Markets

The Illusion of Control Treasury Secretary Scott Bessent frames the move as a liquidity measure for a thin summer bond market, not an attempt to suppress yields by fiat. Call it what you will: the mechanism is the same, the government stepping in to buy debt investors don’t want, at prices they wouldn’t otherwise pay. Bessent’s decision to double the debt buyback program is not a solution. It is a desperate gamble that will fail on contact with reality. The move is predicated on a dangerous illusion: that the U.S. Treasury can outmaneuver the bond market by sheer force of will. This is not fiscal policy; it is magical thinking dressed in bureaucratic jargon. ...

Three facts describe the current state of artificial intelligence infrastructure spending, and none of them are matters of opinion. The companies building that infrastructure have, over the past five years, repeatedly extended the accounting assumptions that determine how quickly their hardware loses value on paper: assumptions that flatter today’s earnings regardless of what eventually happens to the hardware itself. The revenue actually being generated by the AI industry falls far short, by any reasonable measure, of what would be required to justify the scale of capital currently being committed. And the financing structure built to bridge that gap has diffused the risk away from the technology companies themselves and onto pension funds, index-fund investors, and, in some cases, ordinary electricity ratepayers; parties who never chose to make a bet on artificial intelligence at all. ...