Notes from a week watching my screen. - Oct 2026
I've been staring at the same chart for like three weeks. Waiting for someone on TV with a title to say it out loud.
No one is saying it.
So I'll say it: the bond market is cracking.
Not the 2008 kind of crack.
No Lehman moment. No one screaming on a trading floor. It's slower. Quieter. Which is worse, because quiet lets everyone pretend it's fine.
Look:
All together. Same month. Same direction.
That's not one country screwing up. That's the market repricing one idea all at once: lending money to governments isn't risk-free anymore.
IMF director this week said we're in a three-way tug of war. I wrote it down because it actually made sense for once:
- Energy shock - Middle East again. Oil over $100 since the escalation. Then Riyadh airport attack, 12 dead, 300+ hurt, price spikes more.
- AI boom - everyone building data centers, buying GPUs, trying to buy a power plant like it's a sneaker drop.
- Debt - public debt about to pass 100% of global GDP.
Three forces. Three directions. No one steering.
The US number broke my brain.
$41 trillion. Debt.
Not a number. A condition.
At these rates, just paying interest is ∼$1.5 trillion a year. More than defense. More than Medicare. More than anything except Social Security.
And every little tick up in yield? Tens of billions more. And yields are ticking up fast.
I keep doing the math on a napkin and thinking I did it wrong. I didn't.
France looks like 2012 again.
I checked the spread - what you have to pay extra to hold French debt instead of German debt - widest since euro crisis.
Government can't pass a budget. Had to force it through. Deficit target gone. And traders are doing that thing they do where they start whispering the D-word. Default. Not loud. Just enough to move prices.
Japan is the saddest one. Invented QE. Bought its own debt for decades to make it work. Debt over 250% of GDP. Now 10-year yields climbing. Bank of Japan is stuck:
No good option.
And AI — the supposed savior — is making inflation worse.
I know. I hated writing that too.
But think: every single tech company racing to build the same thing at the same time — data centers, concrete, steel, copper, energy, electricians — what do you think that does?
It pulls demand. It pushes prices. Right in the sectors you can't scale quickly.
IMF said it themselves: AI capex is inflationary while central banks are trying to kill inflation. Future vs present. Present is winning.
So here's where we are, and this is why I can't sleep:
Governments NEED to spend. Energy, climate, old people, new wars.
But they CAN'T borrow without pushing yields higher.
Higher yields make old debt more expensive.
More expensive debt means less money for the things they need to spend on.
Central banks WANT to cut rates to help.
But they CAN'T because inflation is stuck.
And the market that was told for 10 years "government debt = safe" is now going: are you sure?
IMF says "protective fiscal and monetary policies."
Translation: batten down the hatches.
But we battened down the hatches for years. That's how we got here. Austerity doesn't grow anything. It shrinks. And shrinking makes debt worse.
I don't know how this ends. No one I trust knows either.
What I do know: the bond market doesn't vote. It doesn't care who you like. It doesn't do left or right. It just prices risk.
And right now it's pricing this: you promised more than you can deliver. You borrowed more than you can repay. You ran out of room.
Simple message.
You can't keep doing this.
Nobody in power wants to hear it.
House is on fire. And the guys holding the mortgage are starting to wonder if they're ever getting paid back.
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