those who can access the KOSPI... Hanwha Solutions is another disruptor that may just add to the mix.

https://caffeinatedcaptial.substack.com/p/the-daily-morning-brew-the-metal

Been in since 2016, and what a ride it has been.

Seen every "crypto is dead" funeral. This one's different and not for the reason everyone thinks, atleast in our opinion....

Everyone's blaming the Fed and Strategy selling. Sure. But the real story.... an AI found a 4 year old bug in Zcash's privacy code that the best cryptographers on earth missed.

Why care? Well they minted infinite fake coins. And only took a day to do it... yikes.

Same tech that's draining money out of crypto into the SpaceX IPO is also reading its source code and finding the cracks.

Wrote up where I think this actually goes. I Linked it in the comments.

https://open.substack.com/pub/caffeinatedcaptial/p/the-daily-morning-brew-the-locksmith?utm\_source=share&utm\_medium=android&r=5dyxxv

So...

You bought an index fund specifically so you’d never have to think again about which AI pick is next weeks delicatessen.....

That was the whole product. The fund promised it was just a mirror... it reflects the market, it has no agenda, it’s Switzerland with a ticker symbol right?

Then how is the mirror about to force feed you the three biggest IPOs in history whether you like it or not?

SpaceX is going public. Biggest IPO ever, $75B raise, $1.8 trillion valuation. Anthropic and OpenAI are next.

They’re so enormous the indexes are rewriting their own rulebook to let them in. Which means the mirror is now choosing what to reflect. And the second a mirror chooses what goes in it, it’s not a mirror. It’s actually your drunken uncle. It has opinions, and it’s putting beef on your vegetarian plate.

Meanwhile 70%+ of people think AI is moving too fast, and they’re all about to own SpaceX in their 401(k) or whatever returement account your country supports anyway.

Their only recourse is a sad email to Vanguard.

AND THEN Friday happened. Nasdaq 100 down 5%, worst day in a year. Chips down 10%. Nvidia off 6%. Bitcoin through $60K. The trigger? A good jobs report. The economy did well, so stocks got crushed, because apparently that’s how this works now.

So.... your passive fund is secretly active, it’s about to buy the most hyped assets on earth the same week they started detonating, and your escape hatch is an angry email.

The absence of a decision was always a decision. We cover this in the Daily Morning Brew today... 2,800 words, real numbers, one deliberately boring trade idea below...

https://caffeinatedcaptial.substack.com/p/the-daily-morning-brew-index-funds

So I read the SpaceX prospectus. All 400 pages. You're welcome.

The pitch is $2 trillion valuation, $28.5 trillion total addressable market, Mars colonies, data centers in space, the light of consciousness extended to the stars. Standard stuff.

The reality is funnier. 79.6% of that $28.5T TAM is enterprise AI applications. Aka chatbots that automate spreadsheets for investment banks. The space portion of Space Exploration Technologies Corp's addressable market is $370 billion. About 1.3% of the total. The rockets are on the cover because the rockets are what got you to open the brochure.

Current revenue tells the same joke. Q1 2026... $4.7B total. Starlink (satellite internet to people in places where regular ISPs gave up) made $3.26B and was profitable. Rockets made $619M. The AI business made $818M, lost $2.5 billion in the quarter, and spent $7.7 BILLION on data centers in three months. The rocket company is subsidizing the chatbot company. Ten years ago you would have laughed at that sentence.

Now it's the pitch.

It gets better. About $15B/year of that AI capex is financed by Anthropic renting compute from SpaceX at $1.25B a month. So SpaceX is charging its biggest AI competitor $15B annually to fund the data centers it's building to beat that competitor. Anthropic is literally paying the rent on its own gallows. Not making this up.

Now we get to the actual product on sale, which is the governance package.

Want to sue SpaceX after the IPO? Cute. You need to own 3% of the stock first. At $1.75T that's $52.5 BILLION. Just to file paperwork. The only entities that own $52.5B of a single stock are index funds, and index funds don't sue people. Ever. They are constitutionally incapable of caring.

Securities fraud suit instead? Sure, but it has to be filed in Texas Business Court. If that doesn't work, mandatory arbitration. They thought of everything.

Musk gets 85.1% of voting power. He appoints 51% of the board directly. SpaceX qualifies as a controlled company so it doesn't need independent directors at all. The board can be his cousin, his accountant, and three Twitter mutuals and that is completely fine per Nasdaq rules.

