Today’s briefing:
— Why tech stocks jumped off a cliff
— South Korea wants North Korean soldiers
— Brazil’s curious disappearing act
Your Insider’s briefing:
— Why tech stocks jumped off a cliff
— South Korea wants North Korean soldiers
— Brazil’s curious disappearing act
Good morning {{first_name | Intriguer}}. If Larry Garfield — Danny DeVito’s gloriously unrepentant corporate raider in Other People’s Money (1991) — were still roaming the Street today, he’d look at this week’s tech bloodbath, lean into the mic, and growl:
“Fibre optics. New technologies. Obsolescence. We’re dead alright… we’re just not broke.”
Markets go up and down. Usually up, if we’re honest. But lest we take too much wisdom from a film that was (so I’ve heard) only ever the shadow of the off-Broadway original that Jerry Sterner penned in the rubble of the great 1987 crash, keep in mind that another of his protagonists also quips, “Drexel’s gone, Milken’s in prison, and Trump’s waiting tables.”
Sure, the Drexel reference still holds. But Milken is now a billionaire philanthropist. And as for Trump…?
 | Managing Editor Jeremy Dicker |
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Number of the day
$240B
That’s how much debt Venezuela is now expected to reveal in its ongoing restructure, far beyond the $150B everyone expected. The country has been in default since 2017.
Taking stock.
With markets just torching half a trillion in a day, it's time for a quick global tour of the wreckage, starting in...
🇺🇸 ‘Murica
The big memory and chip names have led this week’s US carnage, with Micron and Sandisk down ~13% in a day, while Intel, AMD, and Qualcomm each shed 6-8%. In parallel, SpaceX extended its post-IPO sell-off, losing all its initial 30% gains to now edge back below its listing value. That's a $300B see-saw for Elon alone.
So what's going on? There are historic egos and fortunes on the line, but indulge us these three quick observations:
i) A $19B-revenue firm (SpaceX) getting a $2.5T valuation was always a big bet on the future, and that brings vulnerability to sentiment swings in the meantime
ii) AI-tied names have led most of this year's gains, so a bit of capital rotation / profit-taking is inevitable (plus Micron's big earnings report is due today), but...
iii) While today's winner-takes-all hyperscaler logic holds, investors might start pricing in doubts around execution, burn, payoff, and even commoditisation.
But of course, none of this is happening in a vacuum. To the contrary, this US rout seemed fanned by some wild overnight news out of...
🇰🇷 South Korea
Korea's KOSPI stock index triggered another circuit-breaker trading suspension Tuesday, driven by memory chipmakers Samsung and Hynix plunging 12%. So what's going on?
One spark might’ve been Hynix announcing it’s shifting some production lines away from its next-gen high-bandwidth memory in pursuit of shorter-term profits — some took it as a signal of softer AI capex momentum. But that aside, Korea is also seeing a mix of...
i) Concentration — these two stocks alone make up nearly half Korea’s index
ii) Leverage — Korea's retail investors (dubbed 'ants') just hit an all-time high margin debt of ~$25B, with tales of folks even surrendering life insurance policies to go all-in, and that's all driving...
iii) Volatility — Korea had zero full circuit-breakers last year, versus four in the last six months alone. And rumours of a Samsung share buyback just sent the KOSPI roaring right back up today.
But the real heart of the global AI stack arguably still sits 800km across the strait in...
🇹🇼 Taiwan
Whereas it takes two firms to make up almost half Korea's KOSPI index, in Taiwan it only takes one: legendary chipmaker TSMC has been on such a run, it's now single-handedly pushed Taiwan's market cap into fifth place ahead of more populous Korea and even India.
What's going on?
i) As AI's foundry backbone with sold-out capacity and long-term contracts, there's probably less mania at play (it's up ~50% this year vs Samsung's ~200%)
ii) But there's still a dash of retail revelry, captured in a young local guy's quote now doing the rounds ("Buy any stock and you will make money"), and
iii) While local TSMC shares have held pretty steady this week, their US-traded version (ADRs) plunged 6-7% yesterday. There are technical drivers (liquidity, USD access), but that kind of spread has historically hinted at frothiness in the US.
So okay, then let's wrap with a visit to the West's big AI moat over in...
🇳🇱 The Netherlands
ASML, the Dutch monopoly over extreme ultraviolet lithography machines (the only tools still capable of making cutting-edge AI chips) crashed 7% Tuesday, partly reflecting the broader tech sell-off we've explored above, but also some very intriguing US claims that China might've gotten its hands on this tightly-controlled tech.
To wrap, indulge us these final three observations:
i) ASML rejects the claims — how do you hide a machine bigger than two jumbos?
ii) Debate is now whether China smuggled (or reverse-engineered) key parts, but
iii) On specific parts, there's even now speculation the US commerce department (which first made the above claims) is just pumping its own tyres via its new $150M stake in xLight, a US startup hoping to eventually weaken ASML's hold.
Now to be clear, this entire final Dutch section all stems from a single scoop, but the bigger picture is what grabs us — could investors now be starting to price in the possibility that the West's last big tech firewall might eventually crack?
And to be even clearer, all the above stocks (ex SpaceX) are still way above where they started on January 1st.
Intrigue’s Take
Could there be something grimly poetic about Alan Greenspan — the central banker who famously warned of “irrational exuberance” back in 1996 — now passing away just as another bout of irrational exuberance gets pantsed in the AI age?
Some of the stories out there are wild, like this one…
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Sound even smarter:
Nvidia’s banned AI chips have reportedly now doubled in price on China’s black market.
