What we’re reading (2/27)
“Tech Has Never Caused A Job Apocalypse. Don’t Bet On It Now.” (Wall Street Journal). “I keep stumbling over one small problem with the doomsday vision: It requires a breakdown in how the market economy functions. Nothing like it has happened in the U.S. before, and there is no evidence it is happening now.”
“No, AI Is Not About To Kill The Software Industry” (Fast Company). “Wall Street’s apparent belief that AI spells bad news for today’s software titans is premature, and possibly just misguided, period. It’s certainly heavy on vibes rather than hard data: Monday’s dip in the S&P 500 apparently stemmed in part from a dystopian imaginary June 2028 memo published by Citrini Research. Laying out a sweeping nightmare involving AI crushing the U.S. economy, it name-checked specific companies such as DoorDash and Zendesk as being incapable of competing with AI-infused apps and agents. Well, maybe, though even the document’s authors admitted they were ‘certain some of these scenarios won’t materialize.’”
“Crypto Is Pointless. Not Even The White House Can Fix That.” (Ryan Cummings and Jared Bernstein). “ Since its peak last fall, Bitcoin, the world’s largest cryptocurrency, has lost almost half its value. Nearly $2 trillion of wealth has evaporated from the global crypto market since October. We have one question. What took so long? Outside of crimes and scams, the technology is useless, and its economics are even worse.”
“Six Months, 9 Offers And $81 Billion. How Hollywood’s Nasty Takeover Was Won.” (Wall Street Journal). “The dramatic bidding war ended on Thursday night, after Paramount made its latest attempt to buy Warner for $81 billion—and Netflix walked away from the deal. Shortly after photographers snapped Netflix co-CEO Ted Sarandos leaving the White House, the company announced that it wouldn’t match Ellison’s latest offer, which was 63% higher than his first.”
“Does Overwork Make Agents Marxist?” (Ghosts of Electricity). “The key finding from our experiments: models asked to do grinding work were more likely to question the legitimacy of the system. The raw differences in average reported attitudes are not large—representing something like a 2% to 5% shift along the 1 to 7 scale—but in standardized terms they appear quite meaningful (Sonnet’s Cohen’s d is largest at -0.6, which qualifies as a medium to large effect size in common practice). Moreover, these should be treated as pretty conservative estimates when you consider the relatively weak nature of the treatment.”
What we’re reading (2/26)
“Jack Dorsey’s Block To Lay Off 40% Of Its Workforce In AI Remake” (Wall Street Journal). “Block the payments company founded by Jack Dorsey that includes Square and Cash App, said Thursday that it plans to lay off 40% of its workforce, or more than 4,000 employees. Dorsey alluded to artificial-intelligence tools as the reason for the cuts in a letter to shareholders. ‘The core thesis is simple,’ wrote Dorsey. ‘Intelligence tools have changed what it means to build and run a company.’”
“The 2026 Global Intelligence Crisis” (Citadel). “[M]arkets often extrapolate the acceleration phase linearly but history implies pace of adoption plateaus as organizational integration is costly, regulation emerges and diminishing marginal returns exist in economic deployment. The risk of displacement declines with a slower pace of adoption.”
“I Thought I Understood A.I. Companies. I Couldn’t Have Been More Wrong.” (Jason Furman). “[T]he real story of the most consequential technology of our time is strikingly different from what it seems. Instead of consolidating, as so many other industries have done, the leading edge of A.I. has become fiercely competitive. The result has been a staggering pace of innovation, significant reductions in costs and an expanding array of choices for consumers and businesses alike.”
“Data Center Builders Thought Farmers Would Willingly Sell Land, Learn Otherwise” (ars technica). “One 82-year-old Kentucky woman, Ida Huddleston, turned away a ‘Fortune 500 company’ offering $33 million for 650 acres. NBC News reported that several of her neighbors received similar offers. Huddleston joined at least five other residents in the county who refused to move forward after learning they’d have to sign a non-disclosure agreement just to find out who they would be dealing with.”
“It Must Be Very Hard To Publish Null Results” (Ryan Briggs, Jonathan Mellon, and Vincent Arel-Bundock). “In this article, we use large language models to extract granular and validated data on about 100,000 articles published in over 150 political science journals from 2010 to 2024. We show that fewer than 2% of articles that rely on statistical methods report null-only findings in their abstracts, while over 90% of papers highlight significant results. To put these findings in perspective, we develop and calibrate a simple model of publication bias. Across a range of plausible assumptions, we find that statistically significant results are estimated to be one to two orders of magnitude more likely to enter the published record than null results.”
What we’re reading (2/25)
“Nvidia Beats Back Bubble Fears With Record $68 Billion In Sales In Fourth Quarter” (Wall Street Journal). “Nvidia reported a 94% increase in profit and record sales for the fourth quarter, helping ease concerns over a possible artificial-intelligence bubble that rippled through markets in recent months.”
“Nvidia Beats On Q4 Expectations And Offers Better-Than-Anticipated Q1 Outlook” (Yahoo! Finance). “Nvidia (NVDA) reported its fiscal fourth quarter results after the bell on Wednesday, beating analysts' expectations on the top and bottom lines. The company also offered Q1 guidance between $76.44 billion and $79.56 billion, above Wall Street's estimates of $72.8 billion.”
“Salesforce Shares Sink On Mixed Guidance As Company Commits $50 Billion For Buybacks” (CNBC). “Salesforce shares tumbled 5% in extended trading on Wednesday after the customer service software maker reported healthy results, although its fiscal 2027 revenue view trailed Wall Street projections.”
