Show was recorded at 6.45pm EST on Sunday 17th May, 2026.

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In Episode 51, Benny & The Squirrel welcome Larry McDonald to the show. Larry is the Founder of Bear Traps Report and bestselling author of A Colossal Failure of Common Sense and How to Listen when Markets Speak. You can find Larry on Twitter @ConvertBond or email him at info@thebeartrapsreport.com.

The show was recorded at 4pm EST (4am in Hong Kong - thanks Larry!) on Wednesday 13th May.

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The 50th Episode show was recorded at 6pm EST on Sunday 10th May, 2026.

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Pod Summary

Seasonality Focus

• Post-COVID regime has made May–July consistently green; the new rule of thumb is “buy April, sell July” — seasonality is a guardrail, not a strategy

• S&P up ~8.5% YTD, tracking the typical post-shock recovery pattern (2020/COVID, 2023/SVB, 2025/Liberation Day)

• Goldman note: hedge fund gross exposure had been declining for weeks — last week was the first increase, described as a “stop-in” (forced covering, not conviction buying)

• Options skew is at extremes: call skew near 100th percentile, put skew near zero on a 10-year lookback — the market is all-offense, no defense; fragile if the flow reverses

AI CapEx & Token Consumption (Minute 7)

• Goldman projects 24x token consumption growth by decade-end - this is a dangerous linear extrapolation in our view

• Massive token wastage is not priced in; efficiency gains will compress demand projections over time

• GPUs are no longer the binding constraint — hence NVIDIA stock’s underperformance

• xAI just rented its entire Colossus Memphis data center to Anthropic - xAI running out of cash and needing to stop the burn ahead of the SpaceX AI IPO

• An xAI ‘neocloud’ valuation of 5–8x EBITDA seems fair - CoreWeave trading at 11x 2026 / 5.5x 2027 is the comparable

• Musk has effectively become a landlord and ceded foundation model leadership

CapEx vs. Buybacks — Equity Supply Problem (Minute 10)

• S&P 500 CapEx rising from $1.3T (2024) → $2.1T (2027); buybacks flat in dollar terms and far less potent relative to total market cap

• LBO flow (shares removed from market) has slowed; major IPO supply pipeline (SpaceX/xAI etc.) could put ~$2T of net new paper into the market

• Bearish equities? The IPO pipeline is your catalyst

Market Breadth (Minute 17)

• Despite the headline rally feeling “bubblicious,” 50% of S&P stocks are in a downtrend technically

• Friday’s session: XLK up 3.5% but breadth only 37%; 9 of 11 sectors had negative breadth

• Post-GFC market concentration near historic highs — the rally is getting narrower and narrower

• Money flowing into US and Korea CapEx beneficiaries — memory, substrates, IMP, chip packaging all surging YTD

• Most AI “bottleneck” plays are already discovered and priced (e.g. ASE (packaging and test) in Taiwan already doubled YTD

Trade Idea: SMH Calendar Strangle (Minute 22)

• SMH (semiconductor ETF) has hit a parabolic phase — won’t correct in time; either continues climbing or drops hard

• Trade: Buy June OTM calls (~38 delta) + Buy September OTM puts simultaneously

• Dynamically manage by rolling the June calls up as the market rallies, using collected premium to fully fund the September puts — ending up in a free put position for the back half of summer

• Allows participation in the near-term bull case while owning downside protection for free

Consumer Short Book (Minute 27)

• Wingstop and Shake Shack both missed last week (Shake Shack blamed weather!)

• Squirrel short restaurant names since mid-summer — thesis: real estate, food costs, and labour all rising while middle-income consumer demand erodes (and wildly expensive stocks)

• The economy is moving from a “K economy” to a “gamma economy” — income and market gains concentrating at the top, everything in the middle hollowing out

In Episode 49, Benny & The Squirrel welcome Brent Donnelly to the show. Brent is President of Spectra Markets and author of AM/FX and the Friday Speedrun. Brent’s 3rd book, Alpha Trader 2: Outside the Box will be available on May 22nd. The first 2 were bangers - this one is more targeted towards professional traders.

