Banks are now trying to offload the AI data center debt they just underwrote
startupfortune.comFor my part, I do work on machine learning projects at home. But I'm nowhere near operating at a scale where datacenter GPU features like being optimized for 4- and 8-bit calculations would be a net benefit. Nor do I have any particular desire to have one of those things making my home office sound like I live next to a steel mill.
It's not too far off from why I don't have a box truck parked in my garage even though it's technically more capable than my Kia. And on the occasions when that is what I need, the local hardware store will gladly rent one to me for $20 per day.
> Tech companies raised $23 billion in AI-related debt globally in September, less than half the amount raised in August, according to Morgan Stanley data covering public bonds and private placement transactions.
> The decline marks a continued drop from June, when companies raised a record $113 billion for AI infrastructure including data centers and chips. In the US investment-grade market, where blue-chip tech groups borrowed around $306 billion between January and August, AI-related bond issuance stopped completely last month.
0: https://www.investing.com/news/stock-market-news/tech-compan...
ftfa "Morgan Stanley attributed the decline to the large amount of debt already raised earlier this year."
ok, is that good or bad? They never say.
Sure. Sometimes they cause global financial crises as part of that process.
https://en.wikipedia.org/wiki/Collateralized_debt_obligation
> In the early 2000s, the debt underpinning CDOs was generally diversified, but by 2006–2007—when the CDO market grew to hundreds of billions of dollars—this had changed. CDO collateral became dominated by high risk (BBB or A) tranches recycled from other asset-backed securities, whose assets were usually subprime mortgages. These CDOs have been called "the engine that powered the mortgage supply chain" for subprime mortgages, and are credited with giving lenders greater incentive to make subprime loans, leading to the 2007–2009 subprime mortgage crisis.
It's hard to ignore the similarities.
Inflation's way up. Real wages are down.
https://www.nytimes.com/2026/10/14/business/economy/inflatio...
> Wage growth has remained relatively muted over the past year. That, combined with higher inflation, means Americans are earning less for an hour of work. Average hourly earnings, adjusted for inflation, fell 0.5 percent in September, and were down 0.7 percent from a year earlier. It was the sixth straight month of year-over-year declines in real earnings.
https://www.cbsnews.com/news/household-debt-delinquencies-ri...
> The share of seriously delinquent auto loan balances has hit a record high this year, while nearly 13% of credit card balances are seriously past due — close to their 2010 peak in the aftermath of the housing crisis — according to recent data from the Federal Reserve Bank of New York.
https://www.cnbc.com/2026/10/09/american-debt-delinquency.ht...
> The ability of U.S. families to stay current on their debts worsened over the past three years, hitting levels not seen since the aftermath of the global financial crisis, the Federal Reserve reported Friday.
Where are they getting this data? This directly contradicts their claim:
> Real average hourly earnings for all employees decreased 0.5 percent from August to September, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today… From September 2025 to September 2026, real average hourly earnings decreased 0.7 percent, seasonally adjusted.
Your chart appears to be weekly earnings, not per-hour wages. Having to pick up more shifts or a second job to make ends meet supports the point, in my book.
This is one of the more out of touch things I’ve read today. I’m not sure from where you’re sourcing your economic data.
Maybe you’re saying this financial collapse won’t be as bad as 2008? I’d agree with you, that one was singularly dangerous and required large scale government intervention to guarantee that the global financial infrastructure didn’t bust. But this bubble will hurt very badly at a time where the consumer is not as strong as you think.
There is no issue with collateralized debt as long as the risk is properly assessed, the whole point of securitization is that you can take on higher risk for higher reward of an asset that was previously just one single piece of risk.
What if this winds up being the case for the trillions dumped into AI in hopes of future revenues?
https://www.reuters.com/business/oracle-corp-goes-high-stake...
> Cloud computing giant Oracle Corp is on the cusp of a junk-grade credit rating and its shares have tanked as the artificial intelligence hyperscaler becomes the fall guy of investors' concerns over the sector's debt-fuelled spending binge.
The specific problem of the 2008 financial crisis was that the banks were going out of their way to obfuscate the source of their CDOs so that, even when it was clear in 2007 that the subprime mortgage market was unraveling, you couldn't look at your instruments and figure out whether or not you were affected. The problem wasn't the CDO, it was the obfuscation. And as far as I'm aware, the current debt offerings aren't being obfuscated--if you want to avoid the data center debt because you think it's junk, just avoid the stuff being touted as data center debt.
yes, i specificly remember when Lehman went under the banks stopped trusting each other's ability to assess their own exposure. The banks stopped lending to other banks and that's when Paulson got on his knees (literally, i think there's a picture of him on his knees in front of Nancy Pelosi) asking congress for cash to guarantee loans. The side effects started squirting out everywhere i think even Mcdonald's was hours away from bankruptcy because the corporate paper market suddenly ceased to exist. Also, money market returns turned negative briefly, that's like a negative interest rate on a traditional savings account bad. It was bizarro world for maybe 72hrs.
