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I fixed the sink… That’s the whole story, honestly. There was a drip under the kitchen sink, I took a photo of it, asked the thing what I was looking at, and then I fixed the thing. No plumber. I know that confirms a few priors about me, but I bring it up because that little win did more to change how I feel about this technology than any essay I’ve read. You can sit around complaining about AI. You can keep telling everybody that software is dead. Or you can actually participate. Learn how to use the technology. Pay attention to the companies benefiting from it. And when the stock market starts rewarding those companies, don’t be afraid to own them. The tape Rough month. The market stopped trading AI and started trading AI against the cost of money, and both can and are true at once. The 10-year has spent most of October above 5% and closed Tuesday a hair under it. Midterms are next Tuesday. Everybody is nervous and nobody can tell you exactly why, which is usually what nervous looks like. Then Anthropic filed its S-1 on Monday. Press reports have it raising around $100 billion at a valuation near $2 trillion, which would make it the biggest IPO ever. Revenue in 2025 was $4.6 billion. Revenue in the second quarter of 2026 alone was $11.6 billion. Third quarter, by the company’s own math, was about $16.8 billion. Nobody has grown like this before. Revenue per employee is over $6.6 million. Ninety percent of their code is now written by their own model. Two things I pulled out of it. First, this company spends most of its compute on research and training, not on serving you and me. The CFO has said that publicly. The part that serves customers is extremely profitable. The part that builds the next model is where the money goes. Which tells you that for the next 12 to 18 months, demand for chips and power isn’t slowing down, because you only stay in this race by spending. Second, the market is right to be twitchy about the multiple. Growth slowed from roughly 147% quarter over quarter to about 45% in Q3, and that’s a real slowdown, not just big numbers getting bigger. OpenAI shipped a model in September that matched or beat theirs and some of the revenue followed. The harness turned out to be less sticky than people hoped. Meanwhile, token prices keep falling and GPU rental prices keep rising, which is a strange thing to watch at the same time. SemiAnalysis has about 50 gigawatts of new data centre capacity coming online in 2027. When that lands, rental rates come down, and then we find out what intelligence actually costs. My read: Is that the aggregate demand across every model, open and closed, is the number that counts, and its really difficult to account for. Anthropic going public is the first time we get a clean look at any of it. I think that’s bullish for the sector short term and medium term. The other datapoint from the week was Microsoft offering a voluntary exit package to about 60,000 people, roughly 27% of the company. Highest-paid workforce on earth. That’s the efficiency showing up in the numbers, and it’s scary if you work there, and it’s exactly why we dedicated the rest of the show to Cognitive Mercantilism... say that fast 3 times. Cognitive mercantilism, explained. Venkatesh Rao published an essay on Saturday called Cognitive Mercantilism. I sent it to about 20 people. Mel had already read it… because of course she did. I want to lay it out carefully because it’s the best frame I’ve found for why the loudest AI pessimists are the people with the most degrees or the most “intelligence”. Mercantilism is what came before capitalism. From roughly 1500 to 1800, if you asked a king or a general or a landowner how an economy worked, they’d tell you something like this. Wealth is a fixed pile. It’s land, gold, silver, and the labour of the poor people who work that land. The point of policy is to grab more of the pile: more territory, a trade surplus, more bullion in the vault. My gain is your loss. Rao’s twist, is that mercantilism was never the philosophy of merchants. It belonged to the aristocrats and the military and the people collecting rents. The actual traders and the people starting businesses were the ones pushing against it the entire time. Capitalism from that push. Under the surface, mercantilism needed four beliefs to hold: * Wealth is scarce and finite. * Ordinary people can’t be trusted with freedom. They’re unruly and need managing by their superiors. * Supply is everything. Control the productive stuff, charge high prices. Demand from the poor doesn’t count because the poor have nothing to spend. * Most people are only good for farming. With 80% of the population in the fields, that looked like the natural order of things. What broke it was demand. Rao leans on the historian Joyce Appleby here. Capitalism wasn’t inevitable. It showed up when people discovered that wealth could be created and not only captured, and that ordinary people could also be customers of production. When a farmer could suddenly want tea and a clock and a window with glass in it, he worked more to get them. Days worked per year went from around 250 to 300. Nobody forced these ppl to work more... Desire did the persuading and the effort followed that desire. Markets got pulled into existence by the wanting. Now swap the word “wealth” for “intelligence” and you have our modern ai conundrum. Cognitive mercantilism treats intelligence as a fixed resource that lives in credentialed brains, to be hoarded, kept expensive, and handed out by approved custodians. And the same four beliefs apply here. * Intelligence is scarce. * Regular people can’t be trusted with powerful tools. * Supply of that resource is everything, so we MUST “control the frontier” because its too dangerous. * And most people are only good for whatever they’re doing now. And who holds this cognitive worldview today? It sure as heck isn’t the plumbers. It’s the people who spent their lives going to school, hoarding intellegence so they could sell it at a higher price. These folks tend to have their entire identity and income wrapped up in owning intelligence and selling it. Doctors, lawyers, consultants, advisors, academics, the media, and yes, the fronteir labs themselves. So it follows that the technocrats building this think it’s the end of the world. They’re the aristocrats in this story. A technology that makes intelligence cheap and abundant hits them exactly where mercantilism hit the landowners in 1780. They’re losing control of their scarce thing. An electrician who started using it to bid jobs and write invoices and run his own estimating does not see it that way. He sees a tool that let him do something he couldn’t do last year. Those two people are not going to agree about AI, and it’s not because one of them is ignorant. Mel put it in economics terms. Think of a production possibility frontier, the curve of everything an economy can make with the resources it has. Most policy is arguing about where on the curve to sit. This moves the curve. That’s a different kind of thing. She also made a point I’ve been chewing on since our chat... Opposition to AI is turning into a luxury belief, the same way being anti-energy did. If you already have enough wealth and security that you don’t need more, you may struggle to understand why anyone would want a tool that helps them get more. And every society needs an elite of some kind. The thing capitalism does well, and the thing this technology does well, is lower the barrier to becoming one. A few caveats we should point out. The Engels’ Pause was real. Between 1800 and 1840 output per worker in Britain rose something like 46% while real wages rose about 12%. The gap went to the people who owned the machines. The handloom weavers didn’t get retrained, they got wiped out. Wages only caught up when the technology spread into enough industries to create new work and when the institutions changed: unions got legalized, the vote got extended, the Corn Laws got repealed. If people … This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

Delta raised fares about 20% from a year ago and nobody stopped flying… Premium revenue was up 18% last quarter. Ed Bastian’s explanation was blunt: the top 40% of American households are “nearly $40 trillion wealthier than they were just a few years ago.” However, that same economy eating airfare increases produced 372 large US company bankruptcy filings in the first half of 2026. That’s the most since 2010, and one more than the same stretch last year. Two years running. We have Zombie companies and we have breakthrough technology businesses. What we need to start asking ourselves as investors: Does this mortgage, this rental, this stock still work if money costs 8%? The tape We recorded Tuesday morning. The S&P 500 closed that day at 7,805, a fraction under the record it set on October 6th. The Nasdaq sat at 27,204. Small caps kept sliding. Bonds are the story. The US 10-year touched 5.36% last week, the highest since 2002, and closed Tuesday around 5.2%. The Fed’s September minutes said another hike “would likely be appropriate by year end.” Brent is above $105, with a hurricane shutting in most of the Gulf of Mexico’s output. Earnings season opened with JPMorgan missing for the first time in 17 quarters. Goldman’s revenue was up 23%. Korea’s market fell 5.5% on Tuesday after Chinese memory maker CXMT announced a denser DRAM design, and SK Hynix dropped 10% in a day. Under an index near its highs, by one count 134 S&P 500 stocks are down 40% or more from their peaks. The average stock is not having the year the index is having. We grew up on cheap money Mel and I came into adulthood as rates were falling. If you bought in Canada in 2016, 2017 or 2018 you borrowed at 3% or 4%, and every renewal looked cheaper than the last. Then COVID took rates to zero. A whole generation, mine included, learned that 2% to 4% was normal. What we need to come to terms with is that period was the exception, not the rule. The better mental model now is 2003 to 2014, not 2016 to 2024. Central banks aren’t trying to juice growth anymore. They’re trying to hold down prices in an economy that, in the US at least, is running extremely hot. Somebody who financed a rental at 2.75% five years ago is renewing at something closer to 4.75% or 5.25%. That cost goes to the tenant. The tenant has less left at the end of the month. Multiply that across the country and you have the next ten years of Canadian politics: rent, groceries, and whether anyone under 40 can buy anything. Mel made the uncomfortable point on the episode. Prices only cool when demand falls, and demand falls when people can’t afford things. In her words, what we’re trying to accomplish “doesn’t always come in the packaging of what we want.” There’s exactly one painless fix, and it’s abundance. More homes, more power, more of whatever is scarce. Every other fix is a decision about who gets hurt... Into the end of the year, The Bank of Canada will probably sit still. September jobs came in at minus 68,300, unemployment hit 6.5%, and the loonie touched an 18-month low. The odds of a hike this month fell to about one in four. That’s the good news, and it isn’t very good. Ottawa’s ban on foreign buyers of homes also expires January 1st, and the government has to decide what to do with it. The great extension In the zero-rate years, a lot of companies borrowed cheap and pushed their maturities as far out as they could. They didn’t fix anything. They bought time. Those maturities stack up from 2028 and peak around 2031. You can see where it’s cracking first. Fitch has private credit defaults at a record 6.1%. In office, 71% of the distressed CMBS balance is tied to a refinancing that failed or is about to, per CRED iQ. The buildings pay their bills and still can’t roll the loan. Telus cut its dividend 55% in July to pay down debt. Meanwhile high-yield spreads sit around 3.1%, close to the tightest they’ve ever been. Credit markets are relaxed. B ankruptcy court is busy anyway. A client moved over to us recently from an advisor holding 120 individual stocks. No one person can follow 120 businesses. Going name by name, I’d guess 30% to 40% of them were dividend payers that only work because money cost 2% or 3%. When those companies refinance, nobody is coming to rescue them. They’ll be sold for parts. So I’m running everything we own through six tests: * EBIT covers interest less than 1.5 times, or less than once on a three-year basis. * Net debt above 4x EBITDA (6x for REITs and utilities). * More than 30% of debt floating, or more than 25% maturing by the end of 2028. * Negative free cash flow after dividends, two years running. * Marginal cost of debt above return on invested capital. * Share count growing more than 5% a year, or convertibles as the main funding source. The fifth test catches the business that only makes sense when money is cheap. There are always exceptions… Debt on its own isn’t the problem. Carvana was the poster child for a broken balance sheet in 2022. Today it’s at 1.0 times net debt to EBITDA, and in August it refinanced its 9% notes into a cheaper term loan. Debt plus improving unit economics works. Debt plus a model that needs 3% money doesn’t. AI at 8%… Parts of the AI buildout run the same borrow-to-build playbook at a much higher cost of capital. The best counterargument I read came from Gavin Baker at Atreides. Anthropic’s S-1 shows roughly $413 billion of non-cancellable commitments to its four biggest suppliers. That headline number is designed to scare people instead of inform them… Spread over the life of the contracts, it works out to about $31 billion a year of cloud spending, which a company at Anthropic’s revenue can pay for itself, plus around $161 billion at Broadcom that Broadcom and private credit will fund. Most of those contracts were also signed below today’s price for