Panic in the stock market rarely comes from crazy ideas. It usually comes from taking a perfectly logical premise, drawing a straight line into the future, and entirely forgetting that human beings are involved.

Over the weekend, a bearish report by Citrini Research went viral, sending shares of IBM, DoorDash, and Visa plummeting. The thesis was terrifyingly simple: Artificial Intelligence is going to collapse the cost of software to zero. AI agents, powered by what is now being called “vibe coding,” will ruthlessly hunt for the lowest fees, bypassing middlemen instantaneously. In this telling, the entire rent-extraction layer of the U.S. economy goes to zero overnight.

It’s a compelling story. Fear always is.

To figure out how to navigate this as investors and entrepreneurs, we have to pull apart exactly what this doomer narrative got right, and the massive, glaring blind spot it missed.

Market Update📈📉

The tape is currently trying to find its identity—it is a trend market, but we are lacking momentum. Here are the key themes we are tracking:

* The Software vs. Hardware Divergence: We have been talking about the AI bifurcation, and the technicals are confirming it. Software stocks have been showing weakness on the charts since last summer, while semiconductor names have largely consolidated and held up well. The market narrative is finally catching up to the price action. We get earnings from both Nvidia and Salesforce on Wednesday, which will be a major tell for this divergence.

* 4% of GitHub public commits are being authored by Claude Code right now. At the current trajectory, we believe that Claude Code will be 20%+ of all daily commits by the end of 2026. While you blinked, AI consumed all of software development.

* Private Credit Warning Signs: While public credit spreads look fine, the charts for publicly traded private equity firms are looking weak. Because equity is the thinnest slice of the capital structure, they are highly sensitive to underlying balance sheet health. Private equity and private credit are key vulnerabilities to monitor closely.

* The Consumer Disconnect: Real GDP looks okay, but if you look under the hood, real incomes (net of transfer payments) are basically flat. Current growth is being driven by consumers drawing down their savings. That is not sustainable long-term without the labor market stepping up to drive incomes higher.

* Housing & Rates: Mortgage rates have fallen back to 2022 lows, but housing demand isn’t surging the way you would expect. In fact, if rates keep dropping, it might actually unlock existing resale inventory, creating much stiffer competition for the homebuilders who have been the only game in town.

The Giant Pachinko Machine

The reason the market spooked is because the foundation of the fear is entirely real. Software creation has fundamentally changed.

As Naval Ravikant recently pointed out, we have moved past classical computing. You no longer have to meticulously write highly structured, precise code. AI programming is more like a giant pachinko machine: you pour massive datasets into a structure you’ve tuned, and the system searches for a program that works.

This means English is now the hottest programming language in the world. As Naval put it: “Vibe coding is the new product management.” You simply describe an application to an egoless, tireless AI, give it feedback by voice, and it builds the scaffolding, the libraries, and the test harnesses.

If your business model is acting as a simple digital tollbooth, you are in trouble. We are entering a Glengarry Glen Ross economy for digital goods. Because anyone can spin up an app, the market will hollow out the middle. The number one app will take all the scale, and a million hyper-niche apps will fill the long tail.

But that is where the truth ends, and the static thinking begins.

The DoorDash Delusion

The greatest flaw in financial forecasting is treating the economy like a physics equation, assuming every variable stays the same while you introduce a massive new technology.

This is where the doomer report falls apart, a point brilliantly deconstructed by analyst Ben Thompson. The narrative looks at a company like DoorDash and assumes it is just a digital button that preys on hungry, lazy humans. If you view it that way, of course an AI agent will destroy it by searching twenty alternative apps for a cheaper fee. Habitual app loyalty doesn’t exist for a machine.

But this view ignores the dynamic, messy reality of what these businesses actually do. DoorDash isn’t just an app on a home screen. It is a massive, three-sided logistical network that coordinates physical human beings, driving physical cars, to pick up physical food from physical restaurants.

The lethal flaw in the doomer mindset is a total lack of belief in human choice, dynamism, and markets. It assumes businesses will just sit still while AI eats their margins. It forgets that incumbent platforms have exclusive data, pre-existing physical infrastructure, and network effects that grant them structural cost advantages. You cannot vibe-code a physical logistics network into existence over a weekend.

The Mud and the Metal

When you spend your days analyzing durable capital—or managing the gritty reality of deploying mobile boilers and Haglunds out into the frozen fields of Alberta—you quickly realize that a line of code is only as valuable as the real-world action it triggers.

You cannot prompt-engineer a barrel of oil out of the ground.

The physical world has constraints. It has friction, weather, and capital cycles. The more abundant and frictionless the digital world becomes, the more valuable the scarce, constrained physical world becomes.

The Motorcycle for the Mind

If you view AI as a competitor for a static job, you will be terrified. But that is the wrong mental model.

Steve Jobs famously called the computer a “bicycle for the mind”—a tool that makes human locomotion vastly more efficient. Naval Ravikant recently updated this for the modern era: AI is a “motorcycle for the mind.” It has an engine. It is breathtakingly powerful. But it still requires a human to ride it, steer it, hit the accelerator, and apply the brakes. AI is not alive. It has no desires. It does not live in mortal fear of being turned off. Because it lacks its own internal compass, it fundamentally lacks what makes an entrepreneur an entrepreneur: extreme agency.

Because most things we want in business and investing are zero-sum games, freely available AI algorithms will eventually cancel each other out. If every seller has an AI optimizing their pitch, every buyer will have an AI filtering it out. When the algorithms cancel each other out, the remaining alpha goes entirely to the human with the most creativity, judgment, and agency.

Action Cures Anxiety: The Playbook

So, what do we do when markets panic and headlines turn dark?

* Anchor to the Physical and the Personal: The digital layer is getting commoditized. The premium is shifting to physical constraints and deep human trust. At Thiessen Shackleton Wealth Management, the conversations that actually matter aren’t about the algorithmic efficiency of a portfolio. They are about fear, greed, legacy, and trust. AI can optimize a spreadsheet in milliseconds, but it cannot look a client in the eye and give them the confidence to stay the course during a market correction. You cannot vibe-code trust.

* Become the Rider: The AI era is a golden age for those with agency. You now have a magic wand. If you want to build a tool, test a thesis, or understand a complex market structure, you have the ultimate, patient tutor that can meet you exactly at the edge of your knowledge.

