★ Priority · 11
IT FINALLY MIGHT BE TIME
PRIORITYRussell Clark from Capital Flows and Asset Markets
- Credit spreads have remained artificially tight since the Fed's post-Covid interventions, masking the true impact of rising cost of capital on equities.
- High-yield spreads and hyperscaler CDS are showing signs of inflection higher, suggesting the negative effects of pro-labor policy on equity valuations may finally be appearing.
- The disconnect between tight spreads and rising sovereign yields remains a key trigger point for potential equity market repricing.
The Democrats Who Know How to Win. Plus. . .
PRIORITYThe Free Press
- Michigan Senate primary between progressive Abdul El-Sayed and moderate Haley Stevens was too close to call, reflecting a Democratic Party split between left and establishment wings.
- Democratic primary results showed mixed outcomes: moderates won in St. Louis while progressives gained in Michigan House races, exemplified by Bernie Sanders-backed Will Lawrence's Lansing victory.
- The Democratic Party faces a critical crossroads with dueling factions in the midterms, fighting between progressive social priorities and establishment donor-class interests.
💬 New thread from Macro Charts
PRIORITYMacro Charts
- S&P 500 reached new all-time highs with expanding breadth at 72% of stocks higher, signaling broad-based strength across core equity themes.
- Tech led the market rally with +4% gain while Materials posted +2%, indicating strong momentum in secular growth and cyclical recovery themes.
- Current technical setup in equities represents one of the most important tactical opportunities of the year, with potential to convert solid performance into exceptional returns.
Tyler Cowen: Nothing Can Stop the AI Revolution
PRIORITYThe Free Press
- Tyler Cowen argues that despite concerns about an AI bubble, the fundamental logic of AI advancement will continue progressing regardless of economic headwinds.
- Historical precedent from the dot-com and housing bubbles shows that major companies like Amazon and Google thrived despite the collapse, suggesting strong AI companies will survive.
- The recent $35 billion loss by an AI hedge fund is not indicative of broader AI progress stalling, as the underlying technology remains sound.
MACRO AND JAPAN
PRIORITYRussell Clark from Capital Flows and Asset Markets
- Western macro investors consistently misunderstand Japan because outsiders lack cultural and institutional knowledge of the country.
- Famous economist Steve Roach's 1997 bearish call on JGBs proved spectacularly wrong, illustrating the dangers of foreign forecasting on Japanese assets.
- Trust in Japan analysis requires insider understanding; foreigners are perpetually the last to grasp market dynamics.
💬 New thread from Le Shrub
PRIORITYLe Shrub from Reminiscences of a Shrub Operator
- The Nasdaq has rallied 7% from the 'Situational Meme Bottom' called last week, with QQQ reaching its 50% retracement level at $705 while SOXX lagged at 38.2% retracement due to Magnificent 7 leadership rotating back.
- Ongoing geopolitical uncertainty around a Hormuz deal keeps markets in 'War of Worry' mode with continuing false starts on dealmaking announcements.
- Market rotation is returning to leadership in mega-cap tech after brief diversification away from Asia tech and Japan, suggesting positioning is consolidating back to traditional market drivers.
Coordinated FX intervention: everybody's favourite market event
PRIORITYMark Farrington from Dollar Watchtower
- The FX market operates as an opaque, nearly $10 trillion daily OTC market with episodic liquidity and continuous valuation debates, making it the 'Wild Wild West' of global finance.
- Fiat currencies lack intrinsic cashflow, forcing valuation frameworks like EER, PPP, and IRP to constantly battle against massive deviations from fair value driven by capital flows dominating trade flows.
- Coordinated FX intervention and demand/supply shocks temporarily add guardrails and market clarity to an otherwise highly opaque and prediction-resistant market structure.
A New High for Legal Weed. The Wunderkind Who Lost $35 Billion. Plus. . .
PRIORITYThe Free Press
- First time in US history daily marijuana use exceeds cigarette and alcohol consumption as legalization continues expanding.
- Heavy cannabis use rates climbing with mounting evidence of harms; New York Times editorial board and Elton John both expressing regret over legalization.
- Data contains overlooked details about legalization's durability and societal impacts covered by Charles Fain Lehman's drug policy analysis.
💬 New thread from Macro Charts
PRIORITYMacro Charts
- SMH semiconductor index touched $524.77, testing critical pullback support range with buyers showing up at key technical levels.
- August positioned for significant upside potential; $525-530 range contains multiple support levels making it one of most important tactical setups of year.
- Technical analysis indicates important test of near-term support successfully defended, supporting bullish near-term outlook.
