For much of the past year, when the USDJPY disconnected – initially playfully and then terminally – from 2Y yield differentials, FX traders have been asking when and how will this gaping divergence finally converge. Alas, that answer remains elusive still, even as the collapse in the yen has pushed the currency to a generational low, and become an increasingly political topic leading to a surge in Japanese bankruptcies, and a relentless battering of what little is left of Japan’s middle class. 

And yet, despite the yen’s push into what until just two months ago were seen as unthinkable lows by the BOJ no less (which promptly spent $50BN to prop up the currency this April when it touched 161), the fact that the Japanese central bank allowed the yen to resume its descent through the July 4th holiday despite the unprecedented divergence from fundamentals, where it is now about 25 big figures too cheap…

…  has encouraged hedge funds to keep piling on yen shorts seemingly encouraged by a theory proposed by Mizuho’s Jordan Rochester that the USDJPY has become negatively correlated to yield differentials, essentially representing the EM-ification of Japan (as Bloomberg reminds us, veteran currency traders will recall that we have seen this sort of thing before, via the “Japan premium” applied to short rates and swap yields around 1997-98 as the country’s banking sector was in the process of imploding).

Another source of pressure on smaller businesses may be foreign-exchange hedging, including the use of so-called reverse knockout options, according to Yuji Saito, executive adviser at SBI FXTrade. Such products are widely sold by regional banks as structured hedging products, particularly to small and regional importers seeking to minimize upfront option premiums.

Once the exchange rate reaches a preset knockout level, the option expires and the hedge ceases to provide protection. Companies needing dollars must then either purchase them in the spot market, enter into a new hedge – often at less favorable levels – or leave themselves exposed to further currency moves.

“The weaker the yen gets, the more importers roll into increasingly risky option structures,” Saito said. “Once the knockout level is breached, they are forced to buy dollars in the spot market, creating a negative spiral that puts even more downward pressure on the yen.”

Analysts estimate that remaining reverse knockout levels are clustered between 163 and 170 yen per dollar, territory that many firms didn’t think the currency would reach as intervention from the central bank would likely be forthcoming due to the adverse economic impact of such unprecedented currency collapse.

“The number of knockouts could increase if the yen weakens further,” said Hiroyuki Machida, director of Japan FX and commodities sales at Australia & New Zealand Banking Group. “The situation is becoming significant for companies that are unable to pass on higher costs.”

And yet, despite the clear adversely consequences to both Japan’s economy and society, the perception that Japan’s new PM Takaichi doesn’t want higher rates or a stronger yen, is leading to ever greater pile ups inside the short yen trade, which was clearly visible today when the latest CFTC Commitment of Traders data showed that hedge funds are most bearish on the yen since 2007, just before the housing bubble burst. 

An even more remarkable CFTC chart is the one showing non-commercial spec net positioning in the yen, which over the past two years has completed one of the most dramatic swings in history, from record bearish, to record bullish, and back to record bearish again!

The cherry on top was the overnight reco by the Goldman Sachs FX team which capitulated on its bullish yen bias, but instead now sees the currency dropping to a new 40 year low of 165 next. This is how the bank explained it: 

With USD/JPY near its weakest level in 40 years, intervention risk is elevated. But it can only have a short-lived impact if macro fundamentals continue to push in the other direction (as we’ve already seen this year). We think the trend higher in USD/JPY should extend, barring a negative US growth shock or a BoJ pivot towards more aggressive policy tightening—neither of which appears likely over the coming year. Therefore, we are revising up our USD/JPY forecast path to 162, 163, 165 (vs. 160, 158, 155 previously). Without rising recession risk or a pivot towards aggressive BoJ tightening, we think the trend higher in USD/JPY should extend and continue to favor it as a funder for high-carry EM expressions

So with the bulls capitulating and everyone already bearishly positioning, what happens next? Usually precisely the opposite of what everyone expects, since there is nobody left to add to the bearish side. 

