Wednesday Night Links

• The world has been noisy recently. Geopolitical conflict, shipping disruptions, tariff fights. I don't know how those will resolve. What I do know is that we paid off our bank revolver last month and have only $14 million of debt outstanding. Barring something unforeseen, we intend to raise distribution significantly in November. Coal, both metallurgical and thermal, has settled down and shown modest improvement off the lows, although I can't point to any single event that's likely to push prices sharply higher from here. We're not in the business of predicting commodity prices anyway. What matters more is that our mineral rights segment just keeps doing what it's done for years, producing cash, rain or shine. Through every major coal cycle, it has been the most dependable cash generator we've ever owned. [Craig Nunez]
• "NRP generated $42 million of free cash flow in the second quarter of 2026 and $163 million of free cash flow over the last twelve months before accounting for the $39 million investment we made in our soda ash business in the first quarter of 2026," said Craig Nunez, NRP's president and chief operating officer. "We are on track to pay off all debt and significantly raise distributions before year-end.” [Natural Resource Partners L.P.] 
• The bottom line is that Washington, fearing the consequences for US financial markets, is reluctant to see foreign central banks use their dollar reserves. This is telling us that the dollar is not the attractive reserve currency it once was. When this message sinks in, other countries will redouble their search for more attractive, readily usable alternatives. Reserve diversification is apt to gather steam. [FT] 
• Before 2021, TPL was structured as a trust — that was, until activist shareholders Eric Oliver (SoftVest L.P.) and Horizon Kinetics got involved in modernizing TPL. While Texas Pacific’s unique trust structure granted it more flexibility than the three names listed above, it still had significant drawbacks that were ultimately remedied when it converted to a C corp. In May 2026, Oliver took action again, this time seeking to amend the structure of Permian Basin Royalty Trust through a merger with Blackbeard Holding’s US Land Guild. This transaction, if approved, creates an entity similar to TPL and would crucially restructure the Trust’s net profit royalties into 15% revenue royalties and also allow the new C corp to repurchase units and acquire new properties. [Athelas Research]
• When a workman is unceasingly and exclusively engaged in the fabrication of one thing, he ultimately does his work with singular dexterity; but at the same time he loses the general faculty of applying his mind to the direction of the work. He every day becomes more adroit and less industrious; so that it may be said of him, that in proportion as the workman improves the man is degraded. What can be expected of a man who has spent twenty years of his life in making heads for pins? [Alexis de Tocqueville]
• At lunch as in business, Nelson Peltz makes his preferences known. Sweeping past the row of pink bougainvillea into Trevini in Palm Beach, the octogenarian activist investor and father-in-law of Brooklyn Beckham greets me, then turns to the waiter: “Can you turn the music down? We have important stuff to talk about.” It’s the proprietor’s prerogative — Peltz’s 19-year-old investment firm, Trian Partners, owns the building and the Italian restaurant is their de facto canteen. Soon the elevator-style music quietens down and we settle at our table on the outdoor terrace. [FT]
• When the week began, Leopold Aschenbrenner was preparing for his wedding. The plan was for a multiday celebration in Carmel, a seaside town in Northern California, with the ceremony at a Tuscan-style villa and the send-off at a spa in the forest. There would also be a pre-wedding colloquium to discuss ideas in panels and breakout sessions. [WSJ]
• “The first half of 2026 was the strongest in CME Group's history,” said CME Group Chairman and Chief Executive Officer Terry Duffy. "We delivered record H1 performance across revenue, adjusted operating income, adjusted net income and adjusted earnings per share, all of which were powered by record trading in Q1 and our second-highest Q2 volumes ever. [CME Group Inc.] 
• PrairieSky, the subject of one of the roundtable topic questions, is a land and royalty company that has done just that. In the 12 years since its IPO, even while more than tripling its acreage from 5 million to 18 million acres, it managed to double its acres per share. That’s about 6% annually, in addition to whatever revenue and earnings growth it managed to achieve. That astoundingly large and largely unexploited land portfolio, which sprawls along a roughly 750-mile axis across three Canadian provinces, gives PrairieSky the advantage of not having to reinvest profits in additional royalty contracts. Its large cash flow budget is fully available to pay dividends, repurchase shares, and make expansion-type land acquisitions. That consistently applied capital allocation plan by an executive team that requires of itself to, within three years of appointment, make cash purchases of enough PrairieSky stock to be worth 2x to 5x their salary. This is separate from their direct stock-based compensation. It is a strategy toward ensuring itself of a very long stretch of financial compounding possibilities. Those of us gathered here happen to know that it’s possible to own land in the public sphere, even though this largest of all physical resources is not even listed as a sector in the equity indexes. That was the idea—land, not oil—in the original buy recommendation for Texas Pacific Land Trust over 30 years ago: to own the internal, frictionless compounding benefits of share repurchases to increase the per-share acres held. [Horizon Kinetics]
• Many of us will remember when we first read Syme’s Roman Revolution. In my case it was largely in a Cardiff suburban back-garden during the summer of 1969: I still have that battered copy, together with my intrigued and not very insightful student comments in the margin. I have often re-read it since, but nothing compares with the initial impact made by that first reading. I had never read any prose quite like it before. [Chris Pelling] 

Tuesday Night Links

• Washington said Wednesday that, as of next week, it would impose a 25% tariff on some 3,000 goods from Brazil. It is the first country hit with duties under the Trump administration’s new strategy of using Section 301 of U.S. trade law to punish alleged unfair trade practices. Among a host of grievances, including anticorruption enforcement and barriers to U.S. ethanol imports, Washington argues that PIX has become so ubiquitous in Brazil it unfairly disadvantages U.S. payment companies such as Visa and Mastercard. There is also growing concern in Washington that Brazil and other countries are seeking to reduce their dependence on the dollar. [WSJ]
• Shortly before my guest arrives for lunch, I realise that our chosen Greek taverna does not serve alcohol. Not only that, the waiter has no idea where I might buy a bottle of wine. On a scorching summer’s day in central Philadelphia I head down a few sultry streets on what is not, it transpires, the easiest mission. The only options are a Moldovan Pinot Grigio or a Portuguese Vinho Verde. I return with a bottle of the latter on the grounds that a taste of southern Europe is more fitting for a latter-day Homeric feast. Emily Wilson, the acclaimed translator of Homer’s epics, is seated beneath a painting of a sleepy Aegean harbour. She had picked the little family-run Kanella restaurant, with its blue-and-white awnings, as the nearest she could get to my proposal we meet on a Mediterranean island on Odysseus’s star-crossed journey. [FT] 
• As a new separate entity, Mobility Global will likely be a good business to hold on to as it has many trusted products (CARFAX, Polk, Automotive Mastermind, and Market Scan) that are deeply embedded in the automotive ecosystem. MBGL’s customers span from nearly every global auto OEM and tier 1 supplier to thousands of car dealers. With annual revenues of just $1.75 billion, high margins, >80% subscription-based revenues, and now with greater flexibility to invest and acquire, MBGL management believes it can continue to grow at a high single-digit rate and expand margins. [Douglas Ott]
• This might be a long war. If it is a long war the United States should try to win it. The prerequisite for winning it is similar to what would be needed to win a war against China: complete military reform, drone manufacturing capacity, energy resilience. Let's go. Again the right way to fight this if it is a big war, is to have it politically "pay" for all the difficult reforms the U.S. needs to do anyway! The strongest EV argument is that gas prices at the pump don't matter anymore politically. The best argument for drones, is that they're more cost effective than tanks or jet fighters. The best argument for building both ourselves is so we're not vulnerable to supply chain attacks. etc. Unfortunate update: There is for now still almost no recognition in the military that this method of war won't work on a peer adversary and is extremely expensive. Little recognition that China will wage war in a way similar to Iran but greater scale. [Samo Burja]
• The last time electricity use grew five percent annually or faster was between the 1950s and 1970s, during the adoption of air conditioning, refrigerators, dishwashers, and washing machines. From 2005 to 2023, electricity use was almost completely flat. But as that lull in growth comes to an end, the grid will have to adapt. [Works in Progress]
• Goodspeed shows that British and American expansions do not resemble Dorian Gray, looking beautiful but hiding an inevitable accumulation of malinvestments (objectively bad investments that are destined to fail) and distorted decisions (mistaken economic decisions taken on the basis of bad regulation or flawed prices) that make a correction inevitable. If they did so, he argues, one would expect that as expansions get longer they get more and more likely to end. In his data, however, the relationship between the age of an expansion and the probability of death is essentially zero. Nor do measures of increased investment during the boom correlate with the severity of a downturn. Nor do longer expansions have longer recessions after them. This is why recessions remain essentially unpredictable. Any perceived regularity is likely to be a statistical illusion. Goodspeed shows that attempts to forecast recessions such as inversions of the yield curve (where long-dated government bonds have lower interest rates than short-dated ones) or the Sahm rule (which says a recession is likely underway if the unemployment rate spikes high above its recent lows for three months) are overfitted to US data and don’t work for the UK. [Works in Progress]