* Look Under the Hood: AI anxiety comes from a lack of understanding. The solution to anxiety is always action. You don’t need to know how to build a neural network, but you should fire up the best models, ask them questions, and figure out where they excel and where they hallucinate.

The future will be weird. The middle will get hollowed out. But the world is not static. It will be built by humans with extreme agency, solving physical problems, and adapting exactly as we always have.

Stay the course,

We’re not AI doomers. “Pessimists sound smart. Optimists make money.”

Dispersion is not noise. It’s the opportunity.

Podcast & YouTube Recommendations🎙

* Ezra Klein with a really great interview

* Secretary Marco Rubio spoke at the Munich Security Conference about the future of the U.S.–Europe alliance.

* A unique mental framework to think about Ai from the Naval Podcast

Best Links of The Week🔮

* 2028: Intelligence Crisis - Citrini Research

* How Does OpenAi Compete? - Bennedict Evans

* Xbox Replaces Head of Gaming - WSJ

* The Long-term Reality of Hyperscalers: The Good, The Bad, and The Ugly Scenarios - MBI Deep Dives

* While AI is tech, not all tech is AI, and tech-heavy indices fall short of capturing the full spectrum of AI beneficiaries. - UBS

* Tim Opler’s latest biopharma market update covers industry sentiment, M&A activity, capital markets & more. - Stifel

Most people treat their health like an old car: they ignore the bumps and bruises until the smoke starts pouring out of the hood. In our post modern world of aesthetic refinement and high-performance business, we’re seeing a radical shift in how people treat their health.

The Repair model is dying; the Optimization model is taking over.

I recently sat down with Raj Dhillon, a 20+ yr veteran of rehabilitative medicine and the co-owner of Pivotal Physio, to discuss why the physiotherapy industry is currently at the heart of the massive shift in how we value human capital.

* Pivotal Physio & The ARC Concept: Pivotal Physiotherapy Official Site (Edmonton)

Pivotal Physio & The ARC Evolution

In Edmonton, Raj and his team at Pivotal Physio aren’t just running clinics; they’re building a blueprint for the future of health. With strategic hubs across Northgate, Fort Saskatchewan, and the Brewery District (High Performance Centre), they’ve scaled beyond the traditional “one room, one therapist” model.

The real game-changer is their ARC (Athletic Development & Recovery Centre). Located inside Evolve Strength Downtown, ARC represents the “merger” of the gym and the clinic.

* The Concept: Why wait for an injury to see a specialist? ARC treats the “weekend warrior” and the professional athlete with the same proactive rigor.

* The Services: It blends high-level clinical expertise (IMS, pelvic health, concussion management) with elite recovery tech like NormaTec compression and hydrotherapy contrast tubs.

This isn’t just about fixing a sore back; it’s about TAM Expansion. By moving into the lifestyle and performance space, Raj has effectively turned patients into long-term members.

How We View The Opportunity: A $400+ Billion Market

The numbers backing this shift are staggering. The global Preventative Healthcare market is no longer a niche for the ultra-wealthy - it’s a massive, institutional asset class.

Some Canadian Context:

In Canada, the economic case for preventative health is even more urgent.

* The Economic Burden: Chronic illness costs the Canadian economy roughly $236.3 billion per year in lost productivity and healthcare expenses.

* Research suggests that increasing access to physiotherapy could reduce the financial burden of just three major conditions (osteoarthritis, back pain, and heart disease) by an additional $144 million annually.

* Workforce Gap: Demand for these services is expected to grow 70% by 2033, yet we currently face a massive supply shortage. This scarcity creates a moat for established players like Pivotal who can retain and train top-tier talent.

Reformed Millennials Thesis: Why Health is the New Tech

If you’ve been a long term listener and reader, you know our philosophy is that leverage is everything. Traditional healthcare offers little leverage—it is a one-to-one exchange of reactionary service.

Preventative Health provides “Maintenance Alpha”:

* Consolidation: What we are seeing across the market is a number of Private Equity Roll-ups in the physio space, mirroring the consolidation seen in dental and vet clinics over the last decade.

* Predictable Revenue: By shifting to a recurring maintenance model (like ARC), clinics move away from lumpy, injury-dependent income toward stable, subscription-like cash flows.

* The ROI of Uptime: For a business owner, a 10% increase in physical uptime (mental clarity, energy, lack of chronic pain) is the highest-returning investment on the balance sheet.

Bottom Line: The line between healthcare and performance has permanently blurred. Raj Dhillon and Pivotal are proving that the future belongs to those who view the human body not as a liability to be managed, but as an asset to be optimized.

Sources:

* Market Size & CAGR ($412.59B): Mordor Intelligence: Preventive Healthcare Technologies and Services Market Size & Share Report (2026-2031)

* Consumer Segment Growth (13.6%): Business Research Insights: Preventive Healthcare Market Analysis 2026-2035

* Annual Economic Burden ($236.3B): Canadian Physiotherapy Association (CPA): Pre-Budget 2026 Submission

* Chronic Disease & Productivity Costs ($190B / $122B): Sun Life: Chronic Disease in the Workplace Report

* Physiotherapy ROI & Savings ($144M): CPA Impact Studies: Deloitte Economic Impact of Physiotherapy in Canada

* Workforce Demand Growth (70%): Canadian Occupational Projection System (COPS): Physiotherapists (2024-2033)

If you only looked at your crypto or software stocks this week, you probably think the sky is falling. But if you zoom out, the Dow just hit 50,000 and Europe is at all-time highs.

This isn't a market crash, it's a changing of the guard.

* The Market Regime: From “US Tech Dominance” to “Global Industrial/Breadth.”

* The Tech Regime: From “SaaS Middle Game” to “AI Endgame” (Atoms & Energy).

* The Geopolitical Regime: From “Alliances” to “Transactionalism” (Trump/Carney).

The speed of technological releases is mind numbing. It seems every week I am learning and adapting portfolios and my mental model of how all this new technology will defuse into the world.

It’s terrifying and exciting.

Market Update📈📉

For decades, the U.S. dollar has functioned as a safe haven.

When investors get nervous, capital flows into dollars. When fear rises, demand for safety rises with it. The dollar benefits.

So what does it mean when the dollar is making multiyear lows in the middle of a broadening bull market?

