Is The Soft Landing Officially Dead?

Summary

• The macro turn that matters: the 5% tail at the next Fed meeting flipped from a cut to a hike. Avi’s alarm bells — PPI printed +1.4% MoM vs 0.5% expected and 6.0% YoY (“largest 12-month gain since December 2022”), headline inflation 3.8%, oil jammed above $100 with Hormuz still shut — and “nobody like I’m not seeing a ton of fear in the market because of this.” His base case: a real scare inside 3–6 weeks, “we probably see lower prices on a lot of these assets than we see today.”
• Avi went from 0% to ~30% cash in two days and wants 50%, after everything “kind of 3x’ed” since the Iran war. Jonah said his portfolio ran +60% YTD. The logic: “all else equal, something going up in price makes that thing worse, not better,” memory stocks have outrun revenues, and “the higher the volatility, the better the value of cash — V up is also V down.” The whole take, verbatim: “you need to be more careful today than you were a week ago.”
• Jonah trimmed 7% on pure rally statistics — the only sharper major asset rally in ~200 years was NASDAQ 1999 — but calls a hike cycle “a fade, it’s just never going to happen.” Avi’s counter cites tariffs getting refunded and “AI is tremendously deflationary.” Avi’s wargame if wrong: OpenAI and Anthropic “have to ask to exist once every six months,” the capital doesn’t come, data-center spend slows into a stagflationary crisis — and that crash is “the buy of the century” for anyone holding dry powder.
• Micron is “a memecoin with a use case”: 35x trailing earnings, but earnings “could literally triple, or probably will triple,” making it under 15x forward, and Jonah projects DRAM prices quadruple in 18 months or less. Memory is a literal commodity in a bottleneck — like Cushing for WTI — and unlike 2022’s supply-shock head-fakes, this is a demand supertrend. SK Hynix runs 72% operating margins: “they’re just manufacturing tanzanite there without any competition.”
• Jonah puts only 15% odds on a Trump–Xi chip deal despite the CEO delegation in Beijing: Xi’s Taiwan and scarcity strategy “rely on the opposite of what the US wants,” and “I just do not see Trump mortgaging the future of the US stock market for another 20% sugar high rally.” Avi’s summit flyer: Illumina (ILMN, $22B, kicked off China’s do-not-do-business list) — smallest name on the trip, barely moved, pure stock position.
• Bitcoin “looks kind of [expletive]” — bullish through the 60s and 70s, they hoped for 90, it couldn’t hold above 82; Avi is hands-off and says Clarity “is not going to do anything for Bitcoin.” Avi says about two-thirds of what he reduced was BTC—GBTC to be specific—and wants to rebuy lower, but still calls BTC “the easiest 10-to-15 bagger in risk assets over a 10-year time frame.” Teaser for next episode: “Saylor is starting to really become a problem for this asset.”
• Structural backdrop trade: long SPY / short VXUS, levered — Europe redistributes (“a great place to be a normal person, but a terrible place to be a striver”), America has excess liquidity; a Swiss dealer’s Roman-coin clients are now entirely China, the Middle East, and America, where 20 years ago Europeans bought.

Deep dive

1. The tail flipped: 5% now prices a hike, not a cut

• Avi’s single scariest number: “we now have a 95% probability of nothing happening at the next Fed meeting. But instead of a 5% probability of a cut, we have a 5% probability of a hike.” The trigger was PPI at +1.4% MoM vs 0.5% consensus, 6.0% YoY — the largest 12-month gain since December 2022 — on top of 3.8% headline inflation, and he doesn’t buy that it’s all oil.
• His own arc, quoted against himself: “I’ve been sitting here going, I’m so bullish I can’t see straight. Buy everything. Touch every memory stock. Get balls long.” Everything 3x’ed since the Iran war — and now “people are writing off these numbers. I’m getting nervous.” If inflation reaches 4.5–5% and hikes start, “it’s going to be nuclear for bonds” and choke the debt these AI expansions are funded with.
• On Kevin Warsh, just confirmed as Fed chair: “candidly, he was never right about much… we would wait 3 weeks and then he would change his opinion” — unlike Jerome, who had principled long-term views but “was a real slow reactor.” Avi’s charitable read: “fail fast and move on is like the best thing in markets.”

