Grifters

Ahem.

As we suggested the other day, SpaceX returned to earth, crispy. Elon’s stock IPO’d at $135, went to $225 a share after the noobs poured in and today descended to the $120 range. Yes, it’s below its initial public offering level, which is a bad omen. In fact the company shed a record $1 trillion in market valuation in a couple of weeks. Also bad.

In fairness, there is an AI, chip and tech sell-off happening these days after valuations went to an unsustainable, nosebleed level.

Howcum? Isn’t AI the shining city on the hill?

Sure, probably. But not yet. To get there will take boatloads of money for infrastructure build-outs that will involve dollops of debt and gutted balance sheets. There are deep and growing concerns about this level of capex (estimated to be about $800 billion this year) at a time when tech profits look to be softer than expected. Not a good combo.

Cash flow concerns have hit tech stocks, plus the fact a lot of investors jumped in on borrowed money on the Robinhood app. Leverage works both ways, and the pain in a sell-off can be intense. It begets more selling.

That’s not all. Remember the DeepSeek scare? Wall Street recoiled when it seemed a Chinese AI rival to ChatGPT had been developed by a bunch of kids on the back of three scooters in Guandong using their iPhones (or something similar). Was the American AI industry blowing through billions needlessly?

Now here’s Kimi K3, from China’s Moonshot AI, said to pace what OpenAI and Anthropic are doing with their frontier creations, but with cheaper chips, the promise of better pricing and practical utility. Just yesterday China ramped up its rivalry with America, chiding the US for imposing restraints on new AI models.

And, hey, Trump just made it all worse. (Of course.)

If Xi needed another reason to think the US president is losing it, that came with last night’s speech on electoral integrity in which Trump hinted China may have thrown the 2020 presidential election and stole the data of 220 million Americans. The talk was such an embarrassment that most networks refused to carry it and even Fox warned viewers not to buy what they were hearing.

This underscores the danger of the Iran war. There is no honourable way out for America, so it is choosing to be dishonourable. Civilian infrastructure is being hit. Peace talks are finished. If the president sends ground troops in, everything escalates.

Oil has bounced higher. Gas costs more. Inflation is being fuelled. Central banks will have to respond if it continues. Already two of Canada’s major economics shops – at CIBC and Scotiabank – are predicting substantial rate hikes late in 2026 and into next year, with RBC agreeing 2027 will be a time of tightening.

Even before that happens, war. Bombs, casualties, trade disruptions and the ongoing energy shock are killing investors’ appetite for risk. Oil above $80, maybe headed higher, means the cost of money will not fall, and probably rise. Not good news for corps shouldering massive financing for data centres the size of towns.

America is now unreliable, unpredictable, undisciplined and dogmatic – fighting a theocracy of hardliners using the global economy as a weapon. AI is shiny and exciting but hatched into a world where people are warring instead of talking, walling each other off, becoming nationalistic, parochial, protectionist and adversarial.

You can’t blame Elon for wanting to go to Mars, since merely being a trillionaire is boring. As Trump lays the ground to challenge the results of this November’s key midterm elections, risks on this planet augment.

We’ll survive them of course. Just be careful what you believe. It’s a deepfake world.

About the picture: “As a younger Millennial recovering from “whining, moaning, and snivelling syndrome”, I’ve become far more content with my renting reality here in Campbell River on expensive Vancouver Island,” writes Chris. “I’ve recently broken $100k in savings thanks to the advice given in your columns which is currently putting me in a far better position than many of my house-poor friends. Here is a picture of Frankie the Golden Retriever who smartly moved from the floor to the couch hoping I would continue the petting there. I think I’m the Greater Fool here.”

To be in touch or send a picture of your beast, email to ‘[email protected]’.

Source: https://www.greaterfool.ca/2026/07/17/grifters/