Michael Burry Closes Hedge Fund After Shorting AI Bubble

[Music] All right. Good morning everybody. [Applause] [Music] [Applause] That's good stuff. Good morning all you magnificent melon heads of the world. Happy Thursday everybody. Today's November 13th, 2025.

And our top story this morning, for the second time in two weeks, Dr. Michael Bur is in the news again. He has closed his hedge fund, Scion Asset Management. Uh, there's a lot to unpack here in this story. A lot going on. A lot of overlap with a lot of things that obviously we talk a lot about on this channel here.

Uh, first of all, I, you know, I can't help but notice that the financial press doesn't know how to read a 13F. Um, Dr. Bur expressed some frustration in his own unique way on Twitter. A lot of people were saying, "Oh, he made $900 million bets against the AI bubble." No, that's just the nominal value of the shares underlying the options that he bought. It was actually a much smaller bet than that. U, not not the first time we've seen that happen. But I digress.

Uh, but it turns out in October, on October 27th, Dr. Bur issued a letter to his shareholders announcing that he was going to liquidate his fund. And there was a powerful line in this letter. I'll show you what was in it. He says, "My estimation of value is not now and has not been for some time in sync with markets." I can't help but wonder, do you think maybe that phrase, "our estimation of value was not in sync with markets," do you think maybe that resonates with a few of you guys out there? It sure as hell resonated with me. Resonated to the point where like the fillings would fall out of my teeth if I like, like a tuning fork. Yeah. You think maybe these markets don't really have a good concept of value? You think maybe, just maybe, Dr. Bur might be on to something.

And look, this is not the first time. Obviously, the guy is a freaking legend for making the exact same call a few years ago. And of course, the market did not learn any of the lessons from that because the fraud and the abuse that created the bubble last time was rewarded with bailouts. So, why change your behavior if there are no consequences?

And what I suspect happened here is that after finding out about an extensive short position, I guess Nvidia and Palantir, two names that at the end of September were going vertical and up in a straight line. I suspect some of his investors started pulling their money much the same way they tried to during the GFC in the leadup to the big short. And Bur went through hell last time. And I'm guessing he had no stomach for that fight all over again. Why would you put yourself through that a second time? So, he just decided he was going to liquidate his fund again. I don't know that his investors tried to pull their money, but I suspect that's probably what happened. And he just said, "To hell with it. I'm out of here."

Uh, so look, we've, we've got one of the biggest investing legends of all time. And I, I know there's going to be some AI bro a-hole in the comments who's going to be like, "Bur was wrong about some other thing at some point." Well, congratulations. That doesn't mean you're smarter than Michael Bur. I think there's a lot of these AI bros out there that think they're smarter than, than Michael Bur right now. You're not. You're not even close. You're not fit to shine Michael Bur's shoes, but go ahead, run your mouth on Twitter. That's great through your anonymous name. That's, that's adorable. Uh, thanks for the engagement.

Uh, so along with that, we've got headlines this morning like Cisco earnings beat on data center buildout. Like AMD stock ripping because Lisa Su, who ironically Jensen Wong's cousin, I kid you not, uh, the AMD CEO, Lisa Su, is out there with these sky-high projections. Our revenue is going to increase 60% over the next two years because of data center buildouts. We've got Anthropic is in the news this morning saying, "We're going to spend $50 billion on AI infrastructure. $50 billion that we don't have." Another company spending money it doesn't have and has no feasible path to acquiring it, but everybody's just like, "Oh, they're going to spend the money. The CEO of a startup said it. It must be true." That's the kind of headlines we get.

So, I share Michael Bur's frustration. This market is nuts. People have no idea what they have done. There is one guy who's got an idea what they've done. Holy crap, this article in Fortune that I just saw. Shout out to my friends at Macro Edge who spotted this one. Um, Scott Galloway, he's a professor, podcast host, and author. He's from the NYU, uh, Stern School of Business. He put it bluntly. Uh, he said, "AI could trigger a systemic shock through markets, leaving nowhere to hide, and no one gets out alive." Yikes. And he's right.

That's the same OpenAI that is asking, in many ways, for a bailout recently for taxpayer guarantees for chip subsidies. Fanny and Freddy taking stakes in tech companies. Yeah, if OpenAI goes, this whole bubble goes with it. And you better believe that Galloway is right. Nowhere to hide. No one is spared in that environment. And look, OpenAI, they're not going to get this bailout. It ain't happening, guys.