Which brings us to the rare contrarian view: pushing back against those speculating that the currency might continue its slide – which as we showed above is pretty much everyone – Japan’s former top FX official said the yen should be as much as 20% stronger than it is, or around 130 per dollar

“This isn’t about fundamentals anymore — it’s about how people’s expectations have shifted,” Tatsuo Yamasaki, who served as vice finance minister for international affairs a little over a decade ago, said in an interview Monday with Bloomberg. “But we are reaching a climax.”

“I wouldn’t be surprised if the yen were around 130 to the dollar. That’s honestly how it looks to me,” he told Bloomberg, an outcome that would lead to the liquidation of countless FX trading desks. 

Yet, as noted, he remains a lone hawk in a world full of yen bears. The slide along with a relatively tepid response from Japanese authorities has some speculating the rout may have room to run. Jesper Koll, expert director at Monex Group, and Calvin Yeoh at Blue Edge Advisors consider 200 and beyond within the realm of possibility should the Bank of Japan fall further behind in tightening policy.

Yamasaki, now a senior professor at the International University of Health and Welfare, doesn’t see that happening. The BOJ is likely to continue raising rates, while the odds of another Federal Reserve rate hike remain roughly 50%, making a further widening in the Japan-US rate gap far from certain, he said.

“As far as interest rate differentials, yes, the BOJ’s next move is definitely a rate hike, maybe followed by several rate hikes, while the Fed’s next move is still uncertain,” he said. Even if the Fed hikes, it will likely be a one-off move, he said.

“They’ve already issued the warning, and anyone who is still holding short yen positions knows that they risk being punished by an intervention – that is, being forced to unwind those positions,” Yamasaki said. “The finance ministry has already moved beyond the warning stage, and the authorities have demonstrated they’re willing to act.”

Yamasaki also downplayed concerns that Prime Minister Sanae Takaichi’s latest economic and fiscal policies point to a worsening of Japan’s fiscal position. Last month, Takaichi unveiled a growth plan featuring a 14-year, ¥370 trillion investment program combining private- and public-sector outlays, while projecting that Japan’s debt-to-GDP ratio will continue to decline even as the government commits ¥10 trillion in annual spending. The plan appears designed to pair an ambitious investment agenda with assurances of fiscal discipline.

Yamasaki said the market will have a much clearer picture of Takaichi’s fiscal and monetary policy stance later this year as the government compiles its budget for next year. “At that point, I think the market will recognize that there wasn’t a fundamental case for such a weak yen in the first place,” he said. 

Until then, however, Yamasaki said authorities should be prepared for a prolonged battle with speculators.

“If you’re facing a long fight, spending tens of trillions of yen every time the market moves isn’t the answer, because the currency will simply move back again,” he said. “The priority should be to prevent the yen from weakening much further. Once people come to believe that the fundamentals actually point to a stronger yen, I think the currency will appreciate on its own.”

Yamasaki added that “stealth intervention” — small-scale operations that avoid drawing immediate market attention — could be an effective way to keep speculators off balance. Having said that, Tokyo isn’t likely to get any help from its counterparts. He said it would be politically difficult for the US to join such efforts while maintaining its standard opposition to currency manipulation by other nations.
“Basically it’s not going to happen,” he said.

There is another reason why the BOJ will have no choice but to tighten soon: the 20Y JGB yield just hit a new record high overnight, rising 4bps to a new all time high 3.816%. It was 0 in 2019.

Ironically, Yamasaki headed the Finance Ministry’s foreign-exchange market division during a period when Japan was attempting to prevent the yen from doing the opposite, namely strengthening. Authorities spent about ¥35 trillion on intervention between 2003 and 2004 in that campaign. 

Even with Washington unlikely to jump into the market, Yamasaki doesn’t expect any pushback if Japan intervenes.

“I don’t recall a time when the US was on board with Japan’s intervention intentions as much as it is now,” he said, reiterating comments made recently by current forex chief Atsushi Mimura. In a Bloomberg interview last week, Mimura highlighted what he described as “closer-than-ever” communication between Tokyo and Washington on currency matters.