Maybe it’s not about debasement. Maybe it’s not about the end of fiat currency. Maybe it’s much simpler than that.

In an environment where investors are embracing risk across sectors, countries, and asset classes, who needs the ultimate safe haven?

Instead of asking what a weaker dollar is doing to stocks, maybe we should be asking what stocks, and risk assets around the world, are doing to the dollar.

Emerging Markets Hit All-Time Highs

The move to new all-time highs is not happening in isolation. It reflects rotation.

Capital is moving away from crowded mega-cap U.S. technology stocks and into other risk assets.

Participation is expanding. Leadership is changing. That’s what healthy bull markets do.

This is not a China trade and it’s not a dollar collapse trade.

In our opinion, it’s a risk appetite and global rotation story. This is what money moving toward opportunity looks like.

When emerging-market currencies are breaking out and emerging-market equities are printing fresh all-time highs, that’s not fear. That’s demand.

The USD is not falling apart it’s just not needed in this current moment.

Because in a broad, expanding bull market, investors do not hide.

They hunt.

Podcast & YouTube Recommendations🎙

* Patel on the MAD pod

* OpenClaw Eliminates Apps

* Elon having beers with Stripe and Dwarkesh

Best Links of The Week🔮

* Brent Beshore on the human competitive advantage - Twitter/X

* Sinofsky on the death of software… Nah but kinda - Twitter/X

* One of the best interviews i’ve listened to between Ben Thompson and Benedict Evans on SAAS - Stratechery

* “Mexico's decision to halt oil shipments to Cuba has delivered a fresh blow to the fuel-starved country, with the island logging its first month without oil imports in a decade. Oil imports to the island reached zero in January for the first time since 2015... due to a US naval blockade and threat to impose tariffs. Cuba is facing shortages of everything, from cooking gas, to water and electricity, with multi-hour lines at gas stations and at least two large beach resorts shutting down due to gasoline shortages.” Source: Bloomberg

* Home automation is swiftly moving into wellness-focused applications, as our friend Joe Mattera of Mattera AV Designs writes in a recent blog post. Computer controlled lighting through the day can combat Seasonal Affective Disorder and help keep you “in the zone” as you work in your home office. Automated heating and cooling, linked to motion sensors, can save real money and alleviate financial anxiety. Security systems increase peace of mind. Frankly, we always thought home automation was a “nice to have”, but after reading this it feels more like an essential for any home. Read Joe’s full take here.

* “OpenAI CEO Sam Altman told employees that ChatGPT is “back to exceeding 10% monthly growth,” according to an internal Slack message viewed by CNBC. The company is aiming to launch a new model within ChatGPT this week, Altman said. More than 800 million people use OpenAI’s chatbot, ChatGPT, weekly, but the company is facing increasingly stiff competition... On Monday, OpenAI will officially begin testing ads within ChatGPT.” Source: CNBC

In a healthy bull market, you don't usually see people rushing to buy toothpaste and condom stocks. But right now, Consumer Staples are crushing the S&P 500, and Financials are breaking down. The "tape" is guilty until proven innocent—and Mark Carney just gave us the verdict on Canada's future, too.

Market Update📈📉

The “Guilty” Tape

The burden of proof has shifted. In a healthy bull market, you don’t usually see investors flocking to “boring” stocks like toothpaste and toilet paper. But that is exactly what is happening right now.

* Consumer Staples (XLP) are up 6.5% year-to-date, crushing the S&P 500 (+1.5%).

* Financials are lagging badly. When you look at the ratio of Financials vs. Consumer Staples, we just broke below key support levels from October.

Why it matters: Markets don’t usually let “defensive” sectors lead unless smart money is worried about what comes next. As we said on the show: “In a market like this, the tape is guilty until proven innocent.”

One more thing on the Dollar (USD): Don’t fear the strong dollar; respect it. The historical link between the USD and Energy is holding. If Energy is about to outperform (and the charts say it is), a strengthening dollar isn’t a headwind—it’s part of the regime shift. The crowded “short dollar / long metals” trade is looking very vulnerable.

The USMCA “Sunset” Review

With the July 1, 2026 deadline approaching, here is your cheat sheet on the most important trade deal in North America.

1. How the Renewal Works (The “Sunset Clause”)

This isn’t a standard renegotiation. It is a mandatory check-in written into the deal to prevent it from becoming stale.

* The Date: July 1, 2026 (The 6th Anniversary).

* The Goal: All three nations (USA, Canada, Mexico) must confirm in writing they want to extend the deal for another 16 years (to 2042).

* The Risk: If they don’t agree, the deal doesn’t die instantly. It enters a “year-to-year” purgatory where they must meet annually to fix issues. If nothing is fixed by 2036, the deal terminates. Business hates uncertainty, so a non-renewal in July could spook the markets.

2. What They Want (The Friction Points)

🇺🇸 The United States (The Enforcer)

* China Backdoors: The U.S. is obsessed with preventing China from using Canada/Mexico as a side door to sneak goods into America tariff-free. Expect them to demand tighter “Rules of Origin,” especially for EVs and car parts.

* Dairy Access: A classic grievance. They want the access to the Canadian dairy market they were promised, arguing Canada is using administrative loopholes to block them.

* Labor Rights: Continued pressure on Mexico to ensure cheap labor isn’t undercutting American wages.

🇨🇦 Canada (The Defender)

* Stability Above All: Canada’s economy relies on this deal. The #1 goal is to get that 16-year extension signed quickly to keep investment flowing.

* Supply Management: We will shield our dairy and poultry farmers at all costs, likely trading other concessions to keep the Supply Management system alive.

* Softwood Lumber: We will try to use this leverage to finally fix the timber tariff dispute, though it’s technically outside the USMCA.

The Bottom Line: This July isn’t just a rubber stamp. With Carney’s “Rupture” speech setting the tone, Canada is trying to pivot to new partners while desperately trying to keep the American door open. It’s a balancing act that will define our economy for the next decade.