Uh, this is now a Main Street versus Wall Street problem. This is now an us versus them issue. All right? And, and think about the political implications of electrical costs doubling for poor people after the cost of living has already gone up by 30% in the last few years. All right, this is now, it could be the defining political issue of the midterm elections. And think about this, the forgotten man, air quotes, is what put Donald Trump in the White House. And of course, Donald Trump gets there and what does he do? He forgets about the forgotten man and he hitches his wagon to this sociopath Sam Altman and Larry Ellison and Masayoshi Son with this stupid Stargate project because he wants his stock bubble. Oh, it's my best stock bubble ever. Republicans are on the wrong side of this. Republicans are doing everything they can to drive up electrical costs for poor people. Democrats see it and it is blood in the water to those Democrats and they are lining up to beat the Republicans over the head with this issue. They're not wrong.

And, and guys, you know me. You know my political leanings. I mean, I try not to get too political on this show, but they, they are what they are. I can see a lost building when it's way out. They're going to get their butts kicked if they don't change course on this issue. And so, do you really think when it's such a hot button political issue that Republicans are going to be like, "Okay, let's print, borrow, and spend a bunch of money into OpenAI to keep the stock bubble inflated." No way. Some, some Republicans will go along with that. Trump will demand it, but you'll never get the conservatives to go along with that. And the Democrats are lined up just loving life right now, which means OpenAI is not going to get their bailout, which means OpenAI is not going to survive. It is a cash-burning furnace. Sam Altman is being called out on that and he's responding like a sociopath or in a narcissistic rage every time he gets questioned about it. This is going to be ugly, guys. And, uh, Bur, much like last time, he's early, but he's right.

Other stories going on this morning, we have got Disney earnings. Uh, streaming was good. Everything else sucked for Disney. Disney down ahead of the opening bell. We've got two wild stories out of Europe about real estate. This is interesting. Luxury apartments in London selling for 50% of what they sold not too long ago. Why? Because all the rich people are leaving England right now because of the tax system, uh, and the taxes are probably going to go up. But 50% decline in a couple of years. Yikes. I thought we were in a housing bubble.

And while that's going on, we've got this article about the Bank of Spain putting all kinds of safeguards and and guardrails in place to limit credit expansion because they're worried about lax lending standards, all while telling us, "Don't worry, lending standards have not slipped." Okay, then why are you putting up these guardrails if you're telling us lending standards haven't slipped? So, keep an eye on European real estate. That's interesting.

This morning, we got good earnings from JD.com, Chinese e-commerce giant. Now, that is being driven largely by government stimmies and programs all designed to stimulate consumption. Uh, lower prices also. And at the same time, we've got data about Chinese loan growth way below expectations, stalling out here. And this is after yesterday we had an article about how Chinese banks were faking loan growth by giving loans to people and they were paying it right back. But you know, in between that happening, they could report to the government that they increased their loan issuance. So, all these stories combined, there's deflation in China. That is a big problem. China's got a population collapse, a real estate collapse, and a big debt problem. If prices start going down, that debt gets harder to pay off. Yikes. Things not looking so good over in China.

And of course, we got to end the show on a dark note of 2020s bingo note. Epstein. That story just ain't going away. Nor should it. Guys, we got a lot to talk about this morning. Why don't we shrink my big melon of a head and let's see what's going on in markets today. Don't forget that like button. And you new guys, come on back, have your coffee with the melon heads tomorrow. So, hit that subscribe button because we do this one every single day.

And right now, the S&P 500 is down by 27 points or 0.4% to the downside. The Dow is also down 84 points or about 0.8% lower. And the Nasdaq down even more than that, 150 points lower for the Nasdaq or 0.58% lower. Despite some strong earnings in tech, the index is lower. We got a slightly weaker dollar, off by about 20 basis points here at 99.27. That's lower by about 0.2%.

Looking over at the bond market, we got yields moving just a little bit higher here. 30-year Treasury 4.680. That's up almost two points. The 10-year at 4.093, up almost three points. The 2-year 3.597. That's up three points and change. And the one-month is up almost one basis point at 3.952.

Looking over at the commodities board, hey, the shinies have been looking really, really good. Good these last couple of days. And there I go. I just jinxed it. Silver turns red. Uh, silver quietly rallied about five bucks over the last three days. Man, that snuck up on us. Almost no fanfare. Uh, but right now, we got spot gold $4,221. Higher by 26 bucks or 0.63% higher. December gold futures also higher by about $12 at $4,226.

