1% Insights

#FOMCWatch When rates stay high, the rich aren't the ones who get hurt first. The bottom 60% are.

Ray Dalio just broke it down, and it's pretty simple:

The government keeps borrowing, and everyone else gets pushed out of line for credit.

If you've got plenty of money, you're the last to feel it. Families without much cushion and companies that can't easily borrow feel it first.

Then credit gets tight, business slows down, profits drop, and stocks eventually catch up.

Basically, high rates make the strong stronger and squeeze everyone else. The market just takes a while to notice.

Elon just handed 200+ neoclouds a death sentence.

His post on X was unusually blunt: over the past few weeks, debt markets have "almost entirely shut off access to money" for any company that doesn't have substantial revenue outside of AI data centers. In plain terms — if your only story is selling GPU hours, the debt window is basically closed.

Three things worth pulling out of this:

1. The money tap is off. Bond market isn't funding pure-play compute stories anymore.
2. 200+ neoclouds are heading for "guppy-level death and consolidation." Most won't make it.
3. SpaceX just closed $40B in debt for GPUs — but only because it's investment grade with Starlink and launch revenue backing it.

The real signal: in this cycle, revenue and credit rating decide who survives. Pure infrastructure plays without independent cash flow are about to find out what a leverage cliff looks like.