More recently, when the yen was foundering in September 2022, Yamasaki warned of intervention risk. Two days later authorities intervened to support the yen.

Gov. Josh Shapiro sat down with Dana Bash on CNN’s State of the Union this weekend and said the quiet part out loud: his party is being overrun by its socialist and far left flank.

Bash pressed Shapiro on Darializa Avila Chevalier, who won the Democratic congressional primary in New York’s 13th congressional district last month while running as an open socialist.

Chevalier’s platform includes abolishing prisons, opening the borders, ending deportations, and granting mercy even to violent criminals. 

Bash also noted that Chevalier attended a pro-Palestinian rally on October 8, 2023, one day after Hamas terrorists slaughtered, raped, and kidnapped their way across southern Israel.

According to Bash, that rally featured antisemitic rhetoric defending the attack. Bash asked Shapiro how he feels, as a Democrat, about someone with those views heading to Congress.

Shapiro tried to have it both ways.

“Well, her district voted for her,” he said. But that statement also came with a convenient disclaimer. “But I have profound differences from that particular candidate, based on the citations that you read there. And she’s not someone who, you know, seemingly, I would agree with on many things, or that we share similar values. She ran on the Democratic ticket, I guess as a socialist; her voters in that district determined that she was the one they wanted representing them.”

Note the hedge. Shapiro was describing someone who wants to shield violent criminals from deportation and who reportedly stood in solidarity with people cheering a massacre of Jews. Yet, the strongest word he could summon was “seemingly.”

Bash followed up by asking what Chevalier’s win says about the Democratic Party. Here Shapiro dropped whatever remained of the diplomatic pretense. “I think that what our party has to go through, that will be very healthy, and something that we’ve not really done since the 1992 elections, is to have a battle over what we believe in,” he said.

CNN: Abolishing prisons, opens borders, ending deportations of criminals…what does that say about the Democrat Party?

SHAPIRO: “What our party has to go through that will be very healthy…is to have a battle over what we believe in.” pic.twitter.com/lncogDmeXl

— RNC Research (@RNCResearch) July 5, 2026

That’s a rather pointed reference because 1992 is the year Bill Clinton dragged his party toward the center with promises of welfare reform and law and order, and Shapiro seems to be arguing that’s the direction the battle needs to go again, which is clearly not the direction the party is going in.

Trump Derangement Syndrome has spent the better part of a decade radicalizing rank-and-file Democrats who once considered themselves moderates, and the party’s growing communist and socialist wing has capitalized on that fever by dragging positions on wealth, taxes, crime, and immigration further left with every election cycle.

The party has also grown more hostile toward Israel, with some pundits arguing it has grown outright antisemitic. That climate may explain why Shapiro sidestepped Bash’s question about whether his Jewish faith could complicate a 2028 presidential run. Meanwhile, fellow Pennsylvania Democrat, Sen. John Fetterman, has shown far more willingness to call out his party’s antisemitic drift. 

Shapiro, being Jewish and a supporter of Israel, places him on a collision course with a Democratic base growing comfortable nominating candidates who marched in solidarity with people, justifying an attack that included the massacre of more than a thousand Israelis.

On paper, Shapiro is the strongest hand the Democrats hold: a two-time statewide election winner in a key swing state.

But the Democratic Party isn’t the same party it was in 1992, and Shapiro’s remarks on CNN made one thing clear: the party’s civil war is already underway.

Graham Platner’s Senate campaign was thrown into turmoil Monday after a woman publicly accused him of sexual assault in a detailed report published by Politico.

Jenny Racicot, a 41-year-old Maine woman, told reporters Jessica Piper and Adam Wren that Platner sexually assaulted her in late 2021, near the end of an on-and-off consensual relationship that began after the two matched on Bumble in 2019. Before publishing the allegations, Politico interviewed Racicot three times over two weeks, spoke with a man she dated after Platner, and reviewed therapist emails and years-old Facebook messages.