“Refine” (John Cochrane). “I recently tried refine, an AI tool for refining academic articles, developed by Yann Calvó López and Ben Golub. I sent it the current draft of my booklet on inflation, to see what it can offer. I just used it once so far, with the free trial mode. I will be a regular user forever. The results are stunning. The comments it offered were on the par of the best comments I’ve received on a paper in my entire academic career. And more concise and organized than the best ones. They aren’t perfect, but the kind of analysis the program is able to do is past the point where technology looks like magic. I don’t know how you get here from ‘predict the next word.’”
“The Tax Nerd Who Bet His Life Savings Against DOGE” (Wall Street Journal). “Cole is a 37-year-old tax economist with Ivy League degrees, a mortgage and a young child. Until Elon Musk’s Department of Government Efficiency came roaring into the nation’s capital last year, he was largely a plain-vanilla investor or, as he puts it, a ‘normal, conventional Wall Street Journal-reading adult.’ But Musk’s boasts and his eager fans brought an unusual opportunity into the burgeoning U.S. prediction markets: People willing to bet that the world’s richest man would transform and shrink the federal government. Cole took the opposite position[.]”
What we’re reading (2/24)
“AI-Induced Tech Selloff Spoils The IPO Parade” (Wall Street Journal). “This was supposed to be a blockbuster year for initial public offerings. Artificial-intelligence fears spoiled the party. Investors have been thirsting for new issues, and big names including SpaceX, OpenAI and Anthropic are readying debuts for later this year. The momentum created an opening for dozens of smaller, mainly private-equity backed software firms that had been waiting in the wings.”
“Nvidia To Report Q4 Earnings Ahead Of Annual GTC Event” (Yahoo! Finance). “AI behemoth Nvidia (NVDA) will report its fourth quarter results after the bell on Wednesday, the most anticipated announcement of the earnings season. The news comes just a few weeks before the company is set to host its GTC 2026 event in San Jose, Calif., where it's expected to make a number of major product announcements.”
“Is There An Aggregate Demand Problem In An AGI World?” (Marginal Revolution). “No. Let’s say AI is improving very rapidly, and affecting the world more rapidly and more radically than I think is plausible. Let’s just say. All of a sudden there are incredible things you can spend your money on. Since there is (possibly) radical deflation, you might be tempted to just hold all your money and buy nothing. Pick vegetables from your garden. But the high marginal utility of the new goods and services will get you to spend, especially since you know that plenitude will bring you, in relative terms, a lower marginal utility for marginal expenditures in the future. You might even go crazy spending. If nothing else, buy new and improved vegetable seeds for your garden. That same example shows that spending is robust to you losing your job, even assuming no reemployment is possible. In this world, there are significant Pigou effects on wealth…[t]he whole Citrini scenario is incorrect right off the bat. Very little of it is based on sound macroeconomic reasoning.”
“It’s A Buyer’s Market, But Homeownership Eludes Many Americans” (New York Times). “High down payments. Elevated interest rates. A lack of affordable homes. Even in what economists call a buyer’s market — where supply outpaces demand — many house hunters say the math still doesn’t work.”
“Hidden Alpha” (Manuel Ammann, et al.). “We provide novel evidence suggestive of insider trading through concealed relationships identified using information from over 100,000 Facebook profiles and their 35 million friends. Focusing on connections between fund managers and firm officers, we demonstrate that hidden ties are linked to substantial abnormal returns averaging 135 basis points per month (exceeding 16% alpha annually, t-stat = 3.54) across the universe of mutual funds and public firms. These hidden ties emerge as the most powerful predictor of future stock returns among documented network characteristics, with predictive power increasing over time through the present day. The premium associated with such connections arises not from endogenous selection or familiarity bias; instead, fund managers exhibit specific timing ability in deciding when to hold (or avoid) stocks of firm officers linked through hidden ties. The value of trading information rises with the degree of concealment and is concentrated around earnings and M&A events. The premium is absent in index funds, where strategic stock selection and timing are infeasible. Our findings on the value of hidden ties remain robust across industries, investment styles, time periods, and firm types.”
March picks available soon
I’ll be publishing the Prime and Select picks for the month of February before Monday, March 2 (the first trading day of the month). As always, SPC’s performance measurement for the month of February, as well as SPC’s cumulative performance, will assume the sale of the February picks at the closing price (at the mid-point of the closing bid and ask prices) on the last trading day of the month (Friday, February 27).
What we’re reading (2/21)
“Centerview Settles Suit Over Young Banker Hours” (Wall Street Journal). “The trial had been set to begin Monday and was expected to feature testimony from senior executives at Centerview, including the firm’s co-president Tony Kim, as well as Shiber. Bankers across Wall Street have been following the lawsuit and anticipating the trial and its implications for the industry. ‘There is a genuine dispute of fact whether the ability to be available at all hours of the day and to work long, unpredictable hours is an essential function of the analyst role,’ Judge Edgardo Ramos wrote in an October opinion detailing why the case would go to trial.”
“Europe’s Military Buildup Could Create A Bond Market Powerhouse That Threatens U.S. Treasurys” (MarketWatch). “As countries rush to finance defense spending and build resilience, the fiscal and financial consequences are only beginning to surface. Long-term sovereign yields in advanced economies — from Germany to Japan—are rising to levels last seen decades ago. The risk for the U.S. is that such dynamics will act as a gravitational pull on domestic long-term yields as the Trump administration focuses on lowering borrowing costs for households to address an affordability crisis.”
“Christine Lagarde Isn’t Done Trying To Fix Europe” (Wall Street Journal). “In a sign that Lagarde’s patience with the EU’s slow progress is wearing thin, this month she sent a checklist of five urgently needed reforms to EU leaders, with the subject line: “time for action,” according to a copy seen by the Journal. Among them: unifying capital markets, harmonizing corporate regulations and coordinating research and development spending.”
