This week’s world-famous-news-haiku-competition™ is about how Bitcoin and Gold are surging against the dollar, following the Treasury’s interventions in the bond market and our national debt surpassing $40 trillion. Send me your entry — to haiku at cheddar dot com — by noon ET Thursday, for consideration by your Cheddar peers. (Don’t worry if you get a bounceback email. The mailbox is working, it’s just been inundated with haikus lately, thank goodness!)

Matt Davis — Need2Know Chedditor

Table of Contents

• Billionaire in AI-Written Bonds Op-Ed Controversy

• JPMorgan Eases Lending Rules for AI Nouveau-Riche

• Sneaker Stocks Slide as Consumers Tighten Wallets

• Backlash Against Flock Cameras Ramps Up

• Canada Strikes Back Hard on Tariffs

• Poll of the Day: For Flock’s Sake

• Poll of the Day: Oh, Canada!

What’s the Stock Market Up To, Eh?

$SPX ( ▲ 0.32% )  $DJI ( ▲ 0.3% )  $NDX ( ▲ 1.59% )  

Companies Mentioned in Today’s Newsletter

$JPM ( ▲ 0.08% )  $SPCX ( ▲ 2.19% )  $ANTHZZX ( ▲ 0.42% )  $DKS ( ▼ 30.68% )  $NKE ( ▼ 3.12% )  $ADDYY ( ▼ 1.46% )  $FLOSZZX ( ▼ 0.04% )  

Billionaire in AI-Written Bonds Op-Ed Controversy

Imagine being U.S. Treasury Secretary Scott Bessent. Just last year, you fawned over your legendary mentor, hedge fund manager Stanley Druckenmiller, telling the Financial Times that “in macro, there’s Stan and then everybody else.” You were probably hoping for a proud nod from the master. Unfortunately, Druckenmiller outsourced roasting Bessent in a Wall Street Journal op-ed to an AI-bot, instead. As the FT noted, there are “some tell-tale signs of AI involvement in this WSJ op-ed.” 

And what a computerized slap! Stan, or rather, Stan’s bot, savaged the Treasury’s bond buybacks, declaring that “this wasn’t liquidity management, it was price management.” The AI-crafted rhetoric grew dramatically philosophical, warning that “every basis point of artificial yield suppression is a subsidy to procrastination.”

The Drucken-bot also warned that “once markets believe Treasury is defending a price, every rise in yields becomes a test of official resolve, and the operations must grow to survive the tests.” It ended with an accusation of playing politics: “Debt management that even appears to follow the political calendar spends the one asset that took two centuries to accumulate: the credibility of the Treasury market.”

Ultimately, if your idol is going to demolish your credibility, it’s a bit of a silver lining to know they probably did it via copy-paste, I suppose. Druckenmiller told journalists “of course” the column was written with AI, yesterday. “I write everything using AI now,” he said. Although the journal is yet to respond to requests for comment.

Quote of the Day

JPMorgan Eases Lending Rules for AI Nouveau-Riche

There is nothing Wall Street loves more than "disrupting" its own ancient, sacred rules when a giant pile of new money is up for grabs. Usually, if you’re a newly public company insider, JPMorgan Chase $JPM ( ▲ 0.08% ) treats your stock like a volatile hot potato. The bank’s standard policy dictates waiting a solid 135 days after an IPO before accepting those shares as collateral for loans. But if you're a SpaceX $SPCX ( ▲ 2.19% ) engineer or sitting on millions of dollars of Anthropic $ANTHZZX ( ▲ 0.42% ) stock, congratulations! You get the VIP fast-track.

JPMorgan has shortened the timeline, eagerly letting AI's nouveau-riche borrow against their holdings sooner. Why sell stock and suffer the indignity of taxes when you can live on cheap debt secured by highly volatile, newly minted paper wealth? Anthropic’s valuation has skyrocketed from $18 billion to $965 billion, with a potential $2 trillion October float. With some engineers sitting on tens of millions of dollars in stock, banks are salivating. And of course, what goes up will never come down again, ever.

When asked about this sudden flexibility, JPMorgan told the FT, “Our practices exceed regulatory requirements, and we have always assessed transactions on a case-by-case, client-by-client basis, factoring in elements such as market liquidity.” 

Rules continue to be for poor people.

Sneaker Stocks Slide as Consumers Tighten Wallets

The greatest threat to global capitalism isn't, let’s say… geopolitics. It’s your refusal to buy another pair of $200 sneakers. Because Foot Locker owner Dick’s Sporting Goods $DKS ( ▼ 30.68% ) (don’t Google it…) saw its stock plunge as much as 27 percent this week after admitting that consumers are stubbornly refusing to play along. Executive Chair Ed Stack said the “industry is carrying too much inventory” while shoppers have grown “even more cautious than expected.”

