Mastodawn

Jack William Bell

More #bubblewatch weekend notes:

Remember Thursday's short downturn in AI stocks the day after Nvidia released their self-fluffed earnings report? It was caused by AI trading systems flagging accounting fraud.

> The Algorithm That Detected a $610 Billion Fraud: How Machine Intelligence Exposed the AI Industry’s Circular Financing Scheme. https://substack.com/inbox/post/179453867

And the recovery afterwards? That is apparently human beings deciding the AI systems were full of shit.

Get your head around that…

The Algorithm That Detected a $610 Billion Fraud: How Machine Intelligence Exposed the AI Industry’s Circular Financing Scheme

On November 20, 2025, trading algorithms identified what may become the largest accounting fraud in technology history—not in months or years, but in 18 hours.

Jack William Bell Nov 24

Monday 11-24 #bubblewatch

The market climb at the end of Friday is continuing. Apparently on the expectation the Fed will cut rates in December.

> Wall Street surges on tech rally, rate cut optimism. https://www.reuters.com/world/europe/wall-street-futures-mixed-investors-mull-fed-rate-cut-focus-data-2025-11-24/

This is a general upturn, but tech stocks are doing quite well. And yet a rate cut doesn't change fundamentals of the bubble, so this seems like the old saw: "The market can stay irrational longer than you can stay solvent."

Jack William Bell Nov 25

Tuesday 11-25 #bubblewatch

This is the first time since I started this thread on 11-4 where a rise in the market on one day was followed by another rise on the second. Apparently this is everyone betting on Federal Reserve rate cuts.

> Wall Street advances as Federal Reserve rate cut bets gather momentum. https://www.reuters.com/business/us-futures-ease-with-investors-focus-data-alphabet-shines-2025-11-25/

Is this the end of the 'roller coaster' we've been seeing? Or just going for a longer drop?

Note again: a rate cut doesn't change bubble fundamentals.

Jack William Bell Nov 25

Socialism by another name: Betting public money on the stock market.

> $10 Billion and Counting. https://www.nytimes.com/2025/11/25/us/politics/trump-intel-steel-minerals-china.html

Outside of Intel, which seems to be the old 'too big to fail' play, so far these are all materials and industrial companies with good fundamentals. But watch out for the Administration adding AI stocks to the mix!

Trump Administration Is Taking Billions in Stakes in Firms Like Intel

The Trump administration is spending billions of dollars on deals with ownership stakes in companies. The unusual practice shows no sign of slowing.

The New York Times

Jack William Bell Nov 26

Wednesday 11-26 #bubblewatch

Yesterday's climb in the market continues. The bubble blows up a bit bigger. And yet who knows what's going to happen after four days straight of no trades?

We'll find out on Monday.

> Wall Street extends gains as Fed rate-cut bets for December grow. https://www.reuters.com/business/wall-street-futures-edge-higher-december-rate-cut-expectations-data-awaited-2025-11-26/

Jack William Bell Dec 1

Monday 12-1 #bubblewatch

Last week ended with the market rising generally amid optimism the Fed will cut the prime rate. Monday opens with a general drop (and a crypto free-fall) as Treasury Bond yields rise.

> Wall Street slips as yields rise, crypto stocks tumble. https://www.reuters.com/business/wall-st-futures-drop-caution-ahead-data-powells-remarks-2025-12-01/

This is all common market volatility, not yet the #AI econo-gedden many of us are expecting. But the roller coaster of the last few weeks has trended generally down.

Jack William Bell Dec 2

Tuesday 12-2 #bubblewatch

I'd say the market was see-sawing, but I've already settled on 'roller coaster' for the metaphor. In any case, after two days of moderate 'up' we are back on the 'down one day, up the next' train. Err. Roller coaster.

> Nasdaq, S&P 500 edge higher as Fed rate cut bets grow, Boeing advances. https://www.reuters.com/business/us-stock-futures-steady-after-wall-st-selloff-eyes-fed-2025-12-02/

As noted yesterday, the overall trend is 'down'. But right now everything is hanging on the Fed announcing a rate cut.