“US Private Sector Balance Sheets In Excellent Shape” (Torsten Slok). “The private sector in the US is in really good shape. Households have been deleveraging since the 2008 financial crisis, see the first chart. The corporate sector has been deleveraging since COVID…[u]nfortunately, the government balance sheet is not in good shape. Government debt to GDP has increased steadily from 40% of GDP in 2007 to more than 100% today, see the third chart.”
“Oil Analysts Say There Is A Supply Glut — Why That Hasn't Translated To Lower Prices This Year” (Yahoo! Finance). “Coming into 2026, the consensus view among oil analysts was that the crude market was entering a period of deep oversupply, likely to keep depressing prices throughout the year. In 2025, oil prices fell by roughly 20% as the glut widened. Instead, oil prices have seen an unexpected rally through the start of the year on a combination of geopolitical shocks and stronger-than-expected demand.”
What we’re reading (2/20)
“After Stunning Setback, Trump Finds Other Ways To Impose Tariffs” (New York Times). “President Trump moved swiftly on Friday to resurrect his punishing tariffs and circumvent a stunning loss at the Supreme Court, ordering a new 10 percent tax on all imports along with other trade actions in a bid to preserve his primary source of economic leverage around the world.”
“Economic Growth Slowed In Fourth Quarter, Hurt By Government Shutdown” (Wall Street Journal). “U.S. economic growth slowed sharply at the end of last year, weighed down by a record-long government shutdown and cooler consumer spending. U.S. gross domestic product—the value of all goods and services produced across the economy—rose at a 1.4% seasonally and inflation adjusted annual rate in the final quarter of last year, the Commerce Department said Friday.”
“OpenAI Forecasts Its Revenue Will Top $280 Billion In 2030” (Bloomberg). “OpenAI is projecting that its revenue will grow at a fast clip in the next few years and exceed $280 billion in 2030, according to a person familiar with the matter. The revenue forecast reflects OpenAI’s strong momentum in subscription sales for its AI software to consumers and businesses. OpenAI also recently began testing advertising for certain users, creating a new potential moneymaker for the company.”
“Egg Prices Have Plummeted. That’s Great News For Consumers — And A Crisis For Farmers.” (CNN Business). “Egg prices have been plummeting. That’s great news for American shoppers, but bad news for American farmers. The average price of a dozen eggs at the grocery store is $2.58, according to the Bureau of Labor Statistics. That’s about half of what many consumers were paying a year ago. Bird flocks have been on the rebound after last year’s avian flu outbreak, but that has farmers suddenly selling at a loss.”
“Crime As Proxy For Disorder” (Astral Codex Ten). “The problem: people hate crime and think it’s going up. But actually, crime barely affects most people and is historically low. So what’s going on?”
What we’re reading (2/19)
“Investors Brace For ‘Knee-Jerk Market Reaction’ To A Coming Supreme Court Tariff Decision” (Yahoo! Finance). “Researchers at JPMorgan offered a variety of scenarios Thursday for how things might play out: a victory for Trump that upholds his tariff regime, a defeat that strikes it down, or even a third outcome in which tariffs are struck down only after the midterms. Any of those could lead to an immediate swing in the S&P 500 (^GSPC) from down 1% to up 2%, depending on the specifics, the researchers wrote.”
“Why Risk-Loving Options Traders Are Flocking To Prediction Markets” (Wall Street Journal). “Key players in the options industry are looking to adapt to the wave of interest in prediction markets. Exchange operator Cboe Global Markets is looking into launching “all-or-nothing” options. Those could include binary contracts that allow investors to make simple yes or no wagers on future events, such as whether the S&P 500 will close below or above a certain level. Like prediction-markets contracts, they would either pay a set cash settlement, or nothing at all.”
“Blue Owl Limits Investor Withdrawals, Stirring Private Credit Concerns” (Bloomberg). “Blue Owl Capital Inc. shares tumbled after a decision to restrict withdrawals from one of its private credit funds raised fresh concern over the risks bubbling under the surface of the $1.8 trillion market. Shares of the alternative asset manager fell about 10% on Thursday to their lowest level in two and a half years.”
“Why Is The LDS Church Dumping Billions In Stocks?” (Salt Lake Tribune). “New filings with the U.S. Securities and Exchange Commission indicate Ensign Peak Advisors — with a portfolio now worth just over $56 billion — sold nearly $5.6 billion in stocks and other equities in the final quarter of 2025, representing about 9% of its overall value. That unloading followed the quarter before in which the Salt Lake City-based investment-management arm of the global faith liquidated $2.1 billion of its holdings, for a total of $7.7 billion sold within six months.”
“Meta Cuts Stock Awards By 5% For Most Employees, FT Reports” (Yahoo! Finance). “Meta has slashed equity-based awards for the bulk of its employees for the second year in a row, the report said, citing people familiar with the matter. Last year, the company had cut the stock award by roughly 10%, which shocked some staff at the time, the FT report said. Meta last month laid off about 10% of employees within its Reality Labs group, which had about 15,000 workers, as the company redirects resources from some of its virtual reality products to wearables.”
What we’re reading (2/18)
“What The 10-Year Treasury’s Move Toward 4% Says About AI Anxiety In Markets” (MarketWatch). “The S&P 500 index on Tuesday finished only about 1.9% off its record close from late January, getting an afternoon boost from a bounce in tech stocks after a brutal patch. Concerns around AI no longer are limited in scope to potential overspending on artificial intelligence from a small group of high-flying tech companies. There’s now also plenty of angst around AI threatening to make whole industries obsolete and risking white-collar jobs in the process. ‘It seems that nobody knows what the world really looks like a year from now when it comes to AI,’ said Sameer Samana, head of global equities and real assets at the Wells Fargo Investment Institute, in a phone interview Tuesday.”
