★ Priority · 14
Market Update & Signals 9/25/26
PRIORITYMacro Charts
- Extreme investor risk-off sentiment may paradoxically present a buying opportunity for equities, echoing the Paul Tudor Jones approach of assuming every position is wrong.
- Despite bond volatility (MOVE index spikes) and multiple macro headwinds, stocks are holding sideways, suggesting either market confidence or complacency worth testing.
- The disconnect between bond stress and stock resilience points to either a fundamental disconnect or a buying setup depending on whether one believes the market or the warning signals.
đź’¬ New thread from Le Shrub
PRIORITYLe Shrub from Reminiscences of a Shrub Operator
- Multiple macro hedge funds have closed this week amid market volatility, signaling potential 'Leopold-style cleansing' and casualty-taking across strategies including biotech.
- Similar to the 'Situational Awareness Meme Bottom' in July that preceded a mega-rally, monitoring for comparable price action setups in specific asset classes could signal tactical opportunities.
- Xi-Trump meeting produced panda diplomacy rather than concrete trade deals, suggesting continued geopolitical uncertainty despite diplomatic engagement.
đź’¬ New thread from PauloMacro
PRIORITYPauloMacro’s Substack
- Bond volatility (MOVE index at 105) has consequences for de-risking and potential 'Rolling Crackups' similar to February patterns may emerge.
- Japanese 30-year yields present a dangerous technical setup poised for breakout and catch-up with other global yields.
- Factor pairs and dispersion strategies could face stress as bond market dislocations spread across regions and yield curves.
HIGHER YIELDS ARE NOT IMPLYING DEFAULT RISK - AT LEAST NOT YET
PRIORITYRussell Clark from Capital Flows and Asset Markets
- Despite US 10-year yields above 5% and net interest payments exceeding defense spending, currency markets show no default risk pricing in yet (GLD/TLT ratio stable).
- Markets appear to be pricing in stronger US growth next year rather than sovereign default risk, evidenced by continued debt issuance and absence of dollar devaluation.
- AI-driven capital demand is crowding out distressed borrowers; industries suffering from high rates get 'tough luck' as capital flows concentrate in growth and technology sectors.
(Idea) How Would US Diesel Export Restrictions Impact Energy Stocks?
PRIORITYIdeas from HFI Research
- Trump administration is considering diesel export restrictions rather than an outright ban, as Energy Secretary Wright warns a complete ban could force refiners to cut production and reduce gasoline and jet fuel supplies.
- The policy discussion moved quickly from speculation to serious consideration after Trump's September 22 statement, though the White House denied reports of a planned 90-day blanket ban.
- Legal constraints apply: Congress repealed the provision expressly authorizing export restrictions in 2015, requiring any new policy to navigate more complex regulatory frameworks.
đź’¬ New thread from Le Shrub
PRIORITYLe Shrub from Reminiscences of a Shrub Operator
- Despite flat equity market close, bond markets experienced severe selling pressure, triggering leveraged losses for traders.
- The sharp move in fixed income suggests underlying volatility and risk-off sentiment beneath calm surface-level equity action.
- Geopolitical and macro backdrop remains fragile, with volatility potentially surfacing through less-watched asset classes.
Douglas Murray: The Case for Mass Deportations
PRIORITYThe Free Press
- Douglas Murray argues that mass illegal immigration constitutes lawbreaking that Western governments must reverse through mass deportations.
- Public opinion hesitates on deportation implementation despite recognition of the immigration problem.
- Murray contends that national integrity requires consistent enforcement against all forms of lawbreaking, including unauthorized border crossing.
the math of why “crappy” investments aren’t cheaper
PRIORITYKris Abdelmessih from moontower: a stoner dad explains options trading to his kids
- Covariance matters: independent coin flips produce dependent outcome variables (heads and tails sum to 100), requiring careful mathematical modeling.
- Using LLMs as tutors to fill knowledge gaps in portfolio construction and variance/covariance identities through guided discovery rather than direct answers.
- Jane Street-style interview questions reveal gaps in intuitive probability reasoning that require rigorous mathematical derivation.
Market Update & Signals 9/24/26
PRIORITYMacro Charts
- 10-year yields surged 15bps to multi-decade highs; TLT at lowest price since 2002 launch; markets pricing 100bps Fed hikes over 12 months.
- Historical comparison shows 10 of 13 prior yield spikes of this magnitude led to buying opportunities (2022) or upside (2022-2026), with average time-to-bottom one week.
- SPY gap-down risk to 763 but major support expected to hold; bond sentiment in capitulation range suggests noise-driven volatility rather than structural correction.
The Most Famous Bar in America. Plus. . .