Jack William Bell Dec 3

Wednesday 12-3 #bubblewatch

The market is apparently convinced the Fed will drop rates significantly. T-Bill yields continue to drop and stock prices are still edging up, although tech stocks not so much.

> Fed hopes fire risk rally. https://www.reuters.com/world/china/global-markets-trading-day-graphic-2025-12-03/

However, job data is *not* looking good. And, again, nothing has changed on the #AI bubble fundamentals; it's still unsustainable and only hanging on right now because of risk takers and greater fools.

Jack William Bell Dec 4

Seattle NPR station KUOW has a report on the #AI #bubble.

> What happens to Seattle if the AI bubble pops? https://www.kuow.org/stories/what-happens-to-seattle-if-the-ai-bubble-pops

However, the story is dominated by an interview with Tim Porter – a Managing Director at Madrona (local vulture capital firm) – who is clearly motivated to deny it is a bubble. When pressed he admits to every aspect of why people believe it is a bubble, but never backs off his assertion it is *not* a bubble.

(Posting to archive a link, not recommended listening.)

What happens to Seattle if the AI bubble pops?

Companies are spending hundreds of billions of dollars to build the AI infrastructure of the future. But companies are struggling to make a profit on the AI of today. So, is that future real, or just a mirage?

Jack William Bell Dec 5

Wednesday 12-4 #bubblewatch

Mixed trading today. Many stocks held their ground with continued optimism over a Fed rate cut, but that same optimism was muted as government economic figures are missing or 'soft' and non-governmental figures (like ADP's employment numbers) are looking rather grim.

> Claims muddy Fed outlook. https://www.reuters.com/world/china/global-markets-trading-day-graphic-2025-12-04/

Treasury yields are going back up again.

Jack William Bell Dec 8

Monday 12-8 #bubblewatch

I didn't do a bubblewatch update last Thursday and Friday, partially because those days were merely a continuation of last Wednesday. The writeups stressed market optimism for Fed rate cuts, but the market itself showed only a marginal increase in value.

Today it seems that optimism has drained out…

> US stocks drop on higher Treasury yields, caution ahead of Fed rate decision. https://www.reuters.com/business/wall-st-futures-edge-up-fed-interest-rate-cut-decision-nears-2025-12-08/

Values lower across the board.

Jack William Bell Dec 8

Following on the heels of Nvidia's recent earnings report, Oracles Q2 report should arrive on Wednesday. Expectations for it seem to be low, as Oracle shares have been bouncing around the same valuations for weeks now.

> Oracle Stock Tests Key Level. Here's What Wall Street Is Saying Ahead Of Big Earnings Report. https://www.investors.com/news/technology/oracle-stock-earnings-q2-2025-ai-openai/

Note: there are other things than the #AI #bubble to be concerned about in Oracle's recent dealings and together they have driven up corporate debt.

Oracle Stock Tests Key Level. Here's What Wall Street Is Saying Ahead Of Big Earnings Report.

Oracle stock is ahead for a fifth straight day as analysts defend the costly AI push that has weighed on ORCL stock.

Investor's Business Daily

> https://rustedneuron.com/deck/@jackwilliambell/115691333577846015

Jack William Bell Dec 9

Tuesday 12-9 #bubblewatch

And the market is back on the bumpy roller coaster, edging back up a bit as Fed rate cut optimism again gains the upper hand.

> Wall Street edges higher as Fed rate cut decision nears. https://www.reuters.com/business/wall-st-futures-flat-fed-decision-looms-nvidia-gains-2025-12-09/

Unrelated, but thematic to this thread:

#economy #AI

Jack William Bell Dec 10

Wednesday 12-10 #bubblewatch

The Fed has finally spoken and they have intoned, "One quarter of a percentage point will I give you!"

And despite the fact a quarter of a percentage point (0.0025%) isn't squat, there was much rejoicing and industrial stocks saw moderate gains.

Tech stocks, however? Again, let me point out the US GDP and Fed rates have little or nothing to do with the fundamentals of the AI bubble.