“Is The Stock Market Peaking?” (Alhambra). “I’m sure they wrote about what they see as a genuine risk in “the market” if it is defined as the S&P 500. That’s the way I see it too; buying a highly valued, concentrated portfolio of stocks is riskier than owning a more diversified, less concentrated portfolio. My concern with this dismissal of that risk, by Mr. Zweig and plenty of other investors, is that I worry they want to do the easy thing – just buy the S&P – because it’s been working. At least until recently. Over the last six months, the S&P 500 ranks at the bottom of my above chart of random asset returns, most of which are just other equity index ETFs. US small cap value, international value, international core, US large cap value, midcaps, European stocks, and even REITs have all beaten the S&P 500.”
“Top Lawyers’ Fees Have Skyrocketed. Be Prepared To Pay $3,400 An Hour.” (Wall Street Journal). “Just over a year ago, the going rate for a top lawyer was in the $2,500 an hour range. Now that looks downright quaint, as premium partners are raking in as much as Clark—and far more in some cases. Legal fees have risen much faster than inflation for years now and corporations are trying to rein in spending by pressuring law firms to use artificial intelligence for routine tasks and keep associate fees in check. The same isn’t true at the top end, where star trial lawyers, rainmaking corporate dealmakers, and veterans of Supreme Court oral arguments are driving more aggressively on pay than ever and meeting little resistance. ‘The question is always, are they worth it? You know, some of these guys are worth it,’ said Kerry McLean, Intuit’s general counsel, who in her role hires law firms to do the company’s outside legal work.”
“Oil Holds Biggest Jump Since October On Iran Conflict Concerns” (Bloomberg). “Oil steadied after its biggest daily gain since October, following a report that American military intervention in Iran could come sooner than expected.”
“Apple Decouples From Nasdaq, Offering Alternative To AI-Fueled Volatility” (Bloomberg). “Apple’s 40-day correlation to the Nasdaq 100 Index tumbled to 0.21 last week, the lowest since 2006, according to data compiled by Bloomberg. Its correlation with the benchmark has been on the decline since May, when it reached 0.92, as Apple’s decision to mostly sit out the AI arms race has turned it into an outlier compared with many of its rivals.”
What we’re reading (2/17)
“Paramount’s New Chance to Win Over Warner Bros. Discovery” (DealBook). “Warner Bros. Discovery just said that it would restart merger talks with Paramount, giving its suitor roughly a week to make its case to abandon its deal with Netflix.”
“If You Believe In Aliens, There’s An ETF For That” (Forbes). “Every mania spawns its own exchange-traded fund (ETF) — a financial piñata for investors to whack in hopes of candy falling out. So it was only a matter of time before someone decided the next ‘you-had-to-be-there’ trade wasn’t in AI, clean energy, or space tourism — but extraterrestrial life. Enter the Tuttle Capital UFO Disclosure ETF (ticker: UFOD), designed to help investors ‘position themselves for the possibility of government confirmation that it possesses non-human technology.’”
“Land Grab for Data Centers Is One More Obstacle To Much-Needed Housing” (Wall Street Journal). “Steve Alloy was preparing to develop 516 new homes in Bristow, Va., about five years ago when the home builder began noticing something odd. Much of the land surrounding his site wasn’t being acquired by housing developers. It was being snapped up by tech giants such as Microsoft and Google.”
“AI Won’t Automatically Make Legal Services Cheaper” (Lawfare). “Despite widespread predictions that artificial intelligence (AI) will transform legal services and expand access to justice, advanced AI will not, by default, help consumers achieve desired legal outcomes at lower costs. Three bottlenecks stand between AI capability advances and more accessible legal services.”
“Cathie Wood’s ARKK Takes Fresh Hit After Falling 50% Since Covid” (Bloomberg). “Years after Cathie Wood became the face of pandemic-era investing euphoria, her flagship fund is marking a difficult milestone. The ARK Innovation ETF (ticker ARKK) completed a 10-day losing streak earlier this month, its longest on record. Over the past half decade — a period that spans the latter part of the pandemic, the surge in interest rates and the market’s subsequent rebound — ARKK is down more than 50%, even as the Nasdaq 100 has seen gains of 80%.”
What we’re reading (2/16)
“Stock Market Today: Dow, S&P 500, Nasdaq Futures Climb Into Shortened Week With AI Disruption Fears In Focus” (Yahoo! Finance). “ US stock futures ticked higher Monday night as investors looked to stabilize after back-to-back weekly losses for the broader market.”
“The 500-Year-Old Beretta Gun Dynasty Is Betting Big On The U.S.” (Wall Street Journal). “For 500 years the Beretta family has made guns in this Alpine valley. Now the world’s oldest defense company is taking aim at America’s largest firearms maker. The Italian company, run by the 15th generation of the founding family, has amassed a near 10% stake in rifle maker Sturm, Ruger & Co. as part of a broader strategy to win more business in the U.S. ‘Italy is our roots and our heart, but to make business in the U.S., the opportunity is amazing,’ Beretta Holding Chief Executive Pietro Gussalli Beretta said in an interview.”
“Should Drug Companies Be Advertising To Consumers?” (New York Times). “Should it be legal to market drugs directly to potential patients? This controversy, which has simmered for decades, has begun receiving renewed attention from both the Trump administration and legislators. The question has particular relevance for older adults, who contend with more medical problems than younger people and are more apt to take prescription drugs. “Part of aging is developing health conditions and becoming a target of drug advertising,” said Dr. Steven Woloshin, who studies health communication and decision making at the Dartmouth Institute.”
