Animal Spirits: Is Debt Fueling the Rally?

Taiwanese investors are taking on heavy debt to amplify stock market gains amid an AI-fueled rally, while margin debt levels reach risky heights. The trend is driven by FOMO and leveraged bets on companies like TSMC, raising concerns about market stability.

Today’s Animal Spirits is brought to you by Vanguard and Franklin Templeton : On today’s show, we discuss: - ‘FOMO Really Got Me’: Taiwanese Go Deep Into Debt to Amp 100% Stock Rally https://www.bloomberg.com/news/articles/2026-06-23/tsmc-fueled-ai-frenzy-makes-taiwan-capital-of-leveraged-stock-bets?srnd=homepage-americas The Trillion-Dollar Borrowing Binge Lifting the Stock Market to Risky Heights https://www.wsj.com/finance/stocks/the-trillion-dollar-borrowing-binge-lifting-the-stock-market-to-risky-heights-8d0377f9?st=5vmNTT Ignore the Margin Debt Alarm https://econompicdata.blogspot.com/2015/06/ignore-margin-debt-alarm.html The Debasement Trade Is Unraveling and Kevin Warsh Is One Big Reason https://www.bloomberg.com/news/articles/2026-06-24/the-debasement-trade-is-unraveling-and-kevin-warsh-is-one-big-reason?cmpid=BBD062426 oddlots&utm campaign=oddlots&utm medium=email&utm source=newsletter&utm term=260624&utm content=5913 Semiquincententacles https://assets.jpmprivatebank.com/content/dam/jpm-pb-aem/global/en/documents/eotm/semiquincententacles.pdf Ranks of the Ultrawealthy Jumped in 2025 https://www.wsj.com/economy/ranks-of-the-ultrawealthy-jumped-in-2025-fe98fe37 Who Will Pay No Federal Individual Income Tax in 2025? https://taxpolicycenter.org/fiscal-facts/who-will-pay-no-federal-individual-income-tax-2025 Forget Work. Passive Income Is the New American Dream. https://www.wsj.com/lifestyle/careers/passive-income-dreams-2e67ee5c?mod=hp lead pos8 We can finally say AI isn’t killing jobs https://econlab.substack.com/p/we-can-finally-say-ai-isnt-killing-jobs?utm source=post-email-title&publication id=5899791&post id=203878828&utm campaign=email-post-title&isFreemail=true&r=khrn&triedRedirect=true&utm medium=email Mark Zuckerberg Directed Meta to Create a Prediction Markets App https://www.nytimes.com/2026/06/23/technology/meta-prediction-markets-app.html Your summer holiday is a retirement killer https://www.ft.com/content/50d18d45-b103-4f01-aff7-02083d532aed?syn-25a6b1a6=1 No Hair Transplants, Pills or Toupees. These Men Are Embracing Baldness. https://www.wsj.com/style/fashion/baldmaxxing-men-embrace-baldness-ef765d0c?st=zwacwE&reflink=article email share Pizza Has Gone Cold. Domino’s Is Still Worth a Look. https://www.wsj.com/business/hospitality/pizza-has-gone-cold-dominos-is-still-worth-a-look-38fab850 Listen here: Charts: Recommendations: Tweets/Bluesky: — Corey Hoffstein 🏴☠️ @choffstein June 30, 2026 Micron’s earnings were a slightly negative-sum event: Apple and the hyperscalers shed more market cap then $MU , Sk Hynix, Samsung, $SNDK , $STX , and $WDC gained today. pic.twitter.com/sQewprXDpF — Luke Kawa @LJKawa June 25, 2026 Hyperscaler free cashflow projections via Charlie McElligott at Nomura: pic.twitter.com/bkmLEhO8tZ — Tracy Alloway @tracyalloway June 23, 2026 One year returns: Sandisk +4385% Western Digital +974% Micron +809%Oracle -30% Microsoft -27% Meta -23% pic.twitter.com/4FDU4M1ffw — Ben Carlson @awealthofcs June 25, 2026 Usually a lurker on here but dipping my toes briefly into the "k-shaped economy" discourse. At PNC we track the debit & credit spending trends of a fixed cohort of ~4 million households. Long story short: lower-income spending/balance sheet trends have been on a tear in 2026 — Brian LeBlanc @BrianLe Blanc June 24, 2026 The GenAI economy has generated $110 billion in sales over the past 12 months. It is growing fast. On an annualized basis, the revenue run rate exceeds $175 billion. These numbers took us several months to construct, and as far as we know, it’s the first bottom-up, deduplicated… pic.twitter.com/6xZbCZ8Cti — Azeem Azhar @azeem June 25, 2026 NEWS: The Warriors signed a new jersey patch deal with AI cloud firm Iren. The multi-year agreement is the richest sponsorship in the history of North American team sports at an average of more than $50 million per year. pic.twitter.com/dA6cC6qyQr — Kurt Badenhausen @kbadenhausen June 25, 2026 it is still increasingly? completely insane how GDP has been above trend this cycle while the housing sector typically responsible for up to 20% of commercial activity has been effectively frozen. https://t.co/wDSsHvq9rr — talmon joseph smith @talmonsmith June 24, 2026 Follow us on Facebook https://www.facebook.com/animalspiritspodcast/?ref=settings , Instagram https://www.instagram.com/animalspiritspod/?hl=en , and YouTube https://www.youtube.com/channel/UCBRpqrzuuqE8TZcWw75JSdw . Check out our t-shirts, coffee mugs, and other swag here https://idontshop.com/ . 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