Fun read from Dario. It does feel like the points finance guys have to make are more compelling now that we’re talking about external financing needs and credit spreads rather than Nvidia product cycles, HBM, and tokens.

It feels like anything rate-sensitive in the US is waiting for OATs to stabilize. Europe’s pretty good at avoiding worst-case scenarios and limping along so it’s probably just a matter of time and waiting for that pain point.

I know Choosin’ Texas for the same reason I know who Salish Matter is and what Nee Dohs are — I have elementary school-aged kids, it has nothing to do with my music preferences (I mostly listen to podcasts anyway).

The safety data for Waymo gets better and better. Comparison w/ human drivers on rate of crashes with serious injury: Latest data: 270M miles, 20X better Mar 2026: 170M miles, 13X better Before that (forget exactly when): 10X better

Random thought. It was luck that the companies best suited to building out AI happened to be immensely profitable quasimonopolists. They could finance the first leg of the buildout internally without having to meet external ROIC tests. Though they are now issuing debt, that debt is backed by the hyperscalers' non-AI cash flows, not the AI itself. In other words, the AI capex boom has been possible because the technology has never had to prove its profitability. That wasn't the case with the TMT or other prior booms, which went bust when the capex ran too far ahead of the prospective profits.

It would be better if the housing market bull case were based on solid income-based affordability and low mortgage rates rather than stock market wealth and pockets of undersupply/low construction, but that is not the housing market we have.

GS: We estimate that hyperscaler capex is driving roughly half of S&P 500 earnings growth this year. As hyperscaler capex growth slows and depreciation expenses rise, the impact of AI investment spending on S&P 500 earnings growth will begin to fade and eventually become a drag.

Color from the red hot San Francisco multifamily market: - rents are up city-wide 25-30% YTD, but have flattened recently (healthy) - pockets are still rising, mostly in downtown/soma and new construction that has lagged the recovery in rent control stock - institutionally-backed operators are competing on limited deal-flow, as deployment pressure is driving down cap rates - one off institutional size rent control deal cap rates are now solidly under 5% and dropping (rates rates rates blah blah blah) - more new construction deals are now hitting the market, some owners having survived post-COVID better than others - huge price per unit sale prices but all well below replacement cost - one new construction deal is being flipped off a 2024 basis, going for a 2x on value - the sub-institutional investment market is spotty - higher rates are being felt here as buyers are more reliant on financing to fund deals and care more about cash flow (weird) - politically, it’s cool to hate landlords again. The “rent emergency” measures are a nothingburger but sentiment matters for future policy - the development pipeline is ramping thanks to higher rents, deliveries expected to start in 2028-29, but high financing and construction costs will new supply’s impact on the market - behind all this of course is the AI narrative, with big IPOs on the horizon, hiring outstripping layoffs, but everyone a bit more nervous than they were a year ago because no one in SF multifamily likes a spotlight (nor should they)