Pick Your Fighter: Precious Metals vs. Copper
PRIORITYPauloMacro’s Substack
- USD positioning extended with author expecting USD rollover in line with 'Triple Yasu' scenario of USD down, bonds down, equities down.
- Compares precious metals as philosophical 'opt-out' asset versus copper as economically sensitive commodity given macro outlook.
- Oil price near-halving in Q2 informs commodity allocation preference within broader macro framework.
Should I Get a Gun?
PRIORITYThe Free Press
- British journalist reflects on Second Amendment after experiencing active-shooter situation in Washington D.C., questioning whether civilian gun ownership truly enhances freedom.
- Writer seeks genuine understanding from those who support gun rights, prioritizing dialogue over judgment despite strong reader backlash.
- Article explores tension between journalistic principle of understanding diverse viewpoints and the polarized nature of American gun debate.
Markets · 19
Resets & What's Cool with the Kids
Andrew Sarna
- Hedge fund gross leverage saw its second-largest monthly decline on record in July despite S&P 500 posting only 0.2% gains.
- The S&P 500's recent 5%+ four-day rally ranks among the most extreme moves in 25+ years, occurring only three other times since 1999.
- Venture investing shows extreme difficulty with managers needing 95th percentile performance since 2017 just to match the S&P 500's 4.05x TVPI return.
US Markets - First Look
Derek Wallis
- U.S. markets following through to record highs with S&P +28bp, while 10-year yields hold at 4.62% and international markets remain mixed.
- Asian markets significantly outperformed with Japan +2%, China +1.5%, and Korea +1.8%, while European consumer stocks lagged despite EU tech firms emerging as unexpected AI winners.
- Key data releases and themes include geopolitical concerns around Iran blockade effectiveness and global leader complacency toward Trump's threats.
FX Positioning And The Suppression Of Volatility
Capital Flows
- BOJ intervention in the yen and policy mechanics determine whether suppression of volatility holds amid Treasury Secretary discussions.
- VIX is rising alongside a 2% equity rally, signaling divergence between volatility expectations and market performance.
- Carry trade dynamics feed into overall liquidity picture driving the AI trade and broader market positioning.
Part Two: Leopold and the Media (The Access Economy)
Postcards From the Edge of the World
- Financial media's access incentives and desire to maintain relationships prevent rigorous scrutiny of narratives, particularly around rising star figures.
- Leopold Aschenbrenner's excessive leverage and inexperience were visible in months-old media profiles but went unchallenged until margin calls forced a reckoning.
- Institutional failure stems from the 'access economy' where proximity to newsmakers and fear of losing interviews trump editorial independence and skepticism.
💬 New thread from Nico
Nico from AiQ
- Black Sea geopolitical tensions are worsening wheat supply conditions while short-term bearish factors like demand substitution remain secondary considerations.
- End-users have been consistently rewarded for waiting to purchase wheat, creating incentives to delay buying despite tightening supplies.
- Binary outcome analysis requires distinguishing between temporary price pressures and structural supply disruptions in commodity markets.
Trading Post August 4, 2026 My Options
Michael Burry
- Michael Burry is completing forensic analysis of Big Five hyperscalers' earnings for his next Heretic's Guide installment.
- The S&P 500's 5% four-day surge to new highs has occurred only three times historically: 3/21/00 (near dot-com peak), 4/23/99 (start of dot-com crash), and 11/9/20.
- Burry maintains positions betting against the market (SOXX puts and equity shorts), believing a potential 1987-style crash is possible despite current momentum.
How to Lose $35 Billion with Philosophy
Ted Gioia
- Leopold Aschenbrenner, a 25-year-old hedge fund manager, lost tens of billions in days through reckless use of 4x leverage buying AI stocks while his wedding was occurring.
- His investment strategy was more akin to gambling than hedging—he doubled down on AI exposure by shorting supposed AI-replacement companies instead of protecting positions.
- A small downturn in AI stocks wiped out his entire capital, illustrating the dangers of extreme leverage and failure to properly hedge concentrated bets.
US Markets - Five Points
Derek Wallis
- US markets slightly higher with limited catalysts beyond Iran speculation.
- Explores parenting philosophies through lens of discipline vs. freedom, comparing Tiger Mom approach to free-range parenting using frameworks from Charlie Parker and Nietzsche.
- Reflects on mastering rules before transcending them as key to original growth and self-directed transformation.
US Markets - First Look
Derek Wallis
- US markets flattish as oil and yields edge up; S&P near middle of range with 10-year yield at 4.71%.
- European markets mildly higher with tech leading while consumer names drag; Asia mixed across Japan, China, Korea, and Hong Kong.