compute. His bigger point I agree with completely. Expensive money is good for this buildout. We’re short power, short chips and now short capital, and that’s what keeps it from turning into a bubble. Run this cycle with zero rates, TSMC tripling its capex and turbines on every shelf, and you get an overbuild. An overbuild is the worst outcome for investors and for everyone else. Slower and longer is better. Who’s spending So where does the money that isn’t stuck refinancing go? I’ve been working backwards from one assumption. If robotics is solved within a decade, manufactured goods get a lot cheaper. If that’s right, the smart way to spend discretionary dollars between now and then is on what stays scarce. My list keeps landing on travel, the Four Seasons, golf courses and real life. For Canadians the banks are the uncomfortable part. Financials are about a third of the TSX. Stripe says more than 86% of the Forbes AI 50 use it. The fastest-growing companies in the world aren’t building on big-bank infrastructure, and our banks need to decide what they’re going to offer those companies. Some will figure it out. Some won’t, and the market will price the difference. Three provinces over three weeks Quebec voted October 5th and elected a Parti Québécois minority on about 28% of the vote, the lowest share ever for a governing party in that province. Paul St-Pierre Plamondon has promised a sovereignty referendum in his first term, though not before Trump leaves office. Alberta votes Monday. There are ten questions. Question ten, which sits first on the ballot, asks whether to start the legal process toward a binding vote on separation. Questions one to five deal with immigration, social programs and voter ID. Six to nine are about Ottawa: who appoints superior court judges, abolishing the Senate, opting out of federal programs with funding, and provincial law winning in provincial areas. Mel’s advice is worth repeating. Vote for what you actually want. Don’t vote strategically. If you want to send Ottawa a message without starting a separation process, questions six through nine are where that message goes. The surprise of the episode was how differently our … This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

Alberta filed its application for a West Coast oil pipeline on July 2nd 2026... It was designated a project of national interest this morning in Fort Mac. On Tuesday the Prime Minister stood in Vancouver and welcomed LNG Canada’s Phase 2 at Kitimat, a $33 billion final investment decision that doubles the facility and ranks as the second-largest single private investment in Canadian history. So inside one week this country said yes to a million barrels a day of oil heading south-west and a second helping of natural gas heading north-west. Meanwhile the most downloaded app in America is a robot from Meta that comes with its own computer. I called our Q3 client letter A Bridge to the Future, and after this week I think that should be changed to The Pacific Link to the future… One bridge is being built out of software and it runs through Menlo Park. The other is being built out of steel and gas turbines, and it runs from Bruderheim Alberta to Vancouvers Delta Port. MARKET Update: The Fed went on September 16th, a 12-0 vote taking the funds rate to 3.75% to 4%. First hike since 2023. The 10-year hit 5% on the 14th and was through 5.1% by the 23rd, the highest in nineteen years. That has done something strange to the market. The Nasdaq touched 27,000 this morning and sits roughly half a percent off all-time highs, but about 70% of its components are below their 50-day moving average. The equal-weight S&P, where Sherwin-Williams counts as much as Apple, is in a 17.5% drawdown. When money costs more, the companies that can raise it at the lowest spread get a tailwind and everyone else gets re-rated. The index looks fine because eight companies are fine. Underneath it, the broader economy is being repriced. I think we have a rough three or four weeks into the midterms and then a good finish to end the year… Uncertainty parks capital on the sidelines, and midterms manufacture uncertainty. Earnings have run well ahead of expectations this year while multiples contracted, which means the market got cheaper in 2026 even as it went up. The seven to nine months after a midterm is historically the best stretch of the four-year cycle. A bridge made of software Until this quarter, an AI was something you talked to. Muse is something that does things for you. The trick is simpler than it sounds. Meta gives every user their own computer, a real one running in Meta’s data centre, and the agent logs into it and works on your behalf with your calendar, your email, and your habits. An agent is just an AI with access to a computer. Before this year the only people who had that were engineers willing to wire it up themselves. Meta handed one to everybody on September 8th, and Microsoft did roughly the same thing for office workers on the 25th with a persistent Copilot agent called Autopilot that gets its own identity, memory and workspace inside your company’s Microsoft 365. An Anecdote from my life: I was sitting in the sauna with Adrianna and typed “book me a hair appointment tomorrow at Parlor Barbra.” It read my email, already knew who cuts my hair, checked my calendar and booked 3:40. One prompt. A few days earlier I asked it to sort out airport parking for a Seattle trip and it had already pulled my WestJet booking, the ninety-minute buffer and my plate number. Two prompts, fifteen seconds, replacing fifteen minutes of form filling. Then my son’s soccer registration failed on the league app. Muse flagged the email, I re-registered him, the schedule went into the calendar, and it sent the whole thing to Adrianna with a reminder to pack his socks and shoes. That last part matters more than the haircut. Mel made the point on the episode that the mental load of running a household has always been carried disproportionately by women, and the thing I noticed is that it didn’t get redistributed to me. It got lifted off both of us. Ben Thompson’s version is better than mine. He asked Muse to organize the recipes he’d saved on Instagram, and five minutes later he had a small custom app that categorized them. Nobody built that app. Nobody will ever sell it. It exists because one guy wanted it and the marginal cost of wanting is now about five minutes. His conclusion is that apps stop being destinations and become “mere suppliers,” and that the scarce thing moves from discovery to inspiration, which makes whoever owns the agent “the ultimate gatekeeper of not just user demand, but desire.” Google and Meta built the two best advertising businesses in history by solving discovery. Getting things done is about to be abundant. What stays scarce is the desire part of getting things done. Why Meta wins this even though its model isn’t the best. This is Clayton Christensen, straight out of the textbook. Once a product is good enough, the competition stops being about performance and starts being about convenience, and then distribution. Meta bet that a good-enough model inside a great product beats a great model inside a chat window. The labs with better models still do not have a consumer surface with this kind of lock-in, and there is almost nobody on earth with more distribution than Meta. It also finally explains the glasses, which were never a product so much as a delivery mechanism... The adoption numbers are worth being precise about, because I got them slightly wrong on the recording. Muse crossed five million downloads in twenty-two days per Sensor Tower. ChatGPT took fifty-six days to the same mark, Grok took 103, Claude took 492. It has held the top of the US App Store free iPhone chart for twelve straight days. And Meta has been spending its own house ad inventory on it, up to half of its daily impressions in the two weeks ending September 27th, which it has essentially never done for anything but Threads. Companies don’t put their own megaphone behind something until the retention data says it’s working. The tell that it’s real is that Amazon said no. On September 20th Amazon blocked Muse from shopping its site. Amazon’s advertising business did more than $68 billion last year, roughly double the profit of its retail operation, and an agent walking straight to checkout doesn’t look at a single sponsored placement. The next day Shopify opened checkout to Muse through Shop Pay. Walmart and Target have been backing an open agent-checkout standard with Google and Shopify. The incumbent with the most to protect pulls up the drawbridge. The challengers hold the door. That’s the same pattern as the second-place carriers signing with the iPhone, and it tells you more about where this is going than any demo. The distribution story is enormous. The bridge made of steel Pacific Link is 1,250 kilometres from Bruderheim to the coast near Delta, almost entirely along the Trans Mountain corridor, one million barrels a day, $35.2 to $43.7 billion. It is the first project listed under Schedule 1 of the Building Canada Act. Ownership lands at 45% Ottawa through Trans Mountain, 45% Alberta through the Alberta Petroleum Marketing Commission, and 10% Pembina through construction with an option on up to another 10% at commercial operation. Indigenous communities are being offered a minimum 10%, financed through the Indigenous Loan Guarantee Programs. This is not a construction approval. Yet. The Major Projects Office and the Canada Energy Regulator have until September 1, 2027 to finalize conditions covering ownership, benefits, Indigenous rights, environmental protection and local hiring. The federal government is putting its own name and its own money on the timeline, which is a different thing from a press release. Speed is the resource. Alberta is not out-competing Virginia or Texas on access to capital. Capital is the one thing the world has plenty of. What Alberta can compete on is the willingness to say yes quickly, and ninety-one days from application to designation is not a normal number on this continent. The metric to guard from here is months from application to shovel. If that number holds, everything else… This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

Welcome back everyone. Summer’s over, whether we agreed to it or not, and you can feel everyone with impact returning to their desks. It shows up in the inbox, on the timeline, and most of all in the bond market. Market Update📈📉 Warsh gave his Jackson Hole keynote and dropped the pretence: “we have work to do.” Core PCE is running 3.3 percent against a 2 percent target, headline 3.7 on oil, and the market has genuinely priced a September rate hike into play. That’s a stunning shift from March. You can see it in the ten-year, in gold, and especially in small caps, which carry the highest financing costs and get hurt first when the tail of the curve rises. IMPORTANT MARKET STRUCTURE CHANGE: While the Fed talks tough, the Treasury has been quietly running a yield-cap operation, buying down the long end of the curve, because mortgage rates ripping higher into a midterm cycle is a political problem. The Fed is actively tightening while the Treasury tries to loosen, two arms of the same government pulling against each other, and the Fed chair doing the tightening is the one Trump picked himself. And the Treasury is losing. Yields sit above where they were when the operation started. Why? Go back to the Ben Thompson question we covered two episodes ago: are we going to have enough money? For eighteen months the bottlenecks were GPUs, optics, power and the market has worked diligently toward solving each one. The new bottleneck is capital. For the first time in roughly twenty years, the hyperscalers are issuing serious amounts of debt, and per Cembalest’s new Eye on the Market piece, their 2026 issuance is about $320 billion, which works out to roughly 70 percent of all new long-duration Treasury borrowing this year. When Washington goes to raise money, it now competes with Microsoft and Google for the same buyers, and frankly, on the financial metrics, some of those companies are maybe more creditworthy than the government. That competition is what’s pushing the long end up, and the long end is what sets your mortgage rates. The AI infrastructure layer, the biggest contributor to S&P earnings growth for two years, has ground sideways to down, with many names off nearly 40 percent from the June peaks. Beating earnings and guiding up wasn’t enough: Earnings season is over and essentially all of the bottleneck tech companies beat and guided higher. It didn’t matter. When the cost of capital rises, your multiple compresses, and beat-and-raise stops being enough. The market wants perfection. Is the spending justified? The revenue says yes. Google Cloud’s backlog jumped $52 billion in a single quarter to over half a trillion dollars. AWS grew 37 percent, Azure 43, Google Cloud 82. Earnings revisions are at the high end of anything we’ve seen in thirty years. Two asterisks belong on all of it, though. First, capex and R&D from these companies went from $460 billion in 2024 to nearly $900 billion over the last twelve months, so some of the market’s earnings strength is the spending itself. Second, an unusually large share of S&P earnings right now comes from unrealized gains on stakes in Anthropic, OpenAI, and SpaceX, positions marked up from raises done at $200 to $500 billion valuations. Anthropic is expected to go public in about eight weeks at something like $2 trillion. Those are real gains on paper, and paper is doing some of the market’s lifting. My honest read: none of this is fatal. The proverbial trains are full and running on time, and demand for the railway has never been more justified. Expect a choppy six to eight weeks while the bond market finds and appropriate yield level, and remember that these rate