The show was recorded at 6pm EST on Thursday 7th May.

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Show was recorded at 7.20pm EST on Sunday 3rd May, 2026. Make sure you join us on Thursday. We have Brent Donnelly coming on to chat about FX and his new book - Alpha Trader 2.

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Episode Slide Deck

Global Macro Divergence

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Show Slides

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Where Do Profits Come From?

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Pod Summary

Ags and ‘Oh Canada’ Update

• The agricultural commodities sleeve has been the primary driver of 🐿️returns during the broader period of de-grossing

• M&A activity in Canadian Mining and Energy has also been a positive contributor. Upside: 30% bid premiums; downside: need to find new trades!

BUSHY™’s Current Portfolio Positioning

• 35% in cash and hedges; ~6% gold; ~15% ag commodities (the performance driver); ~15% trend followers; some EM local currency bonds; ~22% equities

• Benchmark: Vanguard 2035 Target Date Fund (classic 60/40 global mix)

• Five peer ETFs tracked: Cambria’s Trinity, Bridgewater’s All Weather Fund, 3Fourteen’s Real Asset Allocation, Bobby Elliott’s HFND, and Evoke’s RPAR

  • Bridgewater All Weather: heavily positioned in bonds, TIPS, bond futures, and cash — very defensive

  • Bobby Elliott’s HFND: ~47% in cash — “prepping for World War Three”

  • Meb Faber / Cambria: global diversifier; described as Rupert’s “spirit animal” on asset allocation

  • Warren Pies / 3Fourteen: concentrated in US stocks, minimal non-US equity exposure, still holding a significant bond allocation

Broader Market Positioning & Leverage (Minute 6)

• Goldman Prime data shows a significant de-grossing since the February/March peak

• Net positioning remained rangebound (50–58) through most of the period, with the Liberation Day dip as the main exception

• Gross leverage rose steadily from the 2022 lows to the silver market peak, then de-levered

• Interpretation is ambiguous: bulls say room to reload; bears say big funds are cautious for 6–18 month horizons

• Significant de-grossing observed specifically in tech; semis/memory remain crowded long; software is widely short (”vibe coding” narrative)

China Positioning & Revised Investment Thesis (Minute 9)

• China hedge fund gross leverage is at post-COVID peaks, despite the property market remaining depressed — a deliberately controlled deflation of real estate as a savings vehicle

• Key lesson: wasn’t “listening to the game master” (Jim Leitner concept) — Chinese authorities’ five-year priorities are AI, tech sovereignty, and sovereign resilience, NOT massive boost to domestic consumption

Market Concentration & the “Mike Green Market” (Minute 15)

• Nomura (McElligott) note highlighted the reversion to narrow-breadth Mag-7 dominance after a brief period of broadening in late 2025

• Described as a nightmare for newsletter writers; also problematic for long/short managers who build “alpha buckets” outside the mega-caps

• The April rally anatomy: Initial positioning squeeze → Mythos (Claude) AI excitement → FOMO chase by underperforming funds

Hyperscaler CapEx Boom & the Kalecki Profit Equation (Minute 17)

• Last Wednesday was the single largest earnings day in history: ~$12 trillion of market cap reported in one day

• Big five hyperscalers (incl. Oracle) CapEx as % of GDP has gone from ~60bps to a projected 240bps — nearly 180bps of incremental drag/stimulus

• Amazon is now spending more in CapEx than its EBITDA; others (Meta, Alphabet, Microsoft) in the 70%+ range; Apple notably absent from the CapEx race

• Ben explains the dynamic via the Kalecki Profit Equation: profits = net investment – business savings + dividends + taxes; CapEx boosts reported profits because revenues are recognised now but costs (depreciation) are deferred

• Result: net income/EPS ripping up to the right; free cash flow plunging (gap widened from ~$135bn annualised to ~$500bn for the hyperscalers); stocks follow earnings, not FCF — for now