- Key themes include mixed Iran messages, stocks hovering near records, and AI transformation of US economy with data on factory orders and Palantir earnings.
💬 New thread from Nico
Nico from AiQ
- Market selling subsided Monday after another weak open, with traders waiting for substantive White House news versus distraction headlines.
- China reportedly bought 14-16 soybean cargoes Friday but with only two buyers now consolidated into the same company, raising questions about market transparency.
- Conditions support AiQ's yield strategy amid continued volatility in softs and cattle markets as traders navigate conflicting signals.
SAAS: Slopulism As A Service
Nico from AiQ
- Europe shows no improvement and Black Sea risks are severely underpriced after last week's developments, with wheat experiencing volatile price action divorced from fundamentals.
- China remains opaque with conflicting signals: red flags on growth and demand versus green shoots for grains and concerning weather patterns.
- Soybean yields are still trending below models despite improved US rains; traders must distinguish between noise-generating headlines and underlying structural changes.
The Compute Standard
Capital Misallocation
- Essay explores the 1980s Japanese Bubble as a case study in how financial systems defer costs of booms into the future, with 36-year deferral mechanisms.
- Draws parallel to current AI/GPU boom by examining what happens before a bubble bursts: how refinancing vehicles warehouse costs and enable next lending boom.
- Land speculation in Ginza at peak bubble mirrors today's compute infrastructure valuation dynamics and similar boom-bust patterns.
CoreWeave: What Has to Happen Next
Cape Fear Advisors
- CoreWeave analysis focuses on 'quality of cash'—distinguishing actual cash from claims, prepayments, and ambiguous balances rather than reported earnings.
- Largest pure-play AI cloud provider presents clearest test case for detecting AI bubble dynamics through cash flow analysis rather than relative valuation.
- Circular financing structures common across AI vendors warrant scrutiny to identify whether they signal systemic risk versus ordinary business practice.
Portfolio Update
The Haymaker Team
- 30-year Treasury yield broke to 18-year high of 5.27%, signaling potential breakout past 5.5% resistance dating to 2003.
- Portfolio positioning update addresses dramatic developments in fixed income markets with implications for broader asset allocation.
Market Commentary
David Cervantes from David Cervantes | Pinebrook Capital
- Analysis examines historical forward returns following 20% corrections in semiconductor sector (SMH) since 2011.
- Study identifies exact trading days when drawdowns crossed -20% threshold and measures price recovery at 1-week, 2-week, and 30-day intervals.
- Data includes measurements of further declines from correction crossing point to eventual trough and duration of additional decline.
[Abridged] Foundations: Market Structure, Volatility Targeting, Pod Shops & Other Gremlins
Michael Burry
- 2011-2026 delivered 12.09% annualized real return with dividend contribution at 1st percentile of 145 years of data.
- Recent market volatility shows 4x more chaos from down days vs. 1985-2000 era, with 2x faster fear dissipation.
- Variance scaling patterns suggest markets lack linear random walk behavior over extended periods.
💬 New thread from Michael Burry
Michael Burry
- GameStop is converting zero-percent debt with share issuance tied to volume-weighted average price, creating a potential death spiral dynamic.
- Share count will depend on the 35-trading-day VWAP starting August 3, 2026, with a per-share price floor providing some protection.
- Noteholders can hedge or unwind positions through stock sales or derivatives, which could materially pressure GameStop's stock price.
Korean Regulator: Sorry, Suckers... (Money Printer Pro at 8:30 AM)
Garrett Baldwin (MP Pro)
- Korean and Japanese market intervention is linked to the collapse of hedge fund Situational Awareness, which triggered forced liquidations in leveraged tech positions.
- Short sellers pressed tech stocks lower, triggering cascading losses for Korean leveraged traders caught in the downturn.
- Fed symposium at Jackson Hole will likely set policy tone for the remainder of the year, with potential for significant market implications similar to past events.
US Markets - Five Points
Derek Wallis
- US markets are higher as oil prices decline, pushing yields lower and improving risk sentiment.
- Key data points this week include ISM, NFP, India rate decision, and BoJ minutes alongside scattered earnings reports.
- 50-day moving average and yield levels are the critical technical and macro anchors for market direction ahead.
Politics · 13
The Cambridge Fabulist
Eli from Man of Steele’s Substack
- A journalist's inquiry into Cambridge professor Jason Arday's doctoral thesis originality triggered a UK Metropolitan Police investigation into the journalist.
- The case raises questions about institutional accountability and the chilling effect of allegations when protected identity status is involved.