Podcast & YouTube Recommendations🎙

Carney Speaks to Davos:

Elon:

Best Links of The Week🔮

* “OpenAI is reportedly asking a high price to advertise on ChatGPT, around $60 per 1,000 views, or triple what ads on Meta’s platform usually cost, according to The Information. Despite the higher price, OpenAI won’t be offering advertisers the same level of detailed information that Google and Meta do, such as whether users took any action in response to seeing an ad on ChatGPT, like making a purchase. Early advertisers on ChatGPT will only get “high-level” data on how their ads perform, like total ad views or total clicks.” Source: The Verge

* “The Trump administration is proposing a .09% average payment increase for Medicare Advantage plans in 2027, significantly below Wall Street’s roughly 4% to 6% expectations. The proposal also includes eliminating payments tied to diagnoses from insurer medical chart reviews not linked to specific medical visits, reducing the 2027 payment rate by 1.53 percentage points. Overall payments are projected to increase by 2.54% for 2027, combining the proposed rate changes with an additional 2.45% from underlying billing trends.” Source: WSJ

* “Nvidia invested an additional $2 billion in CoreWeave, a cloud computing firm and key customer, to speed up an effort to add more than 5 gigawatts of AI computing capacity by 2030. As part of the collaboration, CoreWeave will be among the first to deploy forthcoming Nvidia products, including storage systems and a new central processing unit, or CPU, called Vera. The investment has sparked concerns about circular financing deals that have lifted valuations of AI companies and fueled concerns about a bubble.” Source: Bloomberg

* “Elon Musk’s rocket maker SpaceX is lining up four Wall Street investment banks for leading roles on a blockbuster initial public offering, which is likely to be the world’s largest ever new listing. SpaceX executives have held meetings with bankers from Bank of America, Goldman Sachs, JPMorgan Chase and Morgan Stanley in recent weeks as the company prepares for an IPO as soon as this year.” Source: FT

* “European Union lawmakers are expected to vote on ratifying the bloc’s trade deal with the US after President Donald Trump walked back his latest threat to impose tariffs on European allies. The trade deal’s ratification process was suspended due to Trump’s “coercive” threats, but was restarted after he said he wouldn’t impose the levies. European Parliament President Roberta Metsola said the reversal was enough to justify voting on the measure, which could have a preliminary vote in the coming days.” Source: Bloomberg

Listen on Apple, Spotify, or Google Podcasts.

2026 Predictions📈📉

Todays newsletter is for forward guidance and optimism. Since my conversation with Mel last week, Ive had some time to build a list of predictions I have for the coming year.

* Alberta Votes on their separation referendum and its not even close. While the rhetoric and fiscal considerations of the vote will become a hot issue in the province, the vote ends in a lopsided victory for nay.

* We are moving from an era of “Who has the fastest processor?” to an era of “Who has the fastest and biggest memory pipes?” The Memory Wall is the newest mainstream focus as data management and data commute>compute as a result of inference growth, becomes more important.

* By summer of 2026 it will be as though the digital world is going through some kind of fast evolution, with some parts of it emitting a huge amount of heat and light and moving with counter-intuitive speed relative to everything else. Great fortunes will be won and lost here, and the powerful engines of our silicon creation will be put to work, further accelerating this economy and further changing things.

And yet it will all feel somewhat ghostly, even to practitioners that work at its center. There will be signatures of it in our physical reality - datacenters, supply chain issues for compute and power, the funky AI billboards of San Francisco, offices for startups with bizarre names - but the vast amount of true activity will be occurring both in the digital world, and in the new spaces being built and configured by AI systems for trading with one another - agents, websites meant only for consumption by other AI systems, great and mostly invisible seas of tokens being used for thinking and exchanging information between the silicon minds.

* In 2026 we will stop asking Ai to be our copilots and we will begin finding ways to complete our busy work while we sleep. We are still in the waterwheel phase of AI, bolting chatbots onto workflows designed for humans.

* Reemergence of software as a trade idea. Markets will care less about the picks and shovels of the data center build out and start fixating on the ROI of the capital deployed. Think AI Agents and efficiencies. This prediction is a bet on the data owners and platform managers in 2026.

* 2026 is the year of Basic Robotics and Amazon leads the MAG 7 in % performance for the first time in half a decade. The collision of AI and robotics is the Champagne and cocaine cocktail that will fuel Amazon’s retail margin expansion, catalyzing a 2x increase in the gross merchandise value of its largest business (retail) by 2033, without adding any human workers. Just as Ford’s assembly line slashed automotive production time by 88%, Amazon’s robotics investments have reduced the time from click to ship by 78%. The rest of the Mag 7 capitalizes on the elevation of information (bits) over objects (atoms), while Amazon is leveraging bits to move atoms faster and cheaper.

* JPM joins the Trillion Dollar Club and becomes the first financial inside the magnificent 7. Additionally, financials lead the market, along with software and industrials in 2026.

* Podcasts finish off Late Night TV - The Late Show with Stephen Colbert employs 200 people, costs $100 million, and makes $60 million. When Colbert shifts to podcasting, he’ll take eight people with him and make just $20 million, but it’ll only cost $5 million to produce. The means of production are being arbitraged. There will be outrage from the creative community, who believe they’re too precious to face disruption.

* The Degen Economy Grows and continues to eat Las Vegases lunch. HOOD, COIN, Pollymarket, WealthSimple etc. I predict/believe that prediction markets, 24/7/365 stock markets, tokenization and the international retail investor are a Cambrian explosion of growth for financial markets. While the volatility in these stocks and markets are severe, they have survived the internet bubble, the great financial crisis, COVID and a rising rate environment. The survivors get smarter, and the onramps kept coming. The players in the market are growing.

* Narrative Economy becomes the predominant investment theme. You might be wondering, What is the ‘narrative economy’? It is an economy that sits on top of ‘technology’ and the ‘degenerate economy’.

The ‘narrative economy’ emerged full throttle in 2024. Storytelling always mattered in public markets and because of technology, ZIRP and politics/policy we now have Memestocks and Memecoins that are ‘storytelling’ first entities. These sit on top of the ‘degenerate economy‘ thats work ~$2 plus trillion (Bitcoin, Solana, HOOD , Fan Duel, Draft Kings, Coinbase).

Welcome back!

This week were talking politics and pipelines. Keep reading below for our thoughts. Or tune into the podcast for a deep dive.

Pipeline MOU Update📈📉

The “Alberta-Ottawa Pipeline MOU” signals a fundamental shift in the Canadian economy from energy confrontation to energy collaboration. By linking the approval of a major infrastructure project (the pipeline) directly to decarbonization efforts (Pathways Alliance CCUS), the agreement effectively creates a “Grand Bargain” that integrates the resource economy with federal climate goals.