The movies don't really do justice to just how upside down and nonsensical the financial world became. It was a knife's edge for 2 or 3 days.
My fear is that this is all going to turn into one big front-running exercise where those connected with the Trump crime family are warned to get out first, banks that swear allegiance are bailed out next, and the rest of us get to hold the bag.
The nuance here, though, was that the CDOs and similar instruments were sold in a tranched fashion, and the super-senior tranche was made to look as if it was very low risk, as normal for tranches instruments.
But when your entire series of tranches all consists of trash, then which tranche you were in didn't really matter.
CDO and CDO2 instruments hid this distinction really well, and unfortunately the ratings agencies bought into it and sold crap as AAA securities.
It's very hard to understand something when your salary depends on you not understanding something.
They just kept the music going, more ratings issued was more money for them. Paid by the bank creating the security, what could go wrong
There were a lot of factors that contributed to the 2008 crisis: adverse selection leading to low quality portfolios, mispriced assets, high leverage which magnified losses, lower-quality securities being held by investors who couldn't really afford to bear the losses on them, etc. But the fundamental concept of tranching is not actually that bad, even though every time people read about it they think it's the exact same as 2008. Banks have been tranching debt since long before 2008 and they have been tranching debt ever since. Not just mortgages either, but all kinds of debt.
Are these companies worth their incredibly high valuations?
Yeah... maybe think on that a bit in this context.
It feels like each bubble gets bigger.
Well you would expect that given that the market keeps getting bigger and the money in circulation keeps getting bigger.
Inflation alone means each bubble should be bigger than the last all other things being equal.
Not sure its just related to centralization, probably more so that information can flow more freely now, but I fully agree.
[0] https://en.wikipedia.org/wiki/Tulip_mania [1] https://nvidianews.nvidia.com/news/nvidia-partners-with-apol...
Loans are sold off, which means that they can raise more money to make loans. Each time you do that, you create more money out of thin air, which is profit.
The problem is, it only works if everyone believes.
THe problem with 2008 is that people stopped believing and demanded banks settle immediately. which then meant that they needed to raise cash, which meant looking at their assets, which meant looking at the risks of those assets, and then it went to shit.
Investors bought a lie packaged by the financial institutions. They shouldn’t have believed in the first place because the risk was junk-level but not sold as such.
Everyone thought they were ok because they didn't look at, or were not shown the, default rate of their instrument. The risk profile was deliberately obscured, or the people wilfully ignored it.
they were valuable until it wasnt.
Lots of names to obfuscate the same financial yada yada.
/s
>We lent £1,000 to John Sozzleby at 10%. We quantify the risk level as “iffy”, which is 42.6 qualm points above "dodgy". and are willing to sell you the debt for £700. its a great deal!
... and from the linked piece ...
| Banks do not sell down debt they are confident in
... I have no claim to expertise but both of these can't be true.
I wouldn't worry about it anyway, you can be sure when the day comes "they'll be to big to fail".
> They sell down debt when they are worried about concentration, which is exactly what "approaching internal limits" means in plain English: too much of this bank's balance sheet is now one bet on one sector holding up.
Which is correct, but kind of weird because being confident in a credit and being worried about concentration are not really mutually exclusive things. You can be pretty confident in an investment but not want it to constitute a majority of your portfolio. (Bankers know that even very strong credits are never 100% guaranteed to pay out.)
Let's say I offered you the chance to pay $100 to get $120 back if at least one coin toss in five came up heads. That's a pretty good bet, right? But would you bet your house on it?
When the debt in 2007 sucked, it crashed the economy. But when the price was good in 2006, everyone celebrated.
Note: prices are getting worse for bonds today but nothing panic worthy yet.
I am panicking a bit TBH
Do we even have one bankruptcy yet?
I'm keeping an eye on Coreweave and Oracle. But they haven't collapsed yet, not as of today anyway.
If it's anything like 2007, it's going to be the one we aren't watching that collapses first. Those in the open about their debts and situation are often more honest and solid than other unknown players. The ones who are lying the most are the ones with the worst accounting and worst books.
------
So yeah, chances are that Coreweave is just this week's topic. We really don't know how close we are to a collapse until someone out there actually starts to collapse.
Those should really eat a lot of shit if any of the two ai companies stops buying everything no matter the price.
It adds up quick.
Which is why I hate when people criticize some obviously overvalued shit, and the response is "why don't you short it".