Racicot said she texted Platner that night, telling him not to come over. Then she heard footsteps on the stairs. Platner had let himself into her unlocked rural home, and by her account, he smelled of alcohol and hovered near blackout drunk. She said he climbed on top of her on the couch and kept grabbing her as she told him to stop, knocking over an antique sewing kit and scattering needles without pausing. When she tried to leave the room, he followed her into the bedroom and had sex with her against her will.

“I remember him grabbing my pelvis and being really forceful of me,” she said. “I remember the specific moment where I thought to myself, like, ‘This is no longer my choice.'”

He fell asleep in her bed. She said she considered forcing him out but feared a blackout-drunk driver on rural Maine roads might kill someone. The next morning, when he tried to put his arm around her, she pushed him away and asked if he remembered the night before. He said he did not. She told him to leave and never contact her again.

Racicot waited several weeks, making sure she was sure she was not pregnant from the assault, before sending Platner an Instagram message stating the encounter was not consensual. That message no longer exists because Racicot deleted her old texts and social media exchanges with him and could not recover them for Politico. Nor did she file a police report, citing shock, confusion, and fear of retaliation. Her therapist heard the account at the time, and emails Racicot shared with the paper show that she sought help to corroborate it. A man Racicot began dating in 2022 also said she described the incident in pieces before sharing the full account in 2023, and his version matched hers.

Politico also reviewed Facebook messages from 2023 in which Racicot warned an acquaintance against getting involved with Platner, telling her that he does not listen when he is drunk. A friend she confided in last summer recalled her describing him as very drunk and unwilling to accept no as an answer.

Platner’s campaign called the allegations a coordinated hit by outside political operatives and noted the story landed about a week before Maine’s ballot deadline, echoing the timing of allegations that surfaced before the primary. The problem is that Racicot’s politics align with Platner’s, and her hesitation to come forward stemmed from a conflict between supporting his platform and disapproving of him as a person; she wanted voters to have a full picture of who he is.

The New York Times contacted her in spring 2026, and she shared the assault claim off the record; the resulting article described his behavior in general terms while coverage centered on accuser Lyndsey Fifield, whose Republican ties gave Platner’s allies an angle to deflect the accusations, which ultimately did not impact his campaign. His candidacy had already survived offensive online comments and earlier claims he mistreated women, which he denied while attributing past behavior to mental health struggles and alcohol abuse. Prior to the New York Times story, Platner had assured Senate Democrats that no more scandals would come out about him.

June 10 pic.twitter.com/oXp7ztcHRA

— Jon Levine (@LevineJonathan) July 6, 2026

Despite the damning allegations in the New York Times story, Platner raised more than $200,000 after the story came out, his best fundraising day since Gov. Janet Mills exited the race. After seeing Fifield’s account get minimized because of her politics, Racicot was convinced she had to come forward.

In a video statement posted on social media, Platner denied the allegations but said he was taking time off to reflect on the path forward.

“I wanted to directly address the troubling, serious, and false allegations against me,” Platner said. “Any accusation of non-consensual behavior is categorically false.” He thanked supporters for building “the largest volunteer base in the history of Maine politics” before arriving at the sentence that counts. “So regardless of the inaccuracy of the reporting, but mindful of the political reality it will inflict, we are taking the time to reflect on the best path forward for the state that I love, the people that I love, the movement I belong to, and the goal of defeating Susan Collins,” he said. He closed with a vow that “you never turned your back on me, and I will not turn my back on you now,” and the sign-off, “As Maine goes, so goes the nation.”

pic.twitter.com/9itIt4Mw25

— Graham Platner for Senate (@grahamformaine) July 6, 2026

Maine law gives Democrats until July 14 for Platner to drop out of the race and still legally replace him with another candidate.

Authored by Zachary Stieber via The Epoch Times,

An outbreak of serious pneumonia is growing in New York, officials said on July 5.