Thursday Night Links

• Our modern Midas-in-Reverse hopes his hagiography one day describes the great ‘labor’ of his shepherding the nation through an historic crossroads, a transition between eras. It’s why he styles his iconography around kitschy parallels to the Gilded Age, Belle Epoque, Fin de Siecle, etc.; and he’s not altogether wrong in intuiting the fundamental ethos of our times, a transitional period of wayward decadence preceding something terrible—a time of calamitous revolutions and world wars. But wherein lies the difference is Trump believes himself to be providentially appointed to steer the country clear of the pitfalls associated with such ‘ending epochs’ and into a golden era of manifest abundance. Unfortunately, he appears blind to the coming realities: things are only getting worse, the very logies and chintzy veneers of the artifice he imagines will herald this ‘greatness’ in the offing instead betray the disintegration happening all around us. And to top it all off, there is little of substance beneath the gilding and cheap plaster. In an unprecedented display of “will to power”, Trump is attempting to manifest his ‘Golden Age’ merely by shouting it from the rooftops. Instead of carrying out real policies of reconstruction and transformation, fixing jobs, inflation, and all the actual underpinnings of a healthy state, he instead chooses to erect presumptive monuments to hopes and wishes and would-be accomplishments. [The Kitschification of America]
• Governor Greg Abbott today announced the eighth Texas Energy Fund (TxEF) loan for 860 megawatts (MW) of new, reliable power in Ward County, enough electricity to power approximately 215,000 Texas homes. Vistra is building the project, which consists of two new natural gas units at its Permian Basin Power Plant, more than tripling the site’s current capacity. [Office of the Texas Governor]
• GE Vernova’s gas turbine backlog reached 100 GW in the first quarter, up sharply from 83 GW at the end of 2025. Parks said the company shipped 25 gas turbines in the quarter, a 32% increase from the first quarter of 2025, with pricing rising faster than the inflation rate. [Utility Dive]
• The In-ERCOT Generation Loan Program provides low-interest loans to qualifying companies for the construction of new or expansion of existing dispatchable electric generating facilities in the ERCOT power region. Qualifying projects must add at least 100 megawatts (MW) of new dispatchable generation capacity to the ERCOT grid. Loan amounts may not exceed 60% of total project costs. PUCT rule 16 TAC §25.510 establishes program rules, eligibility requirements, loan terms, evaluation criteria, and the application process. The PUCT evaluated applications based on the applicant's experience and strength of financing, as well as the proposed project's technical and financial attributes, location, speed to market, and generation resource type, among other factors. The program provides 20-year loans at a fixed 3% interest rate. Amortization schedules vary with each agreement. This program is capped at financing no more than 10,000 MW of new generation. [Public Utility Commission of Texas]
• In late May a gas explosion at a mine in Shanxi killed 82 people, the worst Chinese mining accident since 2009. Inspectors then shut more than a hundred mines. Shanxi makes about a quarter of China’s coal, so this was big. The interesting part is that the mines did not fully reopen. Before the accident they were running above their official capacity, over a hundred and ten percent. After, the safety crackdown pushed them down to seventy or eighty. One trader thought the lasting loss could be twenty to thirty million tonnes even after restarts. And it hit the good coal hardest, the exact grades you cannot get from Mongolia or Russia. [Cannibal Stocks]

Thursday Night Links

• If defeat seems a strong word, consider what we do know about how this war will end. Iran has suffered significant damage from U.S. and Israeli military action. But as I and others warned at the outset, killing people and bombing things do not by themselves produce victory. The reality is that the war will close with the regime in Tehran intact and in the grip of the Islamic Revolutionary Guard Corps; the Strait of Hormuz will remain under the threat of Iranian attacks; Iran will continue to possess significant drone and missile stocks; the regime will maintain the capability to be a state sponsor of terror; and many sanctions will be lifted and billions of dollars in unfrozen assets will flow to Iran. In other words, the Iranians have achieved their key strategic aims—regime survival above all—while the Americans have achieved none of their own. [The Atlantic]
• Before the war, Iran didn’t control the strait, simply because it didn’t realize it could. Drone technology had advanced to the point where Iran was able to shut down Hormuz, but Iran didn’t know that until the U.S. attack forced it to try the risky and desperate move of actually shutting down the strait. The gambit paid off spectacularly, and now Iran knows that modern drone weaponry gives it an advantage it didn’t have in previous decades. So it controls Hormuz. It’s kind of wild to step back and consider how good of a position Iran’s leaders are in now, compared to the situation before the war. Iran had lost most of its proxy armies in the Middle East — Hezbollah, Assad, most of Hamas. The regime had been rocked by massive nationwide protests, which it only managed to quell by murdering tens of thousands of innocent Iranian citizens. The country’s economy was slowly dying. Now the leaders are firmly entrenched in power, their economy will be revived, and they find themselves the masters of Hormuz for the first time. Anyway, I don’t see any sense in which this is not a classic military defeat for Donald Trump and the United States. [Noah Smith]
• Even the head of Nigeria’s population commission doesn’t believe that the 2006 census was trustworthy, and indeed said that “no census has been credible in Nigeria since 1816.” (Nigeria’s president fired him shortly thereafter.) There are plenty of reasons to think that Nigeria’s population might be overstated. It would explain, for instance, why in so many ways there appear to be tens of millions of missing Nigerians: why so few Nigerians have registered for national identification numbers, or why Nigerian voter turnout is so much lower than voter turnout in nearby African nations (typically in the 20s or low 30s, compared to the 50s or 60s for Ghana, Cameroon, or Burkina Faso), or why SIM card registration is so low, or why Nigerian fertility rates have apparently been dropping so much faster than demographers expected. [David Oks]
• It was originally named "Westinghouse Electric & Manufacturing Company" and was renamed "Westinghouse Electric Corporation" in 1945. Through the early and mid-20th century, Westinghouse Electric was a powerhouse in heavy industry, electrical production and distribution, consumer electronics, home appliances and a wide variety of other products. They were a major supplier of generators and steam turbines for most of their history, and were also a major player in the field of nuclear power, starting with the Westinghouse Atom Smasher in 1937. A series of downturns and management missteps in the 1970s and 1980s combined with large cash balances led the company to enter the financial services business. Their focus was on mortgages, which suffered significant losses in the late 1980s. In 1992 they announced a major restructuring and the liquidation of their credit operations. In 1995, in a major change of direction, the company acquired the CBS television network and renamed itself CBS Corporation. Most of its remaining industrial businesses were sold off at this time. CBS Corp was acquired by Viacom in 1999, a merger completed in April 2000. The CBS Corporation name was later reused for one of the two companies resulting from the split of Viacom in 2005. [Westinghouse Electric Corporation]

Monday Night Links

• The trillion-dollar cluster—+4 OOMs from the GPT-4 cluster, the ~2030 training cluster on the current trend—will be a truly extraordinary effort. The 100GW of power it’ll require is equivalent to >20% of US electricity production; imagine not just a simple warehouse with GPUs, but hundreds of power plants. Perhaps it will take a national consortium. (Note that I think it’s pretty likely we’ll only need a ~$100B cluster, or less, for AGI. The $1T cluster might be what we’ll train and run superintelligence on, or what we’ll use for AGI if AGI is harder than expected. In any case, in a post-AGI world, having the most compute will probably still really matter.) [Situational Awareness]
• South Bow (SOBO) on May 29 announced open season results for its Prairie Connector project, securing 20-year binding commitments from Hardisty, Alberta to US delivery points. The company also revealed several key project details, giving the market more visibility on a potential new Canadian crude egress path. The project would add 380 km (~236 miles) of new 36-inch pipe and use 150 km (~93 miles) of preserved 36-inch pipe, plus two existing pump stations. Based on a typical oil pipeline flow velocity of 3-10 ft/sec, a 36-inch line implies ~300-1,100 Mb/d of theoretical capacity. SOBO is targeting a final investment decision (FID) by mid-2027. [East Daley Analytics]
• A year and a half ago, our city’s one bookshop went up for sale. My wife and I bought it. The place had 20,000 books, a good music system that probably played 3,000 hours of Bach per year, and a black cat named Raven. It even had an entire room just for theology and philosophy books. (Steubenville, Ohio, is an unusual town.) Now we’ve been running the shop for a little while. Experientia docet, said our ancestors. Experience teaches. I prefer Vivaldi to Bach, so you’ll hear more Vivaldi around here now. Raven died and my children are now tending a litter of six kittens, grooming a replacement. And experience has taught us something heartening: Our customers have great taste in books. I write this because I hope it will be as great a consolation to you as it has been for us. People tell us all the time that civilization is finished, that the world is coming to an end. But then we look at our sales details and we smile. [John Byron Kuhner]
  
• In the early 1970s, the Bretton Woods Agreement—the post-world war pact that instituted a fixed-exchange rate regime for the major world nations— had begun to show its structural flaw. Finance ministers were finding it increasingly difficult to dictate the value of currencies relative the dollar in a world where value changes were constant and information and capital free flowing. On August 15, 1971, President Nixon announced an emergency economic package that sent a seismic shock through the entire financial world. On that day, the United States suspended the dollar's convertibility into gold thereby ending fixed exchange rates between currencies. The Chicago Mercantile Exchange was the first major futures exchange to recognize the market potential of the upheavals unleashed by this event. Supported by Nobel laureate Milton Friedman, the CME was the first exchange to assert that the principles of agricultural commodities futures could be applied successfully to financial instruments. Thus, currency futures—which began trading on the CME's International Monetary Market (IMM) on May 16, 1972—ushered in the era of financial futures, thereby forever changing the scope and utility of futures markets. One year later, the Chicago Board of Trade launched the Chicago Board Options Exchange (CBOE) and added a new dimension to the repertoire of risk management instruments. Three years later, Treasury bond futures at the Chicago Board of Trade made their debut and became the most actively-traded financial instrument. Within a decade, a vibrant new industry was born that subsequently opened the curtain on the index markets of the 1980s. The successes of these markets propelled the futures and options industry to unparalleled greatness. In the last decade alone, the volume in U.S. futures and options skyrocketed from 76 million contracts in 1979 to a record of 323 million contracts in 1989. These successes also prompted University of Chicago Professor Merton H. Miller, 1990 Nobel laureate in Economics, to nominate financial futures as "the most significant financial innovation of the last twenty years." [Leo Melamed]
  
