The Compound and Friends Is It Too Good? AI Capex Explodes Higher, Pre-Revenue Stock Boom, Will Falling Mortgage Rates Save Us With Telis Demos (WSJ)
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Sep 23, 2025 Telis Demos, a Heard on the Street columnist for The Wall Street Journal, dives into the implications of falling mortgage rates and the highly publicized U.S. TikTok deal, exploring ownership and political concerns. He also reveals insights on JPMorgan's credit card strategy and discusses the booming private market investments in 401(k)s. The conversation further touches on the frenzy around pre-revenue stocks, the AI capital expenditures arms race, and implications for the broader economy. A juicy mix of finance, tech, and market trends!
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US-TikTok Spinout And Data Control
- The US-TikTok deal would spin off US operations to a US-led consortium while licensing tech from ByteDance.
- That structure aims to separate US user data control and reduce foreign influence on recommendations.
Mortgage Rates Are Driven By MBS Demand
- Mortgage rates are set by the mortgage-backed securities market, not directly by the Fed's policy rate.
- Investor demand for certain MBS coupons and prepayment expectations drive lenders' new loan pricing.
Prepayment Risk Shapes MBS Preferences
- Investors prefer lower-coupon MBS during prepayment-risk regimes because they last longer and reduce reinvestment risk.
- That shift in buyer preference can create an "air pocket" affecting retail mortgage pricing.