Sometimes the best way to be safe of something about to explode is to just get away from it.
So yes, Oracle is likely a canary in the coal mine.
It can only really be seen as an indicator of hidden risks to the banks from exposure to the SPVs.
But how long it will take before the miners start dropping dead from the fumes, who knows. Could be years, could be a few weeks after the Anthropic IPO when people are sitting smoking on the steps to the helipad saying "what the fuck? No I mean, really, really. What the fuck!"
Cooling is usually what kills you with server gear at home. I don't have a cold aisle, or a case that flows that much air. Can I water cool it enough?
No video outputs would probably be my biggest annoyance. It should be fine at headlessly rendering games for streaming though, as well as AI.
If there's a will, there's usually a way.
So, sort of specialized? but not really.
> If there's a will, there's usually a way.
That's the spirit!
Yes they use pcie electrically, but its not the same slot shape and there is usually carrier boards
You wouldn’t repurpose these for home gaming, it would still be for llms
You can just mod them to run on consumer fans that are designed to spin much slower but have higher diameter
This is already happening.
You can order the SXM carrier boards on eBay/Alibaba today.
> You wouldn’t repurpose these for home gaming, it would still be for llms
When small businesses, home-labbers and prosumers have cheap access to potent GPUs, there will be a Cambrian explosion of grassroots creativity and innovation in areas that are "beneath" AI labs expansive ambitions; I want to see the OBS-equivalent of LLMs. Hell, I'd love to see what some broke artist can do with OBS, an H100, and an open video model.
It can certainly be parted out with proper motivation but it’s going to take a whole new ecosystem to support these in your typical home lab. Even then 20-30kw slices are electric car level energy consumers.
> Good luck powering a 400kw rack in your basement
Wut? Open-weight models already exist and don't need a cottage industry.
I'd gamble on 1 million curious people with 1 SoTA GPU each over one AIaaS lab or company with 1M GPUs when it comes to developing delightful things and experiences. We still don't know what small, specialized models can do because AI labs only ship products that could justify the trillions invested so far. With a single Nvidia A100, I have trained small models that beat the brakes off "SoTA" models in niche areas (estimated TAM is <10M people, world wide) - the "Bitter Truth" doesn't apply to the long tail.
This whole subthread is just sad. "Oh no, it's not the same form factor. It is useless".
Where's the "Hacker" in "Hacker News" there.
It's a shame that we need to defer to "China" as a shorthand for "actual engineers" just because our own engineers lack imagination and drive that would validate being given that title in the first place.
There are a lot of reasons other than skill why China is the way it is. Culture and locality are big ones. I don't know a whole lot but I disagree that any "actual engineer" could easily come up with a sustainable business for this stuff in the US -- for example, harvesting and processing used parts for their components is a hugely laborious process, and China has a huge culture of recycling and reworking that simply does not exist in the US (and would largely be socially unacceptable to introduce!). Take for example the pre-modded 4090s, or the BGA desktop motherboards I mentioned, or any number of other products that are based not merely on sheer engineering. It's not exactly engineering on its own that causes these things to happen, but more the fact that nearly anybody can just throw together an operation like that and have tons of workers available to make it sustainable.
Please don't misunderstand me as attacking you. I was attacking that other guy further up the thread with the empty GitHub account and the equally empty ambitions, trying to drag all of us crabs back into this bucket we find ourselves in.
Oh, plenty of people do not choose not to -- there are tons of blog posts and YouTube videos out there of people doing stuff exactly like this! It's just the making it sustainable part that's very difficult outside of somewhere like China, because -- unless you have special VC privilege -- you can't really offer reasonable prices to the masses, which makes your purchase volume go down, which further drives up your prices even more, until it converges on some insane number.
They do not have display outputs, but, at least with my 4090, if I plug the monitor into the iGPU instead, Windows still renders frames on it and just pushes them to the GPU that has a monitor attached.
So the lack of output ports of those DC GPUs might not prevent that?
Or maybe there are other limitations there I am not aware of, of course. Maybe the silicon cannot do the stuff needed for games or something like that.
Yeah, probably that. But something like the L40 - which is just a 4090 with more VRAM - might be usable like that? Maybe?
You SV guys go use your stock options and try it out for science.
I'd much rather be in the recovery/asset remarketing market rather than the primary/reseller one when this thing pops, for sure.
I think at least we Europeans will really want these data centres once prices become reasonable though. We really need training infrastructure.
There was a cringe-named Republican bill from the beginning of Trump's term, it somehow(?) relaxed the Enhanced Supplementary Leverage Ratio, and the eSLR is one of several related rules on very big banks that deter them taking on "too much" risk.
