Hyperscaler and Nvidia debt issuance now equals 70% of Treasury bond issuance, Michael Batnick said, citing a chart from JPMorgan's Michael Cembalest.
Most explanations for rising government bond yields point to growth, inflation and tariffs. Batnick and Carlson think there is a second, less-discussed driver: AI companies are now competing directly with the U.S. government for lenders.
"It's a scorpion and the frog because we all want to get rich quick."
Batnick is a managing partner at Ritholtz Wealth Management. Carlson is the firm's director of institutional asset management, and the two have hosted this show together since 2017.
I listened to the full episode so you can skip it. 66 minutes of audio, 19 minutes of reading.
Here are the 17 takeaways that matter.
🎙️ Hosts: Michael Batnick, Managing Partner at Ritholtz Wealth Management, and Ben Carlson, the firm's Director of Institutional Asset Management
📰 Published: 9 September 2026
🔴 YouTube | 🟣 Apple Podcasts | 🔗 Show notes | ⏱️ 66 min | ✅ Time saved: 47 min
Key Takeaways
Hyperscaler and Nvidia debt now equals 70% of Treasury bond issuance
Batnick says that, not tariffs or the war in Iran, is the underdiscussed reason government yields keep rising
Higher rates are good news for savers, not a crisis
A 10-year Treasury now pays 4.7%, and Batnick says advisers should be celebrating, not fielding panicked client calls
The S&P 500 got roughly 8% cheaper over the summer even as it rose
Forward earnings estimates jumped 10.7% since June while the index gained less than 2%
Nvidia's trailing operating income now exceeds Apple's
The dividend yield on the S&P 500 is at its lowest level in history
Fewer than 5% of S&P 500 stocks now yield more than the 10-year Treasury, the fewest since May 2007
Robert Kiyosaki's reported $1.2 billion in debt is a hyperinflation bet, not a scandal
A WSJ report counts three million "everywhere millionaires" worth more than $65 trillion combined
Most came from ordinary businesses, not inheritance or Ivy League degrees
An AI booking agent got a New York diner's Resy account banned
The company, Instinct, was hitting Resy's reservation system so hard it looked like an attack
A college degree is still worth it, the unemployment data says
Adults without one have 2.7% unemployment; workers with less than a high school diploma are near 5%
Small colleges without a national brand face a demographic cliff
The number of 18-year-olds graduating high school each year is falling, and a school like Aquinas College in Grand Rapids is filling seats with athletes
Jobless claims keep falling despite two years of AI-job-apocalypse predictions
Coders and long-haul truckers, the two jobs everyone expected to go first, are still hiring
1. The Trillion-Dollar Top Ten
Carlson opened the show by arguing that the past 15 years of bull-market wealth creation have reshaped the entire economy — from a $13 Chipotle bowl to the $12.5 billion sale of the Lakers to the AI buildout itself.
Nearly every company in the S&P 500's top ten, and close to two more below it, is now worth a trillion dollars or more. Batnick noted that Eli Lilly and Berkshire Hathaway have already crossed the mark, Micron and JPMorgan are close behind, and "we don't even blink the entire top 10"
The reaction to size has flipped. Carlson recalled that when Apple became the first trillion-dollar company around 2015 or 2016, commentators treated it as a fantastical, possibly market-topping milestone. He said: "And now you have companies like Broadcom that are sniffing a trillion... And we don't even discuss it."
Both hosts think the size and profitability of these companies is what made the AI buildout possible in the first place — the cash flow gave a handful of firms the ability to fund a spending wave few other periods in market history could have supported
Carlson said: "But I think that not only will there be another recession, which is also not going out on a limb, there will probably be another financial crisis at some point because the psychology of markets, we are just going to push this too far." Batnick agreed the "year recession" prediction has been wrong every year since 2022, but neither ruled out a crisis arriving decades from now rather than soon
2. AI Is Eating the Bond Market
Batnick argued that AI spending, not tariffs or growth alone, is the reason government bond yields keep climbing.
Hyperscaler and Nvidia debt issuance is now 70% of Treasury bond issuance, per a chart from Michael Cembalest that Batnick cited. He called it a form of AI "crowding out" the government bond market that investors are only now coming around to
A Wall Street Journal chart Batnick described showed private construction spending relative to December 2023: data-center construction rising sharply while every other category of private construction — commercial, residential, industrial — falls off a cliff. His read: "the data centers has sucked up everything," pulling in construction workers and permitting capacity that would otherwise go elsewhere
Carlson pushed back gently that the picture has two real drivers, not one: "It's the macro which is entirely legitimate war tariffs a lot of issuance and then it's the second column which is competition from hyperscalers and both those things are combined to drive yield higher"
Batnick's bottom line on whether AI spending alone could cause a financial crisis: "I think if this is going to be a full-blown panic recession financial crisis someday if AI was going to cause that, we have to get way stupider than this. This is not nearly stupid enough."
