Yesterday, we talked about the signal from Google earnings.

Google is Rule-of-50 company — a half-a-trillion revenue company (twelve months forward) — that’s growing faster and becoming more profitable the more it spends on capacity (AI infrastructure).

And they just doubled the expected 2026 spend, from $90 billion (2025 capex) to as much as $185 billion.

It’s an AI infrastructure supercycle.

And at any point, when they decide to dial down the capex, free cash flow will explode higher — making the stock dramatically cheaper (on valuation).

That said, we heard from Amazon today.

Same story.

Andy Jassy upped the ante, announcing a planned $200 billion in capex for 2026.  And he said “we’re monetizing capacity as fast as we can install it.“

So, as we discussed yesterday, the companies that are building the AI supply, are still behaving as if they can’t build fast enough to meet demand.  That’s the signal among the noise.

Let’s talk about Europe.

The European Central Bank met this morning on rates.  They held the line, which was no surprise, but the press conference was plenty eventful.

Let’s talk about why it matters.

First, some backstory.

Since last summer, we have been tracking the coming regime change at the Fed.  It started when Trump began turning the screws on Jerome Powell back in July.

With that, it wasn’t hard to see a scenario building where a Trump-led Fed Chair could use the Fed’s position of power to influence change, particularly in Europe, where leaders were doubling down on failed, anti-growth globalist policies — while enjoying the security and implicit fiscal and monetary policy backstop from the U.S.

Now we have the nomination of Kevin Warsh for Fed Chair, and there are clues that a “Treasury-Fed Accord 2.0” could be coming — which means the Fed may be exiting Hotel California, ending the QE era — and ending the “global central banker to the world” era.

That means the fiscal ambitions that Europe has been forced to take on (industrial and defense building) become a bigger challenge to successfully fund by blowing up deficits.  If that creates stress in the government bond markets in Europe, the ECB will be forced back into action (QE) to tame bond yields of the fiscally vulnerable countries.

But the ECB backstop only works if its major global central bank peers support it (namely the Fed).

And the access to U.S. dollars (dollar swaps) that European banks need during times of stress, are likely to become negotiating chips by the Trump-led Fed.

European leaders have been openly concerned about this scenario over the past few months, and have even talked about “pooling” dollar liquidity from other central bank partners around the world.

With this backdrop, just days after the Warsh nomination, the ECB this morning said they are working on a new “liquidity framework.”

They know the Fed backstop is at risk, and they’re trying to create an independent liquidity network — a “Plan B.”

The problem is, they are trying to substitute liquidity for a solvency problem.  As the German Bundesbank’s President said this past summer, the EU’s ability to fund its own futures is “too good to be true.”

And at the same European leader’s conference they discussed the sovereign debt-bank “doom loop” that still exists, thirteen years after Mario Draghi saved Europe from a cascade of sovereign debt defaults, by threatening to buy unlimited bonds of the weak euro zone countries.