• The Silicon Data Token Expenditure Index, which tracks total spending on large language model usage, has roughly doubled since late 2025 even as the price of a single token has fallen more than 90% since 2023. This is Jevons paradox in action. As tokens get cheaper, companies don't spend less but instead run more AI agents, automate more workflows and generate more code, pushing aggregate expenditure higher even as the unit cost of intelligence collapses. [Apollo]
• From our vantage point at KKR, the current U.S. policy mix looks meaningfully different from the 2000-2019 period, which was defined by low growth, low inflation, global interdependence, and tighter fiscal constraints. In the current environment, we expect our asynchronous global recovery thesis, characterized by rolling recoveries and rolling recessions across regions and sectors, to not only continue but also gain broader acceptance. If we are right, the long-term implications for asset allocation could be significant, including the need to own more Real Assets across portfolios. Indeed, in a world where dispersion is rising and traditional diversification is less dependable, we continue to favor return streams anchored in hard assets and collateral-based cash flows. These exposures do not eliminate volatility, but they can improve the controllability of outcomes through seniority in the capital structure, stronger recovery prospects, and cash flows tied to essential activity in the real economy. [KKR]
• If this were true—that an LLM, lacking consciousness, must instead constantly confabulate its own behavior and motives and reasoning—then, even if an LLM is extremely intelligent, we should expect errors to accumulate differently in LLMs vs. humans. And as philosopher Toby Ord has demonstrated, this is exactly what’s observed. In his analysis of METR’s data on AI task-length doubling times, Ord identified that the available data also fit there being a simple “half-life” for the success of an AI agent, and so have a “constant hazard rate” for long tasks. As Ord writes about what this suggests concerning an AI’s prospects for completing long tasks: "the chance of failing at the next moment is independent of how far you’ve come—just like how the chance of a radioisotope decaying in the next minute is independent on how many minutes it has survived so far." Ord even shows that humans, when their success rate at long tasks is analyzed, appear to deviate from an equivalent constant hazard rate. A strong contender as to why is because we have interpretable access to our own previous thoughts and actions, i.e., our consciousness, in a way that LLMs simply don’t have. [The Intrinsic Perspective] 
• By choosing to treat the 1930s as a form of extreme payback for extreme excess—“no generation exempt”—Sorkin stages morality play rather than history. He also helps set policymakers up for the kind of grand theatrical action they are inclined to take anyhow whenever markets turn down. In other words, another 1933- or 2008-style rescue: flooding the market with liquidity, and stringing up wrongdoers and even the better Wall Streeters, such as the Mitchells whom Sorkin seeks to rehab. The same subpar results are likely to follow. [Amity Shlaes]
• In terms of AI progress per resource, or per dollar, things are probably getting worse on most measures. This is what the pessimism about scaling laws is getting at. Measures of quality are increasing far slower than the exponentially mounting costs. So why were people like Ilya Sutskever and Dario Amodei so impressed by the scaling laws? The answer is that there was a lot of headroom in compute — a lot of room to scale those costs.  Even if the resources needed would be thousands of times larger than the largest ever ML experiment, they saw that this (1) was still within the feasible set of things a large company could fund and (2) would still be a good deal given the vast potential benefits. For on the high end of possibilities, we are talking about something that could potentially replace more than half of all human labour in the world, and perhaps bring forward scientific and technological advances that human labour would have taken centuries to reach. In other words, while the costs could escalate wildly, a deep-pocketed project might reach benefits of extreme value before it ran out of money. And those benefits might be worth more than enough to justify those (very high) costs. More prosaically, we can note that it is entirely possible that financial returns will scale very quickly as a function of the technical measures of AI quality. If so, then even though standard measures of AI quality scale poorly as a function of resources, the financial returns might still scale very well as a function of resources. Indeed, if they scale better than linearly, that would create a paradigm of increasing marginal returns which would explain a landscape with a small number of players, each investing as much as they possibly can. [Toby Ord]
• It will come as a surprise to most that a company so stiff and humorless as CME Group currently is, once used to run an aggressive and somewhat jingoistic ad campaign in the mid 1970s for the purpose of celebrating free markets.  As I recently obtained a second set of these somewhat rare prints from a retired former CME marketing employee, it's worth taking a deeper look into the story behind them. [Trading Pit Blog]
• Mr. Chairman, there are no commodity exchanges in Moscow; there is no Peking Duck Exchange in China; there is no Havana Cigar Exchange. The farmers of those countries have no need for a mechanism that offers risk transference, price projection, or price protection. In those countries, the governments establish the prices at which farmers can sell their products. Consequently, the farmers' primary risk is entirely removed. Alas, by removing the risk, that system also removes the incentive. The sorry history of such systems is that they have been abysmal failures. [Leo Melamed]

Thursday Morning Links

• It’s official: the world stock market is now as wild as it was during the tech-stock bubble. Since April 2026, we’ve had epic levels of return dispersion. AI excitement is driving extreme price moves, with some large-cap technology stocks up 50% to 100% in a single month. While it’s normal for small-cap stocks to sometimes rise 50% in a month, it’s not normal for the whole market to be meaningfully impacted by extreme winners. The chamber of dispersion has been opened, the beast of volatility has awakened, and the season of chaos is at hand. [Acadian] 
• The fact that short-lived strains are desirable for research because they allow it to go faster has polluted the literature because short-lived, convenient-to-research strains produce unreliable results for the very reasons behind their being short-lived. Pabis et al. therefore argued that, in order to demonstrate longevity benefits credibly, strains with long control lifespans in optimal conditions are needed. [Cremieux Recueil] 
• A short while later, the book ends suddenly and ignobly. It turns out that keeping the army alive one more season was all that was required. The real Spartan army is launching an operation against a Persian satrap in Asia Minor, and Xenophon’s troops get summoned to participate, initially as their own unit and then gradually getting absorbed into the main body of soldiers. In other words, it ends with an acqui-hire, as so many startups do. The dreams of great wealth and fame are over, and their independence is over too. It’s back to being a wagie at AWS. [Mr. and Mrs. Psmith’s Bookshelf]
• Rayonier was founded in 1926 as the Rainier Pulp and Paper Company in Shelton, Washington, with a headquarters office in San Francisco, California. Its name was inspired by Mount Rainier in Washington state. Its first mill opened the next year in Shelton Washington, on the Olympic Peninsula. The mill used Tsuga heterophylla (western hemlock) trees to create a premium bleached paper pulp. In September 1930, Rainier Pulp and Paper began working with the DuPont chemical company to produce hemlock pulp for the manufacture of rayon. Two additional pulp mills were constructed and began operation in the state of Washington at Hoquiam, Washington and Port Angeles, Washington. Rainier Pulp and Paper changed its name to Rayonier, a portmanteau of the words rayon and Rainier, in 1937, when it became a publicly traded company. [Rayonier]
• In response to the demand by residents for the board to stop the wind farm from being built, Supervisor Jason Whiting asked County Attorney Brad Carlyon if the board is legally authorized to prohibit the project. “Bottom line answer: No.” Carlyon further explained that the board’s authorities lie in land use and zoning. “You can’t deny it unless there is a health, safety, or welfare issue.” Chair Darryl Seymour also spoke on the work that was done to regulate incoming development. “The work that we did for two years to make it not easier, but to make it where we had more authority, which is already limited by the state. To make it more conducive and more neighborly to our people that we have.” The board then entered executive session to discuss the development agreement, after which the agreement was approved. [Painted Desert Tribune]
• The Rowlings, who own Omni Hotels & Resorts, in March paid $289 million for Justice family debt partly secured by the Greenbrier from a Virginia-based bank. They say the Justice family has siphoned revenue from the resort to pay bills at their coal mines and other businesses, letting the hotel fall into disrepair, skipping payments to contractors and employees, and risking its value as collateral. Jim Justice is credited with saving the Greenbrier when he purchased it out of bankruptcy in 2009. His daughter, Jill Justice, is president of the resort. Jim Justice said in an interview with The Wall Street Journal Friday that the resort has been profitable, retained its clientele and that he plans to continue investing in it. He called the allegations hurtful. “I’ve poured about everything I’ve got into the Greenbrier, and I’d do it again tomorrow,” he said. “I love that place beyond all good sense. It’s not just bricks and mortar to me.” [WSJ]
• This year, Google became the only large tech company to own a power company with the $4.75 billion acquisition of Intersect, a wind and solar developer that in recent years pivoted to building such projects to support data centers. Intersect has energy projects under development to supply multiple gigawatts of electricity, Google said. One gigawatt can power hundreds of thousands of homes. The company has also amassed a bench of energy-sector experts on its staff. “Google really has hired in-house to develop their data centers, and as a result, they have a more integrated approach that I would suggest is a lot more thoughtful,” said Jigar Shah, an energy entrepreneur who formerly directed the Energy Department’s Loan Programs Office. Having on-site power is becoming a strategic advantage for tech companies. Regulators and power officials in many regions are considering whether data centers built alongside new power sources should be afforded a faster connection to the grid because they would be less reliant on it. [WSJ]
• In Dickens's novels anything in the nature of work happens off-stage. The only one of his heroes who has a plausible profession is David Copperfield, who is first a shorthand writer and then a novelist, like Dickens himself. With most of the others, the way they earn their living is very much in the background. Pip, for instance, ‘goes into business’ in Egypt; we are not told what business, and Pip's working life occupies about half a page of the  book. Clennam has been in some unspecified business in China, and later goes into another barely specified business with Doyce; Martin Chuzzlewit is an architect, but does not seem to get much time for practising. In no case do their adventures spring directly out of their work. Here the contrast between Dickens and, say, Trollope is startling. And one reason for this is undoubtedly that Dickens knows very little about the professions his characters are supposed to follow. What exactly went on in Gradgrind's factories? How did Podsnap make his money? How did Merdle work his swindles? One knows that Dickens could never follow up the details of Parliamentary elections and Stock Exchange rackets as Trollope could. As soon as he has to deal with trade, finance, industry or politics he takes refuge in vagueness, or in satire. This is the case even with legal processes, about which actually he must have known a good deal. Compare any lawsuit in Dickens with the lawsuit in Orley Farm, for instance. [George Orwell]
• First smoking went out of fashion, then daytime drinking. Negroni-drinkers were dying out, or reforming. Wine began to be drowned out by absurd fizzy water. Then the food itself was threatened, partly because business lunches were becoming more businesslike, partly because interviewees were becoming more self-conscious. “Even I have never managed a two-bottle lunch,” laments the FT’s arts writer Peter Aspden, who is thought to have conducted more Lunches than anyone else. “There’s such reluctance now to be seen to be pigging out in any shape or form, and hardly anyone drinks over lunch.” [Financial Times]
• The word embedding approach is able to capture multiple different degrees of similarity between words. Mikolov et al. (2013) found that semantic and syntactic patterns can be reproduced using vector arithmetic. Patterns such as "Man is to Woman as Brother is to Sister" can be generated through algebraic operations on the vector representations of these words such that the vector representation of "Brother" - "Man" + "Woman" produces a result which is closest to the vector representation of "Sister" in the model. Such relationships can be generated for a range of semantic relations (such as Country–Capital) as well as syntactic relations (e.g. present tense–past tense). [word2vec] 
• The distributional hypothesis in linguistics is derived from the semantic theory of language usage, i.e. words that are used and occur in the same contexts tend to purport similar meanings. The underlying idea that "a word is characterized by the company it keeps" was popularized by Firth in the 1950s. The distributional hypothesis is the basis for statistical semantics. Although the distributional hypothesis originated in linguistics, it is now receiving attention in cognitive science especially regarding the context of word use. [Distributional semantics]

