● Tesla 8 Trillion Gamble

ARK’s 62% Compound Annual Growth Scenario and the Reality Check of “Tesla $8 Trillion”. Cash Wood’s Logic, Japan-Originated FSD Signals, Cybercap Commercialization Path, and a Comprehensive Valuation Checklist All in One.

Key Points to Read Today

It extracts only the core information on what revenue structure is created when Tesla transforms from a car company to an AI and robotics platform.
It reinterprets the premises and numbers behind ARK’s stated 62% compound annual growth and the overlooked risk and opportunity factors in the market.
It outlines the significance of regulatory momentum indicated by the Japanese Nikkei’s FSD test drive review and the flow of OTA update permissions by Japan’s Ministry of Land, Infrastructure, Transport and Tourism.
It analyzes how the Cybercap test captured by drone footage and the “with or without steering wheel” scenario affect business execution.
It compares the numerical assumptions between BNP and Barclays, which justify the extreme divergence in Wall Street evaluations, and presents an investment strategy checklist.
It also examines how global economic factors such as interest rates, inflation, and stock market volatility interact with Tesla’s multiples.

Headline Briefing

ARK’s Cash Wood revealed that Tesla needs to achieve 49% EBITDA growth annually over the next 7.5 years, with an overall compensation condition requiring a 62% compound annual growth.
This is an unprecedented figure, and it is summarized that electric vehicle sales alone are insufficient, with robo-taxis and the humanoid robot “Optimus” being the core growth drivers.
Wall Street views are divided.
BNP Paribas presents an underperform scenario with a target of $307 and warns that 75% of the current value is tied up in AI businesses with no sales.
In contrast, Barclays raised their target price to $350 based on AI and autonomous driving momentum.
The Japanese Nikkei test drove Tesla FSD in central Tokyo and reported that it was “better than a human” in narrow alleys and emergency responses.
Japan’s Ministry of Land, Infrastructure, Transport and Tourism is expanding the officially permitted range for OTA-based autonomous driving software updates, signaling an opening for commercialization.
The Cybercap captured on drone footage showed a very natural fully autonomous driving performance, leading some to interpret that the prototype might be equipped with a steering wheel.
The presence or absence of a steering wheel is evaluated as a practical variable that could accelerate early certification, regulatory clearance, and the timing of monetization.

Numbers Reflecting ARK and Wall Street’s Assumptions

EBITDA Path.
From approximately $11 billion currently to a median value of $210 billion within 7.5 years, achieving 49% annual growth.
For full compensation, a compound annual growth of around 62% is required.
Growth Engines.
Transition from a “sales-based” model to a “usage-based platform” with the commercialization of robo-taxis.
Structural improvement in manufacturing and service labor productivity through the mass deployment of Optimus.
Scenario Differences Compared to Wall Street.
BNP’s optimistic scenario cites, for instance, 525,000 cumulative robo-taxis, 17 million Optimus units, and 11 million FSD subscribers by 2030, but they add the caveat “if all assumptions hold true.”
Barclays evaluated that AI-driven sentiment could support the multiple ahead of earnings announcements.
Key Interpretation.
ARK’s 62% cannot be achieved by automotive margin leverage alone.
Platform indicators like fleet utilization, per-mile revenue, and robot utilization will dictate the earnings.

The Significance of Japan-Originated FSD Signals

The Nikkei test drive reported cases of “emergency response” and “30 minutes of disengagement” in complex urban environments.
Despite Japan’s reputation for left-side driving and conservative regulations, the confirmed flow of OTA update permissions indicates that the baseline is shifting.
Regulatory Interactions.
Japan’s pre-approval may serve as a signal for policy discussions in countries with similar road infrastructures, such as South Korea.
From a global economic perspective, the easing of regulatory hurdles can be a factor for re-rating technology stocks.

