The BIG Revelation
- MAC10
- Jun 9
- 4 min read
The truth has been buried.
By massive lies and exceptional bull shit; Record greed and corruption; An existential AI asset bubble; Financial industry marketing hype; AND TOTAL economic incompetence.
However, all of the massive lies and corruption are about to be revealed. When that occurs the populace will be shocked to the extreme. Not only by the breadth and depth of rampant criminality, but what it portends for their future. Suffice to say, they will not be enamored of the criminals running the country straight into the ground to their sole benefit.
But for now, the veil of false optimism abides, because markets have remained elevated amid record risk.
As I will discuss further below, the mega cap "MAG 7" are now being used BOTH to subsidize the AI over-investment bubble AND they are being used as the primary source of LIQUIDITY for the mega IPOs themselves, at a time when hyperscaler growth rates are coming into question.
Which is why their collapse is PROOF that the AI bubble is ENDING and about to enter what I call "AI winter".
This week the largest IPO in history will be launched at a 50% higher valuation to the next most over-valued company in the entire market (Palantir). However, the float is very small relative to the size of the market cap, which has many pundits including Jim Cramer expecting the IPO to sky-rocket on the first day due to what they are calling an "index short squeeze". Basically what it means is that Nasdaq index funds are forced to buy the IPO under the new "fast track" IPO rules. Therefore, IPO traders plan to bid up the shares to force the indexers to chase the market. These new rules were put into effect specifically for this mega IPO.
"Forced buyers meeting a deliberately scarce float produce one outcome: "You have effectively created a short squeeze for the index funds. They have to buy stock at any price, and there isn't enough stock for them to buy."
This short squeeze dynamic has caused MASSIVE FOMO among retail speculators AND hedge funds. As of Tuesday, the IPO is already 4x oversubscribed:
"Elon Musk's SpaceX has drawn more than $250 billion of investor demand for what stands to be the largest-ever IPO, said people familiar with the matter on Tuesday, dwarfing the $75 billion the firm is seeking to raise."
The offering comes at a time of extreme volatility in markets...Some analysts have speculated that one factor in the market retreat could be selling by SpaceX buyers raising funds for the IPO"
The problem is that IPO allocations are not determined until the day before trading begins which in this case is Thursday. Therefore if every investor raised enough cash for their maximum expected allocation, that would imply raising substantially MORE than $75b in cash ahead of time. Which is why liquidity has collapsed ahead of the MAIN EVENT. The market is becoming increasingly erratic and unstable, as perma-bull Jim Cramer predicted:
"Cramer also thinks the SpaceX IPO could be destructive for the rest of the stock market. Investors who want to participate may have to raise money by selling other stocks, and Cramer sees prime targets in Amazon, Microsoft, and Nvidia"
Therefore I predict that this SpaceX IPO will implode the ENTIRE IPO market and close off financing to the remaining large AI players i.e. OpenAI and Anthropic. Thereby ushering in an "AI Winter", which I will explain below:
AI winter:
Everyone knows that in order for AI to be economically "successful", it must first kill the economy. The return on AI is predicated upon companies replacing humans with AI bots. That is the "bull case" in a nutshell.
Fortunately, it's not working out too well despite companies spending exorbitant amounts of money on it:
"Sam Altman says AI token expenses have rapidly become a major issue, with some firms exhausting annual budgets in months"
Uber, Walmart and others are limiting employee AI use to control costs, moving away from previous unlimited access policies"
This cost-conscious approach reflects a broader move from AI experimentation to AI economics, with return on investment becoming the key metric"
Unfortunately Bain is the latest source to confirm what everyone already knows, AI has no ROI.
Here is where it gets interesting:
Part of the IPO process is disclosing formerly secret financial information. That disclosure has forced these companies to rapidly scale up profitability ahead of their impending IPOs. For the past decade AI companies were in growth at any cost mode. So for the first time, they are finally revealing the true cost of AI to their client companies which are balking at the price tag and starting to REDUCE their usage. Put another way, all along these private companies have been subsidizing the usage of their products and then publishing fake growth rates. It's like paying someone to buy your own product and then claiming you have massive sales. It's an insane level of fraud that is only NOW being revealed by IPOs.
Unfortunately, Wall Street has hyped AI as a decade-long investment opportunity. But what they failed to mention is that DEMAND for AI is cyclical along with IT budgets - rising and imploding with the economy.
Therefore it's no surprise that sky-rocketing AI costs were the dominant theme of the most recent AI conference, which means that hyperscaler revenues have PEAKED. Taking into account the implosion of the IPO market by SpaceX discussed above, AND the economic implosion of AI via corporate IT budgets, I am predicting an AI winter in which Ponzi capex over-investment is met with diminishing marginal return AND very soon private companies that are cut off from new sources of funding.
In summary, the FULL scope of revelation of EPIC FRAUD is pending SpaceX LAUNCH.