2. Oil: Hormuz still shut, operational stress by September

• Jonah’s inventory chart: the world is short 10–15 million barrels a day with Hormuz closed; absent that, oil “should be worth 40 or 50 bucks — it’s just oversupplied.” Visible stocks are heading toward the 6.8 billion-barrel operational floor “where oil legitimately skyrockets to 200” — reached by September at this rate.
• His bet: it resolves first. “I’m a betting man. I’m betting a lot of money that this gets resolved before September” — the State Department, Department of War, and “the Department of Trump’s hope of not going down in history as the worst president of all time” all have it on the radar.

3. The playbook: sell into strength so you can buy the panic

• Avi raised 15% cash on yesterday’s rebound and 15% more today — 30% total, targeting 50% — from fully deployed. Jonah said his portfolio was +60% YTD. The trader’s question is always “what is the next major fear?”, and right now the consensus answer is “basically nothing… people have sort of flipped” — which is exactly the setup for a cascade, since “a lot of people in these positions are short-term traders now” and retail is shoving memory stocks up.
• The leverage rule: “If you want to be 150 to 200% of your portfolio, do that when nobody’s on your side. You never want to be overlevered when everybody’s on your side.” Exhibit A: Korean market leverage has literally doubled, to more than $20 billion — “all it takes is for the market to sneeze and suddenly you’re down 30%.” And: “the absolute worst feeling in the world is when you blow up when things are going up.”
• Jonah trimmed 7% two days earlier on gut, not inflation: this is “the only time the NASDAQ has ever rallied like this” except 1999 — the sharpest major asset rally in ~200 years — and “I’ve gotten too bullish on these sorts of rallies before and been carted out on a stretcher.”
• Ways to stay long but hedged, per Avi: short the 3x levered ETFs to harvest alpha decay, short bonds or buy short-dated puts against an inflation print — and keep the uranium (“Trump’s going to be expediting some nuclear permits”). You might wake up to “Intel back below 100, and if you don’t have cash, you’re out of luck.”

4. Memory is a bottlenecked commodity — “not tulips, not Cardano”

• Jonah’s core valuation math: Micron trades at 35x trailing, but by their DRAM price rubric earnings “could literally triple, or probably will triple, in the next year or less” — so under 15x forward. His projection: DRAM prices quadruple in 18 months or less, making Micron “probably undervalued” at any sane PE. “It’s a memecoin with a use case… not like the memecoins that you and I were slinging back in 2024 like Slerf and Boden.”
• The commodity framing is the point: memory is literally called a commodity in components land, and this bottleneck is “as bottlenecked as Cushing was for WTI” — prices go parabolic when demand won’t slow, and “there’s no slowing down humanity’s desire to replace human coders or augment them with autonomous coding agents.” SK Hynix’s 72% operating margins draw Avi’s “that’s just disgusting.”
• Jonah’s pushback on the Samsung union strike (May 21–June 7) lifting Micron: wrong mechanism. Under FFF (form-fit-function) fungibility, redesigning a board takes weeks to months, so “I don’t think Micron will win business if Samsung has a strike” — that’s a short-lived supply shock, and he wouldn’t touch a Samsung–Micron pairs trade “given the Korea–US thing.”
• Live correction on air: they’d been carrying Micron at $700B — a comment flagged it’s $900B on the latest price action. Which is Avi’s whole worry: “how much of the next two years is currently in the price?”

5. Not 2022 — but wargame the hike anyway

• Jonah’s asterisk on Avi’s “genuine fundamental rally”: fundamentals are supply and demand, technicals are positioning — and unlike 2022, when supply shocks masqueraded as “demand-driven super trends” and rate hikes drained the hot air (especially from crypto), this is a demand supertrend across multiple verticals. OpenAI and Anthropic are “too strategic to the United States… too big to fail at this point. I don’t see them going the way of Lehman Brothers.”
• Avi’s wargame if hikes come anyway: remember that OpenAI and Anthropic “have to ask to exist once every six months” — still deeply unprofitable, dependent on fresh capital. Hikes → the capital doesn’t come → data-center spend slows → energy bottlenecks → “a stagflationary problem crisis” where Micron, Samsung, SanDisk “take a breather” and contagion spreads. The mega trend survives, so “that would be the buy of the century. But if you have no dry capital to deploy when that happens… shame on you.”
• Late-cycle tell, per Avi: the momentum chasers (likely Coatue, the “CO2 guys”) — who “somehow managed to mark the top” of crypto — just released a video announcing agents are going to be huge. “This is what everyone was talking about 3 months ago… get with it.”

