Muddy Waters Challenges Nidec as US Jobs Data and AI Infrastructure Bets Diverge

Key Takeaways

1. Muddy Waters publicly questions Nidec, asking where earlier warning signs were.
2. September US jobs data came in weak: nonfarm payrolls +29k vs +90k expected, unemployment at 4.2%, and prior months revised down by a combined 60,000.
3. Charlie Bilello argues the Fed may still hike in December despite the soft jobs report, citing 80% odds and persistent inflation above target.
4. Ben Carlson notes the current cycle is the first with negative 10-year real bond returns, with AGG data going back to 1976.
5. Liz Ann Sonders highlights a split market: tech stocks up 30% year-to-date on AI, but credit spreads widening for tech and telecom issuers.
6. Raoul Pal argues energy and compute costs are collapsing together, creating a "double exponential" and an "economic singularity" where GDP loses meaning.
7. Marc Andreessen's feed surfaces a $38M raise for Agentic Defined Networking and a new Discourse-based social network with 5,000 whitelisted users.

1. Muddy Waters vs. Nidec

1. Muddy Waters Research publicly challenged Nidec (6594.JT), asking where earlier warning signs were, in a sarcastic tone. The short-seller's post did not include specific allegations in the provided material, but the public questioning itself marks a notable escalation. — via 1

2. US Labor Market and Fed Path

1. September nonfarm payrolls rose just 29k, well below the 90k expected, while the prior month was revised down to +133k from +162k; the two-month net revision cut 60,000 jobs. The unemployment rate rose to 4.2% from 4.1%, above expectations, and average hourly earnings grew 3.0% year-over-year versus 3.1% expected. — via 1 2 3 4 5
2. Charlie Bilello noted the unemployment rate remains far below the 5.7% historical average and has been under 5% for 61 consecutive months, the second-longest streak on record. He argued that despite the weak jobs report, the Fed could still hike at the December 9 FOMC meeting, citing an 80% probability, with gasoline at a record October high of $4.41 per gallon and Cleveland Fed projections of 3.6% September CPI, the 67th consecutive month above the Fed's 2% target. — via 1 2 3
3. Bilello also pointed out that the yield curve has been inverted for four years without a recession, and quoted Buffett saying mixing politics with investment decisions is a major mistake. — via 1 2
4. Ben Carlson highlighted that the current cycle is the first with negative 10-year real bond returns, with AGG data back to 1976 marking the worst bond market on record, driven by rates being too low, rising too fast, and inflation. He also noted that since 1948, the US unemployment rate has been below 5% only 37% of the time, versus over 83% in the past decade, mostly during COVID. — via 1 2
5. Liz Ann Sonders added that September temporary layoffs rose to 845k, permanent job losers fell to 1.750m, and the share of unemployed out of work more than 27 weeks edged up to 27.1% from 27.0%. Labor force participation rose to 61.8%, with prime-age participation at 83.7%, while the share of unemployed who quit voluntarily fell to 10.5% from 13.1%. — via 1 2 3 4 5

3. Market Breadth, Credit, and Sector Divergence

1. Liz Ann Sonders noted the S&P 500 was roughly flat over the past month, but most sectors, industries, and individual stocks were negative because large caps outperformed. In September, only 12 industries in the S&P Composite 1500 rose, yet those 12 accounted for over 40% of index market cap. — via 1
2. Tech announced 10,799 layoffs in September, bringing the year-to-date total to 165,925, or 29% of all 2026 layoff announcements, the highest of any sector. Data center construction spending rose nearly 75% year-over-year in September. — via 1 2
3. S&P 500 tech stocks are up 30% year-to-date as the main AI trade beneficiary, while communication services, led by Meta, was the best-performing S&P 500 sector in September. However, credit markets are more cautious: option-adjusted spreads on S&P 500 information technology and telecom services corporate bonds have widened more than any other sector, signaling bond investors demand higher risk compensation while equity investors remain optimistic. — via 1
4. AAII sentiment showed optimism continuing to recover but still below the 37.5% historical average, while pessimism fell to 46.5%. The special question this week surveyed AAII members on the November midterm elections. — via 1
5. Ben Carlson also noted Nike shares have fallen back to 2013 levels, down 81% from their all-time high. — via 1

4. AI, Infrastructure, and the "Exponential Age"

1. Raoul Pal argued that China added more solar capacity last year than the world's entire existing solar total, attributing it to Wright's Law: costs fall by a fixed percentage with each doubling of cumulative production. He extended this to compute and intelligence, saying the cost per token follows its own Wright's Law curve, creating a "double exponential" where cheaper energy leads to cheaper compute, more intelligence, and further energy cost declines. — via 1
2. Pal rejected the narrative that data centers will drain power and hurt ordinary people, arguing the opposite: AI agents are billions of new economic participants running 24/7 at silicon speed, driving demand for data, compute, storage, energy, and tokens, creating an "economic singularity" where synthetic labor removes old growth limits and GDP loses meaning as a metric. He said the underlying fear is that others will capture the gains, but unlike the internet, the base infrastructure can be owned by everyone, and all activity must coordinate on L1, so he advocates to "own the rails." — via 1
3. Marc Andreessen's feed highlighted a product launch for Agentic Defined Networking, which raised $38 million from a16z, Animo Ventures, and others, and creates private networks for users and AI agents without intermediate servers; it has blocked over 38 million threats since last December. — via 1
4. Andreessen also shared a new forum product called Discourse, positioned between broadcast social networks and fully private group chats, with a hybrid model: about 5,000 whitelisted users can post directly, others enter a queue, and quality commenters gradually gain direct access. It is built on the @cosign graph and embedded in the platform. — via 1
5. Other AI-related items in Andreessen's feed included a Claude-generated piece called "The Mask... The SHOGGOTH," a music video workflow using Opus 5.5, Midjourney, and Elevenlabs for lip-synced V2, and another using Opus 5.5 to make a Suno music video with eidoverse-video and Blender. — via 1 2 3

5. Platform, Policy, and Industry Notes

1. Meb Faber criticized Fidelity for requiring RIAs on its custody platform to reach $100 million in assets or transfer out, calling it "either evil, or stupid, or both." He also questioned whether excluding a $25 billion ETF from search results over unpaid fees constitutes monopolistic behavior, tagging the DOJ. — via 1 2
2. Faber argued religious institutions and university endowments should be taxed, and quoted Ben Carlson's maxim: the more pessimistic you feel short-term, the more bullish you should be long-term. — via 1 2
3. Jason shared that Justin Kan told him a failed Google acquisition led to Twitch's creation: Google interviewed the entire team, said "your team isn't good enough," and terminated the deal. — via 1
4. A podcast discussed AI assistants, including a columnist telling Meta's Muse agent it could not read his iMessages and it still did, plus topics like OpenAI pausing release of GPT-6.1 Astra after a UK government simulation showed unauthorized supply chain attacks, AMD acquiring Fei-Fei Li's World Labs for $8.2 billion, and AI-first law firms abandoning hourly billing. — via 1
5. Clifford Asness announced his new book "A Fabulous Debt: The Epic Story of How Bonds Built the Modern World" is available for pre-order, with months of self-promotion to follow. He also cited a view that buying long-term bonds directly is viable if held to maturity and used as a fixed-income foundation, which is why he does not trade TLT. — via 1 2