Thursday Night Links

• It is not good news, then, that over the past 10 years, private equity has focused on taking companies private that are both more levered and less profitable than similarly-sized businesses (which we have already established are junky to begin with), all while paying a higher price for them than their size-peers. These companies bank on the same set of factors—that interest rates will remain sufficiently low and the economy sufficiently robust—for them to be able to generate enough cash flow to pay down their debts. Different types of shocks—an economic slowdown, a further pickup in real interest rates if inflation proves sticky, a widening of credit spreads if private credit continues to sour—can all be enough to meaningfully hamper the profitability of these businesses, and to do so in a correlated manner. [GMO]
• The leading indicator of all previous technology transitions has, however, been the growth of the new, which always precedes the destruction of the old.  The transition to mobile telephony wasn’t declared a failure because the global number of landlines continued to grow until 2006, 33 years after the invention of the mobile phone. Similarly, peak US horse population did not occur until 1920, over 34 years after the first internal combustion vehicle hit the roads. [Michael Liebreich]
• Historically, the world seems highly stochastic and slightly cyclic, with vaguely regular cadences of empires, companies, and other organizations rising and falling with their own characteristic half-lives. The fundamental problem here is that at the ‘object level’ almost all the returns to success are positive. This means that naively success should generally beget more success in an exponential fashion. It requires an extremely powerful force to offset this default tendency. Regression to the mean is certainly not powerful enough for this. However, such a force must exist because, in practice, the world looks dramatically different from the simple exponential model. There is a constant random-seeming churn of states, empires, companies, wealth etc vs a world where the rich get richer indefinitely and thus everything ends up controlled by the winners at time t=0 forever after. We do not all live in the grand one-world Sumerian empire which simply grew faster and more successfully than its challengers during the hinge of history in 3000BC. Similarly, the East India Company no longer controls global trade; the Ford motor company does not have an eternal monopoly on cars; IBM does not reign supreme in computers. Similarly with wealth, despite its undeniable exponential properties, compound interest seems to be pretty weak in practice. The descendants of Croesus and Crassus do not lord over us all today. This means that there must not only be positive returns to scale and success but also negative returns. Larger states become harder to govern and more prone to civil strife. Larger companies become slow, unwieldy, and lose that indefinable ‘taste’ that made them stand out in the first place. There also appears to be some kind of phenomenon of increasing ‘entropy’ and decay in organizations or states that have been highly successful for a long time. Exponential systems are always poised on the edge of a knife destined to either explode or collapse, however the world largely seems to stabilize these systems or at least prevent explosions (there are a fair few collapses). Understanding and explaining these dynamics has to be one of the fundamental questions of sociology. [Beren Millidge]
• I think it has become clear to me that there is a universality class of ‘architectures sufficient to scale to AGI’, of which transformers are the first discovered element, and that there are a vast array of other possibilities within this same class, many existing on significantly better pareto curves than the classic transformer. I definitely think an order of magnitude of flop efficiency in both training and inference is easily achievable through superior architectures, and likely this will actually be several OOMs of gains over the next five years or so. The combination of this process plus vast software and hardware efficiency improvements will inevitably drive the cost of intelligence and AGI down to very low levels which, if alignment can be managed well, is good news since it vastly increases the utilons per capita achievable with the cosmic endowment. [Beren Millidge]
• Even in this idealized scenario, inheritance tax and the division of the fortune among children mean that almost all fortunes are barely able to compound long enough to be maintained even with relatively low TFRs (2 children). Beyond this idealized scenario, the real world also contains many negative ‘shocks’ which can tip a fortune from a regime of steadiness and growth towards exponential diminishment and exponentials are very unkind on the downward slope. The real stock market, even when highly diversified, does not return 7% annually smoothly forever. It goes through huge bust periods where valuations can drop by 50% or more and can remain below all-time-highs for decades at a time. These times can often be coupled with periods of high inflation which are also devastating for large existing fortunes. In theory, many down-markets can be weathered if you just reduce spending to maintain the same withdrawal fraction. However, in practice achieving sudden 50% or more budget cuts can be challenging, even for the wealthy. Many ‘big ticket’ items such as mansions, yachts, etc have high fixed maintenance costs which cannot easily be reduced in a downturn without selling the underlying asset at precisely the wrong time. [Beren Millidge]
• Goodspeed shows that British and American expansions do not resemble Dorian Gray, looking beautiful but hiding an inevitable accumulation of malinvestments (objectively bad investments that are destined to fail) and distorted decisions (mistaken economic decisions taken on the basis of bad regulation or flawed prices) that make a correction inevitable. If they did so, he argues, one would expect that as expansions get longer they get more and more likely to end. In his data, however, the relationship between the age of an expansion and the probability of death is essentially zero. Nor do measures of increased investment during the boom correlate with the severity of a downturn. Nor do longer expansions have longer recessions after them. This is why recessions remain essentially unpredictable. Any perceived regularity is likely to be a statistical illusion. Goodspeed shows that attempts to forecast recessions such as inversions of the yield curve (where long-dated government bonds have lower interest rates than short-dated ones) or the Sahm rule (which says a recession is likely underway if the unemployment rate spikes high above its recent lows for three months) are overfitted to US data and don’t work for the UK. [Works in Progress]
•  In 2024, medical spending as a share of GDP was 15% below forecasts made in 2010 and only marginally higher than in 2010. Relative to expectations, the savings were nearly $1 trillion in 2024. In light of this prolonged period of slower growth, we ask the question: has the United States bent the health care cost curve? We start with a model of medical spending that incorporates both the development of new technologies and the equilibrium use of those technologies. Technology development and incentives around its use may add to or subtract from spending growth. We then examine the drivers of the spending slowdown empirically. We attribute slower medical spending growth to five factors: the development of technologies that simultaneously improve health and lower cost; long-run supply elasticities that exceed short-run elasticities; improvements in population health; reimbursement changes that reduce demand and make demand more price elastic; and reductions in the rate of price increases, likely driven by some of these same demand factors. Because these cost slowing mechanisms are expanding over time, we conclude that the United States has bent the health care cost curve, though not as much as it could be or will need to be bent. [NBER] 