But the debt we are talking about is not Private credit debt, its completely different animal with far different risk characteristics
I agree with JPM that now is a good time to invest in public debt.
what do I mean by that? oracle is publicly traded, which means they (should) report profit loss and other key metrics in a standardised way. This means that one company's metrics should be comparable to others. Their value is assessed by the second on a public market. This means that anything that affects thier value (real or imagined) is reflected almost instantly. (same goes for debt)
Private credit, and the stuff its invested in, is much murkier. THey do not have the same public reporting rules. There is no testing of value. Its in the interest of the owner of that debt to talk up the value of the assets they hold.
This means that a fund might invest in 10 companies. Those companies might be doing well, or they might not. Because information is limited, and there are no public trades, the value of those companies are only ever tested at sale, or in a crisis. (ie they fold, or do something so public that they can't avoid the consequences.)
THe problem then is that because information is limited (was it a one off, did the owner hide the problem, did they use the wrong investment strategey, is the rest of the portfolio also over valued by 10x?) causes people to panic, and withdraw money.
Because private credit is not that liquid, it means that if people withdraw too much money, they either have to say "no we have no free cash" (lehman brothers insolvancy), they have to take out bridging loans (expensive and very short term) or sell assets (fire sales rarely get good value and shrink the credit supply)
All of which causes a panic, and people look at places like softbank, see the leverage and think "oh fuck thats not worth anything" and the bubble pops.
Modern finance is basically a collaborative fiction. Its fine so long as everyone buys into the same narrative. As soon as someone says "no, why?" the whole thing falls of the rails.
The world is a napkin
/s
[OPENAI, ANTHROPIC, in unison]
"Cool, imagine if someone could build a Beowulf cluster of those!"'nuff said.
Did you mean CDS? As your sentence doens't make sense as its written.
PETER SULLIVAN: We have to hold these assets on our books longer than we might ideally like to.
JOHN TULD: Yes.
JARED: Sell it all. Today.
JOHN: Is that even possible, Sam?
SAM: Yes. But at what cost?
Not to do so would be reckless.
What is unusual about this is that syndications usually clear in a few weeks but this has been stuck in distribution for six months and still not closed.
And it's just one of them: they know that there is about three trillion dollars of this risky shit out there either in the hyperscaler/FAANG balance sheets or off the books and others are reaching the limits of their appetites for it, so they are going to struggle to sell this particular debt, and meanwhile Oracle's position gets worse every day.
We are getting a lot closer to the Margin Call crisis meeting moment where one bank decides it cannot assess the risk of their share of it, are we not?
But this time it is happening in a world where retail investors, lawyers, government officials, elected representatives are much more likely to have seen Margin Call and The Big Short.
Those bits could be sold off to different global consulting firms, I suspect.
(But aren't those global consulting firms also going to be freaked out about their own AI risks? And what does the whole AI-assisted coding thing do to a sober assessment of what all of Oracle's global business is worth? Lots of unanswered questions)
Also that is not the AI data centre bits; those will have to be chopped off and dumped.
If that doesn't seriously spook the markets — a company as well-known and formerly blue-chip as Oracle, needing an international bailout — then it would be kind of surprising.
Oracle is already close to being classified as junk and reaching a tipping point. If/when that happens it is unclear what affect that will have on the markets on companies invested in AI datacenters with Oracle, and other companies that Larry Ellison and other Oracle investors own shares in.
So the worry is that it makes it clear that the unexamined risk in the SPVs has a lot less light shed on it.
(ETA: that article suggests Oracle is using SPVs)
I mean yes, there are key contractors for certian things, but depending on the structure they can be chapter 11'd to yeet that debt.
Of course junking all those bonds would cause a crisis.
Everyone knows these loans are dogshit but if anyone moves first to say so then everyone else’s loans basically are screwed too. So everyone is incentivized to pretend like there’s no problem even though everyone knows there’s a problem.
1. they are one place above junk;
2. they are being treated as effectively junk;
3. if they get classified as junk, any pension portfolios holding Oracle stock must sell as they can't hold junk stocks.
If that happens then there will be a cascade of effects. Not just in the AI/datacentre sector but elsewhere, as Larry Ellison holds a stake in Paramount/helped finance the Paramount/WB merger.
[1] https://www.youtube.com/watch?v=rHaPfdnRoZ4 -- Mostly Economics Podcast #55: Who pays when the AI bubble bursts with Ed Zitron (12:36 - 23:53)
(Can't remember, is it this Texas one?)
ETA: This whole Oracle bit is really the area of Zitron's predictions that is the least contentious: he called things, they are happening.
