|
|
|
While Everyone's Watching the Fed, Nvidia Just Revealed the Most Egregious Financial Engineering Scheme Since Credit Default Swaps |
Don Kaufman here. |
Here's a story that should terrify every investor, but you won't hear it on CNBC. |
While markets celebrated new highs Monday morning, CoreWeave quietly disclosed a deal that makes the 2008 financial crisis look like amateur hour. |
And somehow, nobody's talking about it. |
The Setup That Should Make Your Blood Run Cold |
CoreWeave builds massive AI data centers packed with Nvidia GPUs. Simple enough business model, right? Here's where it gets insane: |
Nvidia is an investor in CoreWeave CoreWeave buys billions in Nvidia GPUs for its data centers Nvidia is contractually obligated to purchase any unused capacity that CoreWeave can't sell This arrangement runs through 2032
|
Read that again. |
Nvidia feeds money to CoreWeave. CoreWeave uses that money to buy Nvidia products. When CoreWeave can't sell the capacity, Nvidia buys it back. |
|
|
|
It's a Perfect Circle of Financial Engineering |
Think about the implications here. |
When Nvidia's quarterly earnings are looking light, they can just call up CoreWeave: "Buy $20 billion worth of GPUs. Put it on paper, baby. We got you." |
Picture the earnings call: "We're pleased to report record GPU sales this quarter..." while conveniently forgetting to mention they're essentially selling to themselves through a subsidiary they're financing. |
|
|
|
The analysts applaud—the stock rallies. Retail investors pile in. |
Meanwhile, CoreWeave's balance sheet becomes a ticking time bomb of capacity they can't actually sell, backstopped by a company whose stock price depends on maintaining the illusion of organic demand. |
The Trillion-Dollar House of Cards |
Nvidia currently has a market capitalization of $4.4 trillion. |
Between derivatives and companies like CoreWeave that exist purely in Nvidia's orbit, we're looking at easily $10 trillion in exposure to a single company's financial engineering. |
When this thing unwinds – and it will unwind – the lawsuits alone will be staggering. Every class action attorney in America is going to have a field day. |
What CoreWeave's Collapse Actually Looks Like |
As spending slows down, CoreWeave becomes a corporate graveyard overnight. |
Here's the death spiral: AI demand softens. CoreWeave's clients start canceling contracts. |
Suddenly, they're sitting on billions in unused GPU capacity that Nvidia is contractually obligated to buy back - except now Nvidia can't afford to do so without tanking its own earnings. |
Mass layoffs hit first. |
CoreWeave's 1,000+ employees get walking papers. Their massive data centers become empty monuments to financial engineering. The liquidation sales begin - billions in cutting-edge hardware sold for pennies on the dollar. |
Shareholders? Wiped out overnight. |
The company that was valued at $19 billion becomes worthless paper. And Nvidia? |
They're left holding the bag on capacity purchases that destroy their margins and expose the circular financing scheme to every regulator with a pulse. |
Why This Matters Beyond Nvidia |
The entire AI boom rests on the assumption that these companies are selling to real customers with real demand. |
But when your biggest "customers" are essentially subsidiaries you're financing yourself, what does that tell you about actual market demand? |
CoreWeave can keep building data centers as big as they want because Nvidia will pick up the tab on any unused portions. It's like Mikey from the old Life cereal commercials – "Mikey will eat anything. Mikey likes it." |
The Warren Buffett Test |
Buffett always said you find out who's swimming naked when the tide goes out. CoreWeave is about to find out how vulnerable they are when this musical chairs game comes to a stop. |
If you're long any AI names, understand what you're really buying. You're not buying into organic demand growth – you're buying into a structured scheme where the seller is financing the buyer who's buying from the seller. |
This isn't sustainable business. |
It's financial engineering designed to prop up valuations until someone else becomes the bag holder. |
The Bottom Line |
Markets may be hitting new highs, but they're built on a foundation that makes credit default swaps look conservative. |
When this bubble pops, it won't just be Nvidia shareholders who get hurt – it'll be anyone who believed the AI revolution was built on real demand instead of circular financing schemes. |
You've been warned. |
To your success, |
Don Kaufman |
P.S. . Markets celebrate new highs while Nvidia finances its own customers. Wednesday's rate cut just threw gasoline on this dumpster fire. |
Emergency session at 2 PM - I'll show you exactly how the Fed's "help" turns manageable bubbles into economy-destroying catastrophes. Don't get caught swimming naked when this tide goes out. |
RSVP HERE. |
|
|
Macro in 60 Seconds – Fed Week + Volatility Dynamics | • S&P 500 expected move this week: ~$90 (just 1.5%), viewed as underpricing risk given Fed and triple witching. | • Fed announcement scheduled Wednesday (Sept 17), but implied vol is higher for Thursday and Friday expirations – suggesting risk spillover beyond the announcement. | • Misleading read on volatility: VIX up slightly while vol futures down due to expiration arbitrage; real volatility is flat-to-lower. | • Key internals: AD line are soft relative to index gains, rally fueled narrowly by Tesla, Google, and pockets of mega-cap tech. | |
|
|
|
|
ICYMI | This Former TD Ameritrade Executive Just Exposed Wall Street's Biggest Secret | "Shadow Clocks" - The Hidden Timers That Print Money While You Sleep | Watch the shocking replay where Don Kaufman reveals: | ✓ Why the VXX dropped 90% (and how to profit from the OTHER side)
✓ The "certainty trade" hedge funds use to never lose
✓ How $2,000 accounts can copy $23 billion strategies
✓ The ONE thing in markets that's 100% predictable | This isn't about timing volatility spikes.
It's about profiting as volatility DECAYS. | And decay is guaranteed. | Time moves forward. Volatility dies. Money flows from retail to pros. | Unless you know about the Shadow Clocks. | WATCH REPLAY NOW | Goal: Double your money in 12 months
Strategy: Trade time itself
Risk: Controlled and hedged | Don helped build ThinkOrSwim. Managed systems for 7 million traders. | And he's never shared this publicly before. | The clocks are ticking.
Choose your side. |
|
|
|
|
0 Response to "Nvidia's $10 trillion house of cards just got exposed"
Post a Comment