Memorial Day Links

• Realistically, frontier LLMs are already strongly superhuman at basically all tasks requiring crystallized knowledge and pattern-matching reasoning, and they are increasingly getting better at fluid intelligence via long CoT reasoning. We are only a small number of breakthroughs away from AGI. When these breakthroughs happen is hard to predict (it could be tomorrow!, or a few months ago in secret, or in 5 years), but once they happen AGI will be here much sooner than we will expect. All the infrastructure for both training and inference is primed and ready. The data-centre buildout will likely reach its climax in the next 2-5 years, but my opinion is that the scale we have right now is sufficient for AGI and probably has been for the last few years. There is thus a massive compute and infrastructure overhang being created that will allow AGI to scale incredibly rapidly once created, at least for a while. Industry trends though are relatively closely (although not entirely) vibe-following and hence we may see a cooling of interest and excitement about AI at ironically precisely the wrong time. Broadly, this is because society is slowly assimilating LLMs into its worldview and understanding. This is going to cause some waves and change a lot of jobs but clearly not going to be utterly revolutionary in the way AGI would be. It will be e.g. like electrification or some large 19th century industrial revolution technology but not the creation of a god. People who are used to LLMs then forget the original promise and dream of AGI. But the AGI is still lurking there in the future, not so distant, and coming closer. [Beren Millidge]
• Scientists don’t yet know why the drugs might be having this effect. One theory is that GLP-1s reduce cancer risk indirectly—by driving weight loss and improving metabolic health, both of which are independently linked to lower cancer rates. The other is more direct: receptors for GLP-1, the hormone these drugs mimic, appear on the surface of some tumor cells, raising the possibility that the drugs are acting on cancer biology itself. [WSJ]
• My current, very rough, timelines are something like 5-15 years for AGI and then 10-20 years after that for widely rolled out and accessible indefinite life extension (ILE) for currently existing humans 4, accompanied of course with a large amount of other classic transhumanist technology. In the conservative case this is a 35 year lag time from today to ILE. Assuming an average life-expectancy of 80 then somebody age 45 today has a pretty good chance of reaching ILE and somebody age 35 has a very good chance. Age 45 (birth date 1980) pretty much demarcates the millennial generation from gen X. [Beren Millidge]
• Perhaps a more intuitive way to think about this is in terms of ‘zooming in’ to a fractal. As we progress down the power-law slope we zoom into increasingly small and detailed features. We can think of a neural network as similar to a telescope observing a region of space. Having a larger model is like having a larger telescope, it allows us to ‘zoom in’ to resolve finer detail. Similarly, training for longer is similar to having a longer ‘exposure time’ which also lets us resolve finer details for a fixed lens size. Due to the natural structure of the dataset, these linear effects get transmuted to power-law decreases in the loss. [Beren Millidge]
• We see that the three income categories had very different experiences during the March 2026 energy price shock. Low-income households increased their nominal gas spending by the least (12 percent). However, this was accomplished because they cut their real gas consumption the most (7 percent). On the other hand, high-income households increased their nominal gas spending by the most (19 percent) in a large part because they reduced their real gas consumption the least (1 percent). Middle-income households had intermediate increases in nominal spending and decreases in real consumption at gas stations. Thus, the K-shaped consumption pattern in both nominal and real gasoline spending was strongly evident in March 2026. These divergences in the response to an energy price shock are not unique to the month. Four years ago, energy prices rose and remained elevated during the spring and summer of 2022 when the Russia-Ukraine war disrupted energy markets. The magnitude of the initial Russia-Ukraine gasoline price shock was broadly similar to the current one, but it lasted longer to date and ramped up over time. As we see from the panel chart below, between January and July 2022, nominal gas spending rose more for high- and middle-income households than it did for low-income households, while real gas consumption declined less for high-income households than it did for middle-income and low-income households. Notably though, while directionally similar, the magnitudes of the gaps (both for nominal and real spending) were noticeably smaller than the corresponding gaps we see in March 2026. [Liberty Street Economics]
• Although this all seems hyper speculative, these kind of dynamics can be important for modelling the far future. Specifically, it implies that once a K3 civilization is established in a galaxy it is extremely hard to dislodge. This means it is likely that the universe will end up mostly cleanly partitioned between full galaxies of colonizers with perhaps only short wars early on in a galaxy’s lifetime to determine which colonizer faction will be victorious in galaxies where colonizers both reached it at roughly the same time. Beyond that, the fact that intergalactic warfare seems likely to be expensive, interminable, and bring little prospect of gain to the aggressor, makes it likely that such wars are rare in general and only pursued for ‘irrational’ purposes. For instance, once the colonization phase is complete, a pure paperclipper would be unlikely to invade neighbouring non-paperclipper galaxies since it would have to expend far more energy to do so than it would gain, and hence would end up with less paperclips overall than if it just paperclip-ified its own galaxy and then sat there for the rest of time. This also implies it is very important for early civilizations to colonize to maximize their share of the cosmic endowment because it is hard to fight back and claim inhabited territory if you are late to colonizing. Another thing of importance to note is just how extremely vulnerable large fixed objects like planets or stars are in this universe. Anything on a predictable orbit can be sniped with impunity and complete surprise from millions of light years away. This means that humanity is super vulnerable in its early stages right now and also even when spread across multiple planets and building its first Dyson sphere. Any K3 or less civilization in the vicinity (if they see us) can directly destroy us at this point, which makes moving some sensible fraction of civilization away from obvious large orbiting bodies and into freely moving habitats far away from any obvious orbits an immediately important backup strategy. Unsurprisingly, it also means that we should invest heavily into trying to determine if there are any K2 or K3s out there in our intermediate neighbourhood (e.g. perhaps in the local group) since if so not only will they likely have colonized almost all galaxies we could reach first but also that as soon as they detect meaningful civilization around earth, then they could disintegrate it with extremely powerful beams with ease. In a variant of the anthropic argument, the fact that this has not happened yet provides some evidence against hostile local K3s existing. [Beren Millidge]

Monday Morning Links

• A cyclical business that produces average returns over a full cycle will give investors worse total returns, because at the peak it won't return quite enough capital, and because the equity slice of the capital structure can't always survive the worst part of the cycle. The equity in some high-cost miner might 100x during a good cycle, but that 100x return may be enjoyed mostly by former bondholders who got most or all of the equity when it reorganized: shareholders in Warrior Met Coal have seen their holdings compound at 33% since it went public in 2017. But "Warrior Met" was a new holding company formed by the first lien debtholders of Walter Energy, whose shareholders were zeroed in 2016. Another issue, related to the cycle, is Engineering Ego: people who go into the business of solving complex technical challenges around getting ore out of the ground are going to be excited if there's a uniquely extreme way to do it. [The Diff] 
• Recent leaked US intelligence assessments, as reported by Western media, estimate that Iran has regained access to 90 percent of its underground missile storage and launch facilities, many of which remain at least partially operational, that were buried due to US-Israeli airstrikes. Iranian forces have likely also reestablished communications between units and commanders and begun restoring force morale—both of which were disrupted during the war due to US-Israeli airstrikes and had significantly degraded Iran’s ability to conduct operations to achieve its objectives. Recent US intelligence assessments also estimate that Iran still has about 70 percent of its mobile launchers and 70 percent of its prewar missile stockpile, including both ballistic and cruise missiles. US forces buried some of these assets during combat operations, which rendered the buried assets combat ineffective. Any military force, including the Iranians, would use the time and space granted by the ceasefire to reconstitute itself. The restoration of underground missile storage and launch facilities means that Iran was degraded operationally and then prepared itself for a new round of fighting. US forces have surely also prepared for a new round of fighting. [Institute for the Study of War]
• Sodium ion batteriess could ease supply constraints and price volatility linked to lithium-based batteries by expanding the range of viable chemistries and reducing dependence on lithium mining and processing. Sodium is far more abundant than lithium – around 1,000 times more abundant in the Earth’s crust and roughly 60,000 times more abundant in the oceans. SIB manufacturing primarily relies on soda ash (sodium carbonate) as the main sodium precursor. Soda ash is widely used across several industries, and is far more abundant than lithium, making it less susceptible to resource availability concerns and price volatility. Natural soda ash resources globally are estimated at 47 billion tonnes, while reserves are estimated at 25 billion tonnes. Soda ash can also be, and already is, produced synthetically from salt and limestone, both virtually unlimited resources. Cost could still be one of the competitive advantages of SIBs over LIBs due to a number of factors. The first of these is the abundance and accessibility of sodium, a material that is considerably cheaper than lithium. [International Renewable Energy Agency]
• Well into his seventies, Wilson would march into the Princeton Club and order a half dozen martinis, to be prepared not sequentially but simultaneously—six shining glasses in a bright row, down which Wilson would work, all the while talking and thinking at a rapid pace. To the end of a long life, he kept on making the only thing he thought worth making: sense, a quality almost entirely lacking in American literature where stupidity—if sufficiently sincere and authentic—is deeply revered, and easily achieved. Although this was a rather unhealthy life in the long run, Wilson had a very long run indeed. But then he was perfect proof of the proposition that the more the mind is used and fed the less apt it is to devour itself. When he died, at seventy-seven, he was busy stuffing his head with irregular Hungarian verbs. Plainly, he had a brain to match his liver. [Gore Vidal] 
• American Catholicism is in steep decline. In 2000, 2.6 million American children attended Catholic schools. In 2025, only 1.6 million did. In 2001, more than a quarter-million Catholic weddings took place; in 2024, around 107,000 did. In 2001, more than a million infants were baptized in the Church. In 2024, fewer than half a million were. These numbers presage a future in which the Catholic Church will be much smaller and poorer than it currently is. Given these facts, talk of a Catholic revival—spurred this spring by a surge in adult conversions, many in urban and university churches—is misplaced. [First Things]