The big question is to what extent this is a harbinger of bad things. In a less crazy market where the value of enterprise-software-backed consultancy is stable or growing, you can imagine people lining up to bite off chunks from the carcass of a failed Oracle. But is the value of enterprise software even stable? Aren't many of the possible buyers also overextending themselves?
ETA 2: No, the potential force majeure is about a project in New Mexico, apparently
Wouldn't hedge funds or PE recognize this arbitrage opportunity and eat this up, making this a non-issue? Vastly simplifying this: suppose "junk bond" means the chance of default is greater or equal to 10%. Of course it's bad if the risk of oracle going bankrupt edges up from 9% to 10.1%, but we shouldn't expect pandemonium from the 10% cliff edge, because there's plenty to be made by selling all the bonds that pension funds are obligated to sell, because now they have higher yields (yields move inverse to bond prices).
(Sincere, not rhetorical questions)
Eh, people do weird things all the time.
Also, there is often extreme information asymmetry.
I guess, maybe, but perhaps the risk that GP is commenting on is that it could be it's own form of Juicing.
I do sincerely doubt, even with the big shifts that AI enables to have companies 'move away' from Oracle, that Oracle will default.
On the other hand, There's still an elevated chance of decline.
IOW, Those stocks might move from pension type plans to different baskets as a result, however there is a non-negligible risk of some (not total!) loss in the 5-10 year term.
Will add, I would -hope- that the same pension rules around selling questionable stocks, would also have rules limiting what level of exploitation is possible.
Of course past performance is no guarantee of future results, as they say.
Recently, the Australian AI firm failed to secure an IPO [1], [2].
OpenAI is looking to go for an IPO despite shaky revenue [3], [4], [5], resulting in a stock drop for companies like Oracle invested in OpenAI [6].
Anthropic is in a similar situation: looking to IPO despite shaky finances [7], [8], [9].
The companies involved are all investing in each other and trading money between them leading to circular investment [10].
[1] https://www.wsj.com/finance/firmus-ipo-ai-trade-f490c240
[2] https://www.abc.net.au/news/2026-10-10/how-firmus-the-bigges...
[3] https://techcrunch.com/2026/10/08/openais-revenue-is-reporte...
[4] https://www.inc.com/chris-morris/what-openais-leaked-financi...
[5] https://futurism.com/future-society/ai-financial-bubble-open...
[6] https://www.cnbc.com/2026/10/08/open-ai-revenue-nvidia-oracl...
[7] https://www.investors.com/news/technology/anthropic-ipo-fili...
[8] https://www.newconstructs.com/wp-content/uploads/2026/10/Ant...
[9] https://www.tradingkey.com/analysis/stocks/us-stocks/2622154...
[10] https://graceblakeley.substack.com/p/the-ai-circular-economy
Equity shares do not have ratings, bonds have ratings. Everything else is correct, if their bond ratings slip one more level they will be rated junk which may force some holders to liquidate if they’re not allowed to hold junk bonds.
Much of what Margin Call is about has already happened in the few days and weeks before the day in the movie — the events that precipitated the widespread firings, including a rather deliberate firing of the head of risk management, but are not really discussed.
In the meeting, Sullivan is talking about the music slowing, saying "if the music were to stop…". He's suggesting that the situation is bad, in the context of the un-discussed preceding days, so some action is needed, which is why he escalated.
Tuld saying he fears he "can't hear anything" is about much more fundamental uncertainty — his own belief that no set of numbers could be useful (he didn't even want to discuss the numbers in the report) and that the actual situation required acting on his gut instinct that it was much, much worse.
He, basically, thinks the risk cannot be assessed ("I'm telling you, this is it!") and arbitrary action is needed.
In short, the point is he did not have any confidence they could ride out the consequences of the preceding, largely un-discussed few days, because they were beyond their parameters, and that there was no time to assess the real hidden risk.
The trigger for the chosen action is not the newly correct numbers in Sullivan's report, but it forcing Tuld to confront his belief that even those numbers were no guide for anything.
(Sam's dog dying after his sad failure of a divorce is a crucial metaphor — the dog days are literally and metaphorically over)
https://www.economist.com/content-assets/images/20260711_EPC...
Which of course is a valid point to raise, but you should just say "corporate bond issuance is at a all time high", rather than some clickbait headline about how "Banks are now trying to offload the AI data center debt" and it's "out of scale to anything we've thought about, ever."
And the key point of it is not "larger than ever" but "out of scale"?
I'm chastising the author of the article, for the "Banks are now trying to offload..." framing, not the commenter. Hopefully the fact that I was commenting about the headline made this clear.
>And the key point of it is not "larger than ever" but "out of scale"?
Isn't that "larger than ever" but with more exclamation points?