limiters are healthy. Bubbles without governors are the ones that end in 2008. Bubbles with them tend to leave behind the railways and the fiber, the things that define the next century. I think AI ends up delivering something like the railway plus the internet combined. But from here, you have to know exactly what you own. It won’t be as easy as it was twelve months ago. Canada note: the Bank of Canada is expected to hold at 2.25 for a seventh straight meeting. Our headline CPI of 2.8 is gasoline-driven and our core is bang on target at 2 percent, so there’s no case to hike. The loonie sits at 1.39, banks don’t see a Canadian hike until 2027, and anywhere between 1.30 and 1.40 the economy is happy. Meanwhile Alberta’s Q1 fiscal update landed with oil averaging roughly $90 against a $60.50 budget assumption. As Albertans, we are on the right side of nearly every force squeezing everyone else. Why this isn’t the dot-com rerun The question every client asks: is this a bubble yet? Here’s the framework that finally made it click for me. The internet had one dimension of exponential growth: user count. Everyone paid a flat fifty or a hundred bucks a month, and using it ten times more didn’t cost ten times as much. One curve, and once penetration hit about 50 percent, it saturated. That was March 2000. AI has two dimensions which is different than the Internet/fiber era. Penetration crossed 50 percent a few months ago, right on schedule. But usage per person is just leaving the station. Median enterprise AI spend is about $12 per employee per month today. The plausible destination is around 10 percent of a white-collar salary, call it $1,200 a month. And it’s already visible: a16z said this week that their portfolio founders are running at multiples of the median. The internet stopped at fifty bucks a month. This doesn’t stop at twelve. And the unit economics of the infrastructure have changed underneath us. A gigawatt costs $40 to $60 billion to build, roughly 70 percent of it flowing to Nvidia. But look at SpaceX’s filings renting compute to the labs and the software companies: in some cases a gigawatt is generating on the order of $100 billion in revenue. Put out $40 to make $100 in a year and tell me that’s malinvestment. The usual caveat stands, all exponential growth is an illusion before the ceiling arrives. But this ceiling has an extra dimension holding it up. The backlash, and the window of opportunity The next leg of risk isn’t chips or money. It’s politics. The blanket hatred of data centers on social media is real and spreading: New York has its moratorium, Virginia is wobbling, and now Texas, the build-anything state, just imposed a temporary pause. Mel’s framing deserves to be quoted at length. This is an arms race, the first our generation has seen since the space race, and the question isn’t whether the world is going there, it’s who arrives first and captures the upside. Skepticism about water and power is legitimate, and we have institutions and regulators built to answer exactly those questions. But ask who benefits when North America blocks its own growth. It’s China, period, end of story. And a society that can be talked into fighting itself over obvious opportunities is a society that can be divided and conquered without anyone setting foot on a battlefield. Her challenge to listeners was the best moment of the episode: whenever a TikTok take hardens your politics, ask yourself whether TikTok would permit that same discourse about the Chinese government inside China. You know the answer. So why is it happening here? For Alberta, every moratorium elsewhere makes our window wider and more valuable than it was six months ago. Bring-your-own-generation, anchor tenants paying their own freight, ratepayer bills going down. We have the model. The only question is whether we defend it before someone imports the fear. CUSMA/USMCA The escalation, quickly: on August 25 Canada suspended negotiations and announced a dollar-for-dollar response to US 50 percent tariffs on $27.6 billion of Canadian exports, effective September 8, with groceries largely carved out, alongside a $7.5 billion support package. Trevor Tombe’s estimate in The Hub is worth reading carefully: the aggregate impact is small, about 2.5 percent on the average export rate, but the aggregate hides… This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

Welcome back everyone. Market Update📈📉 Start with one number that has nothing to do with AI. The 30-year Treasury hit 5.31% this week. That’s the most expensive long-term money since 2007. I was in high school the last time capital cost this much. Canada’s long bond is at levels last seen in 2010, and it’s the same story in Germany, France, and Italy. Everywhere you look in the developed world, the cost of borrowing for thirty years is breaking out, and it’s happening at the exact moment the biggest companies on earth need to borrow more than any group of companies has ever borrowed. You might assume these companies are so rich it doesn’t matter. That’s no longer true. On top of the capex you can see on their income statements, nine large tech companies are carrying roughly $3 trillion in commitments that don’t show up on their balance sheets, most of it tied to AI and much of it longer-dated than people assume. Notably, on the calls this quarter, the CEOs themselves stopped comparing this moment to the dot-com era. They compared it to the railroads. Ben Thompson was on Invest Like the Best this week and said a thing I haven’t been able to stop thinking about since. Everyone argues about whether we’ll have enough compute or enough electricity. He thinks the harder question is simpler: are we going to have enough money? For three years the market has treated capital as infinite and chips, power, and memory as the bottlenecks. Each of those has been a bottleneck. But watch the walk down the capital ladder. First the buildout ran on big tech’s cash flows. Then it moved to debt and off-balance-sheet structures. Now Nvidia is partnering with Apollo, Brookfield, Blackstone, and KKR on a $500 billion vehicle to reach into pension funds and insurance floats, the deepest and most conservative pools of capital on the planet. To get that money, the private equity shops have to underwrite data centers like real assets: how long do they run, what cash do they throw off, what’s the honest depreciation schedule. And Nvidia effectively had to underwrite its own CUDA moat to give them the confidence to do it. Which brings us back to the railroads… In the 1870s the world literally ran out of money mid-buildout. Nearly every railroad went bankrupt, many more than once. BUT, the trains kept running. The railroads opened the West and powered the economy for a century and a half. The technology worked and the investors got wiped, at the same time. The great returns on the rails didn’t really show up until Buffett started buying them a hundred years later. The returns on this buildout need to show up a lot sooner than that, or we’re in for a world of hurt. So is there real revenue? Yes, and the numbers are hard to process. Anthropic is running at roughly $65 billion in annualized revenue and is expected to go public within about ten weeks. They believe they exit this year at $100 billion or better, and there are credible investors who think $400 to $500 billion by the end of 2027 is on the table. If the data centers are the railroads, Anthropic and OpenAI are the biggest trains on the track, and the freight is real. One more distinction: a data center is really two businesses. * Training, done on the newest chips, is a loss leader. You can’t sell a training run. * Inference, serving your prompts, is believed to carry margins in the 90s for Anthropic. The training bill is why the leading labs are barely profitable despite those inference margins. And that explains the strategy underneath the open-source push. The hyperscalers don’t want to spend trillions building infrastructure only to serve two customers who keep all the margin. So Nvidia, Meta, Google, and Amazon are backing open-weight models, Kimi K3 and Muse Spark among them, that now run three to six months behind the frontier. Their goal is to compete the frontier labs’ margins down and pull that profit back toward the infrastructure layer. That’s a healthier market, and it’s why the picks-and-shovels names have rallied so hard these past few weeks. Canada, America’s farm team: Mel’s segment this week deserves your full attention. Her opening argument was blunt: “Canada does not have the leverage it thinks it does, and the longer we spend beating our chest, the longer we delay fixing our own house.” Trevor Tombe’s piece in The Hub made the rounds as a good-news jobs story, complete with a victory lap tweet from the Prime Minister. However, if you read the actual article the employment gain was within the survey’s margin of error, and Tombe’s real conclusion was that Canada is returning to normal growth “along a permanently lower path.” Our peer countries grew about 1.7% while we contracted. Mexico, heavily exposed to the same US trade risk, outgrew us. So did the EU. So did post-Brexit Britain. With commodity prices this friendly, that’s not bad luck; that’s just horrific policy choices coming to bear. Canada has become the farm team for the American economy. There are now 517 US-based companies with Canadian founders that have together raised $414 billion. Fifty-six of them are worth more than a billion dollars each. That’s roughly the size of our entire federal budget, built by people we educated and then lost. And it’s not an accident. The Americans built a conveyor belt for our talent: the Thiel Fellowship and 1517 Fund for high schoolers, Neo Scholars and Emergent Ventures and YC’s apply-and-defer for students, the Founders Fund residency and SPC for new grads, then Y Combinator and the a16z speedrun. Each rung lifts a kid from Waterloo or the U of A up and out, funds them, houses them, and celebrates them. We spend twenty-five years raising a great entrepreneur, and then they pay taxes in Delaware, California or Texas. Part of this is culture… We have no better country on earth in which to be average, and I mean that as a genuine compliment. But we treat the top one percent as the enemy, and they are listening. Mel put it well: “nobody’s asking you to bring out the violins for millionaires, but a good start would be to get off their necks.” The Fraser Institute’s new study says the average Canadian family now spends 42% of its income on taxes, more than housing, food, and clothing combined, and the tax bill has grown faster since 1961 than any of them. If we want the infrastructure, the services, and the rising standard of living, we need the people who pay for it to want to stay. Elbows up is a privilege. It means you’re already post-economic. The people still trying to build don’t have that luxury. The new status symbols We closed on a lighter thread that I think is a real investing signal. The perfectly curated life is dead as a status marker. When everyone’s kitchen is Instagram-ready and anyone can buy the bag, its no longer signal... That has become a base case. We should watch what’s replacing it: refinished shoes instead of new ones, thrifted furniture, and increasingly, not posting at all. Mel’s list of the new status goods was better than mine: muscle you visibly worked for, clear eyes and real rest, the ability to sit still with a book for an hour, a family, and the quiet flex of not needing a job. (agree to disagree on this one) My wife and I have been watching Cape Fear on Apple, the Scorsese production with Javier Bardem and Amy Adams. Best show I’ve seen in a year. But the moment that stuck with me was Adrianna saying she loved how Amy Adams looks because she looks real. Six months ago we watched a Nicole Kidman movie and her comment was that nothing in her face moves. When the tastemakers start prizing real over done, that eventually shows up in earnings, the same way new entrants showed up in Lululemon’s and Nike’s numbers. Hollywood is still how America exports its culture, and culture is where consumer trends are born. Keep an eye on the aesthetics-procedure complex. The volumes may quietly tell the story first. New episodes every two weeks. Keep learning, keep earning, and keep investing. Podcast & YouTub… This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