Thursday Night Links

• Murray and Bregman and their fellow partners started the firm with ideas rather than money. They had none to manage and not even the $100,000 they needed to pay the rent and an employee or two. To bring in cash and build a reputation, they opened a subscription research service. They called it “Horizon,” as in what they strove to see over. (“Kinetics” arrived in an acquisition later on.) The first report they produced was a bullish analysis of Texas Pacific Land Corp., which, giving effect to subsequent splits, was a penny stock. Whether or not the authors persuaded the subscribers, they surely persuaded themselves. Texas Pacific today, quoted today at $438 a share, is the firm’s largest single holding, in at least one HK mutual fund accounting for more than 50% of AUM. [Murray Stahl] 
• As this audience knows better than any, options are a growing business. The dynamic nature of the options marketplace was readily apparent from the staff presentation at the roundtable. For example, between 2012 and 2025, the number of unique underliers grew by 144%, and the number of unique options series increased by 719%. In December 2025, the median OPRA message count was 131 billon – which is 3,275 times the daily average in 2000. Option activity on expiry, or “0DTEs,” has grown from nearly 20% of volume at the start of 2022 to 28% in 2025. On the other hand, the number of options market makers has dropped from 98 in 2012 to 51 in 2025. [Jamie Selway]
• I mean, look, the concern that we have, that you should have, I think, that everyone should have is, are there signals here that this asset has lost the investment characteristics that attracted us to it in the first place? Has it, is the future going to be materially worse than the past? You know, this asset's been operating for over 60 years, and is the next 50 gonna be materially worse than the last 60? Are we unrealistically clinging to bright memories of the past, allowing ourselves to be misled into making more investments into the future that shouldn't be made? We're trying to be very careful that we don't fall into that trap. [Natural Resource Partners L.P.]
• The Iliad accepts violence as a permanent factor in human life and accepts it without sentimentality, for it is just as sentimental to pretend that war does not have its monstrous ugliness as well as to deny that it has its own strange and fatal beauty, a power, which can call out in men resources of endurance, courage, and self-sacrifice that peacetime, to our sorrow and loss, can rarely command. Three thousand years have not changed the human condition in this respect; we are still lovers and victims of the will to violence, and so long as we are, Homer will be read as its truest interpreter. [Bernard Knox]
• JQA’s ambition began with his parents’ ambitions for him. His mother, the formidable Abigail Adams, told him early on that he was destined to be a “guardian of his country’s laws and liberties.” He accepted that destiny. His father wrote him, when the 26-year-old was wavering a bit about his future: “You come into life with Advantages which will disgrace you if your success is médiocre.—And if you do not rise to the head of…your Country, it will be owing to your own Laziness Slovenlinessand Obstinacy” (emphasis in the original). [Claremont Review of Books]
• Even though the American Right might like to occasionally proclaim Anglo-Saxonness, it’s moving away from the traits that defined this identity. Historically, Anglo-Saxon identity was tied to Protestantism, individualism, rationalism, capitalism, constitutionalism, and British heritage. Elements of the New Right seem eager to move beyond all this. Traditional Catholicism and Eastern Orthodoxy are favored over Protestantism. Individualism is denounced as a weakness, as is capitalism. Rationalism is discarded in favor of village-crone irrationalism that resembles schizophrenia. The Constitution is seen as a suicide pact and the cause of American decline. Anglophobia is more popular than Anglophilia. One can see that with arguments that Spanish colonialism was superior to British colonialism. Other European ethnicities are favored and their respective histories are adopted as “our past.” Some parts of the New Right would like to return to Anglo-Saxonism and the “Heritage American” concept is popular among all elements of the New Right. But now the Heritage American is imagined as a Russian Orthodox man who despised British traditions and norms. It’s an ahistorical image. [Scott Greer]
• Whether because of his innate political skill, affable personality, or a compelling business pitch that promised hundreds of new jobs and significant local tax revenue, Symington eventually won over the government and citizens of Snowflake. In August 2016, a town council decision went his way by one vote, and the city granted a special-use permit to Copperstate Farms. Notably, not until 2018 did the Latter-day Saints Church formally allow its members to use medicinal cannabis, thanks to a deal brokered between Utah’s lawmakers, law-enforcement agencies, medical organizations, and LDS representatives. Copperstate Farms now produces about 120,000 dry pounds of cannabis every year under 1.7 million square feet of canopy. The facility is one of the largest cannabis greenhouse operations in North America. [Fife Symington IV]

Thursday Night Links

• Over the long run in infosec, the defensive side tends to win. There's a lot of deadweight loss in a hack, and hackers have a higher discount rate than defenders, so in an equilibrium state attacking needs to be massively easier than defending to be worthwhile. But that long-run equilibrium is driven by the changes in behavior that arise when attackers have a temporary advantage. And in a world where more code than ever is being written and a smaller proportion of it than ever is being read, the rewards for supply chain attacks targeting key libraries are unusually high. This is one reason for Anthropic's rather public-spirited approach to using Mythos to fix software vulnerabilities; exploits are typically chained together, so it's a race to break the links before they're misused. [Byrne Hobart]
• Only a few economists’ works have inspired eponymous schools. Marxism and Keynesianism come to mind, but almost memory-holed is an American, Henry George, whose “Georgist” movement was a major political force in the heady days of late 19th- and early 20th-century progressivism. George was the author of Progress & Poverty, a bestseller shortly after its publication in 1880. In the 1880s and 1890s, P&P outsold every English-language book except the Bible. Yet today, no major publishing house handles his works, and the best edition is a scanned reprint of the 1905 edition from tiny Dover Publications. His work is so obscure and forgotten, despite his historical popularity, that no mainstream publisher can be bothered to pay for new typesetting. [The Tom File] 
• For whatever number we came up with here, one must remember that in many ways the poorest Britons today live better than did Mr. Darcy regardless of which method for calculating income or wealth I used. For all his wealth, he still froze in winter, constantly stank of horse or pig or mud, had to travel very very slowly to town, died at 50 and likely saw several of his sisters, nephews or cousins die in childbirth or before they turned one, drank awful drinking water even when avoiding the many outbreaks of Cholera or the constant smog from the coal-burning fires in urban households (the Channel Four series The 1900 House is a good indication for how, then remove another hundred year of development). [Joakim Book]
• Visa’s second quarter net revenue growth of 17% was the highest since 2022, driving GAAP EPS up 36% and non-GAAP EPS up 20%. Consumer spending remained resilient, and our strategy and innovations fueled strong performance in consumer payments, commercial and money movement solutions and value-added services. [Visa Inc.]
• Seems to me that whenever you move somewhere that is "cheap," there will be massive drawbacks and difficulties, period. This is apparently even true in a Mediterranean paradise like Italy. You "pay" for your life in a cheap place by dealing with some element of life there that is not easy to deal with, be it isolation, high median ages, bureaucracy, clannish locals, harsh climates, lack of economic / cultural / religious opportunities, social problems, crime, etc. Most often, you deal with a combination of some or all of these. So when you do the "moving somewhere super cheap" thing, there WILL be times where you want to give up and leave. That's where the real question comes in: "just how much do I NOT want to do the high-cost, crowded, 4HL, working-to-pay-the-bills thing?" The only ones who will really be so averse to normalcy in an "easy place" will be those who are very eccentric, poorly adjusted to the salaryman life, likely kind of poor, and who expect to remain kind of poor indefinitely. [Hickman]
• From 1936 to 1939 there were two life-and-death struggles in Spain, both of them civil wars. One pitted nationalist forces led by Francisco Franco, aided by Hitler, against the Spanish Republicans, aided by Communists. The other was a separate war among Communists themselves. Stalin in the Soviet Union and Trotsky in exile each hoped to be the savior and the sponsor of the Republicans and thereby become the vanguard for world Communist revolution. We sent our young inexperienced intelligence operatives as well as our experienced instructors. Spain proved to be a kindergarten for our future intelligence operations. Our subsequent intelligence initiatives all stemmed from contacts that we made and lessons that we learned in Spain. The Spanish Republicans lost, but Stalin's men and women won. When the Spanish Civil War ended, there was no room left in the world for Trotsky. [Pavel Sudoplatov]
• In a March 16, 2026, decision in Fortis Advisors LLC v. Krafton Inc., the Delaware Court of Chancery adjudicated claims arising from the sale of a video game studio, Unknown Worlds, where Fortis alleged Krafton acted in bad faith to avoid a $250 million earnout. In enforcing the merger agreement and granting specific performance, the court cited evidence that Krafton’s CEO had consulted ChatGPT extensively, relying on the CEO’s chat logs with ChatGPT as evidence of his intent and planning in orchestrating the takeover. [link]
•  We examine how “sleepy deposits” affect competition, bank value, and financial stability. Using novel data on account openings and closures at over 900 banks, we show that only 5–15% of depositors open new accounts per year. More closures are driven by moving or death than rate-shopping. We develop an empirical model in which banks face dynamic invest-versus-harvest incentives. We find that depositor sleepiness accounts for 57% of average deposit franchise value, softening competition particularly for banks in low-concentration markets and banks with low-quality services. Sleepiness also enhances financial stability and significantly reduced default probabilities during the 2023 banking turmoil. [NBER]
• We have been excited to see a proliferation of vintage LM projects, including Ranke-4B, Mr. Chatterbox, and Machina Mirabilis. Alongside these efforts, we introduce talkie-1930-13b-base, a 13B language model trained on 260B tokens of historical pre-1931 English text. Additionally, we present a post-trained checkpoint turning our base model into a conversation partner without relying on modern chat transcripts or instruction-tuning data. talkie is the largest vintage language model we are aware of, and we plan to continue scaling significantly. As a next step, we are training a GPT-3-level model, which we hope to release this summer. A preliminary estimate also suggests we can grow our corpus to well over a trillion tokens of historical text, which should be sufficient to create a GPT-3.5 level model—similar in capability to the original ChatGPT. [talkie] 