Observations on Cybercap and Product Strategy Scenarios

Dedicated robo-taxis without a steering wheel.
They offer advantages of cost, space, and durability optimized for full autonomy, but face significant initial regulatory and certification risks.
Concurrent prototypes with a steering wheel.
They provide flexibility in test drives, insurance, and regulatory acceptance, potentially accelerating the timing for commercialization in a semi-autonomous or driver-assisted model.
The goal of an “unboxed” manufacturing process and an annual production target of 2 million units presupposes productivity improvements relative to CAPEX.
Revenue Model.
It has a structure where a platform fee is taken per mile driven, generating higher LTV and predictable cash flows compared to vehicle sales.
This forms the logical basis for an upward adjustment in stock market multiples.

Valuation Sensibility Check

Top-Down TAM.
The markets targeted by urban mobility, logistics, and humanoid robots for labor substitution represent a significant portion of global GDP.
Valuation Anchor.
Energy storage, insurance, and software subscriptions offer diversified cash flows largely independent of economic cycles.
Interest Rates and Inflation.
A decline in interest rates is favorable for the multiples of long-term growth stocks, and stable inflation helps reduce variability in battery costs and margins.
Scenario Band.
If robo-taxi commercialization is delayed, the “core EV + energy + software” path is valued between $1.5 and $3 trillion.
If commercialization credibility is established, a “platform premium” could be added, potentially reaching up to $5–$8 trillion.
The sensitivity to assumptions is very high, so quarterly execution data must be monitored.

Execution Checklist

Safety and Reliability.
Expand urban ODD, reduce disengagement, and cross-validate using insurance data.
Compute and Data.
Expand learning compute and remove bottlenecks in the data engineering pipeline.
Regulations.
Gradually expand the permitting systems at the city, state, and national levels and ensure alignment of responsibility and insurance models.
Manufacturing and Supply Chain.
Achieve improved yields and cost reductions on key robotic components such as actuators and gearboxes.
Product and Pricing.
Optimize the competitiveness of per-mile fees and the operational rates of vehicles/robots.

Reasons for the Division on Wall Street

The conservative view argues that “too much of the value is tied up in AI businesses with no revenue.”
The progressive view maintains that “the unit economics will be redefined through the platform transformation.”
Ultimately, the issue comes down to which side – “regulatory approval speed” or “superiority in real-world data” – prevails.

Key Points Not Included in the Headlines

Employee equity incentives are a hidden variable driving Tesla’s execution speed.
If the compensation plan is approved, the quality of talent attraction and retention will change, directly shortening product release cycles.
Once robo-taxi cash flow is secured, it can self-fund the CAPEX required for the mass deployment of Optimus.
This “cash flow flywheel” is the most realistic catalyst for the 62% compound annual growth assumption.
Cross-selling with insurance and energy storage enhances per-mile revenues and customer lock-in.
Ecosystem synergies arise from urban-level service operations, structurally attaching a premium to multiples.
Japan’s OTA permission flow suggests path dependency in regulations, wherein once opened, it is difficult to reverse.
Leading the initial breakthrough market offers a reference model for subsequent expansion overseas.

Risk Radar

Technology.
Complexities in urban environments and long-tail incidents may damage trust.
Regulation and Politics.
Adverse regulatory winds at local, national, and international levels, disputes over liability, and data border issues present variables.
Competition.
The pace of software transformation from Waymo, Chinese autonomous driving companies, and traditional OEMs.
Macro.
A global economic slowdown, a re-rise in interest rates, and renewed inflationary pressures could simultaneously put pressure on multiples and demand.
Execution.
Robotics production issues, cost overruns, and delays in product launches could discount market cap expectations.

Investment Strategy Checkpoints

Product Reliability Indicators.
Monitor disengagement, accident rates, and insurance loss ratios on a quarterly basis.
Regulatory Calendar.
Check for service permission announcements and target operating numbers at the city, state, and national levels.
Platform Indicators.
Focus on per-mile fees, utilization rates, driver/robot operating models, and take rates.
Cash Flow.
Observe the expanded shares of energy storage installations, software subscriptions, and insurance sales in overall revenue.
Risk Management.
Clarify position sizing and hedging plans by reflecting stock market volatility and the interest rate environment.

This article is for general informational purposes and is not investment advice.

Timeline and Points of Interest

The outcome of the shareholder meeting compensation vote directly impacts management authority and talent strategy.
International commercialization of FSD should be monitored through trends in early adopter countries such as Japan.
Keep an eye on the timeline for Cybercap pilot services and the transition in vehicle production systems.
Optimus will signal its transition if pilot productivity indicators are disclosed within factories.