- Cambridge claims it cleared Arday while facts remain contested, highlighting tensions between academic integrity scrutiny and modern social dynamics.
Ireland’s €53m Government Jet ‘Can’t Land in Fog’ After Israeli Tech Boycott
Jonathan Sacerdoti
- Ireland's €53 million government jet was ordered without an Israeli-made enhanced vision system (FalconEye) due to BDS concerns about Elbit Systems.
- The system is specifically needed for landing in fog and poor visibility conditions, creating operational limitations for the aircraft.
- The incident highlights the contradiction of European countries attempting to boycott Israeli technology while remaining dependent on Israeli innovation in defense and healthcare.
Ghazi Hamad Did Not Retract His Threat to Repeat October 7 Again And Again
John Aziz
- Hamas official Ghazi Hamad refused to retract his October 2023 statement that Hamas would repeat the October 7 attack 'again and again' until Israel's elimination.
- Rather than recanting, Hamad attempted to redefine October 7 by claiming civilian deaths were not deliberate policy, though he provided no concrete evidence or apology.
- Hamad's refusal to unequivocally renounce future attacks suggests Hamas maintains its foundational commitment to continued violence despite international pressure.
The Failure of a Society
Jonathan Rosen from House of Rosen
- Gaza under Hamas rule since 2007 has pursued conflict and indoctrination rather than economic development or modernization.
- Hamas operates as an authoritarian regime with 40-47% unemployment and 50%+ poverty rates while leadership enriches itself.
- The society represents a failed state that chose terrorism and aid-dependency over building institutions and economic opportunity.
Goodbye, Rod Liddle
PAIDWinston Marshall
- Winston Marshall recalls meeting Rod Liddle after Liddle's harsh 2018 review of Mumford & Sons, leading to an unexpected friendship.
- Rod Liddle confronted anti-Israel protesters at a Social Democrat Party convention in October 2023, calling out the depravity of post-October 7th hatred.
- The piece emphasizes courage and moral clarity in standing against antisemitic movements and violence.
The Terrorist NEXT DOOR‼️
Shana Meyerson from Unapologetically Jewish
- Shana Meyerson responds to accusations of genocide, challenging the false equivalence of guilt-by-association in the Gaza conflict.
- Israel has taken exceptional measures to prevent civilian casualties compared to other contemporary conflicts.
- The piece addresses how pro-Israel advocates are demonized despite factual differences in conflict conduct.
BIBI VALUE
The Oracle by Polymarket
- Netanyahu is priced at just 1-in-3 odds to be prime minister after the October 27 Israeli election despite being the incumbent, which some analysts believe significantly undervalues his position.
- Israeli elections can end in a draw, rotation government, or outright majority—and Netanyahu can benefit from a hung parliament as the incumbent, complicating simple win/loss forecasting.
- An interview with Israeli political analyst Amit Segal explores mispricing of Netanyahu's odds, the Trump-Netanyahu relationship, coalition scenarios, and the trajectory of the Iran conflict.
The Green party tried to get me arrested
Jonathan Sacerdoti
- The author, a writer on antisemitism and free speech, was visited by an unmarked police officer at his home with no body camera or uniform, part of what he perceives as an attempt to silence criticism of the Green Party's antisemitism.
- The incident reflects a broader pattern in contemporary Britain where police are increasingly deployed to investigate alleged thought crimes related to controversial topics including the Middle East, free speech, and identity issues.
- The author recorded the interaction and characterizes it as a rite of passage for British writers and broadcasters tackling sensitive political and social issues in the 2020s.
Passing Gas
PAIDDoomberg
- EU veto power over decisions has been systematically weakened over decades through bureaucratic expansion of 'minor' decisions and implementor latitude.
- Russian sanctions dispute marks potential last stand for member-state sovereignty as tensions between national capitals and Brussels become increasingly brittle.
- Original EU promise of unanimous veto power—critical to gaining member support—has become unrecognizable through gradual redefinition of scope.
We've Seen This Movie Before
Jeremy McKeown from Hypernormal Times
- Trump claims Iran peace negotiations are underway while Iran denies any talks exist, creating a disconnect between official narrative and facts on the ground.
- Oil markets have stabilized in the mid-$80s and stock indices hit records despite geopolitical tension, suggesting market exhaustion rather than pricing peace.
- Market behavior has reverted to pattern-following because analysis has become impossible amid noise and contradictory claims from both sides.
Treating Chinese Marxism Seriously
Dr Warwick Powell from Warwick Powell's Substack
- Western commentators systematically fail to understand Chinese Marxist political economy on its own terms, treating it as mere ideology or window-dressing rather than legitimate ontology.