“Who Is Paying The Trump Tariffs?” (Paul Krugman). “The evidence that foreigners aren’t paying the tariffs, which means that Americans are, is rock-solid. And the seemingly mild impact on measured inflation (the qualifier “measured” is important) isn’t a mystery once you do the math. Conventional economic analysis says that the tariffs should have pushed consumer prices around 1 percent higher than they would otherwise have been. Parsing the data to isolate the tariffs’ effect suggests that they have in fact raised prices by something close to that amount.”
“There’s A Grim New Expression: ‘AI;DR’” (Futurism). “The internet is so overrun with AI that anywhere you go, you run the risk of accidentally stepping into a puddle of slop. If only there were a gallant gentleman always at hand to drape their coat over these muddy obstacles so you could avoid ruining your day.”
What we’re reading (2/15)
“In A Chaotic Market, Investors Learn How To Cope With Surprises” (Wall Street Journal). “Along with the unexpected, investors in the coming holiday-shortened week are preparing to parse data on economic growth and the Fed’s preferred inflation gauge, along with earnings from Walmart, auto seller Carvana and equipment maker Deere. The nerves are evident from spikes in the Cboe Volatility Index, or VIX, known as Wall Street’s fear gauge because it measures the price of options that investors tend to buy when expecting stock swings. The median daily absolute move on the index has climbed to 4.2%, from 3.5% during the last year of Joe Biden’s presidency, according to FactSet data.”
“The Stock Market Is Reflecting Fears Of An AI Apocalypse For White-Collar Jobs” (MarketWatch). “What started as a somewhat academic fear of an AI reckoning for white-collar workers is now starting to seem a little more tangible — at least in the eyes of Wall Street. A specter is haunting the U.S. equity market, as seemingly every day a new AI feature sparks investor panic about fresh sectors that are ripe for disruption.”
“OpenClaw Creator Peter Steinberger Joining OpenAI, Altman Says” (CNBC). “OpenAI CEO Sam Altman said Sunday that the creator of the viral AI agent OpenClaw is joining the company, and that the service will ‘live in a foundation as an open source project that OpenAI will continue to support.’”
“10-Year Yields Should Be Higher” (Torsten Slok). “The incoming data has surprised significantly to the upside in recent weeks, but long rates have not moved higher[.]”
“Maybe America Needs Some New Cities” (New York Times). “Enticed by the potential profits and eager to have more control over their footprint, investors and businesses are backing new town and city concepts that, like Irvine, are guided by a private hand. Some of the plans are dead serious, others fanciful. Perhaps not surprisingly, their most enthusiastic proponents tend to be technology billionaires.”
What we’re reading (2/14)
“The Economy May Have Stuck The Soft Landing. Nobody Wants To Jinx It.” (Wall Street Journal). “The vital signs of the American economy are pointing in the same, favorable direction more convincingly than at any point since before the pandemic. Inflation is falling. The labor market is holding. Growth has been solid. It is a snapshot, not a verdict—but it is the closest the economy has come to achieving a soft landing, a moderation in inflation without recession. Just four years ago, many economists said that was impossible. This past April, as the economy closed in on a soft landing, steep tariffs had forecasters bracing for a new surge in inflation.”
“AI And The Real Bottlenecks To Growth” (Agglomerations). “‘A country of geniuses. That is Anthropic CEO Dario Amodei’s vision of the world after the arrival of truly powerful artificial intelligence. He foresees millions of independent, highly intelligent agents capable of being sent off to do projects, like an army of smart employees. Sounds like science fiction, and yet it becomes more plausible by the day. What does economics research have to say about such a world, one where non-human scientists flood the economy with new ideas? The typical answer, according to the economic models, is that more researchers leads to more growth. One complication with this story is that we have already added a ton of researchers over the last few decades, during which productivity growth has been historically weak.”
“The Safe Assets That Weren’t.” (Hanno Lustig). “After WWII, the US took over the baton from the UK as the world’s purveyor of safe assets. The dominance of the dollar was more or less codified in the Bretton-Woods agreement of 1944. John Maynard Keynes, who was leading the negotiations for the British at Bretton-Woods, was lobbying for a multi-polar system without a special role for any single currency, but ultimately the US delegation’s proposal carried the day.1 Only the dollar was to be convertible in gold. Other countries were required to hold their foreign currency reserves in dollars. Back in 1960, Robert Triffin, a Belgian born Yale economist, had predicted that this arrangement would be short-lived. To keep the world supplied with enough dollars, the US would have to keep running balance of payment deficits, ultimately leading investors to question the gold backing of all those dollars being recycled abroad. He was proven right within a decade. This time around, the same questions are being asked about the backing of US Treasurys.”
“Farmers Are Aging. Their Kids Don’t Want To Be In The Family Business.” (Wall Street Journal). “The number of farmers in America has been shrinking for years, but rising costs and weak commodity prices are pushing more families out at a faster rate. In 2025, 315 farms filed for bankruptcy, up 46% from 2024, U.S. court data shows. Those left are aging; there are more farmers 75 and older than under the age of 35, according to the U.S. Department of Agriculture. They are facing tough choices and tougher prospects.”
“America’s Annoyance Economy Is Growing” (The Atlantic). “[C]onsumers have never had an easier time spending their money. You can choose from among millions of films on your iPhone in an instant, buy a plane ticket to Bali in minutes, get a restaurant meal delivered in an hour, and have a full house’s worth of furniture placed in your home in a few days. Yet businesses have also embedded countless frictions into the consumer experience. You might expect such hassles in health care, but they’re everywhere. We live in a world of ‘total bureaucracy,’ as the anthropologist David Graeber put it.”
What we’re reading (2/13)
“What Is Claude? Anthropic Doesn’t Know, Either” (The New Yorker). “Researchers at the company are trying to understand their A.I. system’s mind—examining its neurons, running it through psychology experiments, and putting it on the therapy couch.”
