The $38 Billion Question

The $38 Billion Question

For the last two years, it’s been the single-most anticipated report of earnings season.

Ever since ChatGPT brought AI into the public consciousness in late 2022, the bellwether company to watch has been Nvidia.

Not only is it the premier chipmaker for AI applications… NVDA stands apart from its “Magnificent 7” brethren by reporting its numbers weeks after the others. In other words, it doesn’t get lost in the shuffle with Microsoft, Google and the rest.

The other six issued their numbers last month. So the spotlight on NVDA will be especially bright when the company reports after the closing bell Wednesday.

The financial media’s buildup to NVDA’s numbers each quarter can get really tedious.

Here’s Yahoo Finance this morning: “Analysts expect Nvidia to report adjusted earnings per share of $0.84, up 63% from the year prior. Meanwhile, revenue is projected to be $38.26 billion, up 73% from the same quarter last year.

“Investors will be waiting to hear what Nvidia CEO Jensen Huang says about the environment for AI chip demand and whether he will address potential rising competition in the AI space from China's DeepSeek.”

Well, yes. But those are the obvious angles.

Less obvious is this, according to Paradigm’s AI authority James Altucher: “I’ve already uncovered evidence Nvidia is preparing for a bold move.”

That evidence turns up in James’ proprietary AI-assisted trading model. And the model strongly suggests Jensen Huang will make that bold move in conjunction with NVDA’s earnings release.

If you’re a subscriber to Altucher’s True Alpha, you’re already hip to what we’re talking about. If you’re not, James says, “Time is running out for you to act on what could become the biggest investment opportunity of 2025.”

And yes, James says you can capture maximum profit potential only if you act before Huang hops on the conference call Wednesday afternoon — for reasons he’ll lay out as soon as you click here.

Three Years Later

Three years after Russia’s invasion of Ukraine, Washington’s sanctions on Moscow are a proven failure — and an ongoing threat to the U.S. dollar.

It was on this day in 2022 that Russian forces moved in. Within 48 hours, the Biden administration imposed unprecedented sanctions — not only cutting off Russia from the global financial-messaging network called SWIFT, but freezing $300 billion in dollar-based assets held by the Russian central bank.

Paradigm macroeconomics maven Jim Rickards was among the very few pundits who correctly warned beforehand that 1) Russia would invade to forestall Ukrainian entry into the NATO alliance and 2) Washington’s ensuing sanctions would backfire.

As we mentioned in this space on Jan. 13, 2022 — in an edition titled “Ukraine and the End of the Dollar,” we pointed out that Russia’s gold stash, measured as a percentage of its economy, is the biggest in the world. It frees President Vladimir Putin’s hand in a way Western leaders couldn’t conceive.

The rest of the story is familiar by now if you keep up with these virtual pages: Governments throughout the “Global South” began to wonder if they too might be subject to such extreme acts of economic warfare. They lightened up on their holdings of dollar-based assets… and loaded up on gold.

In a single year, the dollar’s share of total global currency reserves plunged from 55% to 47%.

Meanwhile, the dollar price of gold soared from $1,800 in early 2022 to over $2,900 now.

While Europe swore off imports of Russian energy, Russia readily found new customers in China and India. The disruptions to global supply were severe, and the transition was anything but seamless — especially if you remember $5-a-gallon gasoline in the summer of 2022 — but Russia is doing just fine, thank you very much.

“The Russian economy is growing faster than the U.S. economy,” Jim Rickards said in this space a few days ago.

“Its currency has stabilized at a level not far from where it was when the war began and unemployment is near an all-time low. The Russian economy is on a war footing and operating near full capacity with the ability to manufacture advanced weapons that the West cannot.”

Yeah, remember all the chatter three years ago about how Moscow was scavenging the country’s supply of dishwashers for semiconductors to install in its weaponry?

Mainstream media had to abandon their “Ukraine is totally winning” narrative last year, even before the election. The reality was too overwhelming.

And while it seems Washington and Moscow are coming to some sort of new detente under the Trump 47 administration… a major stumbling block remains.

It seems Donald Trump is determined to obtain rights to the cash flow from Ukraine’s natural resources.

As Secretary of State Marco Rubio tells CBS News, “We explained to them, look, we want to be in a joint venture with you not because we’re trying to steal from your country but because we think that’s actually a security guarantee — we’re your partner in an important economic endeavor, we get to get paid back some of the money the taxpayers have given, close to $200 billion, and now we have a vested interest in the security of Ukraine.”

A “security guarantee” — and “a vested interest in the security of Ukraine”?

Sounds like a recipe for Washington to remain entangled in a part of the world that bears no relevance to the lives of everyday Americans.

Is Trump incapable of cutting his losses? (Or, to be more precise, Joe Biden’s losses?)

