FPTP is such shit.
All this is just capitalism, the capitalists only care about turning money into more money. They don't care how that money is coming from, asset price inflation, Government, credit whatever. One can call it a different variant, but its just capitalism at core.
I mean, MIC has been a thing for decades, basically getting guaranteed transfers from the US Government. The banks were bailed out with $28T of Gov funds during GFC and Obamna did nothing to those responsible for it. The $28T didn't go into a void, it becomes hoards for the capitalists, which aren't taxed well or at all.
Yea, cut rates to near zero. But that alone won't be enough, Government spending is needed. Destroy the imprudent fiscal rules.
Hasan or whoever saying they will vote third party doesn't change the actual reality at all. Will millions of people get out and vote for the corporate Democrat? Why is this so difficult for liberals to understand.
Also, he lives in California, where Democrats have won Presidential elections continously. It makes even less of a difference. Let him vote what he believes rather than stupid harm reduction which doesn't even apply
significant amount of the AI investment leaks abroad, all the GPU imports, server stuff and all, and another huge chunk goes to capitalist hoards. very little domestic multipliers, maybe some temporary construction jobs some staff but thats it.
It does hold up some asset prices.
The Germans and the exporters won't like it.
Whether it's borrowing or spending itself is complicated. Because EU itself making bonds would mean member countries will have to tax more (depending on who are taxed, it'll be bad for members' growth), provide EU with Euros to pay the debt (politically difficult), also will mean high interest rates (considering there is no lender of last resort).
Or ECB could buy the debt instead but then certain members will complain. Neither works well.
Invoicing/settlement currency is not the same as source of foreign currency. Net settlement of imbalances have to be done somehow.
And yea, China exported real goods and imported claims on foreigners/foreign assets/
If China sells goods, receives Dollars and then swaps it for gold, or just real assets in Africa then it still means the surplus is settled in foreign assets. If foreigners can't hold CNY assets, then adjustment happens by China holding foreign assets instead. Even if China holds 0 Treasuries, 0 USD assets and only real assets even then a trade surplus country like China is accumulating foreign assets, so the world is not holding financial claims on China, it's still the creditor and Yuan (a financial asset) isn't the asset the world is holding.
And look at what % of total trade is done in/swapped for real assets. I can't find the exact numbers but real assets are more complicated to obtain. Commodities tend to bubble up when you buy too much of it. Keep in mind they have over a trillion dollar trade surplus.
. If China stops recycling its surplus into the US bond market then the US loses its primary source of cheap credit.
Not how credit works, it is rest of the world's demand for US Dollars that results in US having a current account deficit, again rest of the world is willing to accept USD, US fiscal deficits are financed by spending itself. If China and the whole world decides they don't want Treasuries, US domestic holders can buy it instead, and if domestic people don't find yield attractive, the Fed can buy it. Or, Treasury can simply spend without providing free money assets i.e. Treasuries. The real adjustment wouldn't US can't 'finance itself' or whatever but shows up in exchange rates, as I said, Americans will have less foreign goods. And Trump has already done a light version of that with his tariffs.
trade with China
Pay for the trade how?
You can look at balance of payments data of large countries and it will tell you U.S. and West make up biggest portion of their Trade and Financial Account. Indonesia, Malaysia all these countries earn significant amount of their foreign currencies from the U.S.
China's trade surplus by definition has to be paid for by a capital/financial account surplus, so on the whole it means China (private, public and the central bank) accumulates financial claims on the rest of the world. Since China doesn't supply Yuan in significant amounts (due to capital controls and their policy choices), the large chunk of the claims are in US Dollars, Euros and other first world currencies. In other words, other countries must pay for China's trade surplus somehow.
This can change, for example, if China opens up capital controls, then other countries may borrow from China to buy Chinese goods. What makes Western inflows different is that they purchase some amounts of third world currency assets, like Indonesian Rupiah equities, debt which brings in foreign currencies without debt service risk (at least under a floating currency). If Chinese Government or people were allowed and encouraged to do that this may change.
Not them, but you can't sell Treasuries without a counterparty. China is only able to sell these because there is a buyer on the other side.
And when China sells Dollars which they obtain from sale of Treasuries for Yuan, the Yuan appreciates in the foreign exchange market. But even here, there is a counterparty, someone must be willing to part with Yuan and accept Dollars, the price moves only.