Welcome back everyone. Two weeks ago I wrote that Thursday was a warning, not the flush. The flush coincidentally came with a face and a situationally ironic name. Leopold Aschenbrenner and his Situational Awareness fund. Market Update📈📉 The AI trade compressed for five straight weeks, names down 40, 50, 60 percent from their highs in a straight line. Meta was down 10 percent on the year at the lows, Microsoft down 20, Amazon and Google flat while the Nasdaq held up 13. The proximate cause was sitting in plain sight: the Nasdaq topped the day of Kevin Warsh’s first FOMC meeting. Long-term inflation expectations barely moved, but real rates, the way markets price long-duration assets, jumped about fifty basis points. Warsh is a balance-sheet hawk. He wants the Fed out of the mortgage and long-Treasury market, less forward guidance, and real price discovery. The longest-duration trade in the market, the AI buildout, paid the toll first. Meanwhile, for the first time in a year, the index’s built-in AI hedge failed: the capex payers got punished and the capex receivers didn’t rally enough to catch the tape. Then came the capitulation event. Situational Awareness, one of the most followed AI-concentrated funds in the world, blew up. Roughly $46 billion of equity levered about three times, north of $125 billion of gross exposure, concentrated in exactly the photonics, memory, and GPU capex-receiver names that had been cut in half. When your book drops 50 percent on three turns of leverage, the banks don’t wait. Ken Griffin flew back from Monaco for a day, bought the public equity book for somewhere between $20 and $30 billion depending on who’s reporting, and flew back to his vacation. One of the largest hedge fund bailouts in history, done between dinner reservations. Forced selling from a leveraged whale is the kind of thing that marks bottoms, and so far it has. The capex receivers have rebounded hard. Microsoft went from down 20 on the year to up five. Meta recovered. Amazon just became the fifth $3 trillion company on earth after an incredible AWS quarter. And in the great rotation tell, Apple, which spent a year as the safe haven for people who wanted tech without AI, gave the crown of world’s most valuable company back to Nvidia. Here’s why I think the rebound has fundamentals under it rather than just short covering. GPU rental prices have doubled in the past year. If these were bad investments being depreciated into a glut, the rental market would be telling you. Instead the infrastructure is in such demand that the hyperscalers are demonstrably under-earning on the assets they already own. Microsoft and Amazon’s quarters showed real return on the cloud investment, and the frontier labs are doubling revenue every six months. We’ve never watched businesses go from startup to a hundred billion of annualized revenue this fast. The market is having a genuinely hard time valuing it, and the next test comes when OpenAI and Anthropic hit the public markets, likely around year-end. The market is once again believing the spend is justified. Volatile bottoms don’t mean the volatility is over. But the burden of proof has flipped back onto the bears. No influencers allowed A basket store on Nantucket hung a sign that says “No influencers,” and Mel and I spent longer on it than we planned, because it’s secretly a markets story. Scarcity is the oldest luxury strategy there is. Rolex runs it, Hermes runs it, Porsche runs it, and now an expensive basket shop is running it against the very people who normally manufacture demand. When access gets democratized, exclusivity becomes the product. You’re seeing the same physics in collectibles, where a PSA-10 grade takes a $500 Charizard to $45,000. Authentication, uniqueness, and real-life experience are becoming the scarce assets in an economy of infinite reproduction. It’s why I keep a long-term bucket in portfolios for real-world experiences, the Four Seasons and airline-travel end of the consumer. It’ll never be as sexy as the picks-and-shovels trade. It also never has a Situational Awareness moment. The West, and the rest Mel’s framework this episode is the one I’d ask you to sit with. The left/right spectrum you grew up with, mostly an economic argument about markets versus intervention, is dead as a map. The axis that actually predicts where politicians land in 2026 is this: do you believe Western civilization is worth defending and improving, or do you believe it needs to be dismantled for something presumed better? Data centers, pipelines, billionaires, even the Billy Bishop airport fight all sort cleanly along that line, and almost none of it sorts along the old one. Her sharpest point was about the scarcity loop. An abundance mindset says the pie grows; when someone else wins, that’s evidence you can too. What a chunk of our politics runs on instead is a grift cycle: make people fearful there isn’t enough to go around, pass policies that ensure there isn’t, offer the state as the solution, collect the votes, repeat. After enough cycles, people stop believing the private sector can deliver anything, which makes the state more necessary, which makes the pie smaller. Scarcity is a policy choice. So is the exit. WestJet, and the party that walked away The WestJet strike resolved into a tentative deal, but the political tell stuck with me. The Trudeau Liberals spent a decade courting unions. This Liberal government watched 4,400 flight attendants shut down summer travel over unpaid ground work and had essentially nothing to say. Not intervention, not support, just indifference. Mel’s distinction matters here: the old Liberal enthusiasm was mostly for public sector unions, which grow the state, and about 30 percent of employed Canadians now belong to a union of some kind. When public sector compensation stops involving trade-offs entirely, you get what she called a hostage situation rather than a negotiation, and the public’s sympathy erodes. Ask the postal workers. The deeper irony is the one we keep hammering: the biggest thing happening for blue-collar wages in this country right now is the data-center and megaproject buildout, and the party that historically claimed those workers is ambivalent about both the projects and, apparently, the picket lines. The workers have moved. The parties haven’t caught up. Alberta, it’s time to build 🏗️ This week I published the longest thing I’ve written this year, and it’s the piece I most want you to read and share. It makes the case that Alberta is about to run the last great cycle of the old energy economy and the first great cycle of the new one, simultaneously. The short version. On July 2, the Prime Minister and the Premier stood together and announced a million-barrel pipeline to the coast. Six days later Meta committed $13 billion to a one-gigawatt data center in Sturgeon County, its largest anywhere outside the United States. The pipeline is the biggest version of Alberta’s hundred-year-old model: pull energy out of the ground and ship it somewhere else to become valuable. The data center is the first serious version of a new model, where the gas stays home and gets refined into the most valuable commodity on earth right now. A data center is a token refinery. It converts BTUs into intelligence and sells it globally at software margins. The piece walks through the gas math (every gigawatt of gas-fired data center load is roughly 0.16 bcf a day of new, flat, creditworthy, in-basin demand, the structurally better customer AECO has waited decades for), why one campus becomes five (hyperscalers copy each other’s site audits, and Alberta just passed Meta’s), the TSMC-Phoenix precedent ($12 billion became $265 billion and forty follow-on projects), the Strathcona County tax lesson (industrial assessment is why Sherwood Park pays 30 to 45 percent less property tax than comparable cities, while Edmonton households just absorbed a 29 percent increase in four years), and who actually gets… This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

Welcome back everyone. Market Update📈📉 For most of the past year the index has carried an almost built-in AI hedge. When hyperscalers raised capex, the companies receiving the money rallied, because the spending became their revenue. When hyperscalers hinted at spending less, their own stocks rallied on better free cash flow and more room for buybacks. One side could get hurt, but the other side caught enough of the money to stop the index from falling far. That arrangement made SPX remarkably hard to push down, and it’s why all the violence underneath kept disappearing at the index level. Thursday was the first time that hedge failed. Alphabet reported good operating numbers and raised 2026 capex guidance again, to $195-205B. Free cash flow came in at negative $5.9B for the quarter, and the stock fell 7%. The payer got punished, and the recipients didn’t rally enough to replace it. The old reflex of buying anything that might receive a dollar of hyperscaler capex was nowhere near as reliable. The largest index weights fell, and the hedge on the other side was too narrow to hold the whole thing up. Nasdaq dropped 2% while Brent pushed through $100 and the 10-year traded above 4.7%. Alphabet wasn’t the first warning, just the first one big enough to matter at the index level. Over the prior two weeks, ASML, TSM, Texas Instruments, MaxLinear, Intel and BE Semiconductor all traded lower despite beats or raised guidance. Intel reported a blowout quarter Thursday night and the market yawned. Markets don’t top on bad news. They top on good news, when people stop paying attention to it. Friday bought time without fixing anything. Reports of possible US-Iran talks knocked Brent back down, yields eased, and SPX finished flat. Nasdaq still closed down 1%, so the market didn’t rediscover its love for AI. Macro pressure simply eased. Even the support looked defensive rather than bullish: Apple outperformed by nearly 5%, and names like AT&T had their best week relative to the market in decades. My read: Thursday was a warning, not the flush itself. Where the money is going Money is never destroyed in a momentum unwind. It flows somewhere else. Right now the tell is real yields, which are breaking out globally: the US, France, the UK, Bunds, JGBs. The price of money is rising, and investors are rotating out of long duration, the stocks priced to perfection and to grow forever, into financials, energy, REITs, insurance, and select healthcare. It rhymes with the pre-GFC regime, when fundamental compensation for risk actually started to matter again. The macro backdrop explains why. Kevin Warsh’s Fed is facing three inflation drivers at once: relentless AI-driven demand for equipment and electricity, a reignited tariff regime, and a re-emerging energy shock out of Iran, with shipping lanes blocked, the SPR largely depleted, and Brent above $100. I think the market is underappreciating the risk of a hike as soon as this week. I don’t expect one, because Warsh still appears to view the energy shock as transitory. Which, again, is a dangerous word. Semis are deeply oversold and violent bounces are coming. The momentum playbook says you sell into them. Dimon is playing a different game than you are… The headline of the week was “Jamie Dimon says don’t buy stocks,” and most investors read that as sell everything. Listen to the actual interview and he said “I don’t like prices today,” which is not the same statement. CEOs steward capital on time horizons that have nothing to do with yours. The last time Dimon made headlines like this was 2022, before the Fed hiked 500 basis points, and he wasn’t calling a top then either. He was describing risks to a bank that will outlive him. Meanwhile JPMorgan just broke out of an eighteen-month base to all-time highs. Your portfolio doesn’t care about headlines, and neither does he. Follow your own process. Data centers are the new pipelines At home, Canada has said almost nothing on AI policy while the two superpowers set the rules. Mel’s reframe on the podcast stuck with me: Carney isn’t silent by accident. He has no political incentive to touch it. He doesn’t win that argument with investors, and he doesn’t win it with the public. So the conversation doesn’t happen, and the comment sections under every Edmonton data-center headline supply their own answers. I’m having the same reset conversation at men’s league golf and in client meetings: intelligent, well-meaning people convinced these buildings are the devil. We did the same thing with pipelines for 35 years. Bad communication became bad policy, and the economy paid for it. The tariff file makes the stakes plain. CUSMA didn’t get renewed, so the agreement now faces annual reviews instead. Trump’s threatened 50% tariff on certain Canadian goods hits BC (13.7% of its US exports), Quebec (10.8%) and Ontario (9%) hardest, per Trevor Tombe’s estimates. Alberta: about 1%. The likely next step is pressure on Alberta to tariff energy exports, the only lever that actually bothers Washington. Expect that to go over poorly in a province that has spent 25 years giving more to Confederation than it gets back. The saving grace: natural gas Here’s the positive note I’ll close on. US electricity demand is rising far faster than supply, natural gas production can’t keep up, and the political will to build nuclear at scale isn’t there. Sometime before 2030, I think the Americans won’t ask for Canadian natural gas. They’ll demand it, pipeline and all. Alberta has quietly built the blueprint: infrastructure ready for data centers, abundant gas, and a likely surplus this year with oil trading nowhere near the $56 the province modeled. The US spent 20 years as an energy exporter. That era is ending, and we’re the obvious solution next door. New episodes every two weeks. Keep learning, keep earning, and keep investing. Podcast & YouTube Recommendations🎙 * One of my favorite podcast episodes from ILTB: * We’re not the biggest All-In fans but i really liked this perspective from Friedberg * A great listen if you’re interested in better understanding datacenter + Frontier Lab economics This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

