To The Moon

My Investing Muse (15Sep25)

Layoffs & Closure news

• Elon Musk's xAI fires 500 data annotators working on Grok. The layoffs come amid plans to expand the specialist AI tutor team of the chatbot. - EFTech

• ANZ BANK CEO DISCUSSES JOB CUTS WITH TREASURER ANZ Bank's CEO Nuno Matos speaks with Federal Treasurer Jim Chalmers on plans to cut 4,500 jobs. The move raises concerns over the bank's future direction and economic implications, prompting a governmental inquiry into the layoffs. Source: The Australian

• Oracle has initiated another round of global layoffs, firing more than 3000 employees. - Indian Tech & Infra

• Rivian is cutting 200 jobs... just as the $7,500 EV tax credit vanishes. Washington pulled the plug. Now Rivian has to survive on real demand. - Amanda Goodall

• BIG TECH COMPANIES LIKE AMAZON, MICROSOFT, META, ORACLE, SALESFORCE, AND INTEL HAVE CUT THOUSANDS OF JOBS IN 2025. SO FAR, OVER 100,000 TECH WORKERS HAVE LOST THEIR JOBS THIS YEAR AS COMPANIES TRY TO SAVE MONEY AND SHIFT TOWARD AI AND AUTOMATION. - X user First Squawk

• At least 17 trucking and logistics companies filed for bankruptcy in the second quarter of 2025 alone. Dry van truckload contract rates were flat from the same period a year ago, FreightWaves reported. - The Street

These are some of the layoffs & closures which were announced in the past week. It does seem the unemployment and layoffs continue to trend in a worrisome direction.

America’s Federal Deficit

A chart displaying cumulative receipts and outlays for Fiscal Year 2025. Receipts are categorized into individual income taxes, social insurance and retirement, corporation income taxes, customs duties, excise taxes, miscellaneous, and estate and gift taxes, with amounts in billions. Outlays are categorized into social security, Medicare, net interest, health, national defense, income security, education, and other, also in billions. A deficit of $1,973 billion is shown between total receipts of $4,691 billion and total outlays of $6,664 billion.

The US government has incurred a $1.973 trillion deficit through Fiscal Year 2025

A chart titled "Receipts, Outlays, and Surplus/Deficit for August 2025." On the left, green streams show total receipts of $344 billion, divided into individual income taxes ($153 billion), Social Security and Retirement ($114 billion), Customs Duties ($10 billion), Miscellaneous ($8 billion), Corporate Income Taxes ($3 billion), and Excise and Gift Taxes ($2 billion). On the right, blue streams show total outlays of $689 billion, divided into Medicare ($141 billion), Social Security ($134 billion), Net Interest ($54 billion), National Defense ($54 billion), Income Security ($50 billion), Veteran Benefits & Services ($18 billion), Transportation ($14 billion), Education ($14 billion), and Other ($10 billion). A red bar in the center indicates a $345 billion deficit.

In the month of August, the US Government collected $344 billion. Just one problem… They spent $689 billion. A $345 BILLION deficit. In one month. - X user Geiger Capital

A line graph displaying the U.S. Federal Budget Deficit/Surplus as a percentage of GDP from 1920 to 2020. The blue line represents the trailing 12-month deficit/surplus, while a yellow dot marks the latest month, August, showing a significant deficit. Red text highlights "US FEDERAL DEFICIT WAS $345 BILLION FOR AUGUST" with a red circle around the yellow dot. A watermark from Augur Infinity is visible.

The U.S. is running deficits on a crisis scale. August’s $345B shortfall works out to nearly 7% of GDP, a level far above anything seen from the 1950s through the 1990s. For the first 11 months of FY2025, the deficit has already reached $1.97 trillion. That’s the third-largest in U.S. history, and we’re not even done with the year. We’re not steering the ship anymore, we’re just hoping it doesn’t sink. - StockMarket News

33% of US states are already in a RECESSION: Moody’s Analytics finds that states accounting for 1/3 of US GDP are in or at high risk of recession. On the other hand, California, Texas, and New York are holding steady, helping stabilise the national economy. - Financial Times (Moody’s Analytics)

Protection and Hedging Surge

The cost of hedging against a 10% drop in the Nasdaq 100 ETF, $QQQ, relative to bullish bets has jumped to its highest since the 2022 bear market. The relative cost of hedging has risen by ~40% over the last 5 months. As a result, downside protection on $QQQ is now higher than it has been in all but 8% of recent cases. Investors are adding hedges to protect long equity holdings from a potential market drop. This also signals growing caution ahead of the long-anticipated September Fed meeting next week. All eyes are on the Fed. - X user The Kobeissi Letter

A line graph the S&P 500 Consolidated Hedge Fund Shorts from 2017 to 2023. The y-axis ranges from 0 to 1800, and the x-axis spans from 2017 to 2023. A red circle highlights a peak around September 2022. Text overlay reads "HEDGE FUNDS ARE SHORTING S&P 500 FUTURES AT NEARLY A RECORD PACE."

Hedge funds are shorting the S&P 500 futures at nearly a RECORD pace: Hedge funds short exposure to the S&P 500 futures hit $180 BILLION, an all-time high. As a share of open interest, shorts hit ~27%, the highest in 2.5 years, only below March 2023 and September 2022. - X user Global Markets Investor

More companies, including Hedge Funds, are starting to hedge and short. This suggests the market can be turning bearish. Let us research and consider hedging.

My final thoughts

When the First Amendment is ended by the Second... On one side is grief, and on the other is celebration. Once we celebrate death, do we know that we are sick? If change does not come from the top, it will start from the ground.

The gap and opportunity of American energy is attractive.

Financial Strategy and Outlook

This week, we will focus on reviewing our financial position by analysing our expenditures, income, and savings. Our core principles will be to operate within our means, invest only what we can afford to lose, and avoid leverage.

Avoid leverage. The market can be irrational longer than we can be solvent.

I am also conducting a review of our current holdings with the intention of divesting from businesses that are losing their competitive advantages. Additionally, I will consider adding both hedging strategies and defensive positions to our portfolio to mitigate risk.

As we move forward, it is essential to conduct thorough due diligence before taking on any new positions.

Wishing everyone a successful week ahead.

@TigerStars

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