• Market won’t re-rate until expectations for future FCF come down

• Current dynamic is a prisoner’s dilemma: each CEO (e.g. Larry Page: “I’d rather go bankrupt than lose the spending race”) is rationally maximising at the agent level even if the collective outcome is irrational

• Two macro levers to watch: (1) US fiscal deficit — Liberation Day fear was deficit contraction via DOGE/tariffs; now deficits are expanding again via war spending; (2) a future administration (e.g. AOC-type) that actually prioritises fiscal consolidation over the stock market

• Old capitalism framework (pre-GFC) no longer applies; post-COVID fiscal dominance + private CapEx boom = double-whammy profit support even as consumer/commercial real estate struggles

In Episode 47, Benny & The Squirrel welcome Adam Peck to the show. Adam is CIO at Riverwater Partners in Milwaukee and he has managed small cap funds with a value oriented strategy for two decades since he finished grad school with Benny, as they were classmates, and somehow survived that pain gauntlet. Connect with Adam on LinkedIn or check out his writings on his firm’s website linked above.

The show was recorded at 8pm EST on Thursday 30th April.

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The “Unmissable Sunday Show” was recorded at 6.20pm EST on Sunday 26th April, 2026. The B&S Composite Fragility Security Index analysis deck is included below for all paying subs in addition to the slide deck from the show.

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Show was recorded at 7.15pm EST on Easter Sunday 19th April, 2026. Sorry for delay in sending this out I had it set to send Sunday evening and failed to hit send.

This coming Thursday we will be joined by Larry McDonald of “Bear Traps Report” fame.

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In Episode 41, Benny & The Squirrel welcome Craig Shapiro to the show. Craig is the Senior Macro Strategist at Ninja Trader, the largest retail futures broker in the US. He also writes the excellent macro note published here on the stack - The Alethea Narrative .

The show was recorded at 4pm EST on Thursday 16th April.

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Show was recorded at 7.30pm EST on Sunday 12th April, 2026. Sorry for the late one - I told the Squirrel that I needed to watch the end of The Masters - Congrats Rory!

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In Episode 41, Benny & The Squirrel welcome back Charlie Peabody to the show. Charlie is a partner and the founder of financials specialist Portales Partners. The show was recorded at 6pm EST on Thursday 9th April.

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Show was recorded at 6.30pm EST on Easter Sunday 5th April, 2026.

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Happy Easter to all who celebrate. This weekend’s note is a Benny & The Squirrel collaboration! We preview the jumbo SpaceX IPO. The two of us have moved a decent amount of primary paper between us over our careers. And this one is a doozy!

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This note falls into 4 parts:

1. Background and Valuing the core SpaceX business (Starlink and Launch).

2. Dealing with the Pixie Dust and Jazz Hands (the xAI / Space Data Center bit).

3. Deal Dynamics (i.e., who buys all the paper).

4. The Liquidity Black Hole (why this matters to you even if you have no interest in the SpaceX IPO).

Having been an equity capital markets banker for over 25 years, the 🐿️ can safely say that he does not envy the task facing Wall Street’s finest later on this year. This is also one of those deals where the folk on the buyside have no choice but to pay attention. Sitting as an analyst at Fidelity in Boston, a younger Benny could typically be as picky as he wanted to be about the IPO calendar.

However, there are certain moments when a deal comes along that has proper “pay attention” factor for any manager of equities with (or without) a benchmark. The SpaceX IPO is one of those moments.

We started chatting about this topic over a month ago, while Benny was dodging Iranian missiles in an undisclosed bunker 5 star hotel in the Emirates.

I can say off the bat that it is unlikely that either of us will be subscribing for shares in the deal. Even if you also fall into that camp, please stick with us as the deal itself has some important market structure implications.

gNone of these implications are likely to be discussed in mainstream channels - the underwriting bank fee pool is likely to be measured ‘in the high 100s of millions’ of dollars (even if the issuer negotiates a chunky discount to the normal 4-7% of proceeds gross spread). That number buys a lot of cheerleading.