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Meanwhile, elsewhere…
🇵🇪 PERU — Fujimori clinches it.
17 days after election day, Peru’s right-populist heiress Keiko Fujimori (the late Alberto’s daughter) now has an unbeatable lead over hard-leftist Roberto Sánchez. But Sánchez is now crying fraud (without proof) and rejecting the result. (Al Jazeera)
Comment: Neither polarising candidate has exactly given "heal a divided nation” energy, and Keiko herself has a record of crying fraud (this is her fourth run for the presidency). But left or right, the bigger issue is that every time Peru’s leaders make unfounded electoral fraud allegations, they chip away at institutions that are famously hard to glue back together.
🇪🇺 EUROPEAN UNION — Pax over the chips.
The EU, Germany, Greece, and the Netherlands have now joined Pax Silica, DC’s evolving coalition to de-risk AI supply chains away from China. Argentina, Chile, Costa Rica, Kazakhstan, and Panama are apparently next in line. (FirstPost)
Comment: Europe now getting onboard marks a major shift from the continent’s initial hesitations around its ‘strategic autonomy’, but the big ‘get’ here is really the Netherlands which (via ASML above) is arguably upstream of everything else.
🇰🇷 SOUTH KOREA — Accepting returns.
South Korea has announced it’ll take North Korean soldiers captured by Ukraine while fighting for Putin, if they choose to defect to the South. (Reuters)
Comments: It’s not completely new — the South already considers Northerners citizens the moment they express a desire to resettle in the South. But spelling it out is a smart move here: it a) turns Kim’s captured troops into propaganda and intel wins; b) creates an offramp for soldiers to surrender rather than die or face treason charges back home; and c) all raises the costs of Kim helping Putin.
🇵🇱 POLAND — Friendly fire.
Ukraine’s Zelensky will no longer co-host this week’s big Recovery Conference in Gdańsk, after Poland’s new nationalist president (Nawrocki) stripped the Ukrainian leader of Poland’s highest honour. The spat comes after Zelensky renamed a special ops unit in honour of a group Warsaw says committed WWII atrocities against Poles. (France24)
Comment: Ukrainians revere the historic UPA as anti-Soviet independence fighters, and the new name fits Zelensky’s pattern of leaning into nationalist symbols for wartime identity and resolve. Poland remains one of Ukraine’s strongest security partners, but it’s a reminder of how historical grievances can poison even the strongest ties.
🇮🇳 INDIA — Apple components exposed?
Tata Electronics, a major supplier to Apple and Tesla, has now confirmed it suffered a data breach, weeks after a ransomware group dumped 200,000+ proprietary files on the dark web. (TechCrunch)
Comment: As Western firms try to diversify their supply risk away from China, they’ll still encounter new vulnerabilities — including weaker cybersecurity in this case.
🇨🇺 CUBA — Schools close as fuel crisis bites.
The ruling regime has brought the school year to an abrupt close and suspended university entrance exams, citing energy shortages amid the US fuel embargo. Meanwhile, the US has slapped fresh sanctions on military-linked entities, including the regime’s main commercial bank and largest steelmaker. (NYT $)
Comment: As Trump 2.0 doubles down, the pain is now spreading from one Cuban prize (tourism) to another (education). It all looks to us like a US signal that last week’s historic economic liberalisation in Cuba wasn’t enough for DC.
🇸🇸 SOUTH SUDAN — We have a date.
After 15 years and five prior postponements, authorities have finally announced a December date for the country’s first-ever election since independence. (BBC)
Comment: This potentially ends Africa’s longest election-free period in recent history, which might be why folks are still sceptical it’ll even happen — President Kiir has been busy with an epic power struggle (his veep is still under house arrest), rather than completing the required census, constitution, voter register, or election funding.
Extra Intrigue
Meanwhile, in other worlds…
Tourism: Tour agencies are reporting fewer visa rejections in Turkmenistan, as the reclusive former Soviet republic slowly opens up to international visitors.
Science: Researchers Down Under have managed to brew a perfect shot of espresso using ultrasonic waves, in a process that cuts energy consumption by 75%.
Art: Germany and the Netherlands now say they intend to return over 2,000 cultural objects taken from Ghana during the colonial period.
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Bridge of the day
Before and after. Credits: G1.
We love a good mystery here at Intrigue — especially when it involves a 20-metre, 30-ton, 150-year-old bridge somehow ghosting an entire town in Brazil.
That’s right, dear Intriguer — earlier this month, residents of rural Prados woke up to find their beloved 1880s rail-bridge had simply vanished. The iron relic, shipped from England during the reign of Queen Victoria, had long been a quirky local landmark until… gone.
The opening scene for M Night Shyamalan’s next film, perhaps?
Well plot twist: local police went full Gone Girl and tracked the errant bridge to 180km away, where it’s now neatly reassembled behind the gates of a private eco-resort! The new owners insist they bought it for a cool $125K, and even provided the receipt from an antique dealer, though the heritage bridge actually belonged to the federal government.
So mystery solved… sort of?
Today’s poll
Do you think tech stocks will finish this year ahead?
Yesterday’s poll: Do you think the UK's new PM will fare better than Starmer?
🇬🇧 Yes, Starmer just made some bad calls (18%)
🔨 No, the UK's problems are bigger (81%)
✍️ Other (write in!) (1%)
Your two cents:
🔨 C.M: “The UK’s troubles defy the persistent collective belief that the right personality alone will get everything resolved to satisfaction in a timeline that would please a sitcom writer.”
🇬🇧 C.D: “Charisma does matter, and charming the required support to make hard choices like Burnham did in Manchester can get the needed momentum for some progress.”
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