Now, silver is not doing as well this morning, but still looking really good here. We briefly hit an all-time high last night over $54. Right now, we're sitting here with spot at $53.30. That's higher by just 3 cents or 0.06%. New York December silver futures are at 5322. That's lower by about 2 cents or 0.43%. Uh, we are seeing that arbitrage between New York and London shrink a little bit here. It's down to about 6 cents. We were up to about 20 a few days ago. Uh, keep your eye on silver, man. But either way, guys, I like this shiny. And let me just say, premiums in the last two or three days have come down substantially. Even though silver prices have been rising, the percent the dealers charge for this physical metal has been falling. So, there are some good deals out there, in particular on junk silver, the 90% US silver coinage, if any of my stackers are listening out there. But again, I like the shiny.

We've got copper is higher by 0.8%. Platinum is down by about a third of a percent. Palladium is down by 1.6%. Oil is a little bit higher here at 59.04 for December WTI futures. That's up by about 56 or 0.96%.

We've got Bitcoin is a little bit lower this morning. $12,138. That's about a thousand bucks lower than we were this time yesterday. As always, guys, be careful on leverage with your crypto. Winter is here and look, the crypto bubble could pop the AI bubble, or the AI bubble could pop the crypto bubble. Either way, when one goes, both go. So, just, just be careful. Don't say I didn't warn you.

All right, here's the big one this morning. Michael Bur of Big Short fame deregisters Scion Asset Management. This one in CNBC this morning. There's Dr. Bur. Big Short investor Michael Bur, known for his successful bets against the US housing market in 2008, has deregistered his hedge fund, Scion Asset Management. The Securities and Exchange Commission database showed Scion's registration status as terminated as of November 10th. Deregistering would imply the fund is not required to file reports with a regulator, regulator, or any state. Uh, which would basically mean that the fund's or assets under management is now below at, or at least below $100 million. Um, bets by Scion, which managed $155 million in assets as of March, have long been dissected for hints of looming bubbles and signs of market froth.

Now, we got this one. Uh, I, I'm not sure the source of this one. Maybe somebody leaked it, but this is a letter that Dr. Bur sent to his investors at Scion Asset Management. I tried to blow it up as much as I could, and I apologize for the fuzzy print here, but this is on October 27th. Dr. Dr. Bur says, "Dear investors, with a heavy heart, I will liquidate the funds and return capital, but for a small audit and tax hold back by year's end." So, he's already under a hundred million, which means this is in progress. That's why he de-registered. Um, he's saying by year's end, he's going to be totally liquidated.

Now, this is a powerful statement here. "My estimation of value in securities is not now and has not been for some time in sync with the markets." And hot damn if that doesn't just resonate with me. That phrase right there. I mean, I have felt this way for almost three years now. U, he says with heartfelt thanks but also with apologies. "I wish you well in your future investments." And he goes on to recommend his portfolio manager, Phil Clifton, who will, I guess, have new ventures that he will be beginning very soon here.

Uh, look, Dr. Bur, I, I suspect what happened is there was a lot of blowback from people when he announced that he is shorting a bubble, which is historically very risky to do. It's something I have not yet done. Um, emphasis yet, that may be about to change. Uh, but he's not going to go through this again. He went through this last time when he shorted the housing bubble, and all of his investors, they started sending him hate mail, and, you know, the people that helped him start his fund sued him. That, that weighs on you, and Dr. Bur is not a people person to begin with. He's a brilliant man, but, you know, he's always struggled socially. I can understand what I can understand that. And he's just not doing this again. So, he's out. He's liquidating his fund. Uh, I think once again, Bur will be vindicated, but not before people put him through hell.

And let's talk about some of that hell, shall we? Cisco shares surge after AI-fueled outlook exceeds estimates. Stop me if you've heard this one. Oh, and it's Cisco. They did great in the dot-com bubble burst, right? Didn't they? They came out on top. They did awesome. Yeah, I think Cisco shares just broke even yesterday after this big run-up in their earnings. I think they're just breaking even with their 2000 highs right now. All right, congratulations all you long-term holders of Cisco Systems. The shares gained in pre-market trading on Thursday after the network equipment giant boosted its 2026 forecast, showing progress in its effort to capture more artificial intelligence spending. The company, the top maker of machines that run computer networks on the internet, now expects sales of as much as $61 billion in the fiscal year ending in July. That's about $1 billion more than previously expected and higher than Wall Street estimates. Cisco also increased its earnings forecast, which similarly topped analyst predictions. Cisco expects earnings of $4.14 a share in fiscal 2026, excluding some items. That compares with an average estimate of $4.05 according to data compiled by Bloomberg.

