The Week: Iran, SpaceX, and a Nervous Bond Market
Episode
18 min
Read time
2 min
Topics
Investing, Fundraising & VC, Sales & Revenue
AI-Generated Summary
Key Takeaways
- ✓Bond Market Alarm: Thirty-year Treasury yields reached 5.2% — levels unseen since 2007 — while odds of a Fed rate hike before year-end jumped from under 10% to over 40%. Rising yields increase mortgage, auto loan, and credit card costs simultaneously, signaling broad economic tightening ahead.
- ✓AI Debt Risk: Private credit loans funding AI companies carry floating interest rates, meaning rising yields directly inflate their debt service costs. If CapEx continues outpacing revenue — which most analyses suggest is nearly inevitable — overleveraged AI firms face a compounding cost-revenue squeeze with limited exit options.
- ✓SpaceX Valuation Gap: SpaceX targets a $2 trillion IPO valuation at 106 times sales on revenues below Macy's, while Nvidia trades at under 22 times sales despite growing revenues 85% year-over-year. Scott Galloway predicts SpaceX prices closer to $600 billion within six to twelve months.
- ✓Geopolitical Leverage Deficit: Trump entered Iran negotiations without congressional support, allied coordination, or Hormuz defense mechanisms in place, leaving the US with minimal bargaining power. Meanwhile, the Russia-China strategic alignment — described as the most consequential geopolitical shift of the past decade — continues deepening through energy and military cooperation.
What It Covers
Scott Galloway and Ed Elson analyze three converging crises in late May 2025: the Iran war's economic fallout, the bond market hitting 5.2% thirty-year yields, and SpaceX's contested $2 trillion IPO valuation versus $19 billion in revenue.
Key Questions Answered
- •Bond Market Alarm: Thirty-year Treasury yields reached 5.2% — levels unseen since 2007 — while odds of a Fed rate hike before year-end jumped from under 10% to over 40%. Rising yields increase mortgage, auto loan, and credit card costs simultaneously, signaling broad economic tightening ahead.
- •AI Debt Risk: Private credit loans funding AI companies carry floating interest rates, meaning rising yields directly inflate their debt service costs. If CapEx continues outpacing revenue — which most analyses suggest is nearly inevitable — overleveraged AI firms face a compounding cost-revenue squeeze with limited exit options.
- •SpaceX Valuation Gap: SpaceX targets a $2 trillion IPO valuation at 106 times sales on revenues below Macy's, while Nvidia trades at under 22 times sales despite growing revenues 85% year-over-year. Scott Galloway predicts SpaceX prices closer to $600 billion within six to twelve months.
- •Geopolitical Leverage Deficit: Trump entered Iran negotiations without congressional support, allied coordination, or Hormuz defense mechanisms in place, leaving the US with minimal bargaining power. Meanwhile, the Russia-China strategic alignment — described as the most consequential geopolitical shift of the past decade — continues deepening through energy and military cooperation.
Notable Moment
Gavin Newsom described missing his mother's final days due to political ambition, only reaching her bedside as she died from cancer — then spending thirty minutes afterward saying everything he lacked the courage to say while she was alive.
Episode Transcript
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