SHOWNOTES
This week we connect the dots across oil & gas markets, the rise of dollar-pegged stablecoins, and tech’s CapEx surge—then wrap with healthcare M&A and GLP-1 distribution shifts. Expect sharp takes, real numbers, and what it all means for cash flow and valuation.
[00:00] Intro
[00:20] Disclaimer
[00:30] Exhibit C: Oil—OPEC+ restraint & a flat curve
Oil hovers near $60 as OPEC+ (including Russia) keeps supply tight, flattening the forward curve. Limited monthly additions may be enough to hold prices and gradually curb non-OPEC supply growth.
[01:45] Exhibit B: Natural Gas—Term structure resilience
While near-dated gas has been choppy, the 2026 strip holds around ~$4, signaling longer-term support even as the front of the curve softens.
[02:03] Exhibit A: U.S. Fiscal—Deficit glidepath & the dollar
Targets to bring the deficit down from ~1.9T toward ~1.5T (with ~1.1T a better long-run anchor) would improve debt/GDP trajectory. With other major economies levering up, a relatively disciplined U.S. could re-strengthen the dollar.
[02:57] Stablecoins vs. Payment Rails—What actually threatens banks
Stablecoins (not Bitcoin) pose the nearer-term challenge to bank settlement: ~$180B tethered supply and an estimated ~$28T in annual transactions point to real adoption. Large banks (e.g., JPM) pilot 24/7 institutional settlement while providers like Tether/USDC keep pegs via T-bills; upside is always-on money movement, downside is slow base-chain throughput, energy cost, and roll-back limitations.
[07:10] Real-world case: Cross-border flows (SpaceX/Starlink)
Illustration of collecting multi-currency revenues and quickly neutralizing FX risk by hopping into stablecoins, then sweeping back into U.S. Treasuries for working capital—freeing cash and reducing cycle times.
[10:45] Why blockchain won’t replace Visa at checkout
Blocks finalize slowly and propagate across tens of thousands of nodes—fine for large settlements, frustrating at the point of sale. Expect banks to adopt the features (programmability, 24/7, instant-ish settlement) inside more centralized, regulated systems rather than relying on public chains.
[13:46] Page 1: Big Tech check-in (AAPL, AMZN, GOOG, MSFT, TSLA)
Q3 prints were broadly strong. Tesla’s valuation (>200× FCF) contrasts with Apple’s richer FCF yield and subdued CapEx, while AMZN/GOOG/MSFT step up AI-driven CapEx, compressing near-term FCF yields.
[14:15] Page 4: Meta & friends—spend now, justify later? (NFLX, DIS, META, SPOT)
Meta draws heat for outsized OpEx/CapEx without a third-party cloud profit engine. Bulls cite Zuck’s strong historic capital returns and AGI ambition; bears point to revenue timing and the market’s patience.
[16:26] Page 1 (cont.): Data center CapEx & the power bottleneck
Hyperscalers highlight power constraints as a real limiter, explaining “neo-cloud” deals and long-lead grid work. CapEx lifts push FCF multiples higher (lower yields) even as deployed GPU fleets monetize quickly.
[19:36] Page 2: Software’s ‘capital-light’ myth (CRM, NOW, SNOW, ORCL, AVGO)
Low CapEx ≠ low investment: massive Sales & R&D are the true “maintenance” spend in SaaS. As AI inference costs creep into COGS (e.g., paying model providers), expect margin trade-offs unless revenue productivity jumps.
[23:18] Page 3: Nvidia’s cash machine & competitive vectors
With extraordinary FCF conversion and lighter CapEx than peers, NVDA’s valuation premium draws support. Real competitive risk tilts toward in-house silicon at the clouds (GOOG/AMZN) rather than legacy CPU/GPU rivals.
[26:49] Healthcare: M&A thaw, GLP-1 direct channels, and FDA twists
Novartis buys Avidity Bio; patent cliffs nudge Big Pharma to replace pipelines via deals. Lilly’s direct channel gains traction (rumored lower out-of-pocket pricing could widen access), while FDA leadership changes and a Huntington’s therapy setback temper optimism. Vertex’s non-opioid analgesic sees early adoption in elective procedures despite payer frictions.
[31:34] Next Week: TSMC & non-lithography upstarts
Teaser for a TSMC deep dive and a look at a startup pursuing chipmaking beyond traditional lithography—potential implications for capex cycles and competitive moats.
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