All right, AI data centers. We're building them. We can't turn them on because there's no power in the West Coast, but we're still building them anyway. Phase three profit $77.98 ahead of the opening bell for Cisco shares up $4 or about 5%. Let's zoom way out and let's see. Look. Oh, congratulations Cisco shareholders. Look, you have finally broken even from your March of 2000 highs. All right. Patience is often rewarded in time. Holy crap. If only there were signs. Oh, here's another sign.

AMD stock soars after company says its data center revenue will jump 60% over the next 3 to 5 years. Do we need to get into this? We've heard this stupid crap, right? I mean, this, this is Lisa Su, Jensen Wong's cousin, says AI spend, data center spend. You know, by the way, I heard that at the, at the Hong family, when when Lisa Su comes over, the Sus come over with the Wongs, they sit down and they have dinner, Thanksgiving dinner. I heard Jensen and Lisa just pass the gravy boat back and forth. Nobody ever actually takes any gravy. They just keep handing it back and forth talking about how good the gravy is. I don't, again, if only there were signs. AMD stock, that one ripped 9% higher yesterday. It's down 2.7% ahead of the opening bell, giving back some of those loss or some of those gains from yesterday. But again, AI, oh my spending, it's so high.

Speaking of AI spending, Anthropic to spend $50 billion on US AI infrastructure, starting with Texas and New York data centers. Hey, does Anthropic actually have $50 billion? No, you romantic fool. That doesn't matter. The point is they're going to spend it. Oh my god, if only there were signs. Anthropic announced plans Wednesday to spend $50 billion it doesn't have on US artificial intelligence infrastructure buildout, starting with custom data centers in Texas and New York. The facilities, which will be designed to support the company's rapid enterprise growth and its long-term research agenda, will be developed in partnership with FluidStack. Here's all this stuff about, oh, the demand is insane and everything else. Additional sites will be expected to follow in this time. Nowhere in this article in CNBC does anybody mention that Anthropic doesn't have $50 billion. They have no feasible path to acquiring $50 billion. Nobody asks questions. Just repeat the hype.

Well, there's one guy who's asking questions here. Scott Galloway from NYU Stern School of Business. This article, guys, I mean, this is some beautiful bit of doom here. Let me just tell you. I mean, it made me blush. You guys know me. I wear the doomer label proudly on my arm in Invisible Inc. Scott Galloway warns of nowhere to hide in the market if the OpenAI story unravels. Tech analyst and professor Scott Galloway has issued a stark warning regarding the highly inflated valuations of the magnificent 10 megacap companies, asserting a financial collapse at generative AI leader OpenAI would trigger a systemic shock, leaving nowhere to hide for investors across global markets.

All right, so other than everybody, you'll be fine. All right, unless you're included in everybody, you should be fine when this bubble pops. That's encouraging. Galloway, speaking of his prof on his Prof G Markets podcast, characterized the current market reliance on AI as precarious, noting AI has been responsible for 80% of the stock market return since the launch of ChatGPT in late 2022. Co-host Edson reminded the audience AI is what is holding the stock market together and also holding the economy together with OpenAI at the center of the story. The immediate catalyst for Galloway's alarm is a series of red flags signaling a possible financial implosion at OpenAI, which Elson described as a train wreck from a financial management perspective. Amid some pushback from Galloway, Elson explained, "OpenAI is currently generating an estimated $13 billion in annual recurring revenue. Yet, it's spending more than double that amount." CEO Sam Altman has projected spending commitments of over a trillion dollars with the plan being to spend $1.4 trillion that they don't have to $1.5 trillion that they don't have over the next several years, creating a massive shortfall of about $1.2 trillion that they don't have given their current cash reserves. Much of Galloway and Nelson's discussion was centered around what they described as a disastrous podcast appearance by Altman and his friend and OpenAI investor Brad Gerstner, who asked about how the company intends to finance this massive buildout. Elson called Altman's response horrendous. "I couldn't think of a more defensive, frantic, sociopathic response." He added that if you're trying to shake investors' confidence in OpenAI, "I would say this is how you do it." Galloway suggested OpenAI will file to go public at some point in 2026 because of its sheer size. On the other hand, he said such a response would not be acceptable for a public company CEO. "When you are on an earnings call and someone asks you a fair question, no CEO that I've heard of who holds on to his job turns around and says, 'Well, if you don't like it, you can sell your shares.'" He called it a rare misstep, probably reflective of the stress that Altman is under right now. Altman and Nelson also commented on OpenAI CFO Sarah Friar going viral for the wrong reasons, telling the Wall Street Journal that the company is seeking federal government support, a backstop to help finance future data centers. Galloway sees this potential taxpayer bailout as yet another tell that the company lacks a viable financing plan and will likely have to seek financing in the form of debt, which he believes could be the beginning of the end for the AI bubble. Further undermining confidence are leadership concerns, including the recently released deposition of former OpenAI co-founder Ilya Sutskever, who referenced a memo alleging Altman was fired due to a loss of confidence and consistent pattern of lying. Yikes. Galloway argues highly inflatable, highly inflated bubbles typically pop due to narrative shock, a spectacular event that causes a massive change in sentiment. If he had not bet on the trigger, he says he believes the implosion of OpenAI is the most likely cause of such a crash. Galloway warned, "Given the scale of the top 10 companies now, such a similar decline for Nvidia would be catastrophic. Galloway stressed, 'When 40% of the S&P 500 is riding on just 10 companies, if they get cut in half, nobody gets out alive.'" Yikes.