- Chinese economic discourse is fundamentally anchored by Marxist political economy, including recent remarks by President Xi on promoting domestic demand published in Qiushi.
- Misframing Chinese Marxism as ideology rather than analytical framework renders Western observations of Chinese policy partial or actively misleading.
Agent Orange 2.0
Gold and geopolitics
- To effectively dismantle bureaucratic institutions requires extreme political power and a personality massive enough to win elections and survive scrutiny.
- First-term structural policies designed to cause damage while headlines focus on visible targets (like tariffs) provide cover for longer-term institutional change.
- Trump's 2018 China tariffs ostensibly over IP theft exemplify laying groundwork for future geopolitical recalibration disguised as trade disputes.
Who are the Jihadists?
Roy Ben-Tzvi
- Jihadism defined as comprehensive ideological strategy aiming to establish global caliphate under Sharia law, not merely a reaction to grievances or foreign policy.
- Two-phase strategy involves first conquering Arab and Islamic states, then establishing separate legal enclaves in Western nations to eventually dissolve host countries' laws and traditions.
- Framework distinguishes jihadist ideology from mainstream Muslim faith, treating non-jihadist communities as equally targeted infidels in long-term conquest strategy.
Culture · 11
Your 3pm crash isn't your coffee. It's your blood sugar — 20 meals that flatten it
Parent Fit Club
- Post-meal blood glucose spikes peak 30-60 minutes after eating and are primarily driven by muscle contraction's use of the GLUT-4 transporter, independent of insulin response.
- Muscle movement immediately after eating outperforms movement before meals at flattening glucose curves, providing a practical intervention for energy crashes.
- Research-backed meal timing strategies can eliminate afternoon fatigue without relying on coffee or attributing crashes to aging or poor sleep alone.
This Israeli Scientist Found How to Make Wheat More Nutritious
Built in Israel. For everyone. from Mitch's Substack
- Israeli scientist and yeshiva student Zechariah Haber created a scholarly encyclopedia of Talmudic law, completing 350 pages during his studies.
- Haber's ambitious manuscript was discovered by his family after his death in Gaza in January 2024, revealing a hidden scholarly project.
- The work represents the first volume of a planned series covering Jewish law codes and Temple sacrificial laws.
An Essential Book for Teachers, Parents, and Anyone Interested in Learning
Restoring the West by Ayaan Hirsi Ali
- Daniel Willingham's cognitive science research shows 75% of high school students experience boredom, anger, or stress at school.
- Classroom design based on cognitive principles can transform learning from depressing to inspiring by understanding how the mind works.
- The book presents nine evidence-based strategies for educators to improve student engagement and well-being.
“The old-media era of journalists really wanted to be powerful. And I think now it’s about being interesting.”
The Substack Post
- Entertainment journalist Richard Rushfield reflects on his career covering Hollywood from American Idol through SAG-AFTRA strikes and AI threats.
- Modern journalism has shifted from seeking power and influence to prioritizing being interesting and engaging audiences.
- Independent media on Substack offers journalists new opportunities as traditional media consolidates and transforms.
Ala kachuu
Roy Ben-Tzvi
- Bride kidnapping (ala kachuu) is a non-consensual abduction practice where women are taken and forced into marriage.
- Passersby often fail to intervene, sometimes assuming such abductions are consensual despite the victim's clear distress.
- The practice persists in certain cultures despite being recognized as a form of violence and violation.
Postcards: Leopold and the Media (Part I)
Postcards From the Edge of the World
- Part I examines how financial media flipped on 'Situational Awareness' Leopold in 52 days from AI genius to inexperienced investor, exposing access journalism bias.
- Author will explore the psychological toll on journalists with unprecedented access to power and how this shaped a shift from journalism to quantitative analysis.
- Series reveals how certain companies exploit financial media dynamics as extraction points that become chokepoints during market stress.
“We Generously Decided Not to Murder You” Is Not a Good Defence of Islam
John Aziz
- Student argument that Muslim organizers 'generously' protected a critic from a hostile crowd actually undermines tolerance claims by revealing the crowd's threatening nature.
- Framing protection from potential violence by Muslims in power as evidence of Muslim tolerance paradoxically confirms Western suspicion about religious-based intimidation.
- Oxford Union debate motion was poorly framed; better analysis requires differentiating between fundamentalist Islamic ideology and Muslims themselves rather than sweeping generalizations.
Oxford Is Shaping Britain’s Future. That Should Worry Everyone.
Restoring the West by Ayaan Hirsi Ali
- Oxford Union's recent Islam debate descended into physical intimidation with masked activists clashing with police outside and threats of violence framing legitimate debate.