Eighteen cases of Legionnaires’ disease have been confirmed in several Manhattan neighborhoods, the New York City Department of Health and Mental Hygiene said late Sunday, up from 14 earlier in the day and 10 on Saturday.

The cases are clustered in three zip codes, 10028, 10128, and 10075, on the Upper East Side of Manhattan, the department said.

We’re investigating a cluster of Legionnaires’ disease on the Upper East Side (ZIP codes 10028 & 10128). If you live or work in this area or visited the area since late June and are experiencing flu-like symptoms, contact a healthcare provider immediately: https://t.co/0rXv78p1V1 pic.twitter.com/Z4i7iYnnaB

— nychealthy (@nycHealthy) July 3, 2026

Legionnaires’ disease is a form of pneumonia caused by Legionella bacteria, which grow in warm water. The disease shares symptoms with influenza, such as fever and chills, and can be fatal if left untreated.

No deaths have yet been reported with the current outbreak.

People who live in the zip codes, or who have recently visited the east side of Central Park, should monitor for symptoms, New York City Health Commissioner Dr. Alister Martin said in a statement.

People who experience symptoms should see a health care provider immediately.

Treatment for pneumonia typically includes antibiotics, according to the Centers for Disease Control and Prevention.

Certain individuals are more vulnerable to the disease, including individuals aged 50 and older and those who smoke or vape.

One way people can contract Legionnaires’ disease is by breathing in water vapor or mist containing Legionella bacteria. People cannot get the disease from other people.

The probable source of the bacteria is a water cooling tower in the area, according to health officials.

The systems, usually located on top of buildings, control the temperature of cooling systems, such as refrigeration and spray mist systems, which contain the bacteria.

The city’s health department is testing all the cooling towers in the area.

“This is not an issue with any building’s plumbing system. It is safe for you to drink water, bathe, shower, cook, and use your air conditioner,” health officials said in a notice to residents.

“Continuing to use your air conditioner is especially important when the city is experiencing extreme heat and temperatures reach dangerously high levels.”

There have been outbreaks of Legionnaires’ disease in the past from plumbing systems in buildings, but there are no signs that this is the case with the current situation, according to officials.

Officials first reported the cluster of cases on July 2. They said at the time that any owners of buildings where cooling towers tested positive for the Legionella bacteria would be directed to carry out full remediation.

A Legionnaires’ disease cluster in central Harlem, also in Manhattan, sickened 114 people in 2025 and left seven dead.

The writing is on the wall: defense-tech unicorns, particularly those focused on loitering munitions, autonomous drones, and counter-UAS systems, are positioned for years of growth as warfare changes forever. 

These “war unicorns,” as we call them, are increasingly ripe for M&A as larger players race to consolidate across drones and counter-drone systems. The latest example is Nasdaq-listed defense and industrial technology firm Ondas Holdings moving to acquire DZYNE Technologies, a maker of drones, loitering-munition-type systems, and counter-drone technology.  

Ondas Drone Box 

Bloomberg reports private equity firm Highlander Partners will receive $200 million in cash and about $675 million in Ondas stock. Those shares will be locked up for six months.

“The arms race has started,” Ondas CEO Eric Brock said in a Bloomberg TV interview. “Over the last 20 plus years we have de-industrialized in the United States. That means the supply chain has moved to China.”

The deal expands Ondas’ portfolio beyond the civilian drone market into systems developed for military surveillance and reconnaissance, as well as smaller kamikaze drones.

DZYNE BlitzBox Drone 

The American company Dzyne has introduced the BlitzBox system, a container for covertly launching a swarm of attack drones. On the outside, it looks like an ordinary cargo box, but inside, it can hold up to 100 Blitz drones, ready to launch in minutes.#DroneWars #UAS #UAV pic.twitter.com/w9aRaZYrCZ

— Drone Wars (@Drone_Wars_) May 27, 2026

Ondas said DZYNE is expected to generate $191 million in revenue this year and $300 million in 2027.

Recently, Needham analyst Austin Bohlig told clients of a potential drone procurement supercycle, as the US military prepares to spend billions of dollars on these low-cost systems.