So, basically, all our financial well-being is riding on this getting a bailout from the government, Sam Altman. And look, that ain't happening, guys. Just look at the politics lining up around this thing. Skyrocketing electricity prices fuel political backlash against tech sectors, AI, data centers. This is now Wall Street versus Main Street. You do not want to be versus Main Street in this argument. All right, they, you will get rolled over in the elections. Voter anger at surging electricity prices is fueling political backlash against the AI industry's data centers, with Democrats accusing the Trump administration of failing to address the issue as they zero in on affordability ahead of next year's midterm elections. Abigail Spanberger won last week's governor's race in Virginia, home to the largest concentration of data centers in the world, after promising to make the industry pay their own way and their fair share of rising electricity costs. New Jersey Governor-elect Mickey Sherrill has also promised to declare a state of emergency over electric bills on her first day in office and freeze prices in the Garden State. That, that won't work, but you get the point. Two Democrats were elected to Georgia's commission that regulates utilities, breaking total Republican control, with one of the candidates arguing that prices are rising in the Peach State in part due to data centers. On the heels of election victories, Democratic senators in Washington, led by Richard Blumenthal of Connecticut and Bernie Sanders of Vermont, took aim this week at what they described as the White House's sweetheart deals with big tech companies, accusing the administration of failing to protect consumers from being forced to subsidize the cost of data centers. Holy Jack, agreeing with Bernie Sanders. Who had that on their 2020s bingo card? I feel like I need to take a shower now, but he's right. He's freaking right. As a result, everyday Americans are already being forced into bidding wars with trillion-dollar companies to keep the lights on at home. The senators wrote Monday in a letter demanding solutions from the White House. Do you really think the politicians are going to give Sam Altman a bailout? I mean, look at the public anger. I was talking about this the other day. There's signs all over my town. No data centers. Nobody wants these things built. They don't want their power bills going up. And yet they're building them all over the place. And now these guys want money from the government. They want the taxpayers to fund their stupid science experiment. No freaking way. Burm's right, guys. He's just early again.

Meanwhile, we got Disney earnings here this morning. And Disney says film studio expenses weigh on the current quarter. You know, every single business segment at Disney pretty much sucked this quarter except for streaming. I mean, that's pretty much the takeaway from this one. Let's see if we can get some highlights here. Disney reported sales that fell short of Wall Street estimates and set a slate of big-budget films, including a new Avatar picture, will weigh on results for the first quarter of its new fiscal year. And I'm sure this is just going to break the hearts of a lot of the melon heads here. I know you guys just love Disney. I'm sure we'll see it in the comments. Who loves Disney? Let's see. Oh boy, what have I done to my moderators? Revenue for the fourth quarter was little change, at $22.5 billion, Disney said Thursday in a statement. Falling below the $22.8 billion average analysts estimate. Uh, let's see. The entertainment division faces challenges early in the new fiscal year on three fronts: streaming, films, and TV. The company predicts $375 million in operating income from online video in the first quarter. While that represents higher profit for the business, Wall Street was expecting more. At the same time, expenses tied to the theatrical release of Zootopia 2 and Avatar: Fire and Ash will reduce earnings by $400 million, the company said. I guess that's because it comes at the end of the quarter. So, they're going to spend all the marketing and everything in the fourth quarter and then they won't get any of the proceeds from the sales mostly until the first quarter. Uh, while the sports division will benefit from the debut of ESPN streaming service, the timing of spending on sports rights will hold back operating income. The company's namesake theme park and cruise unit, called Experiences, will have $150 million in planned expenses in the first quarter. Yikes, a lot of capital there. Uh, still, Disney predicts 2026 earnings will grow by double-digit percentages with gains weighted toward the latter half of the year. The company plans to repurchase $7 billion of shares, double what it bought in 2025, and raised its semiannual dividend to 75 cents a share. In the just ended fourth quarter, profit in Disney's entertainment division fell by more than a third to $691 million, reflecting lower revenue at linear TV networks and the film studio. Profit from streaming rose 39% to $352 million with revenue up 8%. So you can see Disney streaming services are cannibalizing their legacy TV services and somewhat their film services. So, they're, if they're lucky, they're just treading water there. Disney stock looking terrible this morning, down 6.8%, 8% ahead of the opening bell. $108.73 for Disney shares.