The thing is, it's still relatively easy even with Trump tariffs to get Dollars, plenty of Americans buying financial and real assets abroad, US runs a trade deficit despite Trump. And countries excluding China have been doing whatever they can to obtain Dollars. Since Yuan appreciates, these countries will have to work harder/get lower goods from China.
Dollar's International dominance will end when countries increase domestic demand and Governments do an export ban, at least some restrictions on the US or if China or some major economy supplies what US is doing currently, which is not happening right now.
Even this doesn't mean the end of the Dollar, USD will continue to be in demand within the US, but US will lose some of the resources, labor extracted from elsewhere (real terms of trade) and prices go up (bad news for Treatlers). But it won't be screwed like Venezuela or Syria. Even lesser tier first world currencies like the British Pound, Polish Zloty etc still have disproportionate privilege.
Send military ships with them as escort? Isn't that possible?
article for free
Bulgaria became the 21st member of the Eurozone on Thursday, completing a long-sought step in its European integration despite years of political instability and pro-Russian campaigning against the move.
Sofia has failed to form a stable government for nearly five years. Large protests in November led to the collapse of the latest cabinet and raised the prospect of an eighth election in as many years. Allegations of corruption and mismanagement, the absence of a 2026 budget and sustained fear-mongering by pro-Russian forces have all tainted the moment of euro adoption.
“I warmly welcome Bulgaria to the euro family,” said European Central Bank president Christine Lagarde.
“The euro is a powerful symbol of what Europe can achieve when we work together, and of the shared values and collective strength that we can leverage to confront the global geopolitical uncertainty that we face at the moment.”
What might otherwise have been a celebration of European values has proved more divisive in the Balkan country. Support for the euro stands at about 40 per cent, while opposition exceeds half the population, according to two Eurobarometer surveys conducted in 2025.
Public scepticism is driven in part by fears that retailers will round up prices during the currency conversion, as occurred in other countries after euro entry. The prolonged absence of a stable government has also undermined official efforts to defend the changeover.
Disinformation watchdogs say opposition has been amplified by a sustained campaign from pro-Russian political forces and co-ordinated messaging on social media. Parties such as the far-right Revival, along with Bulgaria’s pro-Russian president Rumen Radev, have called for a referendum on the euro.
Anti-euro activism has been led chiefly by Revival, which has organised protests across Bulgaria, some featuring Russian flags and clashes with police outside EU institutions. During one demonstration in Sofia, supporters attempted to set fire to part of the European Commission’s delegation, chanting slogans such as “No to the euro” and “We want to keep the lev”. The messaging centres on claims that joining the euro would erode national sovereignty, undermine Bulgarian identity and benefit political elites.
Goran Georgiev, an expert on Russian disinformation at the Centre for the Study of Democracy in Sofia, points to a “decades-long push by the Kremlin and its proxies to block Bulgaria’s accession first to the EU and Nato, and later to Schengen and the Eurozone.
“Bulgaria’s euro-Atlantic integration succeeded despite this, and despite systemic problems such as corruption and the lack of an independent justice system,” he said. “The reforms pledged at EU accession in 2007 are still the ones the country struggles to deliver.”
Outgoing prime minister Rosen Zhelyazkov acknowledged “challenges” ahead but said the euro would have a “long-term positive effect” on the economy. Bulgaria’s inflation rate of 5.2 per cent in November “had nothing to do with the euro”, he added.
The switch from the lev to the euro is expected to have limited immediate economic impact, as the national currency has been pegged to the Deutsche mark and later the euro since the 1990s to guard against hyperinflation.
Eurozone membership, however, gives Bulgaria a seat on the European Central Bank’s governing council for the first time, granting it a direct voice in monetary policy.
Now Bulgaria is locked in, no more option to break the currency board.
Don't like what Troika did to Greece and PIIGS? You are spreading pro-Russia propaganda.
You don't like that Eurozone member country debt have credit risk and are closer to American states than actual countries? Russian propagandist.