(At least is the way I read it: not just large but abnormal in context)
I personally think it's all hugely overcomplicating things but that's the way modern world works.
(until it every now and then, on regular intervals, doesn't:)
The longer answer is that banks generally have policies about how concentrated they can be in individual borrowers, industry sectors, geographies, etc. That is why you rarely see a single bank take all of a very large corporate loan. They syndicate it out.
This is common. Selling debt is normal. If there is money to be made by selling the debt and going back to issuing more loans, they’ll try to find a buyer.
Everyone is so primed to believe that all things related to data centers are bad that they’ll assume this is a special event. The person writing the headline knows that.
They hold it to help stabilize the market for it while its being sold and then offload it once the market has been established.
Nothing out of hte ordinary here, but to be fair the original article isnt' a financial site so they would have no real idea about how this work behind the scenes.
This doesn't seem like a story at all given how robust this debt is trading.
[1]: First was a decade ago with RMG (a Canadian monoline lender) and the other two with Scotia, the first of which was a fixed mortgage at purchase, and the second was a refinancing.
Some originators will hold on to servicing of your debt wherever it goes (within certain boundaries, e.x. if you go into a delinquency or reconciled delinquency state).
Those originators use it as a selling point, because many people have gotten bit by servicer flips one way or another.
What I mean is parent companies and contracts that might obfuscate who's owed the debt.
However, I don't know anything about debt markets let alone homeownership.
This means that any mortgage transfer would come with a 'sweetener deal'. If you don't object to the transfer you get a small reduction in your monthlies, e.g.
With variable-rate mortgages, banks can insulate themselves from inflation risks, which they themselves create.
Sure that could be true, but that has nothing to do with the public debt we're talking about.
Completely different markets.
That's like me saying the condo Market in Miami is hot and you rebutting that single family homes in HOA's in Phoenix are not hot right now.
Both can be true at the same time as they are completely different market that are only very tangentially relate.
- I still have a mortgage on a property but don't live there so the mortgage bill gets sent to a different address (b/c rental property)
- Company A originated the mortgage and sells it to Company B
- Company B completely ignores the mailing address and starts sending bills to the original property address
- only through blind luck did I realize that the mortgage bill was being unpaid
This seems like basic, basic bookkeeping but I guess it's also a reminder that "reality has more detail than people realize" and that there are plenty of opportunities for improving systems.
Still another: One particular suite address only maps to one person, entity, or family. Counterexample: Any of thousands of commercial mailbox-rental / package-shipping stores in US strip malls, which tend to have suite numbers (within the mall) and possibly hundreds of tenants, all at one suite.
https://moversguide.usps.com/mgo/move-combined-mobile will let you do it online.
It's a pain that you have to do this because of their incompetence. But it will save you the embarrassment.
One of the changes USPS made in recent years is that they are securing mail forwarding. That type of arrangement may not be possible.
(They'd stop fucking this sort of thing up pretty quick if they faced financial consequences for it.)
As a Canadian, other than the absolutely insane rate of school shootings, this is probably the next-wildest difference I can think of.
Canadian mortgages are held and stay with the bank that approves the mortgage. The only way the mortgage goes to a different lender is if the owner goes to that other bank to renew the mortgage. It just boggles my mind that mortgages can just be assigned willy-nilly without the owner’s consent.
That directly contradicts specific points made in the story, about specific Tier 1 banks and specific amounts of debt not finding buyers. And the amount cited isn't all that great, given the overall equity in play.
> Nothing out of hte[sic] ordinary here
Matthew Moniot, Man Group: "the deal sizes involved are 'out of scale to anything we've thought about, ever.'"
Hard to compare your model with his, since he doesn't have one. When quotes from named credit risk guys from named finance organizations sound like angsty Gen Z, it's not ordinary.
In any case, the story is covering something significant. There is an important test occurring, and we're all going to learn the results, sooner or later. It could all turn out fine, but I don't know. I don't believe you really know either.
But that has nothing to do with the scare tactic headline that says banks are trying tot offload debt. As I said this is exactly how banks work and how they treat all debt they underwrite.
It’s not necessarily a statement about AI, it’s just finance and accounting.
If the market is already crammed with sector-concentrated debt (because of the amount already issued), finding buyers for more is going to get increasingly hard.
At some point everyone big already has enough exposure and isn't interested in the risk of more.
The only thing that keeps the party going is being able to drain that debt off bank sheets, but it's hard to see a ton of interest in fixed rate, capped upside exposure to a high risk industry in an environment of rising central bank rates.
And this is supposedly high grade debt we're talking about: JPMC is spending months on end shopping around a few $10's of billions, and having to discount it. Never mind the far greater sums on the books of vastly less credible outfits, complete with meme names that always age poorly when things go pear shaped.
