Big News: things that are going on are bigger than big. With WAR increasing, fights of the straight of Hormuz and OIL, also:
*Anthropic; the Lawsuit and the $19 BILLION run rate.
*Other AI news & Circular Investment
*The Credit Crisis – First Brands, Blue Owl and bank exposure
*Yen carry trade
*Fed PRINTING
*BTC charts and targets
*XRP highlights for March
*Gold and Silver (something sneaky is happening here)
*Q&A
HOW TO USE A DEX TUTORIAL: https://aurawright.media/how-to-use-a-dex/
REPLAY:
BRIEF- greater detail on all the points I discussed in this call:
ANTHROPIC — THE LAWSUIT & CURRENT STATUS
What happened
The two red lines Anthropic refused to drop: no AI-controlled autonomous weapons, no mass domestic surveillance of Americans
Pentagon demanded unrestricted use “for all lawful purposes” — Anthropic said the fine print would allow those safeguards to be disregarded at will
Feb 27: Trump orders all federal agencies to immediately cease use of Anthropic. Pentagon designates Anthropic a “supply chain risk to national security” — a label previously reserved for foreign adversaries like Huawei
Hegseth went further than existing law allows: barred ALL commercial activity with Anthropic, not just government contracts — meaning Amazon and Google, as Pentagon contractors, technically cannot do business with Anthropic either
The lawsuit
Anthropic called the designation “unlawful and politically motivated” and intends to challenge in court
Filed but frozen — awaiting formal notice of penalties before proceedings can move forward. Expect slow motion until Saturn stations direct March 11
Legal experts say the statute used (10 U.S.C. §3252) requires demonstrating a risk of sabotage by a foreign adversary — unclear how Anthropic’s usage restrictions satisfy that standard
When the government wanted comparable restrictions on Huawei, it took an Act of Congress. This was done unilaterally by Hegseth.
The paradox
While all of this was happening: Claude was actively being used in the U.S. military campaign in Iran — reportedly helping identify 1,000 targets in the first 24 hours
The Pentagon continued using Claude operationally even after the ban. The Department of Defense declined to confirm or deny this, citing operational security
The under secretary of defense was on the phone offering Anthropic a deal at the exact moment Hegseth was posting the ban on X — this was not a coordinated policy decision
The private deal terms being offered would have permitted collection and analysis of Americans’ geolocation data, web browsing history, and personal financial information
Market & public reaction
Claude overtook ChatGPT in U.S. phone app downloads this week — consumers are siding with Anthropic
430+ tech workers at OpenAI and Google signed an open letter supporting Anthropic’s position
Senator Ron Wyden (D-OR) pledged to “pull out all the stops” and seek bipartisan legislation
FCC Chair Brendan Carr publicly said Anthropic “make a mistake” and should correct course
Six-month transition clock: Pentagon has until ~August 2026 to phase out Claude from military systems. Legal resolution likely before then.