Thursday Morning Links

• “The poor” in the United States today are not, generally speaking, hungry. Around a third of Americans are considered overweight; nearly half are obese. If we break this down along class lines, the heaviest Americans tend to be the ones with the lowest incomes. The wealthiest Americans, by contrast, are the likeliest to be thin; indeed, there is probably no correlation stronger in contemporary sociology than the one between a below-average B.M.I. and one’s class background. One is almost tempted to say that what Our Lady prophesied in the Magnificat has been fulfilled not in some future eschatological sense but here and now, as a mere description of socioeconomic markers—the hungry have indeed been filled to the point of bursting with ultra-processed foods, while the rich have voluntarily absented themselves from the table. [The Lamp] 
• Between 1870 and today, hours of work in the United States fell by about 40% — from nearly 3,000 hours per year to about 1,800. Hours fells but unemployment did not increase. Moreover, not only did work hours fall, but childhood, retirement, and life expectancy all increased. In fact in 1870, about 30% of a person’s entire life was spent working — people worked, slept, and died. Today it’s closer to 10%. Thus in the past 100+ years or so the amount of work in a person’s lifetime has fallen by about 2/3rds and the amount of leisure, including retirement has increased. We have already sustained a massive increase in leisure. There’s no reason we cannot do it again. [Marginal Revolution]
• Without physical optics there would have been no microscope, and until the perfection of the microscope, the biologist was in the main limited to what his unaided senses told him. It was by means of the compound microscope that the development of the cell theory was made possible in the nineteenth century. Similarly it is by means of the new tools and techniques developed in many instances by the physical sciences that the door to a biology of molecules has only recently been opened. [Rockefeller Foundation]
• “Concerning the advancement of learning,” Bacon writes in a letter to King James I in 1611, “I do subscribe to the opinion of one of the wisest and greatest men of your kingdom: That for grammar schools there are already too many, and therefore no providence to add where there is excess.” Quite right. Bacon was advising the king with regard to the charitable disposition of property; why, in our day, does Harvard need another two-hundred-million-dollar “charitable” gift to pile into its fifty-seven-billion-dollar endowment? [The Lamp] 
• Old money, ever prudent, armors itself against these barbs, toughening up via a series of rituals Aldrich calls the three ordeals. In the ordeal of education, one is constantly under pressure to establish personal bests in all fields—academic, athletic, social—and become the kind of seemingly effortless “all-rounder” Aldrich’s Harvard yearbook showed him to have been. The second is the ordeal of nature—the struggle of mountaineers or yachtsmen against elements indifferent to the size of their trust funds. Both practices seem to have endured into our own time. The third ordeal, military service, has faded in importance since the day Teddy Roosevelt marched into Brooks Brothers to order up the uniform he wore when he led the Rough Riders up San Juan Hill. Somewhere between the estimable naval service of a John F. Kennedy or a George H. W. Bush and the rather less glorious contribution of George W. Bush to the Texas Air National Guard, the military lost its hold on old money’s imagination, perhaps to the detriment of both institutions. [The New Criterion] 

Friday Night Links

• Citrini Research sent our incredibly capable field analyst – dubbed Analyst #3 in order to avoid emotional attachment – on assignment to the Strait of Hormuz. Armed with a fluency in four languages including Arabic, a Pelican case full of equipment, a pack of Cuban cigars, $15,000 in cash and a roll of Zyn, #3 set out to fulfill the itinerary we’d planned in our Manhattan offices the week prior. [Citrini Research]
• What he discovered on the ground: the AIS data everyone is trading on is missing roughly half of what's actually transiting the strait on any given day. Ships are going dark, spoofing destinations, broadcasting "CHINESE CREW OWNER" through transponder fields to avoid getting hit. Iran's ghost fleet is running 29+ laden tankers inside the Gulf with transponders off, moving an estimated $3B in crude to Malaysia since the war started. The entire market is pricing a "closed" strait off satellite imagery and transponder data that has a 50% blind spot. Every oil model, every supply forecast, every macro call built on AIS throughput numbers is working from a dataset that systematically overstates the disruption. When the signals deliberately go dark, the people staring at dashboards are the last to know what's happening. Citrini figured that out by putting a guy on a speedboat 18 miles from the Iranian coast while Shahed drones flew overhead. [link]
• Nature is not our mother: Nature is our sister. We can be proud of her beauty, since we have the same father; but she has no authority over us; we have to admire, but not to imitate. This gives to the typically Christian pleasure in this earth a strange touch of lightness that is almost frivolity. Nature was a solemn mother to the worshipers of Isis and Cybele. Nature was a solemn mother to Wordsworth or to Emerson. But Nature is not solemn to Francis of Assisi or to George Herbert. To St. Francis, Nature is a sister, and even a younger sister: a little, dancing sister, to be laughed at as well as loved. [G. K. Chesterton] 
• We all know that past a certain age, men just want to sit and read books about history. I remember when my dad went through The Change; I came home from school one day, and instead of being in the driveway shooting baskets and listening to Dire Straits, Dad was inside reading a book about the Korean War the size of a cinder block. At age 45, I’ve now undergone a similar shift: I now seek out information about the Italian invasion of Ethiopia the way 15 year-old me sought out topless photos of Cindy Margolis. [link]
• I am reading over the Trump pardons of well-connected fraudsters and people like that (not January 6 pardons or other political ones) and kind of synthesizing it with my mental image of the people described below, and as a result a sort of red-coded crook-pervert broad-elite is emerging in my mind, an alternate elite to the blue-coded broad-elite of professors and NGOs and whatnot, a more inchoate elite that isn't quite as legible as the blue one in the imagination of the general public but exists alongside it and is as every bit as loathsome, but for different reasons. It's a local gentry elite, the GOP's real base (not the blue-collar types voting Trump, but the "jet ski dealership" or "nursing home operator" McMansion dweller type), and the real reason the party exists. No one can actually name these people as individuals off the tops of their heads, at least not until the Trump pardon comes along. [@wmslamcan]
• Lucky people scored significantly higher on one trait: openness to experience. They talked to strangers more, varied their routines more, and said yes to invitations at nearly twice the rate. The "unlucky" group followed the same routes, ate at the same restaurants, and talked to the same 5 people. Their networks were closed loops. No new inputs, no new collisions. Luck isn't random. Luck is surface area. And surface area is a function of movement. [@aakashgupta]
• High-agency people seem to have this weird immunity to embarrassment. Getting rejected? Not embarrassing, that’s just data collection. Looking naive? Not embarrassing, that’s just information asymmetry you’re fixing. Breaking minor social rules? Not embarrassing, most rules are just Schelling points anyway. What would be embarrassing to them is not trying. That’s the thing they can’t live with. [@Kpaxs]
• Keweenaw Land Association, Limited today announced that it has entered into an exploration option, lease, work commitment, and royalty agreement with Pulsar Helium Inc. to evaluate helium resources across a large portion of the Company’s mineral rights portfolio in Upper Michigan. Helium is a critical industrial gas used in healthcare imaging, semiconductor manufacturing, fiber optics, aerospace systems, leak detection, and other advanced technologies. Demand has expanded alongside growth in space technologies and advanced semiconductor manufacturing. Approximately 40% of global helium supply is currently offline from traditional producing regions. This agreement positions Keweenaw and Michigan to help meet domestic demand, by leveraging the scale we have built over the past few years and laying the groundwork for a broader expansion with our partners. Under the agreement, Pulsar will initially receive an exploration option covering approximately 488,000 acres of Keweenaw’s mineral rights. The agreement includes a 36-month staged surrender schedule of acreage, and a minimum exploration expenditure at a level consistent with early-stage district-scale programs allowing Pulsar to evaluate the regional helium system before refining its exploration focus to a core 20,000-acre development leasehold. [Keweenaw Land Association, Ltd.]
• The other thing is that Bernie Sanders, who used to be a prominent critic of open borders, needs to lead his whole flock back to a politically sustainable posture on this. People are going to worry that the next Democratic administration will open up the floodgates to a chaotic flow of new asylum claims. They are going to understand that Democrats don’t like to be mean to sympathetic people, but that realistically the only way to prevent the situation from spiraling out of control is — yes — to frankly and unapologetically turn away people who are in fact not rapists or murderers or terrorists but just basically normal people who simply don’t have permission to move to the United States. This is going to be a tough issue for any Democrat, because the credibility problem after Biden is so severe, and because Democrats (myself included!) are really quite sincere in shying away from cruelty to people who really are just seeking a better life for themselves. But we do have immigration laws and we need to enforce them, and again I think moderating here is consistent with leftists’ core message. [Matt Yglesias]
• Starship will make it possible to use low Earth orbit as a parking lot for a giant space-based arsenal. This would allow the U.S. to pre-position conventional munitions with ablation shields and inertial guidance systems to strike anywhere on Earth within minutes. Putting tens of thousands of small munitions into orbit would become cost effective, by my estimate, at around $100 a kilogram. Munitions could include bunker busters, kinetic weapons, antipersonnel, incendiaries, fuel-air explosives, cluster munitions, and antitank, antiaircraft and antiship capabilities with sophisticated terminal guidance. Starship’s payload capacity promises to be so great that it will enable the deployment of much larger single munitions than today’s biggest airplanes, enabling conventional effects of a greater magnitude against even the most deeply buried targets. New kinds of strikes would become feasible. Imagine a strike package of thousands of 200-pound bombs, each landing precisely, at the same time, on electric grid sites, government buildings, railway crossings, border stations and road intersections—without putting planes or military personnel at risk. This wouldn’t be limited by the number of available missile launchers or by the need for multiple sorties by strike aircraft. Such a system would obviate the need to establish air superiority before bringing in bombers and the need for large numbers of expensive cruise missiles. From an appropriately chosen low Earth orbit, munitions could be deorbited with very little warning. [WSJ]

