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The Cashflow Memo
SHOWNOTES
This week on Telltales, the crew dives into the intersection of healthcare, AI infrastructure, and macroeconomic tensions—from U.S. drug pricing and PBMs to GPU-driven cloud expansion and semis decoupling.
[00:00] Intro
Welcome to Telltales. Mike Nicoletti introduces co-hosts Jason Wallace and Hunt Lawrence. The trio outlines the topics ahead: energy markets, healthcare disruptions, and the AI-fueled technology transition.
[01:05] World Oil Supply & Demand (Exhibit C)
Hunt reviews oil production numbers for the U.S. and OPEC nations. He forecasts lower U.S. production in 2025 and notes surplus Saudi capacity. Demand in China and Asia remains flat, while political pressure from the Trump administration for $2 gasoline hints at policy moves aimed at lower prices.
[02:30] U.S. Gas Prices & Backwardation (Exhibit B)
Discussion shifts to natural gas pricing. Backwardation in oil has flattened, and 2025–26 gas prices are holding above $4. Early summer heat in Texas has sharply increased power demand, reinforcing bullish outlooks for LNG markets and pricing stability.
[03:52] Federal Spending Outlook (Exhibit A)
Hunt critiques U.S. fiscal policy and budget priorities, lamenting increased defense spending and weak Medicaid reform. With a $2 trillion deficit, the team argues for a much larger spending cut and forecasts political implications on market sectors.
[05:29] U.S. Drug Pricing & Global Disparities
Jason leads a deep dive into a proposed executive order targeting international drug pricing parity. They debate its consequences—potential global price hikes, IP violations, and fractured access to life-saving treatments. Quotes highlight how price caps in the U.S. might lead to compounding in countries like Russia.
[07:47] PBMs and the Transparency Problem
The group explores how Pharmacy Benefit Managers obscure drug pricing and absorb large profit margins. Jason explains the gross-to-net discrepancy, where drug companies might only realize 50% of the sticker price. Transparency and direct-to-consumer models, like the one Hero is piloting, offer possible solutions.
[10:21] The Case for Government Intervention
Mike and Jason suggest this is a rare example where government intervention might outperform private markets. Ideas include national price registries and reforming controlled substance tracking. Amazon and Walmart are floated as potential PBM disruptors.
[13:35] Top Mark Rankings: Sailing Toward LA 2028 (sponsor message)
Brief sponsored segment highlighting Top Mark Capital’s Olympic-class sailing initiative and rankings system for aspiring athletes.
[14:09] The Global GPU Buildout
As the conversation moves to AI infrastructure, Jason explains how countries are shifting from CPU to GPU-based systems. The compute requirements for advanced AI are 10–1000x greater than traditional software. Middle East investments are positioned to backfill lost China demand for semis.
[16:29] AI Models & Language Barriers
The crew reflects on how video generation and non-English model training are expanding. While video models are getting better, they're still computationally expensive. AI model localization is emerging as a new frontier.
[17:57] Decoupling from China and the Semis Supply Chain
Despite political headlines suggesting renewed U.S.-China cooperation, export controls remain. ASML, NVIDIA, and TSMC continue to face limitations. The group discusses how the chip industry will evolve regardless, and why complete decoupling still looms as a possibility.
[20:30] AI Has No Borders
Mike and Jason discuss how open-source models like DeepSeek transcend national controls. Once software is online, it’s nearly impossible to contain. The team pushes back on the idea of an AI arms race, asserting fast followers and open distribution will drive rapid parity.
[22:00] Big Tech and Antitrust Momentum
The conversation turns to regulatory pressure on Google, Meta, Apple, and Amazon. There’s a bipartisan consensus forming that tech giants are too powerful. Jason compares today’s political climate to China's crackdown on Jack Ma and reflects on how influence crosses borders.
[25:25] The Google Remedy: Chrome and AdTech
Google may be forced to divest Chrome and parts of its ad tech stack. The group considers how that would shift browser defaults to AI-driven search platforms like Perplexity or OpenAI, impacting Google’s core revenue model.
[27:00] Final Thoughts
The hosts wrap the episode, previewing next week’s continuation of themes in healthcare and tech. As always, listeners are encouraged to subscribe and read the full Cash Flow Memo at telltales.us.
If you found this episode thought-provoking, subscribe and share the podcast. Read the full Cash Flow Memo at telltales.us and follow us for updates on markets, macro, and innovation.
UNH 0.00%↑ AMZN 0.00%↑ GOOGL 0.00%↑ META 0.00%↑ AAPL 0.00%↑ NVDA 0.00%↑ TSM 0.00%↑ ASML 0.00%↑
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