6. Beijing summit: Jonah gives a chip deal 15%

• Trump going to China with a group of CEOs is, to Avi, potentially phenomenal: the market “is his approval rating and it’s the savings bank of the entirety of the United States,” so opening China is in his interest — and if Nvidia gets H200 export approval, “that’s huge.” His flyer: Illumina (ILMN, $22B) — bought “solely because it was the smallest company on the list,” genome sequencing, kicked off China’s do-not-do-business list, barely up 2%, stock only, no options.
• Jonah’s counter — worth keeping in full: Xi “fosters a climate of optimism and mutual possibility and then stonewalls… if you walk through his door, it tends to be a trap.” His Taiwan designs and geostrategic strategy “rely on maintaining scarcity under Chinese control” — the opposite of what the US wants. The US needs at least a decade, if everything goes right, to divorce itself from Taiwanese and Chinese supply chains (“read Apple in China… best economic book of the decade”). Verdict: Trump posturing, no grand bargain, 15% — “I just do not see Trump mortgaging the future of the US stock market for another 20% sugar high rally.” Avi concedes: “I don’t really have strong rebuttals.”
• The Iran sub-debate: Avi thinks China can pressure Iran (it ships drones, missiles, sanctions-busting finance) and the US could pay with current-gen chips while blocking the next generation. Jonah flips it: China threatening to stop buying Iranian crude is “a threat with no teeth. Not in a billion years” — whereas the US can “block every NITC tanker from ever hitting one of your ports forever.” Avi: “Good point.”
• Jensen’s export argument gets air: “we want the world running on an American tech stack… addicted to American GPUs” — with Avi’s addendum, “maybe we can back door some of those chips. Just saying.”

7. Long America, short Europe — and the alt-asset tell

• Jonah’s structural trade: long SPY / short VXUS, index-vs-index so low-vol, “you could really lever that up and it’s just something that I would bet on for a long time.” The discussion’s backdrop: Europe redistributes — free crowns on the carte vitale, top bracket “north of 70% on anything over a million euros” — making it “a great place to be a normal person, but a terrible place to be a striver,” hence the brain drain. America has excess liquidity and is “a shittier and shittier place to be normal… until the political revolution comes.”
• Avi’s confirming anecdote from Paris: a Swiss dealer in ancient Roman coins, 40 years in the business, says every client is now China, the Middle East, or America — “20 years ago, the Europeans were buying”; now they buy none of it.
• The alt-asset frame that opened the show: Avi’s tanzanite, bought for $9,800 in Jaipur two years ago, resellable near $30,000 — one mine on earth, depleted in 22–25 years, no lab replication. In this liquidity regime, “if you make a 10x, there’s somebody out there absolutely clowning you because they bought a Charizard four years ago.”

8. Bitcoin: “not looking good, guys”

• Avi’s read: “Bitcoin looks kind of [expletive]” — they were bullish through the 60s and 70s, he “really thought that we would be able on this recent rally to get to 90,” it couldn’t hold above 82, and STRC is trading at 100 into its ex-dividend date. Clarity “is not going to do anything for Bitcoin.” He’s hands off; TON’s round trip ($1.30 → $2.00 → $2.80 → $2.20) is “not great price action,” though he stays long-term constructive if Pavel takes it seriously.
• Avi says about two-thirds of what he reduced was BTC—GBTC to be specific—and wants to rebuy lower, while keeping the long-term call: BTC is “the easiest 10-to-15 bagger in risk assets right now over a 10-year time frame,” even if a US–China thaw makes it less globally relevant.
• The cliffhanger, set up for next episode: “Saylor is starting to really become a problem for this asset.”