The cheerleading will not just come from the well-compensated sell-side. SpaceX/ xAI already has a highly diversified cap table…

…full of very vocal investors that (i) will be all over CNBC and (ii) who mostly acquired their SpaceX shares at a fraction of the price currently being touted by Musk. Block your eyes and ears!

However, when we start bandying around fighting talk like “concept valuation paper”, it behooves us to show our workings. The 🐿️ had a crack at handling the topic of valuing SpaceX back in October 2024 (‘To Boldly Go’). An extract:

As you can see, back then the 🐿️ was leaning towards the view that SpaceX was probably undervalued in the private markets IF you were to take the October ‘24 ‘back of napkin’ math above at face value. Indeed, by late 2024, the market had been pretty quick to update that space TAM market share assumption.

In the past 6 months however, the SpaceX valuation has risen to the extent that it is now priced at a 20% premium to the value of the 2040 space industry (in today’s money). Don’t forget that the space revenue TAM this was based on came from Morgan Stanley’s Adam Jonas - not known for his conservative assumptions as relates to Elon Musk connected projects…

Now that we have a potential deal within line of sight, it is time to do the bottom up work. We have built a multi-scenario valuation model for SpaceX. After that, we consider the implications / viability of an up to $115 billion equity raise by the company. Strap-in!

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In Episode 39, Benny & The Squirrel welcome Russell Clark, CIO of Brumby Capital and author of the Capital Flows and Asset Markets Substack (one of our favorites). The show was recorded at 3pm EST on Wednesday 1st April.

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Show was recorded at 6.30pm EST on Sunday March 29th.

Make sure you join us again on Thursday. Russell Clark will be joining us! Should be a lively discussion so come join us later this week!

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In Episode 37, Benny & The Squirrel welcome Harris ‘Kuppy’ Kupperman, CIO of Praetorian Capital. The show was recorded at 2pm EST on Thursday 26th March.

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Show was live streamed at 6.30pm EST on Sunday 22nd March.

Make sure you join us again on Thursday. Harris Kupperman (aka Kuppy) will be joining us! Kuppy never disappoints!

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In Episode 35, Benny & “Farmer Squirrel” welcome Nico Hoyt of ArchAIQ.

Welcome to the wild world of agricultural commodities, where weather, geopolitics and farmer survival collide! Nico is using AI and hard data to replace the guesswork and “FERP”-ing that currently plagues the ag trading world.

Nico brings decades of global trading experience, from clerking in the CME pits to managing capital for family offices and directing institutional grain operations for one of the ABCDs. An American now based in Uruguay, Nico founded ArchaiQ, an end-to-end sovereign tech stack specifically for Ag traders. He is also about to launch PAiQ, a JV with PiQ, a new Ag news and analytics platform. Make sure you follow him on Substack (Nico) / his website / Twitter.

Here is a free link to the 🐿️’s piece from last year on broad-based commodity ETFs - LINK.

Also, Benny recently created a market dashboard in the Perplexity Computer as he continues to dive deeper into Agentic AI. Including a screenshot below for everyone but from now on he plans to send a daily screen shot of it out to his private chat for paid subscribers.

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In Episode 34 The Squirrel & I cover a wide array of topics in cross-asset markets and finish with a discussion of The Squirrel’s recent note on Ags that was co-authored by our guest on the Thursday show Nico Hoyt where will dive deep into the current opportunities in the Ag space.

Show was recorded at 5.30pm EST on Sunday 15th March.

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In Episode 33 The Squirrel & I are joined by Danielle DiMartino Booth to discuss the Federal Reserve, private credit, and Non-Depository Financial Institutions (NDFIs), the labor market, and a few other fun topics. If you like macro you will like this conversation as we basically went off script and chatted the way the three of us would over drinks at a bar. It was a high level, high energy conversation. ENJOY!

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