> S&P 500 gains ground after Fed cuts interest rates. https://www.reuters.com/business/wall-st-futures-slip-ahead-fed-meeting-2026-cuts-doubt-2025-12-10/

Late night update. As expected, Oracle's earnings report was disappointing to the punters. What I didn't expect was for Oracle shares to drop 11% in Asian market after-hours trading!

They might make it up in the morning with the USA markets open. But if the slide continues it could spread to other tech stocks. (Right now both S&P and Nasdaq futures are taking short hits.) I'll be watching this in the morning.

> Oracle knocks stocks as Fed's message drags on dollar. https://www.reuters.com/world/china/global-markets-wrapup-1-pix-2025-12-11/

NOTE: If you've been thinking about trying to set up a big short when the AI bubble finally pops, this could be a good time to take a small flyer – assuming you can afford to take a loss. Because it's likely not the time yet.

I don't think there's going to be any way to predict when the market's attitude makes that sudden turn against AI stocks and, sure, this could be it. But I don't think so.

I will enjoy watching Oracle get pummeled though. So I'm hoping for that much.

> https://www.reuters.com/business/retail-consumer/oracle-reports-higher-quarterly-remaining-performance-obligations-2025-12-10/

Here's an article on Oracle's sales forecast and earnings report:

As I predicted a couple of days ago, one of the things dragging Oracle down is uncleared debt. Some of it in the form of services paid for and not delivered.

And a lot of that is AI related. I'm wondering if some of those open obligations are actually circular deals like Nvidia was doing – IOW they were paid with ownership in the AI company buying the data center services.

Thursday 12-11 #bubblewatch

Last night Asian and futures markets were bearish on Oracle due to their disappointing earnings report and I suggested if this continued once USA markets opened this morning the malaise could spread to other tech stocks.

And … yeah…

> Nasdaq slips to one-week low as Oracle reignites AI jitters. https://www.reuters.com/business/wall-street-futures-slide-oracles-forecast-revives-ai-bubble-fears-2025-12-11/

This isn't the #AI #bubble popping. Yet. But the smarter investors are slowly easing their money out while it's still over-inflated.

Jack William Bell Dec 12

Friday 12-12 #bubblewatch

The market rallied a bit by EOD yesterday, but that evaporated when it opened this morning, followed by tech stocks hitting two-week lows. Oracle and other #AI #bubble concerns were a big reason.

> Wall St slides as inflation worries, AI bubble fears spook investors. https://www.reuters.com/business/nasdaq-sp-500-futures-slip-broadcom-outlook-reignites-ai-bubble-fears-2025-12-12/

We might be edging our way up to the tipping point!

(I might need to post an update today once the USA markets close.)

Jack William Bell Dec 13

Weekend #bubblewatch update.

The Oracle and Broadcom earnings reports are certainly having an effect on tech, and most especially #AI, stocks. But, as I suggested on Thursday, it's a bit muted and not the bubble popping.

> Oracle-Broadcom one-two punch hits AI trade, but investor optimism persists. https://www.reuters.com/business/finance/oracles-stumble-hits-ai-trade-many-remain-bullish-2025-12-12/

The key here? Some investors are taking their profits and walking away, but not enough to get the short players out of bed. There remains a LOT of incentivized optimism.

> https://zirk.us/@ChrisMayLA6/115711494979571990

Jack William Bell Dec 13

@ChrisMayLA6 has an interesting chart showing one significant difference between the current #AI #bubble compared to both the 2000 Tech bubble and the 1989 Japan Finance bubble.

Of course this chart only includes big players with track records, which is fair. But a bit misleading for the AI bubble because the big players this time (aside from Tesla) were priced down in a way similar to IBM in previous bubbles. While smaller players are priced stupid high.

Meanwhile https://finance.yahoo.com/news/jpmorgan-sees-sp-500-reaching-7500-in-2026--or-surging-past-8000-if-the-fed-keeps-cutting-rates-142602366.html

Matthew Miller Nov 26

@jackwilliambell

JPMorgan sees S&P 500 reaching 7,500 in 2026 — or surging past 8,000 if the Fed keeps cutting rates

JPMorgan's stock market strategists think 2026 will be another good year for US investors.

Yahoo Finance