Read the report:

• Congress Moves To Boost Drone Funding As “War Unicorns” See Possible Procurement Supercycle

Related:

• JPM Call With Axon Reveals Race To Fortify U.S. Data Centers Against Kamikaze Drone Swarms
• Goldman Sits Down With Anduril As ‘War Unicorns’ Reshape Defense Tech
• “Flying Beer Cooler”: Pentagon’s Next Kamikaze Drone Ushers In Era Of Cheap Mass-Produced Airpower

Separate, but more on war technology coverage:

• Ukraine Plans To Hyper-Innovate Humanoid Robot Soldiers

The Ondas-DZYNE deal further suggests that defense startups focusing on drones and counter-UAS are prime M&A targets for larger companies.

Authored by Mark Jeftovic via BombThrower.com,

“You just wait until the next bear market…”

Last month, I talked about how many of the legendary investors I’ve long followed as well as many of my contemporary financial commentators (speaking specifically of the contrarian ilk), are almost unanimous in the opinion that the AI trade is well into bubble territory and stocks in general are overvalued. Hell, even I think that and I’m personally “all in” on AI and have a fair bit of equities exposure to it (not a tonne, but it’s there, and the biggest winners in the TSC portfolio lately have all been AI stocks and HPC stocks).

Angela sent me this Diary of a CEO interview with Jeremy Grantham – another legend – and she said it was scary. At his peak he managed something like $165B AUM, but he’s down to $80B or $90B now (he also says the only reason he’s still counted as a billionaire today, personally, is because they include the money he’s given away. Grantham has donated over 90% of his net worth to the Grantham Foundation, which invests and incubates primarily green-tech innovation to combat climate change.

Although Thomas Braziel, whose name you might recognize as a notable distressed asset investor who specializes in crypto i.e. Mt Gox claims, FTX, put out an interesting analysis of Grantham’s green tech foundation’s filings – and surmised that what he’s saying on the talk-show circuit isn’t lining up with where he’s actually allocating the foundation’s …money  )

Via: GMO Q4 2025 Letter

Grantham occupies an exalted perch in the pantheon of institutional investors, so when he opines on something, it tends to get picked up on, which one may find somewhat quizzical, given his lifetime batting average isn’t really in the same league as the likes of Buffett, Munger, Klarman, et al.

His lifetime average returns? The closest analog could be the lifetime average of the GMO Global Asset Allocation Composite, which he co-founded.

Their number? 8.43%. And 0.8% of that was because of a one-time litigation settlement received in 2024

Warren Buffett’s lifetime batting average is pushing 20% (19.8%).

The S&P itself, 10%.

In case you’re wondering how somebody became a billionaire by lagging the major index by 200bp over their entire career, it’s because Grantham is proficient at one thing in particular: not losing money.

The TL;DR from the DOAC interview? A lot of people are about to lose a lot of money.

When Stephen Bartlett told him he was invested in SpaceX, Grantham dead-panned, “Good luck with that”.

Bitcoin? “It’s a zero”.

The interview went a bit viral and I saw a lot of “Billionaire says Bitcoin is worthless” headlines in the mainstream financial press. Grantham has since been on a punditry tour (perhaps in promotion of his latest book, “The Making of a Permabear” – yes, really); and the soundbites that are being repeatedly teased out from them are his “Bitcoin is a zero” sermons, in one case getting into a somewhat heated exchange with Joe Kernen on CNBC – where Kernen, incredibly, makes some of my points far less diplomatically than I have here.

At least it’s not just Bitcoiners getting into scraps! pic.twitter.com/pfJyXM3ZFc

— JOEY (@JoeyTweeets) June 26, 2026

After Grantham trotted out the usual “no use case”, “there’s no there there”, “it’s a bubble”, Kernen straight-armed Grantham in the face with his underperformance over the past two decades,

“You’ve done a great disservice to anybody who’s listened to you over the last twenty years”.