Conclusion

A 62% compound annual growth is a trajectory that only a “platform company” can aim for, not a “sales company.”
The regulatory signals from Japan and the Cybercap tests are pieces that turn the pathway to the platform into reality.
Ultimately, the game will be decided by the rate of safety data accumulation, regulatory trust, and the speed of the cash flow flywheel.
Considering the interaction with macro variables such as interest rates and inflation, an investment strategy based on execution indicators is necessary.

< Summary >ARK sees Tesla’s 62% compound annual growth in the transformation to a robo-taxi and Optimus platform.
The FSD signals from Japan and the Cybercap tests are key pieces of evidence accelerating commercialization.
Wall Street is divided between “an excessive proportion of unrevenue-generating AI business” and a “platform premium.”
The key checkpoints are safety data, regulatory approval, per-mile revenue, and the cash flow flywheel.
Risk management incorporating global economic factors such as interest rates and inflation is essential.

[Related Articles…]
The Economics of Robo-Taxis: Connecting Per-Mile Revenue and Valuation
Optimus Productivity Shock: The Reorganization of Manufacturing and Service Labor

*Source: [ 오늘의 테슬라 뉴스 ]

– ARK 62% 복리 성장 시나리오… 캐시 우드가 말한 ‘테슬라 8조 달러의 미래’, 인생을 바꾸는 기회가 온다!

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● Tariff Armageddon, NATO Arms Surge, Energy Shock, AI Powerplay – Korea Expansion

Trump 2.0 and the Counterattack of Fragmentation: A Comprehensive Summary of Korea’s Survival and Expansion Strategies Amid Reciprocal Tariffs, NATO 5%, Energy Security, and AI Hegemony

This article contains four elements.

• The real impact and timing of reciprocal tariffs and the collapse of free trade on Korea’s exports and employment.
• The new growth axis opened by the NATO 5% defense era, defense industry, and energy security.
• Korea’s food and talent strategies amid the AI hegemony triangle of the US, China, and India.
• The playbook for education, policy, and supply chains that transforms “de-Koreanization” into an “expanding Korea.”

News at a Glance

• Reshaping of the international order.
  Wars and protests occur simultaneously.
  Geopolitical shocks have become constant.
  The global economy is rapidly moving toward fragmentation.

• The return of reciprocal tariffs.
  Investments are compelled through tariffs and subsidies become conditional.
  Diplomacy based on leverage takes precedence over free trade.

• Energy security holds the leash on growth.
  Europe faces cost shocks, while China and India absorb Russian energy, and data centers experience a surge in power demand simultaneously.
  SMRs and nuclear power are making a comeback as the key pillars of physical recovery.

• The NATO 5% defense scenario.
  Although achieving a uniform 5% may be difficult, increased defense spending centered on countries adjacent to Russia will be structured.
  A long-term, robust “pipeline” for Korea’s defense industry is opening.

• A new era where people and investment matter more than trade.
  Talent attraction competition and diversified supply chains are becoming key variables for economic prospects.

• The Ukraine war.
  Despite major powers reaching agreements, the likelihood of the parties accepting terms is low, making a short-term ceasefire unlikely.
  Managing long-term risks is necessary.

Issue 1｜The Collapse of Free Trade and Reciprocal Tariffs: Survival Strategies for Exporting Countries

Reciprocal tariffs are policies that pressure investment and localize investment and employment using tariffs.
Korea’s semiconductor, automotive, battery, and shipbuilding industries need structural solutions rather than relying on short-term exemption negotiations.

• Three-Hub Production System.
  Divide assembly, components, and service bases into three hubs: NA (US and Mexico), EU (Eastern Europe and the Mediterranean), and India/ASEAN.
• Supply Chain Insurance.
  Dual-sourcing key components with China+2 (Vietnam/India/Mexico) and proactively obtaining multi-regional certification for identical specifications.
• Tariff vs. Investment Calculation.
  If tariffs become constant, it may be more advantageous to find the mathematically optimal solution of tariffs and rebates rather than large-scale domestic investment from the home country.
  However, security, technology control, and cross risks must be calculated together.

