Episode summary
Capital Costs Rise as Markets Eye Midterms | Bloomberg Surveillance
Bloomberg Surveillance
· · 34 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: George Noble, Dan Tannebaum, Steve Laipply, Gautam Mukunda
Summary
George Noble argued that the AI boom is a historic misallocation of capital, with weak returns, flawed unit economics, and rising credit stress at names such as Oracle and CoreWeave. He said he is bearish on the market overall but sees opportunity in stock picking, especially in shorts, while also favoring energy and gold as a hedge against the broader consequences of the AI trade and higher rates.
Dan Tannebaum said Russia is still widening the war beyond Ukraine through hybrid conflict and pressure around NATO territory, and he was skeptical that Vladimir Putin has any real interest in meaningful peace talks. He argued that sanctions relief and energy deals have functioned more like release valves for Moscow than real pressure, and that the West still needs to keep up leverage.
Steve Laipply said fixed-income inflows are running at record levels, led by front-end Treasury ETFs, as investors seek income despite volatility and higher yields. Gautam Mukunda said the midterm polling is so weak for Republicans that Democrats could win the House and possibly the Senate, then focus on investigations and an affordability-versus-corruption message heading into 2028.
Key takeaways
- George Noble said AI is "the biggest misallocation of capital in history" and singled out CoreWeave and Oracle as weak spots.
- George Noble said energy stocks remain attractive because the sector is cheap, underinvested, and generates a disproportionate share of free cash flow.
- Dan Tannebaum said Putin is expanding the war beyond Ukraine and has shown no evidence of wanting a real peace deal.
- Steve Laipply said fixed-income ETF flows are at a record pace, with most money going into Treasuries and the front end.
- Gautam Mukunda said the polling implies Democrats could win both chambers, then turn to investigations and anti-corruption messaging.
Notable quotes
“AI is the biggest misallocation of capital in history. Complete disaster. No ROI. Stay short”
“The real way to make big money in the market is try to figure out what is it the market believes it's not true”
“I think SpaceX is the most over egregiously overpriced company at scale in the history of capital markets”
“The bullcase for energy is energy accounts for 3 and a half% of the of of the S&P generates I think 12 on its way 20% of free cash flow”
“we're at 200 globally, about 155 US. the industry US is about half a trillion in flows globally it's around 700”
How the episode opens
Bloomberg Audio Studios podcasts, radio, news. This is the Bloomberg Surveillance Podcast. Catch us live weekdays at 7 a.m.
Eastern on Apple CarPlay or Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. Can I rip up the script with George Noble?
I mean, we got to go there. I mean, he's got some conference coming up or something. It's a bunch of low rent people with nothing to do and they're going to they're going to be doing something like David Keller's going to show up.
Do you know that David Keller has an original edition of 1978 Wells Wilder?
Is that right? — That's like the Gutenberg Bible of Technical Research. None of that matters. — Louise Yumada will be with you. George, you are rocketed. explain the majesty of Louise Yamada.
Thanks so much. Uh Louise is belongs in the hall of fame for technical analysis along with Ralph Aurora and the whole bunch. And uh Louis is still she's still pitching and we're so delighted uh that she'll be joining us next week, Tuesday and Wednesday.
20 of the leading technicians names you would know. This is the varsity team over two days uh 10 to 4 and we're really trying to democratize finance. Thanks for letting me mention it.
It's only $199 and it's all will all be available on replay.
$199 is what a used Wells Wilder book costs if you're lucky to find I can't say enough about the quality of this including John Rook will be there is okay. Let's get down. I need you to explain this. You said it out on Twitter where you get a lot of hate mail. You're making it both ways.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- cost of capital
- ai capital misallocation
- treasury yields
- fixed income flows
- us midterm elections
Companies and tickers mentioned
- BLK
- Noble Capital Advisors
- Oliver Wyman
- Atlantic Council
- BlackRock
Watch the episode
Watch “Capital Costs Rise as Markets Eye Midterms | Bloomberg Surveillance” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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