Grantham’s response and attempt at a defence, combined with something else he said in the DOAC interview, are all leading up to my point here, while being 100% oblivious to it:

To Joe Kernen: he said “We’ve been in a bull market since 2009, let’s see how all this stuff holds up when the next bear market hits”

To Steven Bartlett: he cautioned how Amazon sold off a staggering 92% during the Dotcom bust.

During the drive to Hamilton for a board meeting, I listened to this short Alex Hormozi clip and his analogy (which he cribbed from Brian Johnson) hit me full force and I finally had a working metaphor that explained what I’ve been trying to articulate about these living legends of finance.

That they’re underestimating the significance of fiat debasement is true, but it doesn’t really explode in your brain as much as make your eyes glaze over.

The analogy is fish are swimming around in water.

Some of them become experts at swimming. They train their entire lives, they practice every day, they study the expert swimmers of yore, and they analyze nearly every aspect of the water they inhabit: it’s PH levels, alkaline, currents, flow – everything.

They know how a slight variance in one factor impacts the others – they know “which way the current is going”.

But over time, the water heats up; they may pick up on this, but they’re never quite prepared for what it means beyond a certain point.

When that point arrives, the water evaporates – and now it’s gas. Steam.

Setting aside for our purposes how this would fry the fish, imagine they’re still alive, but now they’re trying to apply everything they know about swimming in water to this new environment, which is gaseous, not liquid.

They would be flailing and flapping around like the proverbial “fish out of water”.

What happened?

They were never wrong about their fluid dynamics.

The physics changed and they had no model for the new reality.

Hormozi’s short clip was applying this metaphor to AI – which is certainly among the key drivers of the “monetary physics change” that we are now undergoing.

But the point of no return, when the phase shift started, was – I believe, and as Raoul Pal has always said – the Global Financial Crisis of 2007-2009.

That was when the water started turning to gas.

Grantham’s own yardstick measures the current bull market from then – when the central banks stepped in, when The Big Print started and when interest rate suppression and credit expansion became permanent features of the global monetary system (I would argue that the process started in 1980-82, and the GFC was a major tipping point).

Yes, Amazon came off 92% when the dotCom bubble burst. But anybody who had bought, even at the high right before that, is now up about 4,642.7 %

On the new Sovereign Capitalist site, we can model all this out interactively (see below).

Run the interactive widget here

On its surface, Grantham’s fixation on loss avoidance serves a purpose (recall Buffett’s top rules of investing: number one is “Don’t lose money”, number two is “See Rule number one”).

If I ever experienced a staggeringly huge life-changing windfall in one moment, I would carve out a “retire your bloodline”-type allocation and hand it to a guy like Grantham (more likely it would be Vito Maida  over at Patient Capital, here in Canada).

But being good at preserving capital has its own opportunity cost, which is far more pronounced now that we’ve traversed the inflection point into the Exponential Age.

The world has transitioned from flat to hyper-cubed – the architecture is completely different now, and the linear measuring stick known as fiat money is ill equipped for the task of describing it.

To Grantham’s point “you just wait until the next bear market”, there won’t be a next bear market, not until we change that measuring stick.

Until the monetary regime change happens – that “change in physics” – any drawdown, no matter how deep, will be papered over with incessant Big Prints until the system itself completes its metamorphosis.

Today’s post was an excerpt from The Sovereign Capitalist my recently relaunched premium service. This goes beyond a dashboard, it’s more of an operating system for high agency net-producers.  All members get access to the full pre-release version of my new book: The Blueprint – Survive & Thrive in an Overclocked Timeline.

By Stuart Chirls of AmericanShipper

The container shipping market is being driven by geopolitics, rates, and network reshuffling, but freight-rate volatility and adjustments by carriers to protect schedules and pricing has supplanted Middle East disruptions as top-level concerns.

Asia-U.S. West Coast prices increased 8% to $6,175 per forty foot equivalent unit (FEU), according to Freightos, a data contributor to SONAR ocean market data.