Issue 2｜Energy Security and SMR: The Power Game in the Data Center Era

AI and cloud computing are causing a surge in power demand.
Renewable energy alone cannot handle the base load.

• SMRs (Small Modular Reactors) and dedicated power purchase agreements (PPAs).
  Demand for “dedicated power” from big tech companies is growing.
  Korea is one of the few countries that maintains an existing nuclear power supply chain.
• The Opportunity for a “Nuclear Foundry.”
  Among the approximately 30 global SMR designs, production capacity is limited.
  The manufacturing foundry model like Doosan Enerbility’s could become the hub of industrial standardization like TSMC.
• Lessons from Europe’s Cost Shock.
  Due to changes in the power geography of Russia and Ukraine, Europe has become burdened with high costs.
  Korea must quickly redesign its portfolio, integrating nuclear power, renewables, and gas.

Issue 3｜NATO 5% Defense and the Ultra-Long Cycle of the Defense Industry

Although a uniform 5% may be challenging, significant increases in defense spending, especially among countries adjacent to Russia, will continue.
Korea’s defense industry will see structural expansion in demand for artillery, K-Air Defense, ammunition, and maintenance.

• Fiscal Realities.
  Korea does not need to immediately follow the 5% rule.
  Instead, it should maximize national interests through exports, joint production, and maintenance, repair, and overhaul (MRO).
• ITAR and Interoperability.
  Export-oriented R&D that concurrently satisfies US/NATO standards and data/source control is essential.

Issue 4｜US, China, and India in AI Hegemony: Their Strengths and Korea’s Position

The United States leads in LLMs, AI semiconductors, and cloud ecosystems.
China is strong in video, robotics, and surveillance-data-based applications.
India is rapidly emerging through software and its talent pool.

• AI on the Battlefield.
  Drones, sensors, and autonomous strike systems are becoming game changers.
• Korea’s Position.
  Focusing on HBM, packaging, AI server power, cooling, edge AI, and industrial robots proves effective.

Issue 5｜The Great Transformation in Talent and Education: From “Loss” to “Expansion”

We are in an era where people and investment matter more than goods.
It is difficult to avoid the overseas departure of young, key talent.

• Diaspora Strategy.
  Similar to Silicon Valley, India, and Israel, redesign the concept of “overseas success = our expansion.”
  Broaden the channels for return through rotational assignments, tax incentives, and re-entry incentives.
• Kindergarten, Elementary, and Middle School ‘Responsibility and Collaboration’ Education.
  There is a need to expand the IB (International Baccalaureate)-style project, presentation, and subjective evaluation format.
• Pilot Programs for Kindergarten Entrepreneurship and Business Education.
  Teach “how to earn money” by having students experience microtransactions, project sales, and settlements.

Practical Playbook 12: A Common Checklist for Businesses and Governments

1) Tariff and Subsidy Matrix.
Update cost curves by product and market quarterly.
2) Three-Hub Production & A-Team Personnel Movement.
Establish a “same process—multiple regions” operational system in the US, EU, and India/ASEAN.
3) Technological Segmentation and Development.
Separate core algorithms and processes domestically from localizing modules developed overseas in multiple layers.
4) Nuclear Power and Power PPA Lineup.
Companies expanding data centers and AI farms should secure a 10–15-year PPA.
5) Export-Oriented R&D in the Defense Industry.
Design to simultaneously meet NATO standards, ITAR, and cybersecurity frameworks.
6) Integrated Packages for Shipbuilding and Maritime Logistics.
Propose bundled packages of LNG, ammonia, and nuclear power support vessels with eco-friendly fuel infrastructure.
7) China+2 Supply Chain.
Use a triangle dispersion of key raw materials among “China, India, and Mexico” as the default.
8) Financial Hedging Rulebook.
Establish policy for continuous hedging limits against tariff, exchange rate, and freight changes.
9) Diaspora HR.
Create a network of Korean leaders at overseas bases and institutionalize return incentives.
10) Regulatory Scanner.
Conduct monthly reviews of regulatory changes such as the EU’s CBAM, US defense procurement, and data localization.
11) Joint Public-Private Bidding Task Force.
Institutionalize “Team Korea” with integrated packages for nuclear power, defense, and infrastructure.
12) “Expanding Korea” Branding.
Unify the narrative of K-manufacturing, K-defense, K-nuclear, and K-AI for a cohesive pitch in winning tenders.