All right, some interesting real estate stories out of Europe here. This bears watching. London luxury apartments sold at 50% discount as slump deepens. Uh, do we call that a discount or do we call that a fire sale when it sells for half price? A flat in one of London's most luxurious new apartment blocks has sold for about £25 million. That's about $32.9 million. A discount of more than 50% from the asking price just earlier this year. The final new build apartment for sale at The Glebe in Chelsea has been reduced to 45 million pounds from 55 million before a cut-price deal was agreed to this month. So they had already slashed the price. They got even less than that. Uh, the sale price reflects a value of about £2,300 per square foot. That's still ridiculously expensive. Almost half of the average level of the eight earlier sales in the same project, based on data from promotional literature sent to brokers by a representative of the developer. Uh, the identity of the buyer is unclear. Already suffering after a decade of unfavorable tax tweaks, the top end of London's housing market has been further hit this year by the abolition of a preferential tax status enjoyed by some wealthy foreign residents. That's prompted more sellers to agree to hefty discounts in order to secure deals. In other words, all the rich people are leaving England, and so rich people's houses are getting a lot cheaper. Still, average people still can't afford them. Not even close. But there is an exodus of wealth from that island. It is bonkers. And it looks like it's going to get worse here because what's more, speculation around further taxation in the run-up to the UK's budget on November 26th, including changes to capital gains tax relief and so-called mansion tax, is further weakening demand for luxury homes. There were 65% fewer £5 million-plus transactions in October than the same month a year earlier, according to Lonres. Now, look, I don't shed any tears for these guys. I'm sure they can afford it. Uh, but if you abuse your tax base, you won't have a tax base to abuse. And you can see it here. The wealth is leaving England. What's that leave behind? A whole bunch of people who need money and nobody paying into all these public systems. So, yikes there.

And that's not the only big real estate story I'm seeing in Europe this morning. Bank of Spain steps up oversight of lending as mortgages rise. This is kind of like 2007 to me here this morning. The Bank of Spain is stepping up oversight of credit standards after a sharp increase in new mortgage lending. It said on Thursday in its semiannual financial stability report, the central bank is developing a framework that would allow it to activate macroprudential limits on lending standards to prevent risky borrowing when needed. Any eventual application would require further analysis to ensure measures are appropriate for Spain's economic conditions. So, they're putting guardrails on lending standards. Why would they do that? Why would they do that? Apparently, there's no need, though, because the bank noted that conditions for granting new mortgages show no signs of significant easing, which is why we're putting these guardrails up. It's certainly not because people are flying off the side of the hill, right? No. No, not at all. Uh, loan-to-value ratios are rising only moderately since 2023 to 68.7% in the half of 2025. It also said vulnerabilities in the property market remain far below those seen before the housing crisis in Spain in 2007. So, yeah, we're, we're putting guardrails on lending standards, but it's got nothing to do with lending standards. Don't worry, guys, nothing to see here. Move along. Isolated incidents, totally contained, all that good stuff.

