Oracle Canary in the Coal Mine: Credit Default Swaps CDS: Deep Dive: Dr-Eng-Prof Yogesh Malhotra

Описание: Oracle Canary in the Coal Mine: Credit Default Swaps-Credit Risk Blowup: Dr-Eng-Prof Yogesh Malhotra

Oracle's stock plunges in its worst drop since the dot-com bubble burst, while its Credit Default Swaps (CDS) blow out to Lehman Brothers crisis levels—signaling a seismic shift in market confidence. This is a flashing red warning for the AI-fueled financial ecosystem. In this eye-opening video, Dr.-Eng.-Prof. Yogesh Malhotra dissects the Oracle canary in the coal mine, exposing the multi-layered credit risk blowup tied to backward AI models, the AI-finance hype cycle, exploding private debt, and circular deals hiding exponential risk shenanigans.

At the core is the Credit Default Swap—corporate debt insurance. If you hold Oracle bonds and fear default, you pay a premium to a seller (bank or hedge fund) to cover losses. Quoted in basis points (bps), 100 bps means 1% annually to insure $100 million. Oracle's CDS hit 128 bps—highest since March 2009—with premiums up threefold since July and trading volume 25x higher year-over-year. Investors are panic-buying protection, screaming that Oracle's AI gamble is veering toward catastrophe.

Unlike cash-rich Microsoft or Google, Oracle funds its AI data-center build-out with massive debt: $18 billion in bonds in September and a $38 billion private credit deal, pushing projected net debt to $290 billion by 2028. Its credit rating lags peers, making it the weakest hyperscaler. Stock soared 191% in five months on AI hype, then cratered 46% as bond yields spiked.

Oracle's pivot retrofits legacy systems into GPU-hungry behemoths—less moonshot than money pit—widening the capex-to-cash-flow gap. Its $100 billion-plus AI spend echoes the '90s fiber-optic overbuild: billions buried in servers yielding pennies. Wall Street whispers "bubble," with CDS spikes as the final warning.

Private debt's toxic side amplifies the risk. That $38 billion deal is syndicated private credit—opaque loans from non-bank lenders, ballooning to $1.7 trillion globally. Rising rates squeeze borrowers with floating coupons, while circular deals via daisy-chained SPVs inflate values and hide exponential risks. Banks use Oracle's liquid CDS as a proxy hedge for broader data-center exposure, and momentum traders fuel a fear loop.

This isn't isolated: CDS blowouts threaten the $13 trillion corporate bond market, with 40% in AI-laced tech debt. Lehman 2008 redux—subprime CDS exploded from 20 to 1,000 bps; Oracle's surge could foreshadow contagion if AI profits disappoint.

CDS are the market's truth serum, unmasking hype early. Oracle's plunge tracks this terror, with bonds dumping fast. If it stumbles, suppliers, lenders, and private credit could face margin calls and forced sales in a $200 billion AI capex frenzy.

Dr. Malhotra unpacks these threads with precision, revealing how backward models, hype cycles, and private debt create systemic fragility. This video arms you for the storm. Key takeaways: diversify beyond AI darlings, scrutinize debt footnotes for private credit landmines, and treat CDS spikes as sell signals. The AI emperor's clothes are fraying—will profits save them, or will credit winter expose the illusion?

#CreditRisk #CDS #CreditDefault #CreditDefaultSwap
#OracleCDS #AICreditRisk #PrivateDebtCrisis #AIBubble

#Oracle #DataCenter #AITrade #ArtificialIntelligence #AIHype

For additional reports such as
2025-12-11: New York Times: Why Oracle Is Worrying Investors About the A.I. Boom:
https://www.nytimes.com/2025/12/11/bu...

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