Prices for Asia-U.S. East Coast transportation also rose 8%, to $7,998 per FEU.

Iran has escalated steps to assert sole authority over vessel traffic in the Strait of Hormuz, writes Freightos Research Head Judah Levine, in a note to clients, even as it negotiates with the United States over terms of a final peace deal.

Overnight, Asian tech stocks slumped after a report that Nvidia’s next-generation AI server rack system has been delayed by more than a year due to manufacturing difficulties (we profiled it back in May in “Nvidia’s Vera Rubin Rack Will Cost $7.8MM: Here’s What’s In It“.)

Research firm SemiAnalysis said in an X post that Nvidia’s Kyber NVL144 hit setbacks in the construction of printed circuit boards for the platform. 

MASSIVE DELAY: Just 3 months after Jensen demoed Kyber NVL144 at GTC, it has faced major setbacks and has been delayed by more than 12 months, pushing it back to 2028. Below, we explain why Kyber has faced massive delays and why NVIDIA’s NVL72x2 back-to-back rack architecture was… pic.twitter.com/VYduxnu01B

— SemiAnalysis (@SemiAnalysis_) July 5, 2026

According to the tweet, the PCB midplane at the center of the Kyber design remains too difficult to produce reliably. As we noted two months ago, the Kyber design consolidates 144 of Nvidia’s most powerful chips into a single cabinet, enabling them to operate as one unified system, and was originally expected to arrive alongside Vera Rubin Ultra in 2027. 

Meanwhile, cloud providers pushed back against the design over operational complexity, SemiAnalysis said, leaving Nvidia without a tested path to expand the scale-up architecture for Rubin Ultra.

In response, Japan’s Ibiden, a PCB maker that counts Nvidia as its largest client, dropped as much as 10%. Among related suppliers, Kingboard Laminates Holdings tumbled 18% in Hong Kong, Elite Material fell 10% in Taiwan and Samsung Electro-Mechanics slid 11% in South Korea.

The selloff came after a significant run-up in those stocks. Before Monday’s reversal, both stocks had posted extraordinary gains for the year – Kingboard Laminates by over 470% and Samsung Electro-Mechanics by more than 600%, according to Bloomberg.

The report by SemiAnalysis, which has been known to play “loosely” with market-moving information and trade ahead and/or after its calls (see here and here), many of which have been big flops, landed as AI stock investors have been growing increasingly anxious, with even the smallest setback sparking outsized reactions after a yearslong rally. Last week, global tech stocks whipsawed on headlines hinting at potential overcapacity in the AI buildup and growing competition; earlier today ZH was the first to point out that token expenditure are once again rolling over.

Token spending index rolling over again, down to 2.5 month low pic.twitter.com/0cJhmULDTj

— zerohedge (@zerohedge) July 6, 2026

The SemiAnalysis report spurred “weakness across regional tech” Monday, said Shawn Oh, head of Korea cash equities at NH Investment & Securities Co. in Seoul. The prospect of a Kyber NVL144 delay together with other points in the post are “raising uncertainty around Nvidia’s next-generation scale-out road map and creating a wider competitive window for alternative AI platforms,” he added. It’s also the reason why AMD stock surged today, as any delays in the Nvidia ecosystem allow competitors to grab market share. 

SemiAnalysis also warned that NVL576, which would connect eight of the Kyber racks over optical links to form an even larger system, faces its own delays or constraints on production volume.

However, hours after the unconfirmed SemiAnalysis report sent the Nvidia supplier ecosystem tumbling – giving an opportunity to the research firm to buy the stocks cheap for itself or its partners – an Nvidia spokesman told Bloomberg that “Our road map is intact.”

Additionally, CNBC also reported that its existing Rubin systems have entered full production and deliveries to eight major cloud customers – among them Amazon Web Services, Microsoft Azure, and Google Cloud – are scheduled to begin this fall.

An MSCI Inc. gauge of sector shares is down 8.5% in the past two weeks, extending its loss Monday with PCB makers among the leading decliners.