How a bunch of highly speculative moonshot big tech stuff has managed to be financed by Tier 1 financial institutions and high grade debt, as opposed commonplace equities, is a question for the ages, and we may all yet find ourselves suffering the answers.
The debt isn't trading robustly at all, exactly the opposite.
> JPMorgan and MUFG are part of the group that has spent more than six months trying to distribute $38 billion in construction debt tied to a Texas and Wisconsin data center project leased to Oracle.
> JPMorgan, Morgan Stanley, SMBC and MUFG are quietly shopping pieces of the AI debt pile they helped build, a sign the lenders closest to the money have started hedging their own bet.
> One case shows how stuck this has gotten. A group of banks including JPMorgan and MUFG has spent more than six months trying to distribute $38 billion in construction debt tied to a Texas and Wisconsin data center project leased to Oracle, Bloomberg has reported. Some lenders are now willing to sell pieces of it to non-bank buyers at a discount, just to move it. Six months is a long time to sit on debt nobody underwrote to hold forever.
> Matthew Moniot, co-head of credit risk sharing at Man Group, told the Financial Times the deal sizes involved are "out of scale to anything we've thought about, ever."
FTA: That is exactly why CoreWeave-leased paper prices at 7.00% to 9.875%, against the 5.70% to 7.875% that hyperscaler-leased bonds command, per bond market data compiled by CCIR.
Just so were clear: Core weave paid Micron and NVIDA 80 percent margins to buy equipment at a 9 percent lending rate so it can sell it to providers who are subsidizing tokens at 20x their own API prices (that are likely also subsidized).
Could it all work out? It could. But it does not look like there is the financing to keep building - thats going to impact prices and the moment that happens this debt looks even more risky.
Here is today: Shares of AI cloud provider CoreWeave (CRWV) dropped over 15% Wednesday, a day after venture capitalist Chamath Palihapitiya posted on X a chart that showed the yield Nvidia-backed firm's 2032 bonds hit 15% yesterday as a sell-off brought prices into distressed territory. SOURCE: https://finance.yahoo.com/markets/stocks/articles/nvidia-bac...
I can conclude that supply is far exceeding demand because of the rates attached.
Consider this an invitation to expound at great length on the subject, if you are in to that sort of thing.
In this case CoreWeave has sold ~4billion in 5 year bonds at a 9% rate. If you buy one for 1000 bucks you will get 2x45$ payments a year for 5 years. Then at the end a 1000 cash payment.
For the sake of argument let's say you bought this earlier this year. You now have an asset worth 1000 dollars. If it is a good bond (A US treasury or Municipal Bond) you can borrow against it from lots of place - you have something worth 1000 dollars on your "books" (accounting). For the earliest sales (you) core weave has already made a 45 dollar payment.
You now have a 1000 dollar asset and 45 bucks in cash. IF you hold to maturity and keep all the money you get 1000 bucks back and 450 bucks in interest.
What happens if you want to sell it? Maybe rates went down a lot, so that 9 percent is huge, and the AI boom is going gang busters so that 9percent looks like a good deal. I offer you 1100 for the bond. You now have 1145 dollars in cash.
What happens if you need money, and rates are the same and CoreWeave looks the same? I will offer you 980 for it... You now have 1025 bucks in cash... and I get the rest of the payments (45$x9) and 1000 bucks back at the end. (This has tax implications).
What happens if you want to sell cause you need money AND, you think CoreWeave is gonna burn, or this "ai thing" is a bust. Well it's likely that I think that too. the bond is only ever going to pay 45X9 more payments but I want a higher rate. I say to you "I'll give you 800 for it" (a 15% rate), cause CoreWeave is fucked. You need the cash so you sell it for that much and have 845 bucks. Thats a loss of $155.
Let's say you bought a billion of those bonds, and expected to walk away 1.45 billion in 5 years - but you sold them all off today and LOST 155 million.
Someone owned a LOT of 9% Core Weave bonds and either found a BETTER investment -OR- they wanted out of CoreWeave and no one had the money or desire to own them. The bond buying market is announcing that "We don't want any more CoreWeave Debt".
There are a lot of problems with CoreWeave: those 5 year bonds it sold, well the contracts to support them (15 billion a year in revenue on 60 billion of debt) only run for 3 years. At current rental rates for long term commitment NVIDA hardware had a 3 year pay off term... But thats not power, the building, staff, the business was (is) marginal.
Who was selling the debt? Well my guess would be a chunk of it was JP Morgan (who set up the bonds to start with). Dumping it right after you announce your numbers (they were a minor miss) and lower your target for CoreWeave's stock would be an ideal time. But that is PURE speculation.