Besides, the most valuable Ukrainian minerals — the so-called rare earth elements — lie mostly under territory that Moscow will control in a postwar settlement. Otherwise, Ukraine has mostly coal and iron ore — both of which exist in abundance throughout much of the planet.

So what’s in it for you and me, really? And when will Trump try to explain how this aligns with an “America first” agenda?

Many more chapters remain to be written in this story — and as has been the case throughout, we’ll keep you well ahead of the mainstream.

Not a Black Monday

For much of the weekend, murmurings of a “Black Monday” could be seen and heard online. So far, it hasn’t materialized.

After we went to virtual press on Friday, the stock market fell out of bed. The Nasdaq ended the day down 2.2%, the Dow and the S&P both down 1.7%. The losses erased most of the gains accumulated earlier in the week.

There was no obvious “reason” for the selling. The mainstream settled on a pair of punk economic numbers…

• The “flash PMI” readings were a nasty surprise. Manufacturing was fine, up from 51.2 to 51.6 — any number over 50 indicates growth. But services, a much bigger slice of the U.S. economy, plunged from 52.9 to 49.7. The typical Wall Street economist was expecting a services reading of 53.0

• The University of Michigan Consumer Sentiment Survey was also a shock — coming in at 64.7, far below the “expert consensus” calling for 68.0. Worse, the typical consumer expects inflation of 4.3% in the year ahead — the highest reading since late 2023. The Federal Reserve pays close attention to this number when deciding what to do with interest rates, and a number like this does nothing to encourage additional cuts.

➢ Not-so-fun fact: Five years ago today the World Health Organization declared a pandemic. On that day we had the distinct displeasure of introducing you to the term “social distancing” — weeks before the control freaks and power trippers made it both mainstream and mandatory.

Or maybe it wasn’t the numbers or a virus at all. Maybe it was the news that JPMorgan Chase CEO Jamie Dimon dumped a third of his JPM shares — about $234 million worth.

Whatever the case, “The drop was especially painful,” says Paradigm chart hound Greg Guenthner — because the S&P 500 “just logged new all-time highs Wednesday afternoon. The S&P is now negative on the month and up just about 2.6% year to date.”

But Friday’s losses are not carrying over into today — at least not for the S&P. Checking our screens, the index is ever so slightly in the green at 6,018. The Dow is up about a third of a percent but the Nasdaq is down about 0.4%.

Gold poked its nose over $2,950 earlier in the day but now it’s back to $2,942. Silver is in the red at $32.24. Crude is up slightly to $70.68.

Bitcoin’s late-week rally was squelched the moment news broke of the biggest crypto exchange hack in history. Management at the Bybit exchange promises everyone will be made whole, but Bitcoin’s been knocked back below $95,000 regardless.

Startling Stat

For the record: There’s a new eye-popping number confirming how the American middle class has been hollowed out.

Per Federal Reserve figures pulled apart by Moody’s Analytics, the top 10% of income earners — households making $250,000 and higher — now account for 49.7% of all consumer spending.

Three decades ago — when Billy Madison was tops at the box office and Microsoft was still months away from rolling out Windows 95 — those top earners accounted for only 36%.

In just the last year, high earners grew their spending 12% — while the middle class and the working class tightened their belts.

“The finances of the well-to-do have never been better, their spending never stronger and the economy never more dependent on that group,” Moody’s economist Mark Zandi tells The Wall Street Journal.

Which sorta begs the question: How relevant is an abstraction like “the economy” when so few people are propping it up?

It’s “Russian” — but It’s Not Cancelled

While we commemorate the third anniversary of the Russia-Ukraine war, we also pause to note a return to sanity.

Remember the initial weeks after the invasion?

The outrage against all things Russian on social media? The bars that would no longer serve Stolichnaya vodka (even though it’s made in Latvia)? The symphony orchestras that canceled performances of Tchaikovsky (who lived in the 19th century)? We chronicled it in real-time.

Well, somehow, “white Russians in a can” have managed to survive all that…

Cutwater Spirits — a unit of Anheuser-Busch — introduced its White Russian canned cocktail in December 2020.

A web search turns up no evidence that the name was a drag on sales during 2022 — and the product has become so ubiquitous that it’s even sold in the rural corner of the world where your editor lives and trends don’t show up until years after they do elsewhere.

Yes, I’ve tried it. It’s fine — but I don’t think I’ll have it again simply because I don’t know what the ingredients are in the coffee cream liqueur. Might there be high-fructose corn syrup? Wouldn’t surprise me.

One wonders what Jeffrey “The Dude” Lebowski would think of it, no?

(“Way too sweet,” says a remark on the r/lebowski Reddit board. Can’t disagree, come to think of it…)

Best regards,

Dave Gonigam
Managing editor, Paradigm Pressroom's 5 Bullets