3. Rates Rise, Iran to Blame
Carlson pointed to a second Wall Street Journal chart showing that this year's low point in rates coincided almost exactly with the U.S. strike on Iran, after which yields took off.
Carlson argued the White House inadvertently capped its own damage by pairing tax cuts and a business-friendly stance with tariffs and the Iran conflict: "So if Trump would have come in and just done his ballroom and put through his tax cut and done nothing else, no tariffs, no war with Iran" — and simply let the AI buildout run, rates and mortgage rates would likely be lower and housing activity picking up
Batnick agreed, and framed it as a delayed bill rather than an avoided one. He said the administration may have "inadvertently saved us from something really ugly," but that the underlying pressure hasn't gone away: "it's going to come because listen obviously" — a lower-rate, lower-inflation outcome the policy mix has so far prevented
4. A Bubble Nobody Can Resist
Both hosts agreed that even though nobody collectively wants a bubble, nobody can individually avoid participating in one.
Batnick's argument is that nobody can opt out of a bubble alone, even agreeing one is bad for the group. "If my competitor is buying companies, we can't be left out. You can't override human nature."
"It's a scorpion and the frog because we all want to get rich quick," Batnick said, adding that technology "is just an amplifier of human nature"
Batnick argued that most financial advisers are baffled by client anxiety over higher interest rates, given that higher rates should be good news for savers rather than a source of fear
5. Higher Rates Are Good News
Batnick made the case that rising rates are being treated as a crisis when they should be treated as a gift to savers.
Batnick's case: higher rates are a gift to savers, not a threat. "You could loan money to the US government for 4.7%," he said, calling the after-tax return "wonderful" and arguing the response should be celebration, not fear
He described an adviser at his firm asking to bring him onto a client call after the client read an article blaming bond-market weakness on Ray Dalio's supply-and-demand argument. Batnick's reaction: "Dude, I want in. I want to talk to those clients. Put me on the calendar. I want in the game."
Ray Dalio has been making the same warning for fifteen years, Carlson said. "He loves telling people that it's 1937 and he's been on this beat for a while." Batnick and Carlson will appear on stage alongside an advisor named Colin at the Future Proof conference the following week, for a talk billed as how to talk to clients about Ray Dalio
Batnick also raised, half-seriously, whether he should shift some of his own 401(k) out of 100% stocks and into bonds for the first time, reasoning that bonds now pay him to wait and give him cash on hand to buy more if stocks fall
6. The Market Got 8% Cheaper
Carlson cited a Duality Research stat, later credited on-air to Kevin Gordon, that the market has quietly de-rated even as it rose.
Since June, the S&P 500 is up less than 2% while forward earnings estimates have jumped 10.7% — meaning, in Carlson's words, "Put differently, the market has become roughly 8% cheaper over the summer while everyone was busy soaking up the sun"
Kevin Gordon's tweet, as Carlson relayed it, showed the estimate for second-quarter S&P 500 earnings growth was 14.9% at the start of the year; the actual blended growth rate came in at 53%. Both hosts said almost nobody expected an earnings year this strong
Batnick, pushing past the argument that some of the growth is inflated by markups from private companies now embedded in index earnings, noted that Nvidia's trailing operating income is "higher than Apple." "Circular or not," he said, "it's still something to behold."
7. Dividend Yields Hit a Low
Carlson cited Rob Anderson of Ned Davis Research on how thin dividend income has become relative to bonds.
The dividend yield on the S&P 500 is at its lowest level ever recorded. "Less than 5% of S&P 500 stocks yield more than the 10-year Treasury, the fewest since May 2007," Carlson said, citing Anderson's research
Batnick pushed back on reading too much into the comparison to the 1980–2000 period, when the picture looked similar: rates were structurally higher then, and today's low payout ratio reflects that, as he put it, "Like companies don't pay out dividends anymore because it doesn't make as much sense," when bonds offer a competing return
Both agreed the shift is a genuine repricing rather than a warning sign: "Stocks are all else equal relatively less attractive compared to bonds than they have been for a long time," in Batnick's words, which he called good news for investors who had been pushed into riskier investments by years of low rates in search of yield
8. Batnick Weighs Adding Bonds
Batnick said the idea of moving off 100% stocks crossed his mind for the first time over the weekend.