Alberta is so back. Stampede wrapped, and while the rest of us were nursing a ten-day social hangover, Alberta quietly had the best economic week it’s had in a long time. Four announcements, potentially more than a hundred billion dollars of investment if they all land. For the first time in my adult life, this province is about to build the entire stack: pull energy out of the ground, use it to make something the world wants, sell that, and tax it right here. Let me start with the one that matters most, because it’s the one people are complaining about. The data center comes to the energy On Wednesday last week, Meta announced a thirteen-billion-dollar data center in Sturgeon County, about an hour northeast of Edmonton. Its first in Canada, its thirty-third globally, and its largest anywhere outside the United States. Put one gigawatt in perspective. The entire city of Edmonton, every house, every hospital, every rink, runs on about 1.4 gigawatts. This one campus, roughly the size of 33 CFL fields, will pull close to two-thirds of what the whole city next door uses. The incoming script: Community meetings… angry residents… “Big Tech is going to spike my power bill.” Giant new load shows up, prices go up, Econ 101. Except the data mostly says the opposite, and it’s worth understanding why. A power grid is a fixed-cost machine. You pay for the transmission lines, the substations, the transformers whether electrons flow through them or not. Across a full day, most grids run at maybe 55 to 60 percent of capacity. A data center runs at 90 to 95 percent, around the clock, every day. It’s the customer who buys a seat on every single flight instead of leaving half the plane empty. Fill those seats and the cost per seat falls for everyone. EPRI, about the most sober outfit in the industry, found that for every 10 percent bump in data center capacity in a state, residential rates fell about 0.4 percent, and in the states that grew capacity fastest, bills came down around 6 percent. Then there’s the fiscal side, which is the fun part. Loudoun County, Virginia, is the densest cluster of data centers on Earth. They sit on about 4 percent of the commercial land and throw off 38 percent of the county’s general-fund revenue. Loudoun has cut its residential property tax rate every year for a decade, from $1.145 down to $0.805 per hundred dollars of value. A 2026 analysis found that without the data centers, that rate would nearly double, roughly $5,800 a year for a typical homeowner. If you live in the Edmonton region, you already understand this intuitively. It’s the same reason Strathcona County homeowners pay less: the refineries carry the bill. Server racks are about to do the same thing for Sturgeon County. Here’s what Mel rightly kept flagging. The legitimate criticism of US data centers is cost allocation. When a hyperscaler plugs into an existing grid and the utility builds new generation to serve it and socializes that cost across everyone’s bill, ratepayers really can get hurt before the benefits show up. Alberta solved that. The province lets data centers generate their own power, and it structured the tax so that if you draw from the grid you pay more, and if you bring your own generation you pay less. Meta isn’t showing up to drink from the existing pool. Pembina, Morgan Stanley Infrastructure Partners, and Kineticor are building the Greenlight Electricity Centre right next door: 932 megawatts of new gas-fired power, $4.6 billion, permitted to double. New load, new supply, financed by the customer. The subsidy fight poisoning these projects in Ohio and Georgia basically doesn’t exist here. And the talent piece is the part outsiders miss. I’ve heard genuine horror stories about how hard these things are to build in the US, because the electrical systems are brutally complex and the skilled trades are stretched thin. Albertans are unusually good at exactly this. Drive north to Grande Prairie, Fort McMurray, Cold Lake, or walk the refineries around Edmonton, and you’re looking at some of the most complex energy systems on the planet, built and run by people who do this for a living. Meta figured out it can build a state-of-the-art closed-loop, liquid-cooled facility here, with more consistent power, for something like half what it costs in Texas. If they can do it for thirteen to twenty billion instead of double that, I can genuinely see a path where they build ten of these. So how do you actually make money on it? A friend asked me the obvious question: how do we invest in this? And the intuitive answer, “just buy Meta,” is probably the wrong one locally. Everybody races to the hyperscaler at the top of the stack. The value you can actually reach shows up at the bottom. The electrical contractors who wire these things. The land developers. And above all, the power. Meta and the next nine tenants can’t always build their own generation, which means power purchase agreements, which means the companies that can sell them electricity, whether that’s natural gas, wind, or solar, just found a twenty-year, investment-grade customer. Watch the merchant power names and the midstream players like Pembina, who just found a growth vertical that has nothing to do with pipeline-egress politics. And it’s not a coincidence any of this landed in the lowest-taxed province in the country. The pipelines: Two pipelines hit the table this week. The big one is the West Coast oil line. On July 2 Alberta submitted it to the federal Major Projects Office, and the news that mattered was a private proponent: Pembina, taking a 10 percent economic interest with the option to go higher. It’s a million-barrel-a-day line from the Edmonton area to the BC coast, and it lays on the Trans Mountain corridor for most of its length(85-90%). Notably, it’s a southern route, not the shorter northern one that would sit closer to Asia and take bigger tankers, because the northern tanker ban is not going away. Carney has said as much. We should hear by October 1 whether Ottawa lists it as a project of national interest, with shovels possibly in the ground by late 2027. All of it plays out against an Alberta referendum on October 19. The second line, a proposed Alberta-to-Ontario route announced July 6, is still at the ideation stage. I wouldn’t put a number on its odds. It reads less like a construction plan and more like a signal: provinces cooperating, “build in Canada, stay in Canada,” which is a pointed message from a UCP government that critics love to call separatist. Talk to politicians and the public and everything sounds fantastic. Talk to the people who actually allocate capital to mega-projects, and the needle has barely moved. Because the fundamentals haven’t changed. The tanker ban is still there. The C-69 consultation uncertainty is still there. The carbon tax is still there. What changed is that we have a Prime Minister personally willing to champion a project. And that’s the risk hiding inside the good news. When one individual, through his own leadership, is making the exceptions and pushing the project through, you still don’t have a framework. You have a man. If Mark Carney weren’t Prime Minister, Canada would not be in a structurally better position than it was under Trudeau, because the institutions that would give an allocator certainty still don’t exist. It rhymes, uncomfortably, with investing in a jurisdiction where the rules depend on who’s in the chair rather than what’s written down. It’s good news. It’s real. But you can’t run a resource economy on catching a few project interests once a decade because the right person happened to be in office. The work of locking in durable investment certainty is still ahead of us. The tape, and the geopolitics underneath it The market gave us a perfect illustration of where AI is in its cycle. Meta launched “Meta Compute,” selling its excess AI capacity against AWS, Azure, and Google, and the stock popped more than five percent. But the same headli… This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

Two weeks ago I sat in this chair and told you to stop arguing about whether AI is a bubble and watch two things instead: the bond market, and the war in the Middle East. We got our answer for both. So let’s grade the tape - starting with the one that should humble every expert who opened their mouth this spring, including me. The humble pie nobody’s eating For four months we had a shooting war with Iran. For 90% of it, the Strait of Hormuz was effectively closed. A fifth of the world’s oil moves through that strait, and in the eyes of basically every energy analyst alive it’s the single most important piece of infrastructure in the global economy… And every single person in the energy market had the identical opinion. Oil’s going to a hundred and twenty, maybe a hundred and fifty. Inflation shocks everything. Batten down the hatches, the Nasdaq sells off twenty-five percent. It was unanimous. None of it happened. This past week tankers started transiting the strait again, Iran is winding down the closure, they’ve signed onto a memorandum of understanding — and instead of oil staying high, it collapsed back to roughly five to seven percent above where it sat before the first missile flew. WTI is down in the seventies. After all of that. A war, a closed chokepoint, a quarter of the year with twenty-plus percent of global energy trade taken offline — and crude is basically flat on the year. Nobody is doing the postmortem. Nobody is eating the pie. So let me eat mine, because being wrong in public is the only honest way to get better. I was sure energy stayed higher for longer. I was wrong. Why? Three reasons: One — China drew down its own inventories instead of panic-buying. They had far more in reserve than anyone modeled, which tells you how little we actually know about how other countries operate. Two — China could flex its demand down. Their build-out of EVs, electrified transit, and solar has quietly made oil far more elastic than the textbooks assume; the idea that price has to stay high for long is now genuinely in question. Three — dark transits. There is a whole shadow logistics system moving barrels outside the view of the people who price this stuff, and it’s bigger than anyone admits. Put those three together and you have the only real explanation for why every commentator got it wrong. The part that matters for your portfolio: a meaningful chunk of that Chinese demand reduction in transport is going to be permanent. That’s not a wartime blip you get back. That’s a structural dent in the long oil story. Separate Alberta’s very real cyclical windfall from the secular demand picture — they are not the same trade. Warsh changing the feds math while everyone watched the war Kevin Warsh ran his first meeting as Fed chair, and he is a more hawkish animal than Powell — which is gloriously ironic, because he’s exactly who Trump pushed for. Two things came out of that meeting. First, he told the market he doesn’t love dot plots and isn’t going to telegraph the next three moves. Markets hate uncertainty, and they let him know it. Second, and bigger: he made clear he’s not cutting this year. The market repriced instantly — from pricing a possible December cut to roughly two-thirds odds of a rate hike in September. That is a massive move in the discount rate sitting under every equity attached to the USD. That happened Thursday. Everyone went on vacation. We came back to two red days, the Nasdaq and S&P each down one to two percent, and a market that had been up ten, twelve, thirteen percent on the year handed back a third of it to sit around seven or eight. A Canadian wrinkle I can’t ignore. A Fed that’s cleared out 2026 cuts and is flirting with hikes bleeds straight into us. I was poking through realtor.ca data for fun, and inventory is climbing across the country — including here in Alberta, in Calgary and Edmonton, the fastest-growing part of the country. This housing market cannot handle rate increases. Ontario and BC certainly can’t. Which brings us to the thing that genuinely annoyed me this week. The condo bailout, and the courage we don’t have On June 18, Mark Carney and BC Premier David Eby cut a deal. There are thousands of finished condos in BC sitting empty — over two thousand units — as demand cooled with slower population growth, and the developers who built them are staring at insolvency. So Ottawa and the province are co-funding a package north of three billion dollars, roughly split between them, to buy those condos at their list prices and convert them into affordable housing. Mel’s take was sharp, and I think it’s the right starting point. Why are we intervening at all? When demand falls, price is supposed to fall with it. That’s the whole mechanism. Let the market clear these units at a lower number, and if government wants affordable housing, take the money and build it. Instead we’re rescuing a sector at list price. Her deeper point cut harder: this is preservation, not progress. An outsized share of Canada’s economy is real estate and everything stapled to it, the wealthy and the older cohort are heavily invested in keeping those values up, and protecting them is politically expedient. We have a brilliant economist running the country who surely understands supply and demand — but apparently those laws get suspended for the one golden-goose industry nobody wants to touch. She called it a failure of political courage, and the line that stuck with me: be the one who decides, or stop pretending you can’t. I pushed back, because I’m more sympathetic to the occasional bailout than she is, and here’s why. Force a fire sale and you don’t just punish wealthy developers — you wipe out the contractors, electricians, drywallers, and painters underneath them who only get paid if these projects get made whole. Let the majors fail and you send a signal that Canada isn’t investable, that cap rates need to double, and that contagion can run from condos into the entire commercial and industrial real estate complex. Central bankers — and Carney is still one at heart — look at this through 2008 and 2009 and refuse to risk a run. I understand that instinct. But Mel’s rebuttal landed. If we care this much about the jobs in this sector, why don’t we extend that same care to the natural resources workers we’ve ignored for a decade — workers who, conveniently, don’t swing ridings in the GTA and Vancouver? A central banker’s job is to read the room and pull the levers available. A leader’s job is to change the board. Carney is one of the few people on earth who could actually change the board, and he’s choosing to defend the old one. Europe 2031, and the choice in front of Canada Europe just moved to block US big tech — Microsoft, Amazon, the hyperscalers — from selling software into government agencies, a de facto rejection of American influence dressed up as driving homegrown innovation. And it’s framed perfectly by a piece making the rounds called Europe 2031. It’s a fiction story of two characters living out a a five-year scenario. Its written by serious EU AI-policy people as a warning. The setup: January 2025, DeepSeek’s R1 drops, Nvidia falls twenty-odd percent, memory names down thirty, photonics down forty to fifty, and Europe takes a victory lap — see, AI is solved and cheap, we don’t need America’s hundred-billion-dollar data centers, we’ll buy intelligence on the discount rack. Then the gap doesn’t close. It explodes. By the end of the story the US runs seventeen times Europe’s compute and hosts eighty percent of the world’s AI capacity, because Europe bet that compute was a commodity and that “sovereignty” would make it stronger. It made it weaker. The instinct to reject the technology became the cause of its irrelevance. The piece names Canada explicitly, and this is the part that scared me a little. It lists the middle powers who actually hold leverage, the ones sitting on real bottlenecks. The Netherlands has ASML, the only company on earth that builds t… This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