- OTHER AI COMPANY NEWS
OpenAI
Struck a Pentagon deal the same night Anthropic was blacklisted — with the exact same two red lines (no surveillance, no autonomous weapons) now enshrined in their contract
Altman said Monday OpenAI “shouldn’t have rushed” — called it “opportunistic and sloppy.” Walked it back within 72 hours
Amazon invested $50B in OpenAI — OpenAI commits to spend $100B on AWS over 8 years. Notable: Amazon is also Anthropic’s primary cloud partner. Amazon is now deeply entangled with both top AI labs
OpenAI pursuing IPO — regulatory filing potentially H2 2026. $110B funding round in progress including $30B from Nvidia, $30B from SoftBank
Chinese AI / IP Theft
Anthropic discovered 24,000+ fraudulent accounts allegedly created by Chinese AI labs — DeepSeek, Moonshot AI, and MiniMax — generating 16M+ interactions to reverse-engineer Claude
Framed as a national security threat: distilled models lack safety guardrails, could be used for cyberattacks and disinformation
Adds a second front to Anthropic’s current battles — domestic (Pentagon) and foreign (IP theft) simultaneously
Google / Others
Google negotiating its own Pentagon contract post-Anthropic ouster
OpenAI researchers at NSA/intelligence agencies signaled they would not deploy there “for now” — some internal pushback emerging at OpenAI too
Claude Code cited specifically as the driver behind Anthropic’s revenue surge — developer adoption accelerating sharply
- ANTHROPIC $19B RUN RATE — CLARIFIED
$19B annualized run rate as of early March 2026
Was $9B at end of 2025 — doubled in roughly 10 weeks
Was $14B just a few weeks ago — accelerating sharply
Primary driver: Claude Code — the developer/coding tool, not the consumer chatbot
Enterprise adoption of agentic AI workflows (Claude as a managed layer inside company systems) is the underlying growth story
For context: OpenAI is at ~$20B run rate. Both companies are still small relative to the $650-700B the hyperscalers are spending on infrastructure to support them
- AI CIRCULAR INVESTMENTS — THE BIG PICTURE
The structure
The loop: Hyperscalers (Amazon, Microsoft, Google) fund AI model developers (Anthropic, OpenAI) → who buy compute back from hyperscalers → while chipmakers (Nvidia) invest in AI developers and sell GPUs to hyperscalers
Each investment comes with a procurement commitment attached — the money flows in a circle within a small closed ecosystem
Key examples of the circularity
Microsoft invested ~$13B in OpenAI — structured as Azure cloud credits. OpenAI contracted to buy $250B of Azure services over time
Nvidia + Microsoft + Amazon invested ~$15-23B in Anthropic — Anthropic committed to spend $30B on Microsoft Azure and uses AWS + Nvidia chips
Amazon’s new $50B OpenAI deal: OpenAI must spend $100B on AWS over 8 years. Amazon now has major circular deals with BOTH top AI labs
Oracle signed a $300B supply deal with OpenAI. Oracle stock plunged 30% in Q3 on fears it cannot deliver
xAI (Musk) structured a $20B SPV — buying Nvidia GPUs and leasing them back to itself
The financial stress underneath
$1.5 trillion in remaining performance obligations (contracted revenue not yet earned) concentrated among a handful of AI developers — this is counterparty risk dressed as revenue backlog
Big Four capex 2026: ~$700B — nearly doubling 2025. Amazon projected to go NEGATIVE on free cash flow by $17-28B this year
Alphabet’s free cash flow projected to fall ~90% in 2026 to $8.2B from $73B in 2025
Pure-play AI vendors (OpenAI, Anthropic, etc.) combined revenue is less than $35B — roughly 5% of the $700B being spent on infrastructure for them
The risk: if one major participant retreats or funding tightens, the circular structure means trouble cascades rapidly across all players
Janus Henderson calls it a “virtuous circle.” BCA Research calls it a ticking time bomb. Both may be right depending on the timeline.
- PRIVATE CREDIT CRISIS — FIRST BRANDS, BLUE OWL & BANK EXPOSURE
Timeline of events
Sept 2025: First Brands Group (auto parts, backed by private credit) and Tricolor (subprime auto lender) both go bankrupt. JPMorgan takes $170M in charge-offs on Tricolor alone
Dec 2025: Tricolor executives charged with running a yearslong systematic fraud — inflated loan collateral to raise billions from lenders
Jan 2026: First Brands founders charged with defrauding lenders of billions. Dimon’s warning: “when you see one cockroach, there are probably more”
Feb 18, 2026: Blue Owl scraps quarterly redemption offer on its $1.6B OBDC II fund — investors can no longer exit. Committing to wind down and return capital over unspecified timeline
Late Feb 2026: Blue Owl stock hits worst monthly decline on record. Blackstone and Apollo both fell 5%+ on contagion fears
Why Blue Owl is the current flashpoint
~70% of Blue Owl’s portfolio is in software companies — market fears AI disruption (Claude Code and equivalents) will erode those companies’ revenues and compress margins, triggering defaults on 3-5 year loans
Blue Owl manages $307B in assets total — not a small player
The mismatch: retail investors expected semi-liquid quarterly exits from illiquid long-term loans. That promise broke.