All right, also happening overseas this morning, China's JD.com tops quarterly revenue estimates as demand holds up. You can see China's government trying to blow into this bubble, trying to stimulate consumption in China, and it's being met with modest success at JD.com. China's, uh, JD.com topped market estimates for quarterly revenue on Thursday as the e-commerce giant benefited from steady consumer spending on its platform thanks to government subsidies and lower prices. A little bit of deflation in China there. US-listed shares of the company rose 5% in pre-market trading. Chinese retail majors, including JD.com and Alibaba, are using heavy discounts and price cuts to lure shoppers, who are keeping a tight leash on their spending due to worries over job and income security. And the wealth effect, we talked about this years ago when the Evergrande collapse started. When people's homes go down in value, they spend less money. And we are seeing that now play out in China. JD.com, which is the top retailer of home appliances in China, has also benefited from government-backed trade-in policies that allow consumers to exchange older appliances for new ones. Again, the government trying to stimulate consumption. The company saw strong growth in both user base and customer shopping frequency in the July to September quarter, helping it hit a milestone of 700 million active users. Uh, let's see. Did I have, I guess that's about it. Basically, that, look, the company reported a good quarter because the government is paying people to shop. JD.com shares up only a half a percent here. Not, not doing so hot. These are US-listed ADRs. Um, so they're actually okay, actually down now. JD.com down on this news. $31.10 off by a quarter.

Um, we got more bad news in China. Also, China sees worse credit growth in a year as demand dries up. We talked about yesterday how Chinese banks were faking credit growth. Even with that going on, it's still showing as a decline. China's credit expansion was the weakest in more than a year last month, dragged down by slower government bond sales and sluggish borrowing demand across the economy. Aggregate financing, a broad measure of credit, increased 815 billion yuan, that's about $115 billion US, in October, according to Bloomberg. Uh, let's see. That's the lowest level since July 2024 and well short of the 1.2 trillion yuan forecast by economists in a Bloomberg survey. Financial institutions recorded an expansion of 219 billion yuan of new loans in the month, also worse than expected, with growth in the outstanding stock of loans to the real economy reaching a record low. Government bond issuances recently slowed compared with a year ago, and as authorities bought forward sales earlier in 2025. Another factor at play for credit growth is seasonal, since banks are usually not in a rush to meet their lending targets at the beginning of each quarter. But the disappointing reading came despite the boost from the rollout of funding provided under China's new policy financing tool, which is worth 500 billion yuan. It underlined just how sluggish borrowing demand has become in the face of weak consumer and business confidence. And that's the big thing right there. You know, despite all of these government stimmy programs, right, 500 billion yuan and this new financing tool, all these things they're putting in place to stimulate consumption, they've still got weak consumer and business confidence because the average Chinese citizen has put all of his net worth into his home, and home values have collapsed in China. And we have studied this here in the states. It's called the wealth effect. When home values go down, people feel poor and they shop less. And that is a huge problem in China, especially if you're the world's factory seeing a rising standard of living and you're trying to transition from an industrial to a consumer economy. Well, that's hard to do without consumers, isn't it? China's got big problems on their hands.

And last but not least, this one just gross. Uh, we got to talk about it because this story shouldn't go away. Takeaways from the newly released Epstein documents. Yesterday, we got some emails that were released about the Epstein story, and President Trump's name was all over it. Now, look, there was a lot of Democrat maneuvering behind this release, and I'm sure they scrubbed the emails to make sure only the ones that they wanted to get released were released, which is part of my problem with the way this whole freaking Epstein thing has been managed from the get-go. Both sides are only releasing what hurts their opponents, not what hurts them, even though both sides are doing this stupid thing. That being said, why the hell was the president, who was the president again now in 2019, meeting with this dirtbag before he went to jail? What the hell? I don't know what to, I don't know what to do with this one, guys. Like, are we ever really going to know what happened here? Probably not. Are we going to get this stupid trickle for political reasons year in and year out constantly? Probably. Why not just dump it all and get it over with? Why not just rip the band-aid off? Give us the freaking names. We deserve to have them.

And I just want to say, well, first I gotta do that, and then I gotta say thank you very much to Mr. Mr. Arthur Vanderlay. You know, I've always wanted to pretend I was an architect. Yes. Thank you, George. Uh, of of Vanderlay Industries fame. Yes, he became a YouTube member. Welcome to the Melon Heads, Art. Also, thank you, by the way. I did see the stuff that you sent me on Twitter, Art. I, I get a lot of emails. I don't always have time to respond to everything, especially with the interview schedule being what it is, but I have seen that stuff. Thank you, Art, for all the work you put into that. And welcome to the Melon Heads, brother. Appreciate you supporting the channel, sir.

Snowman 121. Thank you for being a Melon Head member for nine months. He says, "Great reports. Millions of snowballs. Melanchcoin gift." Millions of snowballs. Is that a movie reference? I'm not sure, but the Melanchcoin gift. Thank you very much. 100 million Melanchcoin to Snowman 121. Now I get the snowballs thing. I want to build a snowman. Thank you, sir, for supporting the channel. I appreciate that very much.