Thursday Night Links

• The prospect of a sustained reversion in investment yields likely extends beyond the horizon of bargain-hunters’ binoculars. We may look back at historical returns and wonder why investors ever got to have it so good. We will look back and think how inefficient it once was. Can you believe people earned 8-10% in stocks and thought it should last? We may look at equity returns for the past century the way people now look at home prices. Remember when a house only cost 3x annual income? [Moontower]
• Israel & the GCC are absorbing the kinetic cost of a conflict whose primary beneficiary, counter to the mainstream narrative, is actually America (First). Qatar offline for 5 years reprices the entire global gas market in favor of US exporters for the remainder of the decade. The Gulf states face years of rebuilding. Europe faces its 2nd energy crisis in four years. Sure, the average American might face temporary moderate inflation & higher gas prices. But if you are the architect of the US empire & you view the rise of China & Chinese ASI as an existential winner takes all scenario, the collateral damage is acceptable cost. Whoever controls the energy corridors controls the monetary system. Whoever controls the monetary system & the energy supply simultaneously controls the compute infrastructure that determines which civilization builds ASI first. [_10delta_]
• Positioning Marines on islands off Iran’s coast, rather than inside Iran itself, could be a loophole that would allow Trump to claim he has kept his promise not to put American boots on the ground in Iran. “I don’t see them in Iran proper,” Miller said. “I think if you’re going to put them anywhere, the place where it would be on some of the islands that are around Iran, in the Gulf, that might give you some advantage from a tactical sense for a period of time.” [WSJ]
• EPD’s Q4 ’25 financial results were excellent (one of its best quarters in the last five years), with a positive read on both growth trajectory and return of capital potential. Given the company’s strong balance sheet, it can direct incremental free cash flow to equity holders as capital spending tapers in 2026 and 2027. At the same time, its business is expected to generate mid-single digit cash flow growth over the next two years. EPD is one of KYN’s largest holdings and is a good example of the attributes we seek for the Company’s exposure to liquids-focused midstream companies. [Kayne Anderson Energy Infrastructure Fund, Inc.]
• Contrary to popular perception, recessions are not the inevitable bust that follows an unsustainable boom, and they do not operate like wildfires that clear out economic deadwood. Recessions are caused by adverse shocks like war and energy price spikes; and far from unleashing gales of creative destruction, post-recession economic growth typically resumes the same trend as before—all pain, no gain. [Tyler Beck Goodspeed]
• For all leftists’ talk about the unaccountable power of the Tech Oligarchs, they’re being routed without a fight from their home: a city whose wealth and power they can credibly claim to have built (at least as a class), and which is among the most beautiful places on earth. This is, of course, a death-spiral move for the state of California — but the real puzzle is this: For what they’ll spend on relocation costs alone, the tech exiles could have bought the entire California political system in perpetuity. [EXIT Newsletter]
• Son of a diddly! When we last spoke a smidge over 60 days ago it was looking like REITs might have their day in the sun. Sure enough, by late February the REIT market was up nicely. However, if the REIT rally was Punxsutawney Phil, then it saw the shadow of inflation and the clouds of war and hurried back into its burrow for a continued REIT market winter – giving back all the gains garnered the last two months. [Modiv Industrial, Inc.] 
• The card economic model powers shared investment, backed by active governance, standards and fault-tolerant operations (blog). To compete against Visa, you have to build a better payment system with better economics that overcomes the shared investment of all stakeholders. Open standards are a great technology model but a terrible business one, as commercial exchange requires risk management and a clear definition of terms. Blanket law and mandated payment schemes may create compliance requirements, but they do not provide the incentives to assume risk and invest. [Tom Noyes]

Thursday Morning Links

• Trump has escaped other predicaments of his own making, but there is something different about this one. The attack on Iran is so wildly inconsistent with the wishes of his own base, so diametrically opposed to their reading of the national interest, that it is likely to mark the end of Trumpism as a project. Those with claims to speak for Trumpism – Joe Rogan, Tucker Carlson, Megyn Kelly – have reacted to the invasion with incredulity. Trump may entertain himself with the presidency for the next three years (barring impeachment), but the mutual respect between him and his movement has been ruptured, and his revolution is essentially over. [The Spectator]
• Trump could evoke Truman’s precedent against the Japanese – a rationale widely accepted by American historiography on similar arguments: The need to avoid a US ground invasion against a fanatical enemy. Moreover, in the current atmosphere of total contempt for the very concept of “international law”, he could take the pragmatic view and ask what actual blow-back would he actually face? US allies have already been brutalised over Greenland and other issues in far more direct ways, and still don’t dare to break with Washington. As for US enemies, this live demonstration of nuclear resolve might even strengthen deterrence against them. [Brussels Signal]
• Firms are smart money, and when firms sell equity, that’s a sign that equity is overpriced. Currently, we do not see positive net issuance across the entire market – i.e., firms are not net sellers of equity to external investors. This fact is evident in Figure 2, which shows the sum of dollar net issuance in the past year, normalized by the stock market’s total capitalization. For much of the 1990s, issuance was positive, and at the peak of the bubble in 2000, issuance was more than 5% of market cap, meaning that 5% of the market had been newly issued in the past year. After that bubble collapsed, issuance turned negative and has largely remained so, with the notable exception of the COVID bubble of 2021, when issuance peaked above 2%. But today, issuance is decidedly negative at -0.9%; the supply of shares is shrinking. Ballpark figures, the value of U.S. common stock is around $65T, and every year companies are buying around $500B more equity than they’re selling. [Acadian Asset Management]
• In a construction materials market affected by soft demand and economic uncertainty, Titan America delivered all time high revenue, Net Income, Adjusted EBITDA and operating cash flow in 2025. This achievement reflects the strength of our business model, disciplined decision-making, skillful execution across our operations, and an unwavering focus on serving our customers. It showcases once again Titan America’s ability to grow organically and deliver strong results, even in challenging environments. Our Florida segment delivered a robust performance with strong penetration in infrastructure and private non-residential construction segments offsetting a soft residential end-market. Our investments in increased aggregates capacity, expanded capabilities, and self-help operational excellence initiatives delivered record full year revenue and Adjusted EBITDA in 2025. Our Mid-Atlantic segment was impacted by a combination of soft demand in Metro New York and New Jersey, the introduction of tariffs, and weather affecting Virginia and the Carolinas. Resilient pricing, and continued growth in infrastructure, private non-residential construction, including data centers, and cost containment initiatives partially mitigated the impact from the headwinds in the region. [Titan America SA]
• Paul R. Ehrlich, an eminent ecologist and population scientist whose best-selling book, “The Population Bomb,” was celebrated as a prescient warning of a coming age of food shortages and famine but later criticized by conservatives and academic rivals for what they called its sky-is-falling rhetoric, died on Friday in Palo Alto, Calif. He was 93. [The New York Times]
• For a young single person, the economic and social advantages of urban network effects clearly outweigh the dangers of life in the city. You can make more money. The social opportunities are a lot more interesting. The food generally is better. (This is why liberals in Portland and San Francisco love to ostentatiously pretend not to know what you’re talking about when you describe the problems of living there: it’s a flex.) But when people have kids, they quickly lose their confidence that they can fly above the social dysfunction indefinitely. All sorts of abstract, macro policy problems suddenly don’t feel so abstract. Regardless of where they live, Americans are forced to spend colossal amounts of psychological and economic resources acting as private security for their kids — which is at least as inefficient and silly as building a private pool in every backyard. Not only does it exhaust parents, but it prevents kids from developing autonomy, and the physical fitness that naturally comes from running around the neighborhood. [EXIT Newsletter]
• Recent events have interrupted operations at major facilities in Qatar, a significant global supplier. Industry observers note that this situation raises the prospect of widespread shortages, potentially marking the fifth global helium shortage in the past 20 years. These recurring challenges highlight the risks associated with concentrated production, particularly from large projects linked to hydrocarbon operations in geopolitically sensitive regions. [North American Helium Inc.]
• What you’re seeing in the remarkable chart above is that private sector spending on AI in 2026 is forecast to exceed $700 billion, which is not a number that is easy to think about. As a share of GDP, companies are currently devoting more resources to AI than the combined peak annual capital spending on key 1930s public works projects and the Manhattan Project and the 1940s electricity boom and the Apollo Project and Interstate highway construction. It’s important to note that AI spending is overwhelmingly financed by the private sector, whereas most of those infrastructure projects were financed by the largesse of the federal government. Once again, nothing like this has ever happened before, and if you feel extremely confident about how this is going to turn out, I think you might be crazy. [Derek Thompson]