* Economic Certainty: The suspension of the Clean Electricity Regulations and the removal of the federal oil and gas emissions cap (replaced by TIER management) removes the regulatory “ceiling” that was stifling investment. This implies a return of foreign and domestic capital to Western Canada, as the fear of stranded assets diminishes.

* Integration of Power and Resources: The MOU explicitly links oil production with “data centres,” “nuclear strategy,” and “interties.” This implies that the Western Canadian economy will shift from purely extracting resources to becoming a complex energy hub, where bitumen production funds and fuels a transition toward nuclear energy and high-demand tech infrastructure (AI/Data centers).

* Indigenous Economic Reconciliation: With the Alberta Indigenous Opportunities Corporation (AIOC) backstopping ownership, this deal implies a massive transfer of wealth and equity to Indigenous communities, moving beyond impact benefits agreements to genuine co-ownership of multi-billion dollar infrastructure.

2. Egress Growth and Economics

The most significant economic implication is the Resolution of the Egress Crisis.

* Volume Increase: The MOU outlines a new 1 million barrel per day (bpd) pipeline to the Northwest B.C. coast. Combined with the existing Trans Mountain Expansion (TMX), this creates massive excess capacity.

* Price Differential Collapse: Historically, Western Canadian Select (WCS) traded at a steep discount to WTI because landlocked oil had nowhere to go.

* Impact: With 1 million bpd of new capacity to the Pacific, Canadian producers can bypass the US Midwest bottleneck entirely and sell directly to Asian markets at world prices (Brent/Dubai pricing).

* This effectively eliminates the “differential risk,” potentially adding $10-$15 CAD per barrel to the bottom line of every barrel produced in Alberta.

3. Impact on Oil Companies’ Economics

The economics for the Pathways Alliance members (CNRL, Cenovus, ConocoPhillips, Imperial, MEG, Suncor) will undergo a structural shift.

Capital Expenditure (CaPex) Changes

The MOU creates a “forced” but incentivized capital spending cycle. The logic is explicit: “No Pathways; no pipeline.”

* Immediate CaPex Spike (2026-2030): The six companies listed must now immediately fund and construct the massive Carbon Capture, Utilization, and Storage (CCUS) trunkline and capture facilities. They can no longer “wait and see.”

* Pipeline Financing: The notes state the pipeline is “Private sector financed.” This implies that these companies (likely forming a consortium) will also have to allocate billions toward the pipeline construction, likely front-loading costs in exchange for long-term shipping rights.

* Offsetting Factors: The extension of federal investment tax credits (ITCs) and the Alberta Carbon Capture Incentive Program (ACCIP) will absorb a significant portion (likely 50%+) of the CCUS CaPex, softening the blow to balance sheets.

Profitability Outlook

While CaPex will rise, the long-term profitability outlook is exceedingly bullish for these specific companies:

* Revenue Quality: By accessing the Pacific coast, they will realize higher prices per barrel. The revenue gain from narrowing the differential will likely eclipse the cost of the new carbon taxes.

* TIER Impact: The companies face higher operating costs due to the TIER price increasing to $130/tonne by April 2026. However, because they are building CCUS, they will generate massive “carbon credits” under this system. If they successfully lower emissions, the high carbon price turns from a penalty into a revenue stream (selling credits to other emitters).

* Production Unlocked: The concession of “No federal oil and gas emissions cap” allows these companies to increase production volumes, provided they manage the carbon intensity via CCUS.

Summary of Impacts on Specific Companies

CompanyImpact Analysis

CNRL & Cenovus

As the largest producers with significant heavy oil exposure, they stand to gain the most from the egress (pipeline) narrowing the WCS differential. They have the balance sheets to fund the required infrastructure.

Suncor & Imperial

With strong downstream (refining) assets, the pipeline allows them to export more crude to high-demand Asian markets. Imperial’s relationship with ExxonMobil (majority owner) may help leverage global technical expertise for the CCUS build-out.

MEG Energy

As a pure-play oil sands producer, MEG is highly sensitive to differentials. This deal is a “company maker” for them, drastically reducing their discount risk, though financing their share of the CaPex will be heavier relative to their size compared to CNRL.

Market Risk: The notes mention “Market Risk” regarding a private proponent. If these companies hesitate to fund the pipeline, the deal collapses (”No Pathways; no pipeline”). Therefore, investors should expect a near-term reduction in dividends/buybacks as cash is diverted to these mega-projects, with a promise of significantly higher, stable returns post-2030.

Podcast & YouTube Recommendations🎙

* Owning the next decade of ai apps: with Box CEO Aaron Levie

* BC Premier on the pipeline

* Michael Ovitz the founder of CAA:

Best Links of The Week🔮

* “A late November rally propelled stocks near record highs, with investor optimism over a potential Federal Reserve interest-rate cut in December helping reverse the effects of an earlier midmonth market slump. The S&P 500 rose 0.5% on Friday, pushing it near a record set in late October and helping the index eke out a 0.1% monthly gain. The Dow Jones Industrial Average advanced 0.6% on the day, finishing the month with a 0.3% gain. The tech-heavy Nasdaq, however, registered its first monthly loss since March, falling 1.5% after a choppy period spurred by fears of an artificial-intelligence bubble. The index added about 0.7% Friday.” Source: WSJ

* “Consumers spent record amounts online on Black Friday, but it is less clear how traditional retail stores did on the official kickoff of the peak holiday shopping season, with one tracking company showing a slight increase in foot traffic and another showing the big drop. Adobe, which studies Adobe Analytics date culled from over 1 trillion visits to U.S. retail sites, reported that U.S. ecommerce sales reached a record $11.8 billion online on Black Friday, up 9.1% year-over-year. That exceeded Adobe’s forecast of 8.3% ecommerce growth on Black Friday.” Source: Forbes

* “OpenAI’s huge early lead in the race to dominate artificial intelligence is under the greatest pressure since ChatGPT’s launch, as rivals Google and Anthropic gain ground in the cutting-edge technology. Three years on from the debut of its popular chatbot, the $500bn start-up is grappling with the reality of soaring data centre costs, the technical challenges of remaining at the frontier of AI and the constant battle to retain key talent. It is also facing a resurgent Google, with the release last week of Gemini 3, Google’s latest large language model, which is considered to have leapfrogged OpenAI’s GPT-5 and achieved gains from the model training process that have eluded OpenAI in recent months.” Source: FT

* “OPEC+ countries agreed to maintain group-wide oil output quotas for 2026 in a meeting on Sunday, and also agreed on a mechanism to assess members’ maximum oil production capacity, OPEC said in a statement. Eight OPEC+ countries, holding a separate meeting on Sunday, also have an agreement in principle to maintain a pause in their output hikes for the first quarter of 2026.” Source: CNBC

Listen on Apple, Spotify, or Google Podcasts.