His comp package though. Get this. He gets 1 BILLION restricted shares (5% of the company) if SpaceX hits $7.5 trillion market cap AND he establishes a permanent colony on Mars with at least 1 million people. I want to be clear about what I'm saying.... founding a settlement on another planet is a vesting condition in a U.S. securities filing. The lawyers wrote that down. Then they filed it.

Separate award of 300M shares requires non-Earth-based data centers delivering 100 terawatts of compute. Current global installed compute is about 5 terawatts. He wants 20x the entire planet's compute. In orbit. Around the same planet.

Also Tesla sold $890M of EVs and batteries to SpaceX last year. At a normal public company that's a related party scandal that takes 14 months and a special committee to resolve. Here it's a footnote. The xAI merger in February at $1.25T combined valuation? No special committee, no fairness opinion, investors learned about it on a conference call with bad audio quality. Several couldn't hear it.

What you are buying when you buy SpaceX stock: a non revocable, non suable, non recallable license to follow Elon wherever he feels like going next. If you trust him, the structure is perfect. If you don't, there is no mechanism in this document that helps you. None. Read it yourself.

https://caffeinatedcaptial.substack.com/p/the-daily-morning-brew-the-letter

Happy weekend!

While usually bonds put everyone but my late grandparents to sleep, for the first time in a long while the Fed is making them interesting again...

Usually, when the central bank spends money, it’s by typing trillion into a spreadsheet to save the global banking system from its own cleverness.

But this time it was actual physical money spent on actual physical marble and premium drywall for the Marriner S. Eccles building. And for a while, the DOJ was treating this like a federal crime.

Then this week everyone just stopped. The DOJ dropped the probe. Jerome Powell is leaving his post next month. Kevin Warsh is measuring the windows for new drapes. And the $700 million in overruns? It has basically been folded into the cost of doing business, which is a fun phrase that usually means we got caught but we are all friends here.

If you are a fan of institutional independence (the quaint 20th-century idea that the guy setting interest rates shouldnt have to check if the President is grumpy before he hikes) this week was a bit of a disaster. The play was simple. The White House wanted the Fed to cut rates.

The Fed did not. The DOJ opened a criminal probe into the Feds office renovations. Powell decided he would rather spend his retirement golfing than talking to federal prosecutors about marble prices. The Fed Chair resigns, and presto, the criminal probe vanishes. It turns out the independence of the Federal Reserve is worth exactly one over-budget renovation.

The market reaction to the death of a century old norm was a six-basis-point drop in yields. We have officially priced the soul of the central bank at about the cost of a mid-sized hedge funds bad Tuesday.

Then there is the Iran ceasefire. It is a ceasefire in the way that two people screaming at each other is a conversation. The Strait of Hormuz is technically open, except for the American blockade that says it is not.

Brent oil is looking at $170 a barrel. Inflation expectations are north of 90%. And yet, if you look at the VIX or the MOVE index, you would think we were living in the mid-90s and the only thing we had to worry about was the Macarena. The market has basically installed a software update called Cope v2.1. It has decided that if it does not show up in the earnings call for a tech giant, it is not technically a war.

The most fascinating part of this is the rise of buy write ETFs. These are funds that hold bonds and sell call options against them. Their actual literal marketing pitch is headline paralysis. It is the most honest business model in the world. They know you are too terrified to sell but too nervous to buy, so they are going to monetize your inability to move until the heat from the dumpster fire eventually melts your shoes. It is a product that yields 10% because everyone else is too busy staring at the news with their mouths open to trade.

The 10 year Treasury is yielding 4.30%. Models say it should be 3.91%. That 39-basis-point gap is the We Are Not Entirely Sure tax. It is the extra interest you have to pay people to hold risk-free debt in a world where the risk-free part is currently being renovated with $700 million of questionable drywall and a side of DOJ leverage. You are paying it on your mortgage, your credit card, and your corporate spreads.

Basically everything is being renovated. The buildings, the Fed leadership, and the very idea that things are fine. We are living in a bifurcated tape where the aggregate index is smiling at you, while the individual components like high-yield tech and financials are quietly on fire in the corner. If you are sitting on cash yielding 4%, do not feel bad. In a world where the all-clear signal is being sent by a guy whose office still smells like fresh paint from a criminal investigation, waiting is not a lack of a strategy. It is the only strategy left.

https://caffeinatedcaptial.substack.com/p/the-daily-morning-brew-weekend-deep-b17