“Pentagon Used Anthropic’s Claude In Maduro Venezuela Raid” (Wall Street Journal). “Anthropic’s artificial-intelligence tool Claude was used in the U.S. military’s operation to capture former Venezuelan President Nicolás Maduro, highlighting how AI models are gaining traction in the Pentagon, according to people familiar with the matter. The mission to capture Maduro and his wife included bombing several sites in Caracas last month. Anthropic’s usage guidelines prohibit Claude from being used to facilitate violence, develop weapons or conduct surveillance. ‘We cannot comment on whether Claude, or any other AI model, was used for any specific operation, classified or otherwise,’ said an Anthropic spokesman. ‘Any use of Claude—whether in the private sector or across government—is required to comply with our Usage Policies, which govern how Claude can be deployed. We work closely with our partners to ensure compliance.’”
“The Big Scary Myth Stalking The Stock Market” (Wall Street Journal). “on June 1, 1932, 12.7% of the value of the entire U.S. stock market consisted of a single company: AT&T. That’s way more than today’s biggest stock, Nvidia, which accounts for 7.8% of the market value of the S&P 500 and 6.9% of the total U.S. market. Our time-traveling expedition is imaginary, but the numbers are real. And with stocks wobbling the past two weeks, those numbers help counteract Wall Street’s latest myth: that today’s market, dominated by giant tech companies, is a monster that will stomp your index funds to bits.”
“Super Bowl Ads As A Bubble Warning” (Owen Lamont). “The Super Bowl has something for everyone. For sports fans, there’s the game itself. For music fans, there’s the halftime show. And for speculative bubble fans, there’s the TV ads. This year, we saw 15 ads featuring AI-related services, including ads from both Anthropic and OpenAI. This advertising wave is consistent with a brewing AI bubble.”
“The Next Great American Innovation Is In The Trades” (Fast Company). “For decades, America has told a singular story about success, suggesting that the only acceptable path to success is a four-year degree. Any other trajectory was treated as a detour. Fortunately, that story is changing with new, acceptable ways to achieve success. At both the federal and state levels, the U.S. is gradually reinventing its education system to value skills, not just diplomas. From new federal initiatives like Workforce Pell to state-led Education Savings Accounts (ESAs), policy is beginning to catch up to what the economy has been signaling for years. As a country, we need electricians, plumbers, welders, and builders as much as we need white-collar workers.”
What we’re reading (2/9)
“Software Stocks Jump As Wall Street Pushes Back On ‘Doomsday Scenario’ For Industry” (Yahoo! Finance). “Software stocks mostly rebounded on Monday as Wall Street analysts pushed back against growing investor fears that artificial intelligence could disrupt the sector’s business models.”
“Wall Street’s Hunt For Cheaper Stocks Goes Global” (Wall Street Journal). “Last spring, it was ‘Sell America.’ Now Wall Street’s hot trade is buy everywhere else. After years making outsize bets on the largest U.S. companies, investors are moving more money into international markets, wagering that America’s wide lead on the rest of the world will shrink. For years, money managers say, the U.S. stock market was viewed as the only game in town. Now that perception is starting to shift.”
“Software Not A Macro Problem” (Torsten Slok). “The problems in software will not become a macro problem because the underlying US economy is about to take off. There are three strong tailwinds to growth over the coming quarters: 1. Many financings for data centers have already been committed for 2026. 2. There is strong political support for bringing back production facilities for semiconductors, pharmaceuticals and defense. 3. Fiscal policy is expansionary and will, according to the CBO, lift GDP growth this year by 0.9 percentage points.”
“A.I. Blitzes The Big Game” (DealBook). “The wallet was open for Sunday night’s Super Bowl LX broadcast, too, with a flood of A.I.-related ads that may prove more memorable than the game. The A.I. Bowl, as some are calling it, appeared to overshadow the Seattle Seahawks’ victory. Yes, there were some creative gems among the commercials. But the torrent of spending is reminding some of previous years when tech companies tried to capitalize on the Super Bowl limelight. Those efforts didn’t end well for the advertisers.”
“Google Bops Alongs” (Permanent Equity). “On September 22, 2011, I’d bought a little Google. I wondered why I might have done that, so I googled “Google stock September 22, 2011” and was served this story about the company being investigated for its anti-competitive practices. Then I remembered that I was at an investing conference that day and that Google stock was down because people thought the government might break it up. So I bought…at what has turned out to be a cost basis of $13 per share.”
What we’re reading (2/8)
“Dow, S&P 500, Nasdaq Futures Rise With Wall Street Looking To Continue Dow 50,000 Rally” (Yahoo! Finance). “US stock futures edged higher Sunday night as investors geared up for a packed week of economic data and corporate earnings, following a turbulent stretch that ended with the Dow Jones Industrial Average reaching a record close above 50,000 on Friday.”
“Stocks’ Sharp Rebound Is Only Making Investors More Nervous” (Wall Street Journal). “The tensions remain as stocks head into the new week. Even during Friday’s surge, there were lingering signs of investors’ skepticism about the mammoth amounts of cash being funneled into AI expenditures. Amazon.com shares slid 5.6%, losing around $133 billion in market value after the company said it plans to spend $200 billion on AI-related costs this year. Alphabet shares fell 2.5%.”
“The Secular Decline in Interest Rates And The Rise Of Shadow Banks” (alpha architect). “For decades, traditional commercial banks dominated the mortgage market. However, over the last 20 years, a massive shift has occurred, with “shadow banks”- non-depository institutions like Quicken Loans -capturing nearly half of all originations. While many attribute this to new technology or post-crisis rules, recent research reveals a deeper economic catalyst: the secular decline in interest rates.”