Market Update📈📉

Quick Hits:

* Asset Class Reversal: We are witnessing a historical anomaly. Gold (+54%) is currently the best-performing major asset of 2025, while Bitcoin (-1%) sits as the worst. This is the direct inverse of 2013 and a dynamic we haven’t seen before in a calendar year.

* S&P 500 Technicals: The S&P 500 closed below its 50-day moving average for the first time since April 30, officially ending the 5th longest uptrend since 1950.

* Institutional Signal: despite Bitcoin’s price lag, institutional adoption is heating up. Harvard’s endowment reported in its Q3 13F filings that the iShares Bitcoin ETF (IBIT) is now its largest position and biggest increase—a significant stamp of approval from the endowment world.

The AI “Non-Bubble” and Gemini 3

The narrative regarding Artificial Intelligence has shifted fundamentally over the last few weeks. We are moving from a phase of “inevitable euphoria” to a phase of “verification.”

1. The “Non-Bubble” Disappointment Ironically, both AI bulls and bears are disappointed. Bulls wanted a parabolic, “melt-up” bubble (think 1997-1999) to maximize short-term gains. Bears wanted a bubble so it would burst. Instead, we are in a “non-bubble”: valuations are reasonable (NVDA ~20x), margins are rich, and we are early in the supercycle.

2. The Catalyst: “Sam’s Splurge” (SS) The turning point was Sam Altman’s $1.4T infrastructure plan. Instead of fueling excitement, this massive capital requirement opened “Pandora’s Box,” shifting investor sentiment from blind optimism to scrutiny.

* Credit Risk: The sheer scale of the plan (nearly the size of the private credit market) forced lenders to reprice AI-linked risk. We saw this immediately in widening CDS spreads for Oracle and Coreweave.

* Government & Feasibility: The plan invited government scrutiny regarding energy grids, water usage, and land rights. It dragged long-term risks (post-2028) into the present day.

* Too Big to Fail: The market realized that OpenAI is no longer just a startup; it is a systemic risk. If they fail to execute on $1.4T, they drag the ecosystem down with them.

3. The Market Reaction: BSS vs. ASS We are moving from BSS (Before Sam’s Splurge) to ASS (After Sam’s Splurge).

* Profitability over Narrative: As uncertainty rises, the market is favoring profitability. Companies with tangible earnings (Memory/DRAM) are outperforming, while pure narrative stocks (Nuclear, Quantum) are rolling over.

* The “Giddy” Phase is Over: The straight-line ascent is likely done. We are entering a healthier, more mature phase where stock-picking, fundamentals, and idiosyncrasies matter more than sector-wide hype.

Bottom Line: The AI trade isn’t broken; it is simply growing up.

This is supported by todays release of Gemini 3:

The long-awaited Gemini 3 finally launched yesterday, and the entire industry seemed to have been holding its breath for it. Based on the benchmarks released so far, the model largely meets the high expectations that had built up beforehand. It resets records across multiple mainstream leaderboards, especially in long-horizon reasoning, native multimodal alignment, and cross-modality inference. On many benchmarks the performance gap over competitors is not small, rekindling optimism that large models may genuinely break through long-chain task complexity and real-world application depth. These capabilities are precisely where the next stage of AI deployment will happen—far beyond simple chat or text generation.

What’s interesting is that Gemini 3’s improvement doesn’t come from fancy RL tricks or alignment methods, but almost entirely from stronger pre-training. Multiple sources, including Google employees, confirmed this point: this round of progress is, quite literally, “built on brute-force compute.”

Podcast & YouTube Recommendations🎙

* Plain English with a fun episode on Ai and Work:

* The BG2 Podcast Mentioned in the podcast:

Best Links of The Week🔮

* Warren Buffetts final letter to shareholders. Enjoy Retirement GOAT - Berkshire

* Felix Stocker has a nice essay on mining and society. Which sounds like the topic of the one humanities class a geological engineering major would grudgingly sit through, but which is actually a pretty pivotal question: many modern conveniences—especially including the batteries, windmills, electric motors, and solar panels we use to reduce our reliance on emissions-heavy sources—require inputs that necessarily have to be dug up out of the ground, often in an environmentally-destructive way. When there’s a debate over a mine, it’s not so much big business versus the environment as it is environmentalism versus climate change and energy security

* Mark Humphries in Generative Historyhas a fascinating piece on Gemini decoding centuries-old handwritten records in a very human-like way, by using context clues in the document to infer missing information. In a sense, the LLM’s transcription was more than 100% correct, because it identified and fixed an ambiguity in the historical record (even expert human readers will occasionally miss something like this). One of the unique axes on which models perform well is that they don’t get bored the way a person would, and are willing to check their work to make sure it’s logically consistent even when the task is just to transcribe text.

* And on a similar note, this Dwarkesh Patel and Dylan Patel interview with Satya Nadella has an interesting side note on legibility: Nadella notes that AI makes it easier to move information from an Excel file into a real database, and that means it’s easier to join across different datasets. Cheap determinism is a complement to more flexible but uncertain LLMs. Future historians will have a much easier time trawling through historical data, at least as long as someone pays to store it.

Listen on Apple, Spotify, or Google Podcasts.

Budget Update📈📉

Welcome back.

It was a busy week in Canadian political news. We had multiple floor crossings and a brand new Canadian budget to review. Why does this matter?

The Canadian budget reveals the priorities, trade offs, and a growing deficit that continues to shape future policy in our country.

A great infographic from Canoe financial:

Revenue. Where it comes from?