He has held 100% stocks in his 401(k) his entire career as a long-horizon investor, but said bonds now pay enough — and give him cash on hand for a downturn — that an 80/20 split is worth considering
Carlson relayed a call from Ask the Compound in which a middle-aged investor said market swings now cost him more than his salary in dollar terms, after years of dutifully dollar-cost-averaging through the dot-com crash and 2008. The caller's question, in Carlson's paraphrase, was whether taking some money off the table now counts as prudent risk management rather than market timing
Carlson's framing: "So, it's not making a stock market call. It's just being prudent. There's an alternative and it's paying you pretty damn well, right?"
9. 1981, Not Now, Was the Buy
A Bank of America chart argued that today's negative long-run bond returns make this a strong entry point, similar to two prior troughs. Batnick disputed the comparison.
The chart showed rolling 10-year annualized bond returns were last negative in December 1959 and came close again in September 1981
Batnick: "1981 was obviously the greatest buy bond buying opportunity in history. There will never be a better time to buy bonds than there was in the early 1980s." He called 1959 the opposite case — a poor time to buy bonds because high inflation was about to arrive, producing negative 1% real returns through the 1960s
His conclusion: today's setup is a good entry point, not the generational one the chart implied. "A best buying opportunity for bonds at 20 years," in his words, because the drivers behind 1981's returns — Fed funds rates near 20% — are not coming back
10. Kiyosaki's Debt Flex
The hosts discussed a New York Post report that "Rich Dad Poor Dad" author Robert Kiyosaki is $1.2 billion in debt.
Carlson said most coverage stopped at the headline, but the debt turns out to be tied to real estate holdings rather than personal liability, and Kiyosaki appears to be presenting it as a boast about scale rather than a confession
Carlson's read: "Listen, the guy is finally putting his money where his mouth is. He's preparing for hyperinflation. If hyperinflation is coming, you want all that debt."
Batnick said the book never resonated with him personally, though he understands why it clicked for others; both agreed the anecdotal, parable-like style always read a little like a "madeup story"
11. Doomsayers Got It Wrong
Carlson dug up two of his own old pieces to make the point that confident predictions of generational doom keep failing.
A 2016 Bloomberg article he found, headlined "Turning 30 just got a lot scarier," cited a McKinsey report warning that people turning 30 that year would need to work seven years longer or save nearly twice as much to match the previous generation's nest egg, because, as the report put it, "the golden age of the last 30 years" had ended
Since that piece ran, Carlson noted, the Vanguard Total Stock Market ETF has returned about 15% a year, nearly 325% cumulatively
Batnick: "I'm thinking it's so insane that the media is so negative today and then I quickly reminded myself it's always been this way there's always been sensational headlines... it has literally always been this way." He argued the same doom framing that greeted millennials a decade ago is now being recycled for Gen Z's homebuying prospects.
12. An AI Agent Broke Resy
Batnick described a story he'd only just heard about an AI agent company called Instinct overwhelming the restaurant-reservation platform Resy.
Instinct users were directing the company's AI agent to book hard-to-get restaurant reservations, including at 4 Charles, and the agent hit Resy's API so many times that it looked to Resy like an attack. Resy responded by canceling some users' future reservations and removing them from the platform
Batnick's broader worry: "I don't really want to spend that much time trying to get to the source of truth here." He said he'd rather wait for tech writer Ben Thompson's take than work out the truth himself from the noise.
The story fed a later riff on what happens once everyone has an AI agent competing for the same scarce reservation slots, covered below
13. The Everywhere Millionaires
Carlson highlighted a Wall Street Journal feature on the "American Dream" that both hosts said was a rare positive story in the business press.
The piece profiles Dick Portillo, who opened a hot dog stand in the 1960s not knowing how to cook a hot dog and later sold the company, Portillo's, for a billion dollars. Carlson said his own memory of a first Portillo's spicy Italian beef sandwich with his now-wife has stuck with him for years
The Journal counts three million of these "everywhere millionaires," collectively worth more than $65 trillion, most of whom did not inherit their wealth or attend elite schools, Carlson said
"Only a quarter of business owners worth $5 million or more inherited their companies," and, "Among star founders, there are two and a half times as many from poor backgrounds as from the top 1%," Carlson said, citing the piece
The article also profiles the founders of Dave's Hot Chicken, who started the business in a Los Angeles parking lot eight years ago with $900 and later sold it for a billion dollars. Batnick argued AI will make starting a business easier than ever, even as Carlson noted the era of working your way up from the mailroom to partner, as at old Wall Street firms, is over
14. College Still Pays Off
The hosts pushed back on the increasingly common argument that a college degree no longer makes financial sense.