For three years the only question anyone asked me was whether AI is a bubble. Is it real, who wins, what inning are we in. I’ve been saying inning three or four the whole time, and I’ll say it again. But it’s the wrong question, and last Friday’s tape is the reason why. Here’s the better one. Where is the money actually flowing inside all of this, and what happens to every high-flying name if the bond market becomes the story? The jobs report nobody wanted Last Friday the US printed a jobs report that was too good. Stronger hiring, plus upward revisions to the prior two months that pushed the three-month average to its highest since early 2024. Job openings reversed from shrinking to growing. That’s a hot economy. For two and a half years the market has priced one thing: rate cuts. Money was going to get cheaper. Friday said the opposite. When the cost of money goes up, the multiple you’ll pay for long-duration, high-beta, fast-money stuff comes down, and that’s exactly what AI momentum names are. The compensation you demand for risk has to rise with the risk-free rate. So the two-year Treasury broke out to a fresh twelve-month high, the ten-year sits at 4.57%, and stocks sold off hard. Down two and a half percent on Friday, with more bleeding into this week as we await todays inflation data. All of it is happening with a Fed in the middle of a leadership change, a President running a war in the Middle East, an inflation mandate he hasn’t delivered on, and a midterm cycle bearing down. That’s a lot of headwind in one frame. Sit with how stark the shift is. The market spent two years rewarding one kind of positioning, and the regime just flipped under everyone’s feet. There’s a Canadian wrinkle I can’t ignore. If the data stays hot and the Fed can’t cut, the Bank of Canada can’t comfortably cut either, and we are not in the same economic shape. The US is running hot. Europe is choking on input costs. Most of Canada outside the export-heavy West already looks like it’s in a recession. The exception is Alberta, where oil above eighty dollars has handed us the leverage we’ve wanted for a long time. I’ll be honest. As an Albertan, I haven’t had this much fun investing in eighteen months. That’s an uncomfortable thing to say when a lot of the country is hurting, but it’s true, and that divergence is going to define the next year. The math says don’t buy stocks. The history says buy the right ones. Now look under the hood. The ten-year yields 4.57%. The S&P’s earnings yield is 4.56%. Those are the same number. On the classic risk-adjusted math, why would you own stocks at all? You’re not being paid to. This is where everyone needs to understand one piece of research, because it reframes the whole thing. Hendrik Bessembinder studied 64,000 global stocks over thirty years, a window that includes the dot-com bust, the financial crisis, and four recessions. Every bad thing that’s happened in my lifetime is in the data. What he found is that one to two percent of stocks generated all the net wealth created above Treasury bills. The other 98 or 99 percent, added together, netted out to roughly the return on T-bills. Somewhere between 55 and 57 percent of stocks actually underperformed T-bills over three decades. Bring that down to the S&P 500 and the point gets sharp. Out of five hundred names, maybe ten or twelve do the real work. If you don’t own them, you didn’t just lag. You got wrecked for all the risk you took. And the cruel part is those names are usually the controversial, hard-to-hold ones. The last few years it was easy. Apple, Microsoft, Amazon, Alphabet, Meta, Tesla, Walmart. The next thirty years won’t be the same companies. But I’d bet my house the shape is identical. One or two percent of the names deliver the entire prize. If you won’t invest into where the paradigm is going, you miss it. Full stop. The IPO supercycle, and the lie about it draining the market And the paradigm is going public. Over the next six to nine months we get Anthropic, OpenAI, Anduril, and Stripe, the biggest private payment processor on earth. SpaceX prices this week. Google just raised eighty billion in equity anchored by Berkshire. The greatest entrepreneurs of the last fifteen years are all reaching for liquidity at once. So much for “sell in May and go away.” The people who make their living raising capital can’t go anywhere this summer. The question every client asks me: won’t all these IPOs suck the money out of the market and trigger a correction? It’s the intuitive fear, and it’s wrong. Here’s why. The largest pools of capital on the planet, the Fidelitys and T. Rowe Prices and Manulifes and Sun Lifes, mostly have no mandate to own private companies. Where they can, it’s capped around 15 percent. They were locked out of Anthropic, locked out of SpaceX, locked out of the best compounders of the decade. Once these names are public, those funds have to allocate. That’s where the bid comes from. The global equity market is north of a hundred trillion dollars. It can absorb four hundred billion in new equity without blinking. If there’s a problem, it’s a short one. Think about what that liquidity does on the other side. Ask which Canadian city has minted the most millionaires recently and the answer is Ottawa, because of Shopify. The stock went from a sub-billion valuation to the second most valuable company in the country and turned a generation of early employees and investors into a tech hub’s worth of capital. Now run that forward across the zip codes where SpaceX, Anthropic, OpenAI, and Anduril live. That’s the American flywheel. Liquidity creates wealth, wealth funds the next wave of founders, and the cycle compounds. SpaceX: the $1.8 trillion magic trick Which brings me to SpaceX, where I’ll disclose up front that my firm, RBC, is one of the underwriters. They’re raising roughly $75 billion at a $1.77 trillion valuation, $135 a share, listing on the Nasdaq this week under SPCX. That raise is triple the size of Alibaba, the previous record. It’s the largest IPO in history, and it came in double-subscribed. Finding the capital was never the problem. Is $1.8 trillion outrageous? Of course. But read the prospectus and it gets funny. SpaceX claims a $28.5 trillion total addressable market, the largest TAM in human history. And that number is the whole tell about how Musk works. There are three businesses stapled into one ticker. Rockets, Starlink connectivity, and xAI-plus-X, and yes, X is Twitter. The Twitter business is a dumpster fire. xAI, for all practical purposes, is a dumpster fire. Before Musk merged them in about six months ago, the core was profitable. Fold xAI and X back in and you get a negative-cash-flow company posting a $4.9 billion loss on $18.7 billion of revenue. So why do it? Because rockets and Starlink are only about six to ten percent of that headline TAM. The other ninety-plus percent is “AI,” and the valuation of AI right now is, conveniently, infinity. Here’s the part where I’ve changed my mind on the man more than once. Musk’s actual superpower isn’t engineering. It’s that he never forgets his first job as a steward of capital is to make his investors money. He bought Twitter for $25 billion when Biden’s regime more or less forced his hand, pulled his closest friends in to fund it, and three years later that albatross gets merged into the hottest IPO ever. His backers get their liquidity through SpaceX. Along the way he built Colossus, the biggest data-center and chip-manufacturing project in the US, and used it to expand his story from a $2 trillion space-and-connectivity TAM to $28.5 trillion. That’s not signaling. That’s the discipline of putting returns first, and he’s the best in the world at it. Mel’s frame on this is the one I want people to sit with. For fifteen years a chunk of society convinced itself that if we just clicked our heels and thought about capitalism differently, we could rewrite the rules. We can’t. The person who makes the gold makes t… This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

Welcome Back. Three meetings shaped the last two weeks. Each one looks like a different story. Each one is actually the same story. The first was Donald Trump inside the Zhongnanhai - the inner compound of the Chinese leadership. Only three other sitting U.S. presidents have ever been invited in. The second was Mark Carney and Danielle Smith shaking hands on the West Coast pipeline framework, with an October 1 target to designate it a project of national significance and a stated goal of 8 million barrels a day of export capacity by 2030. The third didn’t happen in any one room - it happened in courthouses across Texas, Florida, Oklahoma, Ohio, and Alberta, where county after county is now ruling against the build-out of AI data centers. That third story is the one most people are missing. Data centers are unquestionably the most politically cancerous infrastructure that has ever been positioned in the history of North America. 73% of voters — left and right, U.S. and Canada — do not want them in their backyard. The AI capex cycle has become, almost overnight, the most hated topic in domestic politics. And that creates a problem the hyperscalers do not know how to solve. It also creates an opportunity for the one jurisdiction on this continent that has spent forty years figuring out how to build hated-but-necessary infrastructure: Alberta. I’m not calling a market top. I want to be clear about that. This is not a 2000 or 2007 setup. But the character of the market is changing. Long rates are breaking out in the U.S. and in Canada, Powell is out and the new Fed chair was sworn in last week, energy is leading, AI names are ripping (Micron just touched a trillion in market cap), and we are about to absorb four of the largest IPOs in human history. Cerebras already priced at $150B. The stock traded to $350 before selling off to the $270s. SpaceX is filing at $1.75T-$2.0T. That single IPO is roughly 75–80% of the entire market cap of the TSX. When that much private money gets vacuumed into a few mega-listings, it pulls capital out of every other corner of the market to find price. Expect volatility through the summer. Where Mel Sharpened It Mel pushed back on a few of my reads in ways that mattered. On the Trump–Xi summit: my instinct was to read Trump’s deferential posture as a tactical concession. Mel reframed it through a Foreign Affairs lens - what she called the new G2 world. It is not a Cold War redux of mutually-assured destruction. It is a mutual recognition that neither the U.S. nor China is going to displace the other, and that the two powers are now finding ways to use each other inside defined domains rather than trying to win. That distinction matters for Canadian foreign policy. If the U.S. is comfortable with a working G2, the question of how Carney’s posture on China (EVs, canola, capital flows) will be received in Washington is suddenly more open than it looked six months ago. She also pushed me on a question I underweight: where is the line between Trump the person and Trump the president? With most leaders that distinction is invisible. With this one it is unusually visible — and getting that read right is what separates analysts who take him literally but not seriously from analysts who do the opposite. The most useful frame Mel offered was on the data-center backlash itself. She introduced Maslow’s hierarchy as the right lens. We make the mistake of treating policy choices as binary… yes/no on the ballot, when they are actually continuums of trade-offs. Canadians have had the luxury of not having to make those trade-offs ourselves, which has produced a generation of luxury beliefs about energy that don’t survive contact with the actual physics of running a modern economy. Caring more about the environment than economics is a position you can only afford when someone else is producing the energy you’re using. The Macro Read: AI’s New Constraint Is Permission, Not Compute For two years the binding constraint on the AI cycle has been compute and power. That is changing fast. Gavin Baker had the cleanest line on it: TSMC could produce $2 trillion in chips this year if they didn’t care about the longevity of their business. There is that much demand. Instead they will produce about 20% of that — roughly $400B — because they are pacing themselves. The chip side of the constraint is being managed by one disciplined Taiwanese foundry. The newer constraint is permission. Data centers need cool climate, cheap power, abundant land, and a community that will actually let them build. The hyperscalers spent two decades building wherever they wanted because latency didn’t matter much and the physical footprint was small. That world is gone. Latency now matters. Bandwidth now matters. Megawatts per square foot has gone vertical. So the build-out is colliding with NIMBY politics in every county in North America right as the cycle needs to accelerate. We would have a bubble if we could actually get the infrastructure built. We can’t. We have a governor on this