To The Moon

News and my thoughts from the past week (03Nov25)

Oracle is facing a MASSIVE debt problem: Its debt-to-equity ratio stands at 500%, and its net debt-to-EBITDA is far above AI peers. The cost to insure its debt is near the highest since October 2023 as banks prepare a $38 BILLION deal to fund data centres for AI infrastructure. - X user Global Markets Investor

Elon Musk says within the next 5–6 years, there will be no conventional mobile phones, no apps or operating systems, and most of the content people consume will be generated by AI. - X user DogeDesigner

A growing share of Americans now owe more on their car loans than the vehicles are actually worth, per Edmunds. During the third quarter, 28.1% of trade-ins were underwater, the highest level since early 2021. On average, these “upside-down” loans carried $6,905 in negative equity. Nearly one-quarter of those trade-ins rolled over more than $10,000 in unpaid loan balance, highlighting increasing financial pressure on consumers. - Unusual Whales

WSJ screenshot

56,000 U.S. purchase agreements were cancelled in August, representing 15.1% of homes that went under contract. That’s the highest share for August deals falling through in records dating back to 2017, per Redfin.

Currently, ~82% of the US population lives in regions experiencing an economic recession, the highest share since 2020. The analysis uses the Fed Beige Book, a report published 8 times a year based on anecdotal information gathered from businesses, economists, and market contacts from the 12 Fed districts. The percentage has DOUBLED since the start of 2025. Over the last 20 years, only 2008 and 2020 saw such a large share of the country in recession. Meanwhile, the latest Atlanta Fed estimate for real US GDP growth in Q3 2025 is +3.9%. - X user The Kobeissi Letter

While the market hits another high, know that the market breadth is not showing a favourable condition. Market breadth looks at the number of stocks that advance (end higher) and the number that end lower. 104 ends up higher, whereas 398 ends up lower. The index does not show this, especially when Mag7 has over 1/3 weightage.

The percentage of subprime auto loans that are 60 days or more overdue on their payments has hit an all-time high of 6.4%, per Fitch.

67.6% of US consumers are now living paycheck to paycheck, according to a PYMNTS survey. This percentage has risen by +10 points over the last 18 months. This comes as nearly 30% of consumers lost their financial safety net before July 2020 and have struggled since. A similar percentage began facing the same situation over the last 12 months. All while 46% of consumers who once had some financial comfort say they have since lost it and feel overwhelmed by their situation. The US wealth divide is hitting historic levels. - X user The Kobeissi Letter

According to Harvard Economist Jason Furman, when you remove data centres and AI, America’s growth is 0.01%.

In a world of autonomous cars like Waymo and Cybercab, Car insurance becomes a highly profitable but massively sub-scale business. Insurance so “you” can drive on the roads vs a robot will become a very expensive luxury good and be priced as such. Most people won’t bother. Rich enthusiasts will. Massive value destruction of incumbent insurers over time. - Chamath Palihapitiya

AI kills consulting

Investor margin debt is now higher than revolving credit card debt

Auto loans have become the riskiest consumer credit products: US auto loan delinquencies 60 days or more past due have surged +51.5% since Q1 2010. During the same period, delinquencies on credit cards, personal loans, and most other forms of consumer credit have declined. As of July 2025, 1.6% of total auto loans were 60+ days past due, higher than both credit card and mortgage delinquencies. This surge has been driven by record car prices and elevated interest rates, with new vehicles now averaging over $50,000 and loan rates above 9%. Currently, 1 in 5 car loan borrowers pays more than $1,000/month. The auto affordability crisis is worsening. - X user The Kobeissi Letter

Subprime loans by undocumented

The US government now spends ~23 cents of every Dollar of revenue on interest expense, near the highest level this century. This comes as interest expenditures exceeded $1.2 TRILLION over the last 12 months for the first time. Interest costs have DOUBLED over the last 4 years as both rates and federal debt have surged. As a result, interest expense as a % of tax revenue jumped +10 percentage points, or +70%, to 23% during this period. For perspective, the government spent ~10% of its revenue on interest on average before 2020. Interest will soon be the US government’s largest expense. - X user The Kobeissi Letter

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