- Thames Valley Police spent £100,000 in taxpayer funds managing the unrest while radical sympathizers physically barred paying student members from entering the historic venue.
- Modern British academia now accepts street mob violence as legitimate political argument, with historic institutions surrendering authority to agitators rather than maintaining civil discourse.
Boy George And The Problem of Proportionality
Eli from Man of Steele’s Substack
- Boy George releases politically charged new single addressing proportionality in conflict, directly referencing October 7 and criticizing selective moral standards.
- Song demonstrates how 1980s nonconformity artist maintains critical stance on contemporary geopolitical issues four decades later.
- Lyrics challenge mainstream media narrative by acknowledging violence against Israeli civilians while questioning double standards in media coverage.
Nasturtiums 4-Eva
Rosie from Milk Street Cooking School
- Nasturtiums are fully edible plants with every part offering peppery flavor ranging from delicate flowers to fiery seed pods.
- All above-ground plant components serve culinary purposes: flowers as garnish, leaves in salads and pestos, pods as capers substitute.
- Article includes four nasturtium recipes featuring two pestos, Vietnamese rolls, and nasturtium-infused vinegar for versatile kitchen applications.
5 Things Every Parent Should Know About The Gentle Parenting Myth
Restoring the West by Ayaan Hirsi Ali
- Gentle parenting movement often overlaps with permissive parenting in practice, reducing parental authority despite advocates' distinctions between the two approaches.
- Children require loving authority, firm boundaries, and manageable frustration to develop resilience, self-control, and confidence in navigating adulthood.
- Fear of upsetting children has shifted focus from character formation to preserving child approval, risking children who struggle with boundaries and legitimate authority.
Macro · 10
The Maybe Not So Dire Straits & Understanding Japan
Jeremy McKeown from Hypernormal Times
- Iran's throttling of Strait of Hormuz flows to one-third of pre-war levels failed to spike oil prices, as Brent fell below $79 and equities hit records despite chokepoint.
- China's early reading of oversupply conditions led to strategic stockpiling and quiet demand reduction, effectively counteracting Iran's leverage strategy throughout the conflict.
- Iran's IRCG leverage play backfired domestically with 6% economic contraction, 69% inflation, and fuel shortages, while regional geopolitics devolved into a toll-booth dispute over Hormuz passage.
War Note: A Crude Time for Patience, TACO-Howitzer, Latest Hormuz Developments, Asia Situation Part 7
MacroEdge Research
- TACO-driven (tactical administration counter-offensive) melt-ups continue with Qatari mediators confident in 24-hour Strait of Hormuz reopening, maintaining the pro-asset inflation regime.
- S&P and Dow hit all-time highs while crypto and high-beta names surged, reflecting borrowed-time nominal strength with midterms just three months away limiting policy shifts.
- Current market environment parallels April's TACO sequence against war escalation, creating an inflationary asset-positive regime that makes true cost-of-capital assessment extremely difficult.
Twilight over the Rising Sun
Gold and geopolitics
- Japan's 1989 asset bubble saw the Nikkei peak at 38,916 with Tokyo's equity market representing 42% of global value, propped up by extreme valuations.
- BOJ rate hikes from 2.5% to 6% and direct intervention in property lending burst the bubble, collapsing land values 80% and destroying collateral backing major loans.
- The ensuing lost decade (1991-2003) saw Japanese GDP grow at 1.14% annually with real wages falling 11%, illustrating prolonged consequences of asset deflation.
Jackson Hole: Your Bank Account is Next
Garrett Baldwin
- To banks, customer deposits are loans earning spread income rather than customer funds, fundamentally redefining the relationship between account holders and institutions.
- Upcoming Jackson Hole symposium and recent Fed publications reveal policy directions that will directly impact retail bank account treatment and interest dynamics.
- Market rebounded from oversold conditions with Equal Weight S&P 500 staying positive through volatility and Cap Weight indices returning to green, signaling broad participation.
Mid-Year Newsletter and Life Update
Jordan from Geólogo Trader 🇦🇺
- Australia's personal income tax now comprises 42.6% of all tax revenue versus 23.7% OECD average, signaling unsustainable tax burden.
- Real GDP per capita under current Australian government has declined below the starting point, the first time since Fraser.
- Tax-advantaged jurisdictions like Paraguay offer location-independent workers significant savings with proper tax residency planning.
Buyers Beware
Nico from AiQ
- A de-escalation in regional conflicts could trigger synchronized buying from Gulf Cooperation Council buyers after five months of stock drawdowns, with significant implications for shipping and commodity buffers.