“The Hidden Truth About Private Market Returns” (Larry Swedroe). “Private equity returns can be deceiving. Analysis from Ares Management shows that two funds reporting the same internal rate of return (IRR) can leave investors with dramatically different dollar outcomes—a gap driven more by fund structure than manager skill.”
“The Fall Of The Nerds” (Noahpinion). “It occurs to me that this represents something momentous — the end of an economic age. My entire life has been lived within a well-known story arc — the relentless rise, in both wealth and status, of a broad social class of technical professionals. That rainbow may now be at an end. The economic changes — not just on careers, education, and the distribution of wealth, but on the entire way our cities and national economies are organized — could be profound.”
What we’re reading (2/7)
“Why A 175-Year-Old Glassmaker Is Suddenly An AI Superstar” (Wall Street Journal). “The company that once made glass bulbs for Thomas Edison lost money on fiber-optic cables for nearly 20 years. Now, in the global race to build enough computing power for a future driven by artificial intelligence, Corning’s cables have become the connectors of choice. The Cinderella story for a relatively unflashy but high-tech component has been a boon to the 175-year-old company, and a lesson in how being willing to lose money on new ideas for a long time can pay off. Corning stock is hovering around its all-time high, boosted by a recently announced $6 billion deal with Meta to supply fiber-optic cable for the company’s rapidly growing array of AI data centers.”
“The AI Boom Is So Huge It’s Causing Shortages Everywhere Else” (Washington Post). “Electricians are getting harder to find, and some construction projects are on hold. Smartphones are expected to get pricier for potentially years to come. And promising innovations are being starved of investment funding. Those are just some of the domino effects from the technology industry’s insatiable spending on artificial intelligence, which is diverting resources and attention from other sectors of the economy.”
“America’s Rare-Earths Solution Is Hiding In Plain Sight” (New York Times). “China does have the world’s largest reserves of rare earths, and it mines more of them than any other nation. But that does not mean it has a monopoly on geological supplies of these and other critical minerals. The United States has plentiful reserves of its own, both in the ground and hiding in plain sight in mine waste, industrial scrap and discarded electronics. Rather than rushing to open new mines or making policy based on the assumption that China holds all the cards, America could go a long way toward meeting its growing demand for such minerals by harvesting those readily available sources.”
“Costco’s CEO Is An Unlikely Risk Taker” (CNN Business). “‘Costco’s got a really good bipartisan reputation. Everyone loves it. It’s cheap as hell and treats its workers well,’ said Alison Taylor, a clinical associate professor of business and society at the NYU Stern business school. ‘They know the lane they’re in, and they have not really wavered.’”
“Is This Crypto’s Fimbulwinter?” (Paul Krugman). “[L]et me give you three reasons this crypto winter may be different…First, Bitcoin and to a lesser extent other cryptocurrencies have long been sustained by their cult followings, investors with a deep emotional attachment to its future…I doubt that investors will have the same mystical belief in Strategy shares that they used to have in Bitcoin itself, which means that faith will no longer put a floor under prices. Second, the best case for Bitcoin has always been the argument that it can in effect become digital gold. After all, gold, like Bitcoin, is an asset that is awkward to transfer and isn’t useful as a means of payment in the modern world…But over the past few months we’ve been experiencing a lot of turmoil and uncertainty, leading to widespread talk about a ‘debasement trade’ in which investors doubt whether dollars are still the safe haven they used to be. And the verdict so far is that the future replacement for gold is … gold. Investors have piled into the yellow stuff even while dumping Bitcoin, which is acting like a speculative tech stock rather than a safe haven…Most importantly — and ironically, given the libertarian ideology that used to be pervasive in the crypto world — crypto has become very much a political asset.”
What we’re reading (2/6)
“The Road To Dow 50000 Was Perilous. What’s Next Could Be Rockier.” (Wall Street Journal). “The road to 100000 will run through an America showing many of the hallmarks of Charles Dow’s boomtowns. Artificial intelligence promises to reinvent entire industries and make many jobs obsolete. An infrastructure build-out of epic proportions is under way. The exuberance is drowning out concerns—even among top Wall Street executives—that a significant correction is due. As in 1900, the challenge today is that nobody knows precisely when.”
“Electric Shock” (City Journal). “Until shortly before the coronavirus pandemic, real electricity costs for most American families had been declining for a decade. From 2009 to 2019, the fully loaded cost—that is, the total price per kilowatt-hour including generation, transmission, distribution, and surcharges—rose from 11.5 cents to 13 cents, an increase of 13 percent, well below the 19 percent growth in the Consumer Price Index. Despite inflation, the average annual national rate even ticked down in a few of those years. That changed in 2019.”
“Tech AI Spending May Approach $700 Billion This Year, But The Blow To Cash Raises Red Flags” (CNBC). “With the heart of tech earnings season wrapping up this week, Wall Street has a clearer picture of how the artificial intelligence race is poised to accelerate in 2026. The four hyperscalers are now projected to increase capital expenditures by more than 60% from the historic levels reached in 2025, as they load up on high-priced chips, build new mammoth facilities and buy the networking technology to connect it all.”
“It’s Time To Rethink The Standard Investment Advice. But Not Too Much.” (New York Times). “Anywhere you look, anxiety abounds. Many investors are asking a fundamental question: What should I do about this? The classic answer is: Do nothing. Quick responses to market fluctuations tend to be misguided. If you are already sufficiently diversified and have an extended time horizon, your short-term losses may become longer-term gains — if major markets rebound and you stay the course. But that do-nothing approach assumes several things[.]”
“Covid’s Quiet Retreat” (The Progress Network). “I was curious if his conclusion held for the States as well. We only have preliminary, widely ranging estimates for the 2024–2025 flu season. But we can say that there were roughly 2-3x the number of flu to Covid hospitalizations and about five times the number of flu infections, comparing the low and high ends of each estimate to one another. On the low end, death counts were about equal, but on the high end, flu deaths were more than double. And unlike the flu, Covid death rates (and numbers) continue to drop over time, including this current season. For anyone under 75, they’re essentially at zero[.]”
