"I Don't See How An Investor Can Not Own SpaceX"

Hunt, Mike, and Jason walk the Cash Flow Memo: oil and gas exhibits, the deficit math nobody wants to do, the Moderna/Merck cancer-vaccine economics, and the SpaceX position Hunt says he’ll probably regret saying out loud. The Cashflow Memo Key Takeaways \* Hunt left Exhibit C’s supply/demand untouched: 10-12M bbl/d still clears Hormuz on tankers running with GPS off, near-month crude falls from $87 to roughly $81-82 while the ’27 strip barely moves ($75 to $73-74), so E&P underwriting stays anchored at $70-75 — the price EOG and Magnolia investors are already using. \* Gas supply got revised up (’26 dry gas 109.5 Bcf/d, ’27 111.5, with 13 of the 18 Bcf/d added since 2021 coming out of the Permian and Waha back to $2 against a $2.70 Henry Hub), but LNG demand at 20.5 Bcf/d next year narrows the supply-demand gap to about 1 Bcf/d, which is what makes the $3.50 ’27 forecast work. \* Exhibit A’s arithmetic leaves one lever: interest expense went from $400B in 2018 to $1T at a 3.5% average rate, defense sits near $1T and Social Security is demographically fixed, so Hunt’s path to a smaller deficit is extending Medicare to everyone and phasing out a $1.2T Medicaid program — and he expects Bessent to have to put a number on deficit reduction in a Monday press conference. \* The Moderna cancer-vaccine readout is thinner than the reaction: endpoints met and a statistically significant recurrence reduction, but no hazard ratio and no p-value published, and the economics run to Merck, which shared costs 50/50, takes 50% of vaccine profit plus 100% of Keytruda, roughly 75% of the combined pie against a Keytruda patent cliff in early 2028. \* Hunt’s I don’t see how an investor can not own SpaceX: 12M Starlink customers, a permitted 100M sq ft Texas fab aimed at making chips without ASML machines, and Memphis delivering 1.5 GW for $28B — leased out two-thirds to Anthropic and one-third to Google — while data centers stall in every other state; Mike’s counter is that traditional methods give you no margin of safety near $100 (they wanted $80), so size it small and hold your nose ahead of a Tesla/SpaceX merger he expects inside a year. Show Notes \[00:29] **Oil Markets & Hormuz** Ten to twelve million barrels a day still move through Hormuz on tankers with their GPS switched off, which is why crude is drifting down rather than up. Near-month falls from $87 toward $81-82 while the ’27 strip holds near $73-74. \[03:43] **Natural Gas Production & Demand** Dry gas production revised up to 109.5 Bcf/d for ’26 and 111.5 for ’27, with 13 of the last 18 Bcf/d of growth from the Permian. LNG demand at 20.5 Bcf/d next year is what closes the gap and supports $3.50. \[05:59] **National Debt & Deficit** Interest expense went from $400 billion in 2018 to a trillion today at a 3.5% average rate. Hunt walks Exhibit A column by column and lands on Medicare and Medicaid as the only line item with real room. \[11:22] **Medicare/Medicaid Reform Discussion** Jason and Mike stress-test extending Medicare to everyone: fraud and waste as the conservative sell, unwinding ACA underwriting rules, and killing 51 overlapping layers of management. \[12:56] **Moderna Cancer Vaccine Update** The trial met its endpoints, but no hazard ratio and no p-value were published. Merck co-developed it pre-COVID on a 50/50 cost share and takes roughly 75% of the combined profit with Keytruda going off patent in 2028. \[16:02] **SpaceX Investment Thesis** Hunt: I don’t see how an investor can not own SpaceX. Compute scarcity, 12 million Starlink customers, and a 100 million square foot chip facility permitted in Texas. Mike on why the valuation gives you nothing to hold onto. \[23:47] **NVIDIA / Google Compute** Memphis put in 1.5 gigawatts for $28 billion, all NVIDIA equipment, leased two-thirds to Anthropic and one-third to Google. Why is Google leasing NVIDIA capacity when its whole plan was TPUs? \[26:20] **Meta Litigation & Social Media Rules** Forty-nine state attorneys general and Meta appear to be converging on roughly $18 billion, shared with YouTube and TikTok. The agreed rules: two hours a day for children, a midnight-to-6am block, parent-only settings. \[29:12] **AI Agents & Next Week** Agents are the story now, and they’re the middle segment next Wednesday. Get the Cash Flow Memo free at telltales.us — roughly 80 companies with updated financials, plus Exhibit A (federal finances), Exhibit B (natural gas), and Exhibit C (oil). New episode every Wednesday. 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