runaway wagon, and it is the most healthy thing that could possibly happen to this cycle. The CEOs running the leading AI labs are not equipped for this fight. Dario Amodei keeps telling everyone the world is going to end and that only he can save it. Sam Altman is, charitably, not lovable. Elon Musk is the most polarizing human being on earth outside of Trump. Alex Karp can’t sit still in a chair. These are not people who win school-board fights in Lubbock or Strathcona County. The AI CEOs of the leading labs have all failed at the political game. It’s over. Game over. They need to find a new path forward. That path forward is going to be checks in mailboxes. A municipality is not going to be moved by a one-time $50M payment to a county budget. It will be moved by a $10,000 annual check to 14,000 households for 20 years. That is the math the hyperscalers are about to learn. Which brings us to Alberta. The Policy Read: Alberta Is the Most Investable Place on the Continent Alberta is uniquely positioned for this opportunity for reasons that compound on each other. Northern, cool climate. Cheap energy. Stranded molecules that can be moved behind-the-meter into power generation rather than flared. The only deregulated electricity market in Canada, which means private generators can build and sign power purchase agreements directly with data-center operators - something you cannot do in a system where the government owns the generation. We have engineering talent that knows how to build large, complex, hated infrastructure on time and on budget. We have been doing this for forty years. The data-center boom is the same political problem as the pipeline - and we are the only province that has spent a generation getting good at solving it. On the MOU itself, Mel did the heavy lifting again: * The Carney–Smith agreement on the industrial carbon price gave industry clarity but not competitiveness. Those are two different things. Clarity is necessary. It is not sufficient. * Brownfield projects will be fine. The economics of greenfield investment - new pipelines, new facilities, the marginal barrel - are still not competitive with comparable jurisdictions elsewhere in the world. * The pipeline is contingent on Pathways. Pathways is contingent on the pipeline. Someone has to move first. * Alberta will submit its proposal to the Major Projects Office on July 1. Designation as a project of national significance is targeted for October 1. Separation referendum is October 19. If you’re the federal government, and you are about to designate a project of national significance two and a half weeks before a separation referendum, you are going to ensure that project is still inside our nation when the dust settles. Mel was unambiguous on the referendum. She is a federalist. She is voting to stay. And her argument — which I agree with — is that separation does not solve the infrastructure problem. It almost certainly makes it worse. If your primary reaso… This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

Every twenty or thirty years a new general-purpose technology shows up and quietly rewrites the entire economic order. Steam. Electricity. The PC. The internet. Mobile. Every single time, the same pattern plays out. One group adopts early and compounds. Another group waits, calls it a fad, tells themselves their experience makes them immune. By the time the second group looks up from their chosen ignorance, the gap is already too wide to close. We are sitting inside that window right now. Most people can’t see it. The line I keep coming back to, and the title of today’s show, is this: “I don’t use AI” is the new “I don’t use computers.” In every previous shift, you had a decade or four to catch up. With AI, the gap between early and late adopters is closer to eighteen months. The moat you spent twenty years building gets crossed in a year and a half if you stop defending it. Mel pushed me on this on the show. Her question: “is it really that people don’t want to adopt, or is it that they don’t feel they can?” is the right one. The honest answer is: it’s intimidating, it’s expensive at the leading edge ($30–$250/month per seat, and tens of millions a year if you’re plugging models into an enterprise), and most people don’t yet have a good mental model for what these tools actually do. But the cost of not engaging is now structural. AI is a motorcycle for the mind in the same way the personal computer was a bicycle. Output expectations are going up everywhere, quality, speed, polish, and the people sitting on the sidelines aren’t holding still. They’re falling behind a curve that is accelerating. If you take the stance “AI isn’t for me” and frame it as a values statement - that’s actually a career strategy. And it’s a bad one. The Bull Market Nobody Believes In The S&P 500, the Nasdaq, the Dow, the TSX, even Chinese equities (the CSI 300 just printed a fresh four-year high) are all hitting new highs at the same time. Most people don’t realize that. Most people are still telling you it’s a bubble. Real bubbles are built on euphoria. Right now, AAII bearishness has run hot for ten of the last eleven weeks. Consumer sentiment is near all-time lows. Half of American and Canadian adults think now is a bad time to invest. That’s not mania. That sounds like disbelief to me... George Soros’s framing is the one I keep returning to: when he saw a bubble forming, he ran in to buy it. Reflexivity. Bubbles are powerful trends, and being short them is one of the most expensive seats in the market. Even if this were a bubble (it isn’t), the data says you’d want to own more, not less. The two truths that can be true at the same time are these: A technology can be revolutionary. The equities tied to it can still go to zero. Both. Together. Always both. Cisco at the March 2000 peak: 201× P/E, $555B market cap, briefly the largest company in the world. Revenue kept growing for years afterward. The stock did not. Today’s setup is genuinely different. Top 10 names are ~40% of the S&P (vs. ~27% at the dot-com peak), but the multiple premium is narrower — 31× for the top 10 vs. 21× for the rest, vs. 43× / 21× in 2000. Multiples less extreme. Concentration more extreme. Different mix, same family of risk. The other thing that’s different: the data centers are lit up. In 1999 the fiber was dark and the rail cars were empty. Today the hyperscalers cannot buy enough capacity. The picks-and-shovels names are sold out into 2027. Power semis broke a five-year base. Memory pricing is up ~90% in a single quarter. Payback periods on these builds are now under three years. This is not a bubble looking for a pin. This is a real capital cycle, and we’re closer to the middle of it than the end. The risk is not that the music stops. The risk is that you capitulate, either out of the trade because you’re tired of being right, or into the trade at the top because the FOMO finally gets you. That’s the Druckenmiller story in 2000: shorted internet, took the loss, covered with discipline, then bought $6B of tech hours from the absolute top because his juniors were printing 3% a day and the social pressure of underperforming his own kids was unbearable. Six weeks later he was down $3B. His own line, years later: “I didn’t learn anything. I already knew I wasn’t supposed to do that.” The most dangerous moment in a bubble is when staying disciplined feels stupid. The Alberta Trade — A Once-in-a-Generation Setup The other big thread from our podcast on monday was Alberta. Mel did the heavy lifting walking through what’s actually happening with Carney, Premier Smith, the November 2025 MOU, the Major Projects Office, and the Pathways CCUS condition. Here’s the punchline you should walk away with: The math has changed. U.S. shale plateaued in November 2025. The UAE has fractured away from OPEC+. There is a structural global inventory deficit of ~1.5 billion barrels. Energy demand isn’t plateauing the way the IEA and the EIA modeled… Why? Data centers have rewritten the demand curve. We’re heading higher: 150, 160, possibly 200 million barrels a day on the long-run forecast. Canada has, in spades, exactly what the world is going to need: hydrocarbons, LNG, hydro, uranium, critical minerals, and the geographic position to deliver them. The Western Hemisphere is structurally long this regime. The thing standing in the way is policy clarity. As Mel walked through, you have three concentric circles that all need to overlap: * federal government, * provincial government, and * industry. Industry will pull the trigger on egress west the moment they can underwrite a 25% return on invested capital. They have no obligation to drill more for national security reasons — that is not their job, and it doesn’t happen anywhere else in the world. Where I disagree slightly with Mel, and where she pushed back on me, is on who has more political risk in this negotiation. My read was Smith. Mel’s read was Carney. She’s right. Smith wins politically either way: if Carney blocks the pipeline, that’s a generational gift to a Conservative provincial government heading into the polls. Carney is the one who has to spend political capital and depart from prevailing Laurentian orthodoxy. He has the upside and the downside. If Carney is serious about economic independence from the United States, which is the entire framing of the elbows-up project, there is a literal silver-bullet sitting in front of him. We just have to build. Energy companies pay twice — corporate taxes and royalties. Bitumen royalties alone were ~$17B on a $60–70B Alberta budget in ‘24–’25. That’s more than RBC, CIBC, Scotiabank, and Manulife pay in taxes combined. That’s the money that pays for hospitals, social services, education, housing. If we want better health care, more teachers, and more infrastructure, we need to sell more of what we do best. End of story. Podcast & YouTube Recommendations🎙 * Eric Nuttal talks about 200$ Oil * The economics and math behind operating and building LLMs * Buffett Breaks His Silence This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

By 2027, Bernie Sanders and his cabal of pessimists are going to be in the streets protesting AI. Blaming it for everything… That's the political tape we're walking into. The reason isn't ideology. It's economics. We are watching the most consequential technology transition since the industrial revolution play out in real time, and the early returns look exactly like the early returns of the last one: capital is winning, productivity is exploding, and the wages of the people doing the displaced work are flat to down. The week the catalysts all printed in one direction Before we get to the politics, let’s grade the tape, because the tape is what makes the rest of the argument unavoidable. TSMC’s Q1 2026 call was the cleanest piece of corporate communication I’ve read this quarter. They raised full-year 2026 revenue guidance to better than 30% year-over-year. Gross margin printed a new high of 66.2% — well above the 56%+ long-term guide. Capex is now tracking the high end of the $52–56 billion range, and management said explicitly that revenue growth will outpace capex growth. That’s a margin-expansion story sitting on top of a unit-volume story. They almost never travel together. They are travelling together right now. ASML revised 2026 revenue up to €36–40 billion (from €34–39 billion) and flagged an EUV supply shortage in 2027. Anthropic’s annualized revenue went from over $9 billion at the end of 2025 to over $30 billion by April 2026. That’s a tripling of ARR in three months. I have spent enough time around early-stage capex cycles to know what they look like, and that is what they look like. The single most important sentence said on a corporate call this quarter came from TSMC CEO C.C. Wei. I’m going to put it here in full because if you only remember one thing from this newsletter, it should be this: “The shift from generative AI and the query mode to agentic AI and command and action mode is leading to another step-up in the amount of tokens being consumed.” Read it twice. Generative AI was a query layer — a person typing a prompt and reading an answer. Agentic AI is a labor layer — a system doing the work end-to-end. The token math compounds, it doesn’t add. And the entity that consumes those tokens isn’t a curious knowledge worker on a free tier. It’s the workflow that used to belong to that worker. The mix shift inside TSMC tells the same story without the press release language. In the fourth quarter of 2019, high-performance computing was 29% of TSMC’s revenue and smartphones were 53%. Today HPC is 61% and smartphones are 26%. The positions have completely flipped in five years. Advanced nodes — 7nm or below, where TSMC is a de facto monopoly — are now roughly three-quarters of revenue. I keep coming back to this: 2026 revenue estimates for TSMC are up roughly 25% since September 2025, and the stock is up roughly 60% over that window. That’s a multiple holding while estimates run up. That is the signature of the market pricing more upside, not less. The bubble signal would be one of MSFT, GOOG, META, or AMZN guiding capex down on this week’s prints. UPDATE; All 4 hyperscalers beat and guided up last night. The Canadian canary nobody is talking about If you want a concrete data point that this is no longer a Silicon Valley story, look at Rogers. Last week Rogers Communications cut its 2026 capex plan by roughly 30%, from up-to-$3.5 billion down to $2.5–2.7 billion, and offered voluntary departure packages to about 10,000 employees. That is not a hyperscaler. That is a regulated Canadian incumbent. If a slow-growth telecom is willing to take a 30% capex axe and put 10,000 buyout offers on the table, the cultural permission to use AI to compress headcount is no longer a coastal phenomenon. It’s a TSX-60 phenomenon. The signal isn’t Rogers specifically. The signal is the speed of