* The federal government expects to collect about $507 billion in revenue in 2025 to 2026. The three biggest contributors are:

Personal income tax

* The largest funding source by far, at roughly $238 billion. Canadians themselves are the primary engine of the budget, contributing almost half of every dollar the government spends.

Corporate income tax

* Businesses contribute $97 billion, the second largest source.

Goods and Services Tax (GST)

* Consumption drives $54 billion through the GST.

Other revenue sources include excise taxes, employment insurance premiums, enterprise Crown corporations, and investment returns. But taken together, the story remains simple: personal and corporate income taxes fund most federal spending.When revenues fall short of planned spending, the gap is filled with borrowing. In Budget 2025, that gap is large.Spending. Where the money goes.

* Planned spending totals about $585 billion including actuarial losses, with a focus on three major areas:

Individual Supports:$144 billion in major transfers to persons

* Old Age Security and Guaranteed Income Supplement: $83 billion

* Employment Insurance benefits: $30 billion

* Canada Child Benefit: $30 billion

These programs represent direct cash support to households. They are predictable, indexed, and politically durable.Support for provinces and municipalities:$111 billion through transfers

* Canada Health Transfer: $57 billion

* Canada Social Transfer: $19 billion

* Equalization and territorial financing: $29 billion

Health care remains the single biggest provincial transfer. Growth in this category continues to exceed revenue growth.Direct program spending and operations:$266 billion on programs and government operations

* Indigenous reconciliation and services: $44 billion

* Infrastructure and housing initiatives: $27 billion

* Climate and natural resource programs: $18 billion

* International assistance: $20 billion

* Defence and security: $60 billion combined

This is where most new policy announcements appear. Key initiatives:

* Housing and infrastructure to address affordability pressures

* Defence modernization and procurement cycles

* Indigenous reconciliation funding commitments

* Climate related and natural resource transition programs

These areas are increasingly multi year and structural, not one time line items.The deficit.Even with more than half a trillion in revenue, expenses are rising faster.

* Deficit before actuarial losses: about $73 billion

* Net actuarial adjustments: about $5 billion

* Final projected deficit: $78 billion

Borrowing fills the gap and adds to debt servicing costs. Public debt charges are now $56 billion, making interest the fifth largest line item in the entire budget. Higher rates are translating into higher carrying costs on federal debt.

For our thoughts on this - tune into the pod.

Podcast & YouTube Recommendations🎙

* Daniel Yergin on Energys Transition:

* Invest Like The Best:

Best Links of The Week🔮

* Boaz Barak on the counterintuitive economics of AI. This is a very good piece, that thinks clearly about bottlenecks: if we automate lots of labor, and that makes us richer, that makes the remaining labor much more valuable. But AI messes up the classic growth equation, because it’s a case where capital is increasingly fungible with labor. We’ll need a whole new formula to even describe what growth looks like in an AI-heavy economy.

* Richard Dewey et. al. trained a model to play a simplified version of liar’s poker via self-play, and then pitted it against experienced human player. They also had it play against LLMs (one interesting note there is that the LLMs tend to play cautiously; they speculate that part of what’s happening is that so much poker advice for beginners suggests folding more often, and that’s carrying over to this domain). Liar’s poker turns out to be a surprisingly complicated game with a vast number end states, so playing it means doing a tiny bit of deterministic reasoning and accumulating an arsenal of nested heuristics—which is a good description of a lot of machine learning.

* “For months, a small company in San Francisco has been pursuing a secretive project: the birth of a genetically engineered baby. Backed by OpenAI chief executive Sam Altman and his husband, along with Coinbase co-founder and CEO Brian Armstrong, the startup—called Preventive—has been quietly preparing what would amount to a biological first. They are working toward creating a child born from an embryo edited to prevent a hereditary disease. In recent months, executives at the company privately said a couple with a genetic disease had been identified who was interested in participating.” Source: WSJ

* Perplexity to pay Snap 400mm to integrate their AI model into their search - ““The deal gives Perplexity exposure to more than 940 million Snapchat users, who will get answers from its AI engine when they ask questions to the company’s My AI chatbot.”

“The new feature will be integrated into the app’s interface early next year. Snap said it will start recording revenue from this deal in 2026.”Source: Techcrunch

Quick note on podcast cadence: This coming Friday we will have a special podcast release talking about the Canadian Budget. Tune in on LinkedIn if you want to hear our views.

Markets

Good, some bad, and a little bit of ugly

We’re getting a lot of emails and calls about whether were due for a bear market.

And It’s always important to bring back the conversation to time horizon.

Some folks are short term swing traders... Most are long-term investors. Many find themselves somewhere in between.

What I want to remind everyone of today is that the longer your timeframe is, the more important asset trends become. And one thing we know for sure, asset prices trend.

Right now, the most bullish data on the board is that long-term trends remain firmly intact across stock markets around the world — not just in the U.S. and Canada.

This is the good: The S&P500, Dow Jones Industrial Average, Nasdaq100, TSX and Russell 2000 Small-cap Indexes all finished October with their highest monthly closes on record.

Europe, Japan, China, Latin America, and London all went out at new highs for the cycle as well.

This isn’t just a U.S. technology bull market.

Consolidation continuation:

Back in early October, we talked about what this market correction should feel like — and the traffic jam analogy still fits perfectly.

This is the bad part of the current environment: There’s simply more supply than demand for stocks at these levels. And much of that can be explained by a historical equity run up from the April lows.

In other words, there are still plenty of investors looking to sell into strength, no matter how strong the longer-term trend remains.

The best visual of this came to my inbox curtsy of Trend Labs:

This chart of the small-cap index remains the cleanest visual of overhead supply in today’s market — and it’s also one of the most important gauges of market breadth.

If the Russell 2000 is in an uptrend, you probably don’t have a breadth problem.

The percentage of stocks on the NYSE that are above their 200-day moving average (in other words, in uptrends), peaked back on September 11th.

Whats happening with market leadership?

The good news is that the worst part about this market can easily be corrected with one day of action, AND it falls within the context of a strong uptrend.

So even the ugly here needs to be viewed within the context of the current cycle.

This is a chart of the First Trust Nasdaq-100 Equal-Weighted Index Fund (QQEW) failing to hold on to its breakout from last week.

Momentum is also putting in a bearish divergence, which doesn’t help the situation:

This index gives each of the 100 stocks an equal weighting, rather than the larger companies representing a larger percentage of the overall index, like the market-cap weighted Nasdaq-100 (QQQ).