Blue Owl sold $1.4B in loan assets to demonstrate they could be sold near par — but questions remain about whether they cherry-picked the best assets
Treasury Secretary Bessent publicly stated he was “concerned” — one of the buyers of the loan assets was an insurance company, signaling migration into the regulated financial system
Bank exposure
Big U.S. banks have made ~$300B in loans to private credit providers — they both compete with and enable the shadow banking sector
JPMorgan announced $50B for its own direct lending push in 2025 — regulators are now encouraging banks to move back in as private credit weakens
Blue Owl is also a key lender to AI data center construction — adds sector concentration risk on top of the software exposure
El-Erian comparison: publicly drew parallels to BNP Paribas August 2007 — when redemption freezes at two credit funds were the first visible crack before the GFC
Senator Warren: called for immediate federal stress tests on private credit, warning it could be the “first cockroach in the $1.7T shadow banking system”
- YEN CARRY TRADE
How it works (quick reminder for members)
Borrow cheaply in yen (low Japanese rates) → convert to dollars → invest in higher-yielding U.S. assets → profit from the rate differential
Unravels when: (a) yen appreciates, erasing the rate advantage, or (b) risk assets fall and you must sell to repay the yen loan
August 2024 reminder: BOJ raised rates unexpectedly → yen spiked → Nikkei fell 12% in one day → S&P fell ~6% shortly after. Same mechanism is still loaded.
Current status
Japan’s 10-year bond yield: 2.35% in January 2026 — was 1.00% a year ago. Japanese yields hitting record highs on fiscal fears
The yen has depreciated ~35% over five years — this has actually helped carry trade returns despite rising borrowing costs
BOJ held rates steady at its last meeting (0.75%) with no clear guidance on future hikes — initially weakened the yen again
BCA Research (Feb 2026): called the carry trade “a ticking time bomb” — borrowing cheaply in yen to fund higher-yielding assets is deeply entrenched and one-sided
Current stress driven by positioning and leverage rather than U.S. fundamentals — makes it susceptible to sudden reversal on even modest news
Scale of the risk
Estimated exposure: $1 trillion to $4+ trillion — no official number exists because hedge funds, banks, insurance companies, derivatives, and structured products all have yen exposure of varying forms
The opacity is itself a systemic risk — nobody knows the full size
Rumors circulating that the U.S. may join the Bank of Japan in supporting the yen — unconfirmed but being discussed in financial media
Cross-asset risk: previous carry trade unwinds have not stayed in FX — they spilled into equities, credit, and volatility. This is not a narrow currency story.
- FED BALANCE SHEET EXPANSION — QE BY ANOTHER NAME?
What ended and what started
QT officially ended December 1, 2025 — the Fed had allowed $2.4 trillion to roll off from a peak of $8.93T. Current balance sheet: $6.539T — still $2.44T larger than pre-COVID
December 10, 2025: Powell announced the Fed would begin “reserve management purchases” (RMPs) — buying $40B/month of short-dated Treasury bills
Simultaneously cut the federal funds rate by 25bps to 3.50–3.75%
Is this QE?
The numbers
$40B/month through May = 7% increase in bank reserves
$40B/month all year = 16% increase — exceeds projected GDP growth
If continued through May, equals ~10% of the government’s deficit financed by the Fed
Separately: Fed quietly injected $18.5B into banks via repo facilities amid the private credit stress in February
Political context
Trump has applied significant public pressure on Powell to lower rates quickly
Restarting balance sheet expansion may be Powell threading the needle — easing financial conditions without outright capitulating on the federal funds rate target
3 FOMC dissents in December: one wanted a larger cut, two wanted no cut — committee is fractured
Watch: if private credit stress escalates and banks need support, repo facilities and RMPs could expand further — this is the mechanism through which liquidity gets injected without a formal QE announcement
