The Economist coined the term speedball capitalism to describe the current state of global finance and markets. It combines massive AI capital expenditures tied to rapid hype and inflated equity valuations with the market depressants of high interest rates and geopolitical instability. On the one hand, you have euphoria from the AI explosion; on the other, a gloomy market backdrop of rising costs of capital.
This is the financial equivalent of the K-shaped recovery. Some are doing well, and others are not. The world looks very different for AI people than for those trying to manage higher rates.
The news cycle seems compressed and quickly moves from strength to weakness. Investors just move from one idea to the next, pushing capital into the next new thing. The finance world is full of contradictions, again, between strength and weakness. All this creates large capital flows that can change on a dime.
This connects to Adam Tooze's phrase, the "profit dollar," which suggests the dollar is associated with equity flows rather than the usual bond-safety flows.
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