Are you saying there are existing bonds at 9% being sold for some amount of money (possibly even less than the original principle?)
How does selling the $1k bond at $800 translate into 15%? The bond was originally worth $1k+$45*10=$1450, now $45*9 ($1405?), so if you buy it for $800 that's approximately 85% of its original value ($800+(9*$45)/$1405) and thus a 15% decrease? How does that relate to the original 9%?
Is this about what existing bonds are being sold for or new bonds?
Presumably a us treasury bond yield is basically the same as inflation?
The bonds were issued earlier this year. Their sale is a loss for someone, and NOT a small one.
> How does selling the $1k bond at $800 translate into 15%? 1000 5 year at 9 percent 5x90(450) + 1000 back.
If you need to dump it for 800, the bond still pays out 1000 in the end, The issuer still pays out 5x90(450). The 200 bucks I pick up at the end gets spread out over the 5 years so it looks like 5x130 (650+800).
That would be 16 percent, but all the numbers for the sake of sanity got rounded from their real ones. 9.xx rate, 8xx resale price, and 14.9 (closing on 15) rate.
It gets calculated that way because if you need to sell more new debt it only makes sense to know how to price it.
> Presumably a us treasury bond yield is basically the same as inflation?
Sometimes, often not. But Treasury Bonds have quite a few advantages. No state tax on the interest payments. They are almost as good as cash, so you can borrow against them at a pretty good rate (Better than a HELOC and way better than a credit card). Lots of institutions will give you a line of credit for up to 90 percent of the value of the bond. You can also borrow against them for margin trading (60percent? better than stocks) -
2. Bank sells the debt at $Z because holding the debt is risky and the bank would rather have cash than debt. Its counterparty would rather have more cash over time and is fine with the risk but does not want to bother with the whole process of closing the loan. $X < $Z < $Y.
3. Profit! Bank spent $X to get $Z, which is greater than $X.
stop trying to normalize that oracle got away with shady deals with those banks.
could you get 20mi on your 1mi house? yeah, oracle could, and much more. how on earth is this "normal" and "what banks do"?
Also just in: water is wet!
This might play out just fine, or crash like the housing market.
Published 8 hours ago
https://www.ft.com/content/678bcd31-6c2a-447b-a68c-ce6dec220...
Investors sell longer-dated AI debt amid Big Tech borrowing spree
Published July 10 2026
https://www.ft.com/content/28380abc-72f9-4287-8d36-2823c7335...
Is it a data center with nothing but GPUs, that does nothing but inference all day and all night?
Is it a data center custom-built for only AI companies to use?
Do these “AI Data Centers” have data storage? VPS? …
Or, as I suspect, is “AI Data Center” simply a fake media buzzword that really means “Normal Data Centers” but with political baggage and stigma built-in.
It's a different build-out to a data centre that can host video/YouTube content (fast CPU, no GPU, large number/size of hard drives), or that can run web servers (fast CPUs, low to average hard drive capacity).
No you're absolutely right. The only difference that I can tell is power requirements are legitimately higher because GPUs consume more electricity. More cooling is also needed because there's more heat generated. Aside from those two things, it's a plain old datacenter that companies have been building at break neck speeds since like 1996. Now that I think about it, how come there's no panic about additional Internet backbone capacity needed to support these "AI datacenters"?
Is this our chance to 'get rich' by buying a negative valued asset? Like that time barrels were trading at 0$ or negatives?
There's also a non-zero chance gubernatorial elections are won on the basis of pardoning such transgressions in the future.
https://medium.com/@vektormemory/the-si-wealth-transfer-is-b...
I never knew my loan and others loan could be packaged together as a financial product, the most famous one being the Mortgage backed securities (MBS), and then repackaged with other MBSes together to make a tranches of debts/loan known as Collateralized Debt Obligation (CDO).
Both MBS and CDO, plus Gaussian Copula that is being used to price CDO, not realizing the implied volatility is actually higher than expected that poisoned the whole scheme, contributed heavily into the unwinding of the 2008 Great Financial Crisis and is what killed Lehman Brothers, and set the powder keg to detonate the Eurodollar crisis 3 years later.
Yet it has been 20 years. 20 fucking years. The banks and the governments around the world hasn't fucking changed. Those CDO money ended up in private credit and Special Purpose Vehicles (SPV) which both of them is in its pending doom.
I can't fathom to imagine how fucked would this financial tsunami would be.
These are moonshot investments. As an investor, equity would make sense - possible downside, but unlimited upside. But with bonds you're still taking all that downside (you'll be further ahead in line than equity investors, but you will still be in line!), meanwhile if the bet does work out in your favor, the upside is limited to just receiving fixed coupon payments.