Credit default swap prices on AI-linked companies just hit record highs. Translation: smart money is quietly buying insurance against an AI debt blowup.
This isn't panic. It's pattern recognition. We've seen this movie before — hype-fueled borrowing binges don't end with soft landings, they end with someone holding the bag.
The AI buildout is real. The revenue models? Still mostly theoretical. And when you're borrowing billions on the promise of future profits that may or may not materialize, the bond market starts asking uncomfortable questions.
CDS spreads are the market's lie detector. Right now, they're saying: "We love the story, but we're hedging the hell out of it."
If you're long AI stocks and ignoring the credit markets, you're flying blind. Equity believers and bond skeptics rarely both get it right.
This isn't panic. It's pattern recognition. We've seen this movie before — hype-fueled borrowing binges don't end with soft landings, they end with someone holding the bag.
The AI buildout is real. The revenue models? Still mostly theoretical. And when you're borrowing billions on the promise of future profits that may or may not materialize, the bond market starts asking uncomfortable questions.
CDS spreads are the market's lie detector. Right now, they're saying: "We love the story, but we're hedging the hell out of it."
If you're long AI stocks and ignoring the credit markets, you're flying blind. Equity believers and bond skeptics rarely both get it right.