What Other Places Don’t Talk About: A Bold Move and Counter-Leverage

• The Tipping Point of Leverage.
  Even within alliances, conditions that lead to “failing together” must be rejected.
  Design swap deals based on three pillars: national interests, security, and technology.
• Conditions Where “Tariffs Outweigh Investments.”
  When tariffs become constant, subsidies are uncertain, and there is no security link, the combination of tariffs and domestic subsidies can lower total costs.
• TSMC-Style Nuclear Foundry.
  A hub model with multiple designs and a single production center will set the global standard, outperforming order-based EPC projects.
• Making Korea a “Distributed Headquarters.”
  Headquarters in Seoul, AI engineering in Bengaluru, and sales in Texas/Bavaria: a functionally distributed headquarters is more efficient.
• Reverse Idea for the Domestic Market.
  By boldly liberalizing visas for foreign tourists, conventions, medical treatment, and education, offset outgoing consumption with incoming funds.

Risks and Fact-Checking

• This article is an analysis based on presented interviews and discussions, and some political and diplomatic issues include claims or speculative statements.
• Statements such as “a short-term ceasefire in Ukraine” or “a renaming of the US Department of Defense” are not asserted as facts and remain debatable.
• Corporate decision-making requires re-verification using primary sources such as the latest tariff notices, procurement regulations, and safety/environmental standards.

Monitoring Indicators

• Update schedules for US tariff notices and detailed campaign promises of the presidential election.
• The expanding scope of the EU’s CBAM and carbon border tax.
• Brent-Henry Hub spreads, LNG time charter rates, and maritime freight indices.
• Russia-Ukraine conflict developments and NATO defense budget execution rates.
• Trends in the US 10-year Treasury yield, pace of inversion resolution, and the dollar index.
• Trends in data center power PPA pricing and duration.

Execution Checklist: Right Now

• Set target ratios for sales from the three hubs and finalize localized products within 12 months.
• Review participation in the 10-year power PPA proposal (RFP).
• Redesign export-oriented R&D projects to meet NATO/US standards.
• Create a list of 50 top-tier leaders at overseas bases and establish tracks for return and cross-functional assignments.
• Initiate pilot programs for kindergarten and elementary challenge-based entrepreneurship and sales classes with local education authorities and schools.

< Summary >In an era of constant tariffs, supply chains and corporate establishments should be dispersed with technology, power, and talent localized.
Energy security is best solved through nuclear power, SMRs, and PPAs, offering advantages in cost, carbon, and stability.
The NATO 5% defense initiative paves the way for an ultra-long cycle of defense exports.
The niche in AI hegemony is found in HBM, packaging, edge computing, and industrial robots.
Address talent outflow by shifting to an “expanding Korea” strategy and transforming early education to emphasize “responsibility and collaboration.”
The key is leverage.
Design the exchange value of security, technology, and market with rigorous numerics.

[Related Articles…]

• Korean-style SMR: The Key to Data Center Power Solutions
• Reshaping the Supply Chain in the Tariff Era: The NA, EU, and India Three-Hub Strategy

*Source: [ 경제 읽어주는 남자(김광석TV) ]

– [모아보기] “세계 강국 미국도 무너진다…” 국제질서 붕괴 부른 트럼프, 대혼란 속 한국의 대응 전략은? | 경읽남과 토론합시다 | 김정호 교수, 진재일 교수

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● Stocks Rally, Auto Loan Time Bomb, AI Power Meltdown

Summary of the US Stock Market Rebound and the ‘Cockroach’ Controversy: Auto Loan Stress, Regional Banks vs. Large Banks, Year-End Liquidity, and the Truth of Excess Demand for AI Infrastructure

Recently, the market rebounded alongside a sharp drop in the VIX, but investors have not easily forgotten the blemishes left by issues with auto loans and regional banks.
In this article, we cover everything from how it differs from a 2008-style crisis, where credit stress might spread, the liquidity points in the US stock market until year-end, and even factors such as power bottlenecks in AI infrastructure overlooked by other news and the surge in auto insurance premiums.
It also systematically outlines how interest rates, inflation, and AI trends are interconnected from a global economic outlook perspective.

