Aug 18, 2026 · 1h 12m
Listen from 4:03
Listen at 4:03
Rising yields test markets as AI debt moves off balance sheets
Treasury yields break out, how to invest with Bill Ackman, Workday rumors, off-balance sheet madness
The episode connects higher Treasury yields, expanding deficits, hidden AI financing, and market breadth to a broader question about whether risk is normalizing or accumulating.
- 1Higher long-term Treasury yields may reflect a return to market-driven rates rather than an imminent crisis, despite larger deficits and debt costs.
- 2Off-balance-sheet data-center financing can shift AI infrastructure risk toward private-credit investors while leaving companies exposed through leases and guarantees.
- 3Broad stock-market participation contrasts with pressure on software businesses, as investors weigh AI spending, enterprise disruption, and financing feedback loops.
Don't miss
The hosts challenge the practical meaning of Bill Ackman’s headline annualized returns by focusing on drawdowns and changing investment vehicles.
The brief
Josh Brown and Michael Batnick begin with rising Treasury yields, widening deficits, and a resilient stock market, asking whether higher rates signal danger or normalization.
The bond debate leads to a less visible risk: companies such as Meta can finance data centers through separate entities, moving obligations toward leases, private credit, and contractual protections.
AI revenue growth helps justify enormous capital spending, but falling equity prices could tighten financing and business conditions, creating a reflexive loop for Meta, Oracle, and software vendors.
Breadth indicators show unusually broad market strength even as enterprise software faces structural pressure, complicating the idea that the rally rests only on a few AI leaders.
The closing discussion turns to Bill Ackman’s concentrated portfolio and investment vehicles, then to leisure stocks and Josh Brown’s Spotify purchase as a trade with explicit risk management.
What was said on this episode
29 statements · 12 positive · 11 negative · 1 mixed · 5 neutral
A faster rise in bond yields would have pushed stocks substantially lower.
“If it was a more violent move, if it happened in... two weeks instead of five months, then the stock market would be a lot lower.”
Listen at 5:52
Most asset prices are benchmarked to the 10-year Treasury, not the 30-year.
“most asset prices are priced off of the 10-year and not the 30-year.”
Listen at 10:02
The 10-year Treasury yield remains within its range since September 2023.
“the 10-year is still within range it's been going sideways”
Listen at 10:09
A 10-year Treasury yield reaching 5.5% by winter would warrant selling risk assets.
“if you could tell me okay i know with certainty that the 10-year will break out of its range and it'll be 5-5 by the winter i would say i would say sell risk assets”
Listen at 10:19
Current bond yields are broadly normal rather than crisis-level.
“These yields are kind of normal.”
Listen at 13:49
The bond market is efficiently allocating capital again.
“The bond market is actually finally working the way it should work. It's allocating capital efficiently.”
Listen at 16:18
Bondholders should demand at least 5% for locking money up for 30 years.
“The bond holder should demand. 5% or more to lock their money up for that period of time.”
Listen at 18:24
Meta is financing its Hyperion data center off balance sheet.
“Meta is building a data center, the Hyperion Data Center in Louisiana, but they are not paying for it directly. It is not going on their balance sheet.”
Listen at 19:07
Alphabet’s off-balance-sheet obligations increased 800% year over year.
“the off balance sheet obligations are up 800% year over year.”
Listen at 20:27
Some AI compute and data-center projects will ultimately be poor investments.
“Not all of this compute and all of these data centers are going to turn out to be good projects.”
Listen at 23:31
Meta disclosed $347 billion of future lease obligations.
“Meta disclosed $347 billion in total obligations for leases that haven't kicked in yet.”
Listen at 23:59
Meta’s stock is approaching recent lows and currently looks weak.
“Meta can't get out of its own way. The stock is approaching recent lows. It looks terrible.”
Listen at 25:17
Oracle credit-default swaps are primarily trading instruments, not default insurance.
“I think it's more of a trading vehicle.”
Listen at 28:55
Asset prices can influence the real-world condition of businesses and governments.
“the prices for an asset dictate the reality for a business or a sovereign government or whatever the case may be.”
Listen at 30:18
AI infrastructure spending could reach $1 trillion annually in 2027.
“a trillion dollars in annual CapEx in 2027.”
Listen at 31:56
Mindlessly shorting horizontal software stocks is no longer viable.
“the period of time where you could just mindlessly short any of them anytime you wanted. That's done.”
Listen at 33:52
Salesforce’s stock price could be lower one year from now.
“I don't know that Salesforce price is not going to be lower a year from now.”
Listen at 34:31
The market reached an all-time high with 75% of stocks above their 200-day average.
“you're having the market hit an all-time high with 75 of stocks above their 200 moving average this is about as good as it gets.”
Listen at 42:16
Very high breadth readings can precede a market pullback, but do not predict one reliably.
“when you get into the 70s, you can get a market pullback. It doesn't mean you will, and it doesn't mean you won't.”
Listen at 42:42
Most private venture-backed startups fail to achieve successful outcomes.
“Most private... private venture-backed startups do not have a happy ending.”
Listen at 47:32
Uber’s autonomous-vehicle overhang will persist for years until deployment becomes widespread.
“it goes away. when it's apparent to the consumer that the roads are flooded with autonomous Ubers. Do you know how long that's going to be? It's going to be years”
Listen at 51:51
PSUS trades 22% below its IPO price and at a discount to NAV.
“it is down 22% from the IPO price, which was 50, and it's trading at a nasty discount to its NAV.”
Listen at 55:19
Howard Hughes Holdings offers exposure to Ackman’s Berkshire-style strategy.
“if you wanted to bet on the Berkshire concept, you would buy Howard Hughes.”
Listen at 1:00:35
Investors should strongly favor new positions before adding them.
“if you're going to put on a new position, you really have to love it.”
Listen at 1:03:30
Spotify’s stock has formed a double bottom and is poised to break out.
“The stock found a double bottom and it's nothing but higher lows and it's about to break out.”
Listen at 1:06:36
Spotify is the best business in media.
“I think this is the best business in media.”
Listen at 1:06:46
Spotify could become the first media business with one billion subscribers.
“can they be the first media business to get to a billion subscribers? I think they literally could.”
Listen at 1:08:17
Josh Brown placed a stop-loss below Spotify’s $400 level.
“I have a stop in below that level because it's a trade.”
Listen at 1:09:00
Spotify offered roughly 50% upside versus 21% downside at the stated entry.
“It's 21% below where we are right now. That's a pretty good risk reward. 50% potential upside.”
Listen at 1:09:40
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.