A Wall Street Journal chart on 22-to-34-year-olds showed college graduates facing worse relative unemployment than non-graduates in 2026 — but Carlson noted the comparison is relative to 2003, and a second chart in the same piece shows college graduates still have by far the best absolute employment outcomes of any education group
Batnick, citing BLS data on unemployment by educational attainment, said the case against college doesn't hold up. "It's not even close. The college degree is still worth it." People with less than a high school diploma have unemployment near 5%; those with a bachelor's degree are far lower
Batnick argued the backlash against college follows the same pattern the show opened with — a real problem (tuition costs pushed "totally unaffordable") turning into an overcorrected consensus that the whole institution stopped making sense
Carlson noted that a cheaper alternative already exists for anyone focused purely on cost: two years at community college followed by transfer to a four-year school, though social pressure keeps most 18-year-olds from choosing it
Small Colleges Face a Cliff
Carlson said his father's small alma mater, Aquinas College in Grand Rapids, Michigan, is a preview of what happens to schools without a national brand. The number of 18-year-olds graduating high school each year is falling for straightforward demographic reasons, and schools without name recognition are filling seats however they can — Carlson said roughly half of the school's current students play some organized sport, because the school actively recruits athletes to fill the class
A Wall Street Journal article on Syracuse University facing an enrollment shortage drew wide attention as an early instance of a problem Carlson said "you can see coming." He argued the immigration policy environment is moving in the opposite direction from what struggling colleges would need — more, not fewer, international students
15. Trust No Video, Ask Claude
Batnick said the hardest part of living online now is that nothing can be taken at face value.
Batnick now fact-checks anything he's not sure is real. "I've been taking screenshots and asking Claude, which is really annoying. I don't want to live in a world like that, but that's the world that we live in." His example: a trailer for a movie called Gatorface appeared on Instagram, and he assumed it was AI-generated until he searched for it and found it was a real film
The two also noted that their children now use AI as the generic word for any adaptive computer opponent in a video game, the way earlier generations said "the computer" — evidence, in their reading, of how normalized the term has become for a much younger audience without them fully registering it
16. Where's the Job Apocalypse?
Both hosts returned to a question they said keeps not resolving itself: why hasn't AI visibly hit the labor market yet.
Jobless claims and continuing claims keep falling despite repeated warnings that displacement is imminent. Carlson cited a piece asking why the "job apocalypse" hasn't happened, and noted that Sam Altman has said "the economy has so much inertia."
Carlson relayed a Stratechery piece by Ben Thompson arguing that AI is very good at organizing tasks but useless at supplying the will to do them. Thompson, on the book "Getting Things Done": "No matter how many systems you build, you still have to act. It's not enough to have systems to do things, you have to actually do the things."
"AI increases everyone's capabilities if they want to use the systems, but not necessarily motivation," Carlson said, summarizing Thompson's argument that AI cannot manufacture motivation, only capacity
Returning to the Instinct/Resy story, Batnick predicted that AI-agent booking ends with the wealthy getting first access to everything scarce. "Why should reservations be free? Shouldn't there be a marketplace for reservations? Why a reservation for Saturday at 7:30 is obviously worth more than a Monday reservation at 5:15?" he said, before adding: "The people with the most money are going to get it." Carlson's reply: people who can't pay will end up paying someone else to wait in a literal, physical line instead
17. Boomers and Housing Wealth
The hosts examined a New York Times op-ed arguing that older Americans are "hoarding" the country's economic potential, and a Boston College rebuttal that added context.
The Boston College response confirmed one of the op-ed's core facts: "It's true that one-third of owner occupied homes are owned by people ages 65 and over, even though they represent just one sixth of the population."
The Boston College data broke retirees into wealth quintiles and found that for the bottom 80%, home equity is essentially their entire net worth; only the wealthiest 20% of older households hold meaningful non-housing wealth
Batnick mocked the sell-your-home solution with a fake policy proposal: "So new rule, there is a 25-year limit on how long you can stay in a house. And after that, sorry old people, you got to go." His serious point was that there is no clean alternative for most older homeowners besides staying put, since a reverse mortgage or downsizing carries real costs and risk
Carlson agreed there's no easy fix: the wealth is real, but it's illiquid, and "there really is no good solution to this"
Bonus Insights
Carlson grew out a mustache for his pool club's annual "Pirates Ball," a costume party his club has held every Labor Day for over a hundred years; this year's theme was Peter Pan, and his wife and daughter, he said, "have a visceral reaction to this mustache."