News at a Glance: Today’s Key Headlines

• The VIX has dropped sharply, and risk asset appetite has recovered.
• The S&P 500 and Nasdaq closed higher, while the Russell 2000 was relatively weak.
• Some regional banks that had plunged the previous day rebounded, and credit spreads remained stable without signs of systemic risk.
• The delinquency rate on auto loans is rising steadily, albeit modestly, with compounding effects from long-term loans and declining used car values.
• Wall Street consensus largely diagnoses this as a localized issue that does not spread to large banks.
• Tom Lee has set a ceiling of +5 to 10% by year-end, fueled by chasing earnings, while Dan Ives advocates a 2–3 year extension scenario for a tech rally centered on AI.

Issue 1: Auto Loan Stress – Why It Is Not a ‘2008-Style’ Scenario

• The backbone of the data.
  The over-60-day delinquency rate on auto loans is gradually increasing.
  An uptick is also being observed in prime loans, but the absolute level is viewed by many as insufficient to trigger systemic risk.
  With an increase in long-term (72–84 month) loans, the proportion of vehicles with values lower than the outstanding loan balance (upside-down) is rising, leading to larger losses upon repossession.

• The difference from 2008.
  It is not a large-scale securitization structure like mortgages, which upended the entire financial sector through derivatives and leverage.
  The risk is relatively concentrated in specific loan segments and some regional banks, and capital and liquidity regulations for large banks have become much more stringent.
  Moreover, the calmness in the AAA spreads in the ABS market and the short-term funding markets distances this scenario from a “domino collapse.”

• Tracing the contagion pathway.
  Declining used car prices → reduced collateral recovery values → increased loss given default (LGD) → higher provisions by some lending institutions → performance pressure.
  Weaker consumption capacity among lower credit segments → decline in actual card payments → a slight slowdown in the demand for retail, automobiles, and travel.
  Whether this pathway will lead to a widespread credit crunch is the crux of the matter.

• Monitoring indicators.
  Trends in prime loans’ 60+ day delinquency rate, auto ABS AAA/BBB spreads, used car price index, bank loan loss reserve ratios, number of repossessions (vehicle seizures), and new car incentive levels.

Issue 2: Regional Banks and Large Banks Are Not the Same

• Regional banks are more sensitive to interest rate and economic changes, and a higher exposure to specific loan segments can lead to greater impacts.
• Large banks have thicker capital ratios and liquidity buffers, giving them a greater ability to absorb losses.
• The current unease is seen as more of a “sector event” concentrated in small banks rather than a credit event affecting the entire system.
• Key checkpoints include the loan-to-deposit rate spreads, deposit outflows, unrealized bond losses, reliance on brokered deposits, and the structure of CRE exposures.

Issue 3: Year-End ‘Chasing Earnings’ Sentiment and US Stock Market Liquidity

• Many institutions remain underperforming their benchmarks, which could lead to increased chasing of earnings during a rally.
• The performance, guidance, and share buybacks by big tech companies remain focal points.
• However, short-term overheating is evident in certain themes such as AI, quantum computing, data center infrastructure, and crypto mining.
• Base scenario: As long as the expectations for a soft landing, gradual inflation slowdown, and progressive rate cuts remain intact, it is likely that a recompression of leading stocks will occur alongside a rotation through sectors that have become excessively oversold.

Issue 4: The Real Discussion Points of the AI Trend and Infrastructure Supercycle

• Dan Ives’ scenario.
  He envisions a multi-year (2–3+ years) expansion phase across the AI infrastructure (accelerators, memory, packaging, networks, storage, and software stacks) driven by collaborative investments among big tech.
  Mergers and acquisitions are likely to accelerate as companies look to alleviate bottlenecks and achieve vertical integration.