The longer the equal-weight Nasdaq-100 (QQEW) is below 144, the longer this correction will last. Same with the Russell 2000 Index (IWM).

It doesn’t mean the market is going to crash, or that we’re beginning some kind of epic bear market. It’s just the same ongoing correction that we’ve been talking about for over a month.

Recap:

It’s a bull market, at the end of the day.

So even though this post is mostly about the bad, the ugly, and the wave of selling pressure we’ve seen in recent weeks, the bigger picture remains the same: We’re still in a powerful uptrend, and there’s little to no evidence that it’s over.

Sector rotation is the lifeblood of a bull market. We know this — and we keep seeing it.

Healthcare was the worst sector. Then it became the best.

Energy was the worst, and now it’s heating up again.

What will come of Q4?

Podcast & YouTube Recommendations🎙

* Gavin Baker on Ai, technology business models

* It’s still so early! A16Z Founding partners talk about the current state of Ai:

Best Links of The Week🔮

* “Google is about to release Gemini 3 and my smart friends tell me it is expected to be better than the de facto leader in AI coding - Claude from Anthropic. That means that the top two AI coding products by far will have both been trained using TPUs (Google’s chip), not GPU’s (Nvidia). On top of the data they own from Android, YouTube, Gmail, Maps etc…I think the world is realizing that Google may have an edge” Here comes Google - Howard Lindzon

* “Advanced Micro Devices, the main contender to Nvidia in the artificial intelligence chip market, failed to impress investors with its revenue forecast after an eye-popping rally sent expectations soaring. Fourth-quarter revenue will be roughly $9.6 billion, the company said in a statement Tuesday. Though analysts had estimated $9.2 billion on average, some projections ranged as high as $9.9 billion. Investors have bet heavily on AMD following blockbuster agreements with OpenAI and Oracle, which plan to use the company’s chips in their build-out of artificial intelligence computing. The hope is that AMD can finally crack Nvidia’s dominance in the AI processor market.” Source: Bloomberg

* “WhatsApp announced on Tuesday that it’s launching an Apple Watch companion app. For the first time, WhatsApp users will be able to use their Apple Watch to get call notifications, read full messages, and record and send voice messages.” Source: TechCrunch

TLDR: Listen on Apple, Spotify, or Google Podcasts.

Market Update📈📉

Welcome back.

The indexes barely sneezed last week, and the high-momentum flyers from quantum computing, nuclear, space, drones, rare earth metals, robots, crypto, and AI pulled back 10-40%. The price action in momentum stocks is often a precursor of what might happen in the general market. Timing it is the tricky part as sector rotations could continue to keep the indexes near their all-time highs.

The market is currently in a range-bound, choppy mode. In such an environment, breakouts don’t work for more than a day or two and often lead to a reversal. Breakdowns don’t last too long either, as the dips near support levels are getting bought. The market is digesting its recent gains and looking for new catalysts. They are right around the corner.

The new earnings season has just begun. Morgan Stanley crushed estimates and gapped up. Then, lending troubles in select regional banks brought down the entire financial sector, and Morgan Stanley gave back its gap. American Express also reported strong results, gapped up, and finished strongly.

It is a scalper’s tape for nimble traders for the time being, where trading less and focusing on earnings movers makes sense until the next clear swing move.

Pocket Lobbyist Insights:

Budget Prime Minister Mark Carney gave a speech in advance of the forthcoming November 4 federal budget outlining his government’s priorities.

Auto alarms: Tariff wars continue–internally with Stellantis and GM decisions to move operations to the U.S., as well as externally with President Trump saying he has “terminated” trade talks with Canada after anti-tariff ads were taken out by Ontario Premier Doug Ford.

Foreign policy: Carney is travelling to South Korea for the APEC summit next week and might meet with President Xi, though that meeting is yet to be confirmed publicly. President Trump will be there and is meeting with Xi.

Crime crackdown: Bail reform through Bail and Sentencing Reform Act introduces over 80 clauses of targeted changes to the bail and sentencing framework in the Criminal Code.

Podcast & YouTube Recommendations🎙

* Historical Cycles: History shows these massive transformations happen in ~80-year cycles. Each cycle involves “watching an old system being essentially dismantled... at the same time as we’re taking off on these new technologies to build the next systems”

* The U.S.’s Self-Inflicted Challenge - Chinese Rare earths leverage and the shocking comparables across multiple industries in Canada:

China’s announcements last week should have the same effect on the U.S.: we need to always act with the understanding that (1) we have a critical dependency on China that is particularly important to our tech industry and (2) that China is willing to leverage that dependency.

Best Links of The Week🔮

* “The six largest U.S. banks collectively earned nearly $41 billion in the third quarter, a 19% increase from the previous year. Bankers express unease about the future despite strong third-quarter profits, healthy consumer spending and low debt delinquencies. Concerns include a cooling job market, elevated inflation and the federal government shutdown’s potential economic impact.” Source: WSJ

* “The U.S. has to use industrial policy to compete against nonmarket economies like China, Treasury Secretary Scott Bessent told CNBC. The Trump administration will set price floors across a range of strategic industries to combat Beijing, Bessent said. The administration could take equity stakes in more companies in the wake of China’s new restrictions on rare earth exports, he said.” Source: CNBC

* “United Airlines posted higher-than-expected earnings for the third quarter but revenue that missed Wall Street’s estimates. The carrier boosted capacity more than 7% in the third quarter while unit sales fell for both domestic and international travel. United said it expects an adjusted-earnings forecast of $3 to $3.50 a share in the fourth quarter.” Source: CNBC

* From Hodinkee: “On this episode of The Business Of Watches Podcast, we catch up with Antoine Pin, the Chief Executive Officer of Tag Heuer, who is having quite a year. The brand is in the first season of a new decade-long deal to be the official timekeeping sponsor of Formula 1. It’s a high-profile, multi-brand agreement that, if executed correctly, could launch Tag Heuer to a whole new level of visibility. But it also comes at a challenging time for the global economy and the watch industry in general, as soaring input costs, a strong Swiss franc, and U.S. tariffs on Swiss goods take a toll on margins and confidence.” You can listen to the podcast or read a transcript of the interview here on Hodinkee.