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AI Bubble Fears Are Creating New Derivatives
https://www.bloomberg.com/news/articles/2026-02-14/ai-bubble-fears-are-creating-new-derivatives-credit-weekly
article
Debt investors are worried that the biggest tech companies will keep borrowing until it hurts in the battle to develop the most powerful artificial intelligence.That fear is breathing new life into the market for credit derivatives, where banks, investors and others can protect themselves against borrowers larding on too much debt and becoming less able to pay their obligations. Credit derivatives tied to single companies didn’t exist on many high-grade Big Tech issuers a year ago, and are now some of the most actively traded US contracts in the market outside of the financial sector, according to Depository Trust & Clearing Corp.
While contracts on Oracle Corp. have been active for months, in recent weeks, trading on Meta Platforms Inc., the parent of Facebook, and Alphabet Inc. has become much more active, the data shows. Contracts tied to about $895 million of Alphabet debt are outstanding, after netting out opposite trades, while around $687 million is tied to Meta debt.
With artificial intelligence investments expected to cost more than $3 trillion, much of which will be funded with debt, hedging demand can only grow, according to investors. Some of the richest tech companies in the world are rapidly turning into some of the most indebted.
“This hyperscaler thing is just so ginormous and there’s so much more to come that it really begs the question of ‘do you want to really be nakedly exposed here?’,” said Gregory Peters, co-chief investment officer at PGIM Fixed Income. Credit derivatives indexes, which offer broad default protection against a group of index members, aren’t enough, he said.
Six dealers quoted Alphabet CDS at the end of 2025 compared with one last July, while the number of Amazon.com Inc. CDS dealers rose to five, from three, DTCC data show. Some providers even offer baskets of hyperscalers’ CDS, mirroring baskets of cash bonds that are rapidly being developed.
Activity among hyperscalers really picked up in the fall when news around the debt requirements of these companies became front and center. A Wall Street dealer said his trading desk is able to regularly quote markets of $20 million to $50 million for a lot of these names, which didn’t even trade a year ago.
For now, hyperscalers are having little trouble financing their plans in the debt market. Alphabet’s $32 billion debt sale in three currencies this week drew orders for many times more that amount within 24 hours. The technology company successfully sold 100-year bonds, an astonishing move in an industry where businesses can rapidly become obsolete.
Morgan Stanley expects borrowing by the massive tech companies known as hyperscalers to reach $400 billion this year, up from $165 billion in 2025. Alphabet said its capital expenditures will reach as much as $185 billion this year to finance its AI build-out.
That kind of exuberance is what has some investors worried. London hedge fund Altana Wealth last year bought protection against Oracle defaulting on its debt. The cost was about 50 basis points a year for five years, or $5000 a year to protect $1 million of exposure. The cost has since risen to around 160 basis points. Bank Users
Banks that underwrite hyperscaler debt have been significant buyers of single-name CDS lately. Deals to develop data centers or other projects are so big and happening so fast underwriters are often looking to hedge their own balance sheets until they can distribute all of the loans tied to them.
“Expected distribution periods of three months could grow to nine to 12 months,” said Matt McQueen, head of credit, securitized products and muni banking at Bank of America Corp., referring to loans on projects. “As a result, you’re likely to see banks hedge some of that distribution risk in the CDS market.”
Wall Street dealers are rushing to meet the demand for protection.
“Appetite for newer basket hedges can be expected to grow,” said Paul Mutter, formerly the head of US fixed income and global head of fixed income sales at Toronto-Dominion Bank. “More active trading of private credit will create additional demand for targeted hedges.”
Some hedge funds see banks’ and investors’ demand for protection as an opportunity to profit. Andrew Weinberg, a portfolio manager at Saba Capital Management, described many CDS buyers as “captive flow” clients — bank lending desks or credit valuation adjustments teams for example.
Leverage remains low at most of the big tech companies, while bond spreads are only slightly tighter than the corporate index average, which is why so many hedge funds, including his, are willing to sell protection, according to Weinberg.
“If there’s a tail risk scenario, where will these credits go? In a lot of scenarios, the big companies with strong balance sheets and trillion dollar market caps will outperform the general credit backdrop,” he said.
But for some traders, the frenzy of bond selling has all the hallmarks of complacency and mispriced risk.
“The sheer amount of potential debt suggests that these companies’ credit risk profiles could come under some pressure,” said Rory Sandilands, a portfolio manager at Aegon Ltd., who says he has more CDS trades on his book than a year ago.