- Strategic miscalculations and reliance on outdated tariff policies are driving a new era of global trade protectionism that could fundamentally reshape international commerce.
- Historical patterns from 2021 (Iraq, Iran, Syria, Turkey imports jumping 7x following regional droughts) suggest major buying waves can rapidly tighten global commodity balance sheets when regional stability returns.
Global Liquidity Watch: Weekly Update
Michael Howell from Capital Wars
- Global liquidity levels remain stable but momentum is clearly slowing, with weaker central bank liquidity partially offset by low volatility and stable collateral values.
- Investors remain risk-on but are rotating positions away from Asia tech and Japan toward Europe, signaling a shift in regional allocation.
- A softer US dollar is providing some support to overall liquidity conditions despite headwinds from slowing central bank contributions.
The Bond Market Awakens
Andrew Sarna
- Fed left rates unchanged but three governors dissented for rate hike; Kevin Warsh provided minimal forward guidance, creating market uncertainty.
- 30-year Treasury yield broke above 2007 levels as long-end yield curve becomes increasingly dysfunctional amid inflation and geopolitical risks.
- US bond market in longest drawdown in history (six years); hyperscaler cloud businesses continue exceptional growth despite volatile AI stock swings.
Welcome to the Digital BRRR... (AKA: The Jackson Hole Agenda)
Garrett Baldwin
- Jackson Hole conference theme on 'Financial Innovation' signals central banks are preparing to rewire the global monetary system around stablecoins and digital payments.
- Federal Reserve and BIS research shows stablecoins replacing bank deposits, altering balance sheet interpretation, and creating new financial risks.
- Central banks intending to complete technical work and soften language before public announcement to avoid panic.
Waving in the 'Yella Fella'
BUSHY™ and Acorn Weekly
- Portfolio positioning focuses on curve shape and policy divergence rather than directional macro bets given current fragmented backdrop.
- Oil's 4% drop removed part of the inflation shock, boosting energy-intensive sectors like autos and travel while energy stocks underperformed.
- Federal Reserve and Bank of England held rates despite hawkish voting pressure, while ECB and BoC remain constrained by weaker growth dynamics.
Energy · 8
What DOE Reports Is Not What DOE Can Deliver
PAIDTracy (Chi) from Renegade Resources
- Strategic Petroleum Reserve fell to 307.65 million barrels on July 24, 2026, lowest since February 1983, and is scheduled to drop below the 252.4 million mandate by year-end.
- Roughly 100 million barrels of current SPR inventory cannot be delivered at rate due to facility constraints: Big Hill offline, West Hackberry at 58% capacity, vapor pressure limits.
- The mandated 252.4 million barrel reserve will effectively consist of only 150 million functional barrels with 100 million stranded, creating a critical deliverability gap.
The Trump Administration is Manipulating Oil Prices - This Will Backfire
Bison Insights
- Trump has repeatedly paused and canceled strikes on Iran, claiming diplomatic progress on reopening the Strait of Hormuz, creating oil market uncertainty.
- A pattern of negotiating breakthroughs followed by resumed strikes suggests Trump is using the threat of conflict to manipulate oil prices for political benefit.
- This strategy risks backfiring as continued uncertainty and failed negotiations could destabilize energy markets and harm the administration's economic objectives.
💬 New thread from Matt Warder
The Coal Trader
- METC (Midwest Energy Trading) production is down 5% quarter-over-quarter and 9% year-over-year with flat pricing.
- Matt Warder estimates Q2 revenue at ~$148M and earnings at -$0.19/share versus Street estimates of $133M and -$0.25/share.
- Stock could rise above $10 on a beat and positive guidance, or fall to $8 on a miss, with cost pressures and diesel price volatility from Hormuz concerns complicating the outlook.
Here is How China Win's The AI Power Race
Grizzle Research and Quant
- China's strategic oil reserves (1.5bn barrels) vastly exceed US reserves (307.65m barrels), providing geopolitical insulation from Middle East conflicts.
- Iran conflict accelerating China's renewable energy transition through scale and battery storage technology advances.
- China's manufacturing dominance (30% of global output, 20% of exports) positions it to leverage energy independence for competitive advantage in AI race.
💬 New thread from Matt Warder
The Coal Trader
- Physical PLV met coal prices down $1.20 to $213.95, with Tier 2 HCC at $180.10 and PCI at $155.80/tonne.
- New podcast episode released on met coal market recovery and thermal coal dynamics.
- Brief update on coal pricing with reference to ongoing subscriber discussion thread.
Salt Caverns
Santiago Capital Research
- Strategic Petroleum Reserve fell to lowest level in 43+ years at 307.7 million barrels, but historic context shows this reflects program success not failure.