• The Real Bottleneck.
  The constraint bigger than accelerator supply is electricity.
  Key bottlenecks include power grid expansion, lead times for transformers and switching equipment, data center site availability, cooling and water supply, and transmission permits.
  Ultimately, the speed of AI expansion will be determined by “MW acquisition” and “power costs.”

• Reallocation of Energy and Capital.
  There could be a sustained shift towards securing core power on a long-term basis (nuclear, SMRs, gas, renewable energy combined with storage), innovations in thermal management (such as immersion cooling), and an upcycle in networking (optical modules and switches).
  This will create an industry revolution investment line that extends not only in semiconductors but also in power equipment, industrial infrastructure, and software optimization.

• Policy and Geopolitics.
  The US–China competition serves as both a risk and a catalyst.
  Although export controls and reshoring may cause short-term friction, they will enhance system stability through supply chain diversification and CAPEX dispersion in the long term.

The Most Crucial Point That Other News Outlets Do Not Emphasize

• The hidden trigger of auto loan delinquencies is not solely “interest rates.”
  Rising auto insurance premiums are sharply increasing the total cost of ownership (TCO).
  Increases in insurance premiums, maintenance fees, and parts costs are exerting unseen pressure that erodes monthly repayment capacity, triggering delinquencies.

• The traditional FICO-centric credit scoring model is not as explanatory as it once was.
  As risk scoring based on driving data and telematics spreads, the boundaries between low and high credit scores are being redefined.
  This presents opportunities for fintech and insurtech, while posing risk factors for some traditional lending institutions.

• Changes in the repossession structure are increasing losses.
  Extended loan maturities and an increase in negative-equity (or “empty”) loans could lead to higher loss rates upon repossession than in the past.
  If used car prices normalize, the upward pressure on loss rates is likely to persist for a longer time.

• The “ultimate speed limit” of the AI supercycle is not semiconductors, but power.
  When evaluating performance, one should consider not only GPU shipment volumes but also the “power required (MW/$) for each dollar of revenue” and the pace of improvements in data center PUE, to make valuations persuasive.
  Companies that consistently improve these metrics are the long-term winners.

Investment Checklist: What to Watch Now

• Macroeconomic and liquidity.
  US stock market volatility (VIX) trends, credit spreads, real consumption (inflation-adjusted card payments), unemployment and wage data, and the path of interest rate expectations.

• Credit.
  Auto ABS spreads, prime 60+ day delinquency rates, bank provisioning and net charge-offs, and liquidity indicators for regional banks.

• Performance.
  Big tech CAPEX guidance and sales mix related to AI infrastructure, as well as investment plans to address bottlenecks in power, cooling, and networking.

• Positioning.
  Maintain a core position centered on quality large technology stocks while managing risk exposure on overheated themes.
  Approach auto and consumer-sensitive sectors selectively, taking into account TCO and insurance premium dynamics.
  Consider diversified exposure to beneficiaries of infrastructure bottlenecks (power equipment, cooling, optical communications, and power grids).

Keyword Map: Core Search and SEO Terms

• Global economic outlook, US stock market, interest rates, inflation, AI trends.
• Regional banks, auto loans, data center power, fourth industrial revolution, M&A cycle.

< Summary >

The stock market has rebounded, but auto loan stress remains.
However, the structure and scale differ from 2008, and the concerns are likely confined to regional banks.
Until year-end, chasing earnings by underperforming funds is supportive of the US stock market.
The AI supercycle remains potent, but the real bottleneck is power and power grids rather than semiconductors.
The hidden variable in auto delinquencies is TCO inflation, driven by rising insurance premiums and maintenance costs, and changes in repossession structures could lead to higher loss rates.
Investment strategies that focus on a big tech core plus diversified exposure to beneficiaries of infrastructure bottlenecks, along with risk management in overheated themes, are prudent.

[Related Articles…]

AI Infrastructure Power Bottlenecks and Investment Points

Auto Loan Delinquencies and Assessing Regional Bank Risks

*Source: [ Maeil Business Newspaper ]

– [홍장원의 불앤베어] 다시 반등한 증시. 바퀴벌레는 이제 소멸된 것인가

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