Monetary Matters with Jack Farley More Credit Problems, Mag 7 AI CapEX Continues, and Money Market Stress | Jack & Max
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Nov 2, 2025 Explore the intriguing world of credit fraud and its ties to major asset-backed loans. Delve into the impressive earnings reports from the tech giants, known as the Mag 7, highlighting their massive investment in AI CapEx. Debate the potential bubble surrounding AI spending versus its long-term trends. Listen in on Fed insights discussing balance sheet expansions amid market stresses and the implications for rate changes. The dynamics of capital intensity in tech business models spark compelling discussions about future valuations.
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Large Telecom Fraud Hit Credit Markets
- Jack and Max identify a new telecom fraud (Broadcom Telecom / Bridge Voice) that hit large lenders and looks intentional rather than systemic.
- BNP called it "a fraud case" and losses reached hundreds of millions, yet markets treated it as isolated.
Syndicated Loans And Private Credit Blur
- Jack explains blurred lines between syndicated loans and private credit as deal sizes and structures converged.
- That blur makes attribution of losses to a single sector misleading and risks underestimating interconnected exposure.
Earnings Mask The Real Story: AI CapEx Surge
- The Magnificent Seven reported strong revenue growth but the headline story is massive AI-related CapEx.
- Microsoft, Meta, Google, and Amazon spent well over $100 billion in one quarter, annualized near half a trillion.