With the cost of basics rising, the head of the Boston Federal Reserve noted this week that poorer Americans are struggling to “make ends meet.” And the first victim of this cost-of-living crisis? Discretionary spending.

But Stack had an even more tragic excuse for the pile of unsold shoes gathering dust in warehouses. Apparently, “certain legacy footwear silhouettes and apparel franchises are simply not resonating the way they once did.” That means your favorite classic kicks are officially uncool, and Dick's is stuck with a mountain of them. Bad news for Nike $NKE ( ▼ 3.12% ) and Adidas $ADDYY ( ▼ 1.46% ) , too, I’d say.

Until fuel prices settle down and the world stops sliding into chaos, I’ll be happily walking around in my un-resonant old sneakers for a while.

Song of the Day: Cleo Sol, ‘Gentlewoman’

Cleo Sol’s fifth album title song is a spiritual, soothing, and emotionally mature record that prioritizes personal boundary-setting, healing, and family devotion over chasing mainstream trends. So, it’s just like this newsletter.

Backlash Against Flock Cameras Ramps Up

Flock Safety $FLOSZZX ( ▼ 0.04% ) now has 120,000 cameras across the country capturing 20 billion license plates a month. The system even catalogs vehicle dents and embarrassing bumper stickers. Not everyone is thrilled about this, and bipartisan public anger is boiling over. While some citizens prefer traditional protest, others have opted for direct kinetic feedback, attacking cameras with shotguns, spray paint, and saws. Activist Kamau Franklin isn't holding back either, telling the Wall Street Journal: “We’re gonna be at their corporate offices, organizing, and we’re gonna be in the street, organizing.”

Cybersecurity researcher Benn Jordan took spy-craft to another level by parking a tech-rigged van outside Flock’s conference to eavesdrop. Jordan promised: “I’m gonna do whatever I can, whatever the law allows me to do, to gather as much information as possible.” This high-tech rebellion gained traction after Jordan exposed a security vulnerability allowing live internet access to a camera feed, leading local resident Jason Hunyar to realize his son was logged in Flock's database before he was even born. Hunyar protested, “I don’t really want my son to grow up in a world where he can be watched by anyone.”

Flock CEO Garrett Langley remains, let’s say, relaxed, counter-attacking, “Am I on the defensive? I’m on the offensive because I need to make sure that everyone has a conversation about how we build this combined world of safety and privacy,” he said.

And…good luck with that conversation, Garrett. It’s hard to build bridges when the other side is holding a chainsaw.

Free Yourself From Advertising Forever!

Canada Strikes Back Hard on Tariffs

After President Trump slapped tariffs on $20bn of Canadian goods, he threatened to tax Canadian cars and even threatened to rename Lake Ontario “Lake America” yesterday. A Canadian suggested they change the name of Lake Michigan to “Lake Epstein” in apparent retaliation. In a more official response, Canadian Prime Minister Mark Carney launched a massive, $20bn retaliatory strike. Beginning on September 8, the Great White North is hitting back with duties of up to 50 percent on hundreds of U.S. goods, including steel, dairy, and agricultural tractors. Finance Minister François-Philippe Champagne proudly declared, “When the U.S. asked too much and offered too little, we chose to stand up for Canadians.” 

To soften the blow back home, he is throwing in a $5.5bn bailout package, promising it will “protect workers, farmers, families, and businesses as we build a stronger, more resilient, and more diversified Canadian economy.”

This all comes at a perilous moment for Washington, which is already battling stubborn inflation. A search for “Canada” on Twitter kept me amused for an hour or two yesterday. I’d recommend it, in fact.

Should You Check Your 401(k) Today?

👍️ 

Yep.

Poll of the Day: For Flock’s Sake

Poll of the Day: Oh, Canada!

We asked: Was Canada Right To Stand Up To the U.S. Over Tariffs?

You answered:

🟩🟩🟩🟩🟩🟩 Yes. The polite diplomatic thing was to roll over, apologize for possessing lumber and steel, and thank Washington for the privilege of being economically shaken down. But somebody has to draw a line somewhere. (321)
⬜️⬜️⬜️⬜️⬜️⬜️ No. Threatening retaliatory tariffs when your entire national GDP is basically a rounding error on California’s balance sheet is not how you win a staring contest with an economic giant. (32)
🟨🟨🟨⬜️⬜️⬜️ Yes. It's good for Ottawa to force American builders to face the horrifying reality that supply chains don't end at the border and affordable housing actually requires Canadian timber. (184)
⬜️⬜️⬜️⬜️⬜️⬜️ No. Canadian families will see hikes in the prices on their own imported goods and groceries just to prove an expensive point to the noisy neighbors downstairs. (38)
575 Votes via @beehiiv polls

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