- SPR created in 1975 following 1973 OPEC embargo to protect US economy from future supply shocks, demonstrating its intended purpose through recent deployment.
- Declining reserve levels indicate functioning crisis response rather than mismanagement, as reserve was designed to be drawn down during energy emergencies.
Nuclear: What Is Westinghouse Worth?
Asymmetric Research
- Westinghouse submitted draft IPO registration to US SEC with potential valuation based on nuclear reactor pipeline.
- Cameco projects Westinghouse can capture one-third of global new-build nuclear capacity (excluding China, Russia, SMRs) through 2040.
- AP1000 design pipeline includes up to 91 potential reactors or 105 GW of capacity worldwide.
Meet the fourth horseman: Maintenance
Irina Slav on energy
- Big Oil posted record quarterly profits, triggering renewed public criticism despite energy companies simply selling essential products.
- Refinery maintenance cycles this year will likely exacerbate political pressure on energy companies as it affects supply and prices.
- Degree of backlash against the energy industry correlates with oil prices, and elevated current prices are stoking unusually high levels of criticism.
AI · 7
AI can help build wealth. But it can also be disastrously wrong.
Prof G Research Team
- 55% of Americans now use AI for financial advice, up from 10% a year ago, surpassing human financial advisers at 41%.
- AI excels at generic financial information but frequently provides biased or incorrect personalized advice, particularly risky since only 50% of Americans are financially literate.
- The combination of unreliable AI sources with financially unsophisticated users creates inevitable negative consequences for wealth-building decisions.
Visa just paid $2.4B for the right to authenticate Your AI Agent 🤖🔐; Cloudflare gave AI Agents a stablecoin wall…
Linas from Linas's Newsletter
- Visa's $2.4 billion acquisition of BioCatch signals a strategic bet on owning the trust and authentication layer for AI agent commerce rather than traditional fraud prevention.
- Cloudflare's new wallet infrastructure enabling AI agents to autonomously hold and spend USDC represents a critical 14-month two-sided infrastructure completion for agentic payments.
- Both deals reflect the AI Monopoly Playbook where large platforms position themselves as essential middleware between consumer protocols and autonomous agent commerce systems.
OpenAI fires back at Apple’s trade secret lawsuit, but the evidence cuts both ways ⚔️⚖️; Coinbase’s Q2 2026: a rec…
Linas from Linas's Newsletter
- OpenAI fires back at Apple trade secret lawsuit with public release of internal iMessages and emails, potentially handing Apple additional ammunition.
- Coinbase Q2 2026 financials show market share gains stopping despite earlier competitive efforts; Robinhood comparison included.
- OpenAI pursuing IPO plans and Super App strategy while exploring Claude Opus 5 for financial analysis automation.
YWR: PEVC Q2 2026 Deal Tracker
PAIDErik@YWR
- Anthropic raised $65bn in Series H at $965bn valuation, up from $380bn valuation in February, with run-rate revenue crossing $47bn.
- Top PE/VC deal flow tracker shows concentrated capital allocation to AI companies led by major institutional investors (Altimeter, Dragoneer, Sequoia, Blackstone).
- Q2 2026 deal activity demonstrates venture capital's heavy bet on AI infrastructure and capability companies over traditional sectors.
Two critical updates re: Astra and mathematics
Gary Marcus from Marcus on AI
- OpenAI's Astra may be overstated breakthrough with minimal technical disclosure, raising concerns about marketing versus genuine scientific advancement.
- Anthropic mathematician replicated half of OpenAI's Astra results within 24 hours using publicly-released Fable model, questioning novelty of claimed breakthrough.
- Replication suggests OpenAI's advance may involve identifying open problems amenable to specific search approaches rather than fundamental architectural innovation.
Perfect Work, Rejected in Triplicate (098)
Peter Simmons from Ground Truth
- AI agents can complete work successfully but fail validation processes due to form requirements misaligned with task completion.
- Security patch was fully implemented with passing tests but rejected because reporting system required input that wasn't needed.
- Highlights disconnect between objective completion of work and bureaucratic validation mechanisms in AI deployment workflows.
Your AI bet can be right and still run out of money. Grab the two-clock prompt: what has to be true, how long it r…
Nate from Nate’s Substack
- Situational Awareness hedge fund sold bulk of public stock portfolio to Citadel after lender pressure forced liquidity event.
- Concentrated leveraged AI portfolio proved vulnerable to timing risk despite potentially correct long-term thesis.
- Fund retained private positions including Anthropic, indicating selective de-risking rather than complete thesis rejection.