cultural adoption. Six months ago, a Canadian incumbent doing this would be a one-off. Today it reads as a template. I am watching BCE and Telus closely for the next two prints, and I am watching the Big Six banks even more closely. The first big bank to publicly acknowledge it is the one to own as a stock and to fear as an employee. What I think happens next I want to be clear that I am not a doomer. I am see justification in the AI capex thesis, and can already see the productivity gains that come with it. The world ends up richer on the other side of this. That has been true of every previous technology transition, and there is no reason to think it won’t be true here. But the transition is the part that’s going to be politically and culturally disorienting. Productivity gains and wage compression can — and during Engels’ Pause, did — coexist for decades. The political response to “the country is much richer in aggregate but my paycheck is flat and my kid can’t get an entry-level analyst job” is not going to be measured. It is going to be Bernie Sanders in the streets, and it is going to be sooner than people think. The 2027 timing isn’t a guess pulled out of the air. It’s the lag I’d expect between visible displacement and the political reaction to it. Productivity is already ticking up. Layoff announcements are already climbing. E ntry-level wage growth has already stalled. That is the smoke. The fire is the next two years. The picks-and-shovels remains the story. The foundation models are accelerating and monetizing. The AI-power complements are becoming more cemented, because the agentic layer is, at the end of the day, an electricity load. And budget for political volatility - because in a world where capital is winning this hard, this fast, the politics catch up. They always do. Podcast & YouTube Recommendations🎙 * Dwarkesh and Reiner Pope Teach Us Ai: * Kill Them With Kindness: Best Links of The Week🔮 * Labour productivity in non-conventional oil extraction is nearly $580 per hour; approximately ten times the rest of the economy Trevor Tombe, University of Calgary * According to a December 2025 C.D. Howe Institute study, just ONE natural resources project has been approved under the new federal Impact Assessment Act * saw this new interview with Ben Uyeda on About Art. Ben is an architect-turned multidisciplinary maker/artist/hotelier. He created Reset Hotel, where we stayed in Joshua Tree recently, and I got to spend a little time with him while we were there. A quote really stood out to me: “The difference between creativity and taste. The culture we’re in right now is mistaking having great taste for being creative. People are mistaking consumption with production, and I think creativity is always about production.“ It’s second nature for me to curate lots of great design ideas and products at this point. It’s what I constantly do online. It’s much, much harder, and probably much more valuable, to build great things. * Rogers Communications Inc. is offering voluntary departure packages to about 10,000 employees in its workforce as the telecom giant moves to cut costs amid slowing industry growth. - BNN * Engles Pause and Employment - Fabricated Knowledge This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

Machiavelli, often considered the father of modern political philosophy, focused heavily on what he called the “effectual truth”—the reality of what actually works, rather than what we wish would happen in an ideal world. He believed that maintaining prosperity requires a clear-eyed understanding of power and a ruthless grasp of human nature. Right now, global markets, international security, and our own domestic economy are forcing us to take off the rose-colored glasses. Here is the effectual truth of what is driving the macro landscape this week. 1. The Geopolitical Contest of Economic Pain The Strait of Hormuz has been largely closed since late February, pushing WTI crude above $100 a barrel and U.S. gas to $4 a gallon. While the market surged this morning on hints of de-escalation, the broader strategic lesson is alarming. We are witnessing a shift away from conventional military deterrence toward a “contest of economic pain.” Adversaries are proving they do not need a world-class navy to inflict catastrophic damage on the West; they simply need the ability to choke off vital global commerce. This is the exact blueprint China is studying for Taiwan. The risk isn’t necessarily a D-Day style amphibious invasion, but a gray-zone “quarantine”—a customs dispute that forces the global economy to capitulate without a single shot fired. The West urgently needs a strategy of structured ambiguity and an acknowledgment of Economic Mutually Assured Destruction, because right now, we are entirely unprepared for the economic fallout of our own deterrence. 2. The AI Pivot: From Hardware to Agents In the markets, we’ve seen a violent rotation out of AI infrastructure names (like Micron, LITE, Coherent, and Ciena). This sell-off was triggered by Google’s new TurboQuant algorithm, which promises 6x memory compression. The debate tearing through the market right now is whether this massive leap in efficiency will kill hardware demand, or if it will trigger the “Jevons Paradox” - where increased efficiency actually drives wider adoption and consumption. While the hardware side re-rates, the software side is accelerating. AI “agents” are moving rapidly from pilots into live production. The true promise of tools like Claude is the automation of the “coordination tax” and the staggering amount of friction, documentation, and internal repackaging required to get anything done in a large organization. AI-native startups are going to move with terrifying speed, while massive incumbents will have to drag their workforce into the AI era. 3. Canada’s Stagnation: Falling Behind Alabama Bringing the focus back home, a jarring statistic has been dominating Canadian business circles: Canada’s GDP per capita has now fallen behind the state of Alabama. Over the last decade, our real GDP per capita grew by just 0.4% annually, dropping us below the OECD average for the first time in recorded history. How did we get here? * The Productivity Trap: A massive surge in temporary residents and cheap labor entirely disincentivized Canadian businesses from making the capital and technological investments necessary to improve productivity. * The Fiscal Mirage: Government spending has ballooned from 38% of GDP to 45% over the last decade. Because GDP includes government spending, this deficit-financed public sector expansion has masked a severe depression in the private sector. * The Brain Drain: The wealth gap at the top is driving our best talent away. Roughly 40% of Canada’s potential top 1% earners have emigrated to the U.S. seeking competitive compensation. But as investors, we navigate the world as it is, not as we wish it to be. My thoughts on the Iran conflict: Iran’s main suppliers are the same people facing untenable, existential risk from Hormuz being closed for an extended period. There are break points here where tens of millions or more die from starvation, cold, etc. Which people from all countries tend to be less than chill about. Yes, the US has global rivals who would like to “beat” American over time, but nobody is trying to have a destabilized Asian continent. *How* we have done what we just did (geopolitical equivalent to the Michael Jackson window baby approach to parenting) probably solidifies our handoff of the global mantle of leadership, which has profound long-term implications. But there is a very immediate “we absolutely cannot f*****g have this” situation on the ground for the exact players who allow Iran to exist. Hard to bear hug Iran while US and Israel are in “just kill everyone” mode. But whenever US and Israel are satisfied with the purge level, Iran will get bear hugged out of Hormuz. Or returned to the stone age courtesy of Huawei firmware. Hormuz being closed for Developed markets is a material threat to standards of living. For much of the world, it would be death on an unimaginable scale. The press has misframed the stakes. Governments (and more proximate markets) understand the actual risk profile here, which is why they’ve traded so weak vs US It’s going to take 5 to taco. None of which include Iran. Oil is down 1% with market up ~4%. Lots of work to do. Below you’ll find all the best stuff I have been reading and watching. Podcast & YouTube Recommendations🎙 * A Great episode that frames the current moment in markets from the Compound and DataTrek: * A great conversation about Taiwan and Iran: * Jamie Dimon talks about his legacy and the future of banking: * Zeihan on how to break Iran: Best Links of The Week🔮 * Ian Bremmer on the state of Iranian de-escalation - X * Josh Wolf talks about the alternative approaches to Ai - Thread on X * Getting on the right side of the ice. A great framming of software in today market. - Thread on X * A fantastic presentation on the future of SAAS from Redpoint. - Redpoint Partners * “Artificial intelligence drove chess toward perfect play, leading to more draws at top tournaments. Now grandmasters are winning by making less optimal moves... - Blomberg * “Whatever the final outcome for Anthropic from its feud with the Department of Defense, the attention it has generated — coupled with the company’s funny Super Bowl ads taking aim at OpenAI and the surging popularity of Claude Code — has made Anthropic more popular with consumers than ever. -TechCrunch This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

Welcome back to the pod, everyone. Todays episode covers the following 4 topics: * Canadian Jobs, Liberal majority and the Mark Carney performance review. * Market structure and positioning * War in Iran * Open Ai Shifts focus to the enterprise as LLMs prove they aren’t just a commodity. Market Update📈📉 Asset prices don’t make their biggest moves because of fundamentals. They move because of positioning. ] Right now, if you are reading the headlines, you are missing the underlying mechanics of what is actually happening in the market. We are looking at the first week of net outflows from equity ETFs since last April. But it’s not just selling. Volume in short ETFs just surged to new all-time highs. Participants aren’t just taking chips off the table; they are actively, aggressively betting against stocks at a historic pace. Add to that the fact that the VIX positioning has totally reset—the crowded trade of asset managers betting on lower volatility has been cleared out. A nd sitting right underneath all of this is the US Dollar Index, testing that massive, psychological 100 level. When positioning gets this one-sided, the risk completely shifts. It’s no longer about how much lower stocks can go. It’s about how catastrophically wrong these participants are going to be if prices start moving higher. If this market starts to go higher, all of those record shorts aren’t just wrong; they become fuel for a violent squeeze. But what lights the match? Political Tug of War: You have to look at the geopolitical chessboard, and specifically, you have to look past the mainstream narrative that the Middle East is just a “distraction.” There is a pervasive, intellectually lazy argument out there right now comparing America’s involvement in the Middle East to the decline of the British Empire. This idea that the USA is overextending itself in the “periphery” while China eats the future. It is a brilliant piece of reasoning, steeped in history, and it is completely, fundamentally wrong. Iran is not the periphery. Iran controls access to the Strait of Hormuz. It is at a nuclear breakout point, and it is the primary force multiplier for both Russia and China. A nuclear Iran is structurally a China-friendly Middle East, especially when China’s plans to price oil in yuan rely on those exact Gulf relations. So, when we see a targeted strike on Kharg Island, taking out military structures while leaving the oil infrastructure intact, that isn’t a distraction. That is a calculated play to force Iran to relent without sending oil to $200 a barrel and suffocating the global economy. It is a stark reminder that deterrence breaks the moment allies start doing the math on American passivity. Open Ai shifts to focus on the enterprise: This kind of forced reality check isn’t just happening in geopolitics; it’s happening in tech, too. Look at OpenAI. We are watching a massive strategy shift in real-time as they pivot away from consumer side-quests to focus strictly on the enterprise. Why? Because in a compute-constrained environment, hosting a billion free users is a financial black hole. Consumer habits are glacial, but enterprise customers will switch workflows overnight if the ROI makes sense. OpenAI is realizing they can’t fight a two-front war. If they don’t lock down the enterprise market against Anthropic, they lose their valuation premium. Meanwhile, incumbents like Alphabet and Meta are perfectly positioned to swallow the consumer AI market because they already have the infrastructure to monetize it through ads. AI is hitting its capital cycle reality phase. The easy money is gone, and the focus is shifting to who can actually generate cash flow. The crowd is leaning entirely to one side of the boat. Will it tip over? Podcast & YouTube Recommendations🎙 * Bill Gurley on the importance of personal agency: * Senra Interviews a human encyclopedia: Marc Andreessen * The most important conversation on the Ai Infrastructure landscape: Best Links of The Week🔮 * Thomasz Tunguz is concerned about memory and power shortages. * The emergence of Ai Agents inside the enterprise - Article from X * Fareed Zakaria makes the case for the USA becoming the next British Empire - Link from X * Jeff Currie from Goldman Sachs talks to the set up in Oil Markets - Link from X This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com