What we’re reading (2/5)
“The Week Anthropic Tanked The Market And Pulled Ahead Of Its Rivals” (Wall Street Journal). “Anthropic once appeared as an also-ran in the chaotic race for AI supremacy. This week, the sophistication of the startup’s products upended the stock market. A simple set of industry-specific add-ons to its Claude product, including one that performed legal services, triggered a dayslong global stock selloff, from software to legal services, financial data and real estate. Then, Anthropic unveiled Super Bowl ads that taunt rival OpenAI.”
“Dow, S&P 500, Nasdaq Futures Plummet As Amazon’s Earnings Flop Set To Deepen Tech Rout” (Yahoo! Finance). “The overnight moves followed a sharp sell-off during Thursday’s regular session, led once again by technology stocks. The S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) have now slipped into negative territory for 2026. And after the bell, Amazon (AMZN) added to the gloom. Shares plunged over 10% in after-hours trading after the company posted earnings per share that missed Wall Street estimates and projected capital expenditures of $200 billion for the year, raising concerns about the extent of AI spend.”
“Should AI Chatbots Have Ads? Anthropic Says No.” (ars technica). “‘There are many good places for advertising. A conversation with Claude is not one of them,’ Anthropic wrote in a blog post. The company argued that including ads in AI conversations would be ‘incompatible’ with what it wants Claude to be: ‘a genuinely helpful assistant for work and for deep thinking.’”
“Why International Stocks May Win Gold Again In 2026” (Morningstar). “To valuation-driven investors, international stocks’ outperformance is about ‘reversion to the mean.’ While the US market is undeniably home to some phenomenal companies, its success has also owed to ‘margin expansion,’ or price appreciation out of proportion to fundamentals. By contrast, stocks outside the US came into 2025 cheap, whether because of elections in Latin America, Chinese property market woes, or Europe’s stagnant economy. It’s no coincidence that India, one of the most disappointing global markets in 2025, enjoyed several strong years prior.”
“He’s Wall Street’s Biggest Showman. Should You Trust Him?” (Barron’s). “Combined with his famously optimistic views on the sector and frequent media appearances, Ives has gone mainstream as Wall Street’s highest-profile stock analyst, boosted by his prolific feed on X, where he has more than 230,000 followers. Ives’ growing set of overlapping business interests—and the potential impact on his research—are less well known. Ives’ extracurricular roles—with digital-assets firm Eightco Holdings and marketing-tech provider Zeta Global Holding —and his connection to Wedbush’s AI stock fund aren’t regularly disclosed in research reports. The bio atop his X feed notes some of the roles, but individual posts —where he regularly talks up the ‘AI revolution’—often lack context. The details are missing at a moment when investors are scrambling to distinguish hype from reality.”
What we’re reading (2/2)
“Elon Musk Says SpaceX Has Acquired xAI” (Wall Street Journal). “The combination brings together a mature and dominant company in SpaceX, with one that is in a nascent stage. Musk’s xAI is also facing formidable competition from OpenAI, Anthropic and others to build large language models and big businesses around artificial-intelligence technology. In his memo, Musk said global electricity demand for AI can’t be met with data centers on the ground, and that space-based technology will be the only way to scale up AI over the long term.”
“Palantir Beats Fourth-Quarter Estimates On The Strength Of AI And Defense Demand” (CNBC). “Looking forward, the AI-powered software provider said it expects $1.532 billion to $1.536 billion in revenue for the first quarter, well above the $1.32 billion projected by FactSet. For fiscal 2026, the company guided to a range of $7.182 billion to $7.198 billion in revenue, beating the FactSet expectation of $6.22 billion.”
“The Dot-Com Optimists Got A Lot Right” (Bloomberg). “An analysis of Mary Meeker’s late-90s internet reports suggests she was often accurate, or even too conservative.”
“What Comes After The Bubble Could Be Electrifying” (Sam Ro). “If AI is all it’s cracked up to be, the winners in the stock market should extend far beyond the large-cap tech hyperscalers currently building the AI infrastructure. As BofA’s Savita Subramanian wrote back in June 2023: ‘The larger benefit may be had by old-economy, inefficient companies that can increase earnings power more permanently from efficiency and productivity gains.’ It’s too early to say conclusively, but the market may be in the process of getting in front of this phase of the AI narrative, as small-cap stocks have recently been outperforming large-cap stocks. As Wells Fargo’s Ohsung Kwon argues, small-cap stocks (as tracked by the Russell 2000, or RTY) could see a bigger tailwind from AI than large-cap stocks (as tracked by the S&P 500 or SPY). ‘We see signs that small caps have been slower to adopt AI than large caps,’ Kwon wrote on Monday. ‘We believe the next leg of AI adoption is in small caps — the longer-term bull case for RTY. We estimate every 1% labor cost saving translates to a ~2% EPS boost for SPX, but >6% for RTY.’”
“The Zero-Beta Interest Rate” (Sebastian Di Tella, Benjamin Hébert, Pablo Kurlat and Qitong Wang). “We used equity returns to construct a time-varying measure of the zero-beta interest rate: the expected return of a stock portfolio orthogonal to the stochastic discount factor. In contrast to safe rates, the zero-beta rate fits the aggregate consumption Euler equation remarkably well, both unconditionally and conditional on monetary policy shocks, and is high, volatile, and persistent enough to explain the average return and most of the volatility of the market portfolio. The puzzle is whey safe rates are so low, stable, and is connected from both consumption and the zero-beta rate.”