PRIORITYThe Free Press
- Last Ditch bar in Massachusetts becomes viral controversy over relaxing mask policy despite being self-identified as 'Covid-cautious' and gender-inclusive.
- Community response included three-hour meeting and accusations of moral betrayal over allowing one mask-free night weekly for queer patrons.
- Story exemplifies cultural tension between stated progressive values and practical enforcement within activist spaces.
SHORT SELLING IS HARD
PRIORITYRussell Clark from Capital Flows and Asset Markets
- Short selling follows three stages: initial ease, devastating losses, and eventually treating it as a tool to express specific opinions rather than broad market bets.
- Never short an index because indices are structurally designed to rise; focus on individual stocks where fundamental deterioration can be exploited.
- Recent short seller destruction in AI, Bitcoin, and Tesla demonstrates why most investors abandon shorting, but selective short selling can work in specific situations.
Ferg’s Finds
PRIORITYFerg from Trader Ferg
- JPMorgan analysis highlights China's imbalanced economy and unrelenting mercantilism through the 'Trojan Fire Horse' framework.
- Michael Howells' liquidity cycle framework explores the ratio of debt and liquidity driving financial cycles.
- Curated finds include masterclass on cyclical industry investing and offshore rig sentiment analysis from Esgian data providers.
Dollar trading in October
PRIORITYMark Farrington from Dollar Watchtower
- October historically sees market crashes (1907, 1929, 1987) driven by Q3 earnings disappointments, tax harvesting, and rebalancing, but none occurred during midterm election cycles.
- 2026 presents an atypical Q3 earnings season with strong results expected and limited tax-loss harvesting opportunities, reducing traditional October crash risks.
- Historical patterns alone are insufficient for trading decisions; fundamental context must be layered in to extract actionable information.
who are the rich people, factorio in print, 9 scary words
PRIORITYKris Abdelmessih from moontower: a stoner dad explains options trading to his kids
- Research by Zidar and Zwick identifies ~3 million 'Main Street Millionaires' (private business owners) with average wealth of $25 million, hidden from conventional wealth measurement.
- Post-1986 tax reforms enabled pass-through business structures that obscured this wealthy class's actual tax burden and influence on US economy and politics.
- Income inequality rise correlates with proliferation of pass-through businesses, revealing structural changes in how wealth concentration occurs outside traditional income metrics.
Politics · 18
How Both Parties Lost the Working Class
Free Agent Politics by John Halpin
- Both Democrats and Republicans have failed to deliver tangible wage, benefit, and living standard improvements for working-class Americans despite decades of rhetoric and promises.
- Political messages are insufficient substitutes for real economic gains; working-class voters increasingly recognize the gap between campaign promises and actual policy outcomes.
- Contemporary definitions of working-class status based on education and median income don't cleanly map to historical industrial-era labor distinctions, complicating both political analysis and economic targeting.
A Bald Eagle, Good Granite & Former President Autopen
Hypernormal Times
- Trump's Xi state dinner yielded minimal concrete outcomes beyond a two-month trade truce extension, with promised tariff cuts and AI communication lines failing to materialize.
- The White House banned major news networks from live coverage and replaced official colonnade photos with autopens, limiting transparency of the diplomatic engagement.
- Geopolitical tensions in the Gulf escalated as Saudi Arabia, Turkey and Pakistan activated a mutual-defense pact after Houthi attacks, complicating de-escalation narratives.
She Pretended To Be Palestinian For Years. She Was Not Palestinian.
John Aziz
- Hannah Gann, a prominent anti-Israel activist, was exposed as misrepresenting her identity as a Black Palestinian woman when she is actually white and Jewish.
- Despite growing up in a $1.8M house in Falls Church, Virginia (wealthy DC suburb) with privilege and education, she built a public persona around false identity.
- Her case exemplifies how identity misrepresentation can be used to gain authority in activism, raising questions about authenticity in social movements.
Democrats’ Road Back to the Working Class
Ruy Teixeira and Michael Baharaeen
- Working-class voters shifted decisively away from Democrats: from +4 Obama margin in 2012 to +13 Trump margin in 2024, the largest Republican advantage in 30 years.
- Demographic shift spans both white and non-white working-class voters, indicating broad-based realignment rather than isolated racial voting changes.
- Democrats now identified with the 'Brahmin left' and college-educated urbanites rather than the 'party of the working class' label they held for 60+ years.
Censorship and Freedom: They Really Don't Go Together
Restoring the West by Ayaan Hirsi Ali
- EU's Digital Services Act and similar regulatory frameworks extend speech restrictions globally beyond European borders, projecting censorship apparatus internationally.
- U.S. 'censorship-industrial complex' emerged under Biden administration, potentially rivaling the military-industrial complex in scope and