Hey Grumpa, long time no see, brother. Thank you so much for the generosity and welcome back. Grumpa says, "Dr. Michael Bur is my spirit animal." Amen, Reverend, to that one. Um, uh, look, I, I just, I think it is hilarious that these absolute tools, these AI bros on Twitter who think they're smarter than Michael Bur. You are chasing reckless call options into a bubble that is devoid of reality, and you're making money, and you think that makes you smarter than one of the biggest investing legends of all time. You are not smarter than Michael Bur. You may be up on your trade. Congratulations. You won't stay rich long because you're an imbecile and a fool, and a fool and his money will soon be parted. Dr. Bur is a freaking legend. Um, he's not wrong. He's right again. And I can tell you when I saw him come out with the depreciation story and with the short, can't help but be vindicated when one of the arguably most brilliant minds of our time comes out and says the same I've been saying for two years. Well, that felt really good. So, I'm sorry to see Scion Asset Management close down. It doesn't surprise me. I think he's probably going through the same he went through in 2008. Uh, he doesn't deserve it, but that's kind of how these people roll. Thank you very much, Grumpa. Appreciate the super chat and the support of the channel, sir. Good to see you.

Hey, John Cook says, "Theta answers AWS and Azure crashes." That's interesting. 20 to 50% less energy cost. Partners include AWS, Google, Microsoft, Deutsche Telekom, T-Mobile. I, I don't, I don't know what Theta. Sorry, I don't know. The Theta answers AWS. Don't know what. Don't just don't know what we're talking about here. 20 to 50% less energy cost. You're probably going to see a lot of claims over the next year as energy becomes a bigger and bigger political topic. That's going to become the blockchain or the EV or the metaverse talking point of the next year. Everybody is going to come out or make a promise that we're going to release a chip that uses just 5% of the power of the H100 with double the results. When all the political energy goes around power, magically everybody's going to start talking about power requirements again. So, um, I, I think the snake oil salesmen will change the brand of their snake oil a little bit, and that'll be the hot topic. But I can tell you, power is not going away. Four data centers in Oregon, one of them gets half as much power as it needs. The other one gets no power, and the other two can't even get the utility to pick up the phone to make the connection. How much money did they spend on those data centers, and none of them work because there's no power? Two data centers in Santa Clara, California can't get the utility to hook them up to the grid. What are we building these stupid things for if we can't even plug them in? And a better question for Jensen, what are your GPUs worth if we can't turn them on? They're freaking paperweights without power. But you know, AMD and Lisa Su says growth, and Cisco, the bubble stock, just broke even after 25 years. Sure, ply your money into that. Good luck. Maybe you know better than Michael Bur, the biggest investing legend of our lifetime. Yeah. Oh, sure. Sure. Maybe you're, you're probably smarter than him. Don't worry about that. Uh, look, John, I'm not, not well-versed in Theta, so I can't comment on that one, but I can tell you be careful of snake oil salesmen talking about power. That's going to be a big deal going forward.

Chuck G says, "The emails were released a long time ago, unredacted. They re-redacted names in it to make the emails look bad." Um, look, maybe they un and re-redacted, or maybe they just dacked or or or postdacted or predacted, whatever they did. The, the dacting going on is irrelevant. Why the hell was the president meeting with Jeffrey Epstein in 2019? You, you can pterodactyl your way all the way around that, but I, I, that's not defensible. It is indefensible. Uh, his name is all over these files, and he campaigned on releasing them. Guys, when, if politics is ever going to get better, we need to call out our own side when they do this. If it's otherwise, it's just going to be this stupid team sport that just continues to devolve in chaos and eventually civil war. We need to hold our own side to higher standards. The other side ain't going to do it for us. So, you know, like, what the hell, what the hell was all that stuff that was released yesterday? That's all I could say. Uh, yeah, I'm sure they're dressing it up and and trying to make it look as politically damaging as possible. But that being said, you don't need to do that much of that. You really don't. Thank you very much, Charles, for supporting the channel.

And thank you everybody for having your coffee with the melon heads this morning. Don't forget that like button and that subscribe button on the way out for the algorithm. Thank you so much, guys, for the super chats and for supporting the channel. I appreciate that very much. As well as you magnanimous melon heads on YouTube, Patreon, and Buy Me a Coffee. Thank you guys for supporting the channel. Links down below to all that good stuff should you feel so inclined. Hi mom. Hi dad. Love you guys. Everybody, till next time. List small, dream big.