$35 billion in debt, a 50% five-year default probability, and a CEO who says the secret is quality.

I’m tired today, because I just took an accreditation exam, so I’m massively sleep deprived and a bit light-headed putting this out. But I passed, and I’ll sleep when I’m dead, right?

A quick note on the CPI report that came out today. It rose 0.1% in July, with YoY inflation dipping slightly to 3.4% from 3.5%. What’s the take from this?

• Shelter and food remain sticky.
• Don’t count on oil prices to stay low. The conflict in Iran remains unresolved. Iran's strategy has been to endure and shift the costs outward, and by CSIS's own assessment, it's working. Worse, other countries are noticing, and blaming the US.
• This impacts everything from energy to the carry trade to USD1.
• Inflation has now outpaced wage growth for four straight months, so “in line with expectations” is hiding real purchasing power erosion.

Hoping this newsletter will also find its way to Bethany McLean and Michael Burry, and others who care about keeping information in the markets clear and honest, and free of hype and narrative.

“Sure, they can buy compute,” CoreWeave CEO Mike Intrator told CNBC. “Yet, for some reason, all these people who can buy compute also feel the need to buy it from us, because of the quality of the product that we deliver.”

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