A listener asked whether the hosts throw out the Allen wrench that comes with new furniture or keep a drawer full of them. Carlson said he keeps every one he's used before so he can reuse his favorite; Batnick said he keeps them but has never once reused one
Carlson recounted a family salmon-fishing charter on Lake Michigan that went from misery to a great photo: a lightning delay pushed the trip to the afternoon, two hours passed without a bite while his daughter got seasick, and then, in the final 20 minutes, every line on the boat hooked at once for a big haul of king salmon
Batnick brought up a listener correction on his prior list of favorite '80s movies, then defended his method — he judges movies by IMDb rating rather than Rotten Tomatoes — after learning Rocky has a 38% critics' score on Rotten Tomatoes. Separately, he said he put on the Rocky movie soundtrack before a 5K charity run and, despite not having run a mile in 20 years, averaged about nine minutes a mile for the distance: "That's how jacked up that soundtrack gets me and every other little boy that watched that in their childhood."
Both hosts plan to see the three-hour Nathan Fielder and Lance Oppenheim documentary about Elizabeth Holmes, made in the weeks before she reported to prison. Batnick said he generally dislikes Fielder's habit of blurring what's real and staged, but is still intrigued; Carlson thinks the film will make Holmes look worse rather than help her image, as she reportedly intended
Batnick said an old, obscure 1992 Harvey Keitel film called Bad Lieutenant kept appearing as a suggestion on his kitchen's Amazon Echo Show, right alongside his family's photo slideshow, and called it "one of the sickest movies I've ever seen"
Recommendations for the week: Apple TV+'s Silo (Batnick, who said its slow-burn payoff in season three was worth the wait), Hulu's Furious (Carlson), the audiobook of Rob Lowe's Stories I Only Tell My Friends (Batnick), the film Backrooms (Batnick, mixed on it), a Paul Giamatti episode of Black Mirror (Carlson, on a tip from a listener), and Netflix's Your Friends & Neighbors season two (Carlson)
Batnick and Carlson's bottom line is that the same forces — a decade and a half of bull-market wealth, and human nature's inability to leave a good thing alone — explain both the AI buildout's size and the market's growing list of things to worry about, even as the underlying economic data keeps beating the era's gloomiest predictions.
Products, Companies & Tools Mentioned
Nvidia (Batnick says its trailing 12-month operating income now exceeds Apple's, "circular or not... something to behold")
JPMorgan — Eye on the Market (Source of the Michael Cembalest chart showing hyperscaler and Nvidia debt at 70% of Treasury bond issuance)
Broadcom, Eli Lilly, Berkshire Hathaway and Micron (Cited as new or near-trillion-dollar companies that no longer draw much reaction)
Resy (The reservation platform, owned by Amex, that banned users after an AI booking agent overwhelmed its API)
Instinct (The AI agent company whose reservation-booking activity got Resy accounts banned; no confident official link found)
Vanguard Total Stock Market ETF (VTI) (Cited to show how wrong a 2016 "doomed returns" forecast turned out to be — up roughly 15% a year since)
Portillo's (Founder Dick Portillo's hot dog stand, later sold for a billion dollars, profiled in the WSJ "everywhere millionaires" piece)
Dave's Hot Chicken (Started in a Los Angeles parking lot for $900 eight years ago and later sold for a billion dollars)
Claude (What Batnick now uses to screenshot and verify whether online images and videos are real)
Books & Resources Mentioned
The American Dream Is Alive. And It's Minting Millionaires. – The Wall Street Journal (Profiles Dick Portillo and the "everywhere millionaires" data both hosts praised)
"Americans Without College Degrees Are Having One of the Best Job Markets in Years" – The Wall Street Journal (The chart Batnick and Carlson debated on relative versus absolute unemployment by education)
"Rich Dad Poor Dad" self-help author Robert Kiyosaki is $1.2 billion in debt – New York Post (The report behind the Kiyosaki discussion)
End of Golden Era for Investors Spells Trouble for Millennials – Bloomberg, 2016 (The "coming collapse in investment returns" piece Carlson cited as an example of doom forecasting that didn't pan out)
Are Millennials Doomed in a Lower Return Environment? – Ben Carlson, 2016 (Carlson's own rebuttal piece from the time)
Older Americans Are Hoarding America's Potential – The New York Times (The op-ed the hosts discussed and partly pushed back on)
Are Older Americans Spoiling the Economy for Everyone Else? – Boston College Center for Retirement Research (The data-driven response the hosts said added useful context)
Has the A.I. Job Apocalypse Been Postponed? – The New Yorker (Cited on why jobless claims haven't reflected AI displacement yet)
Stratechery – Ben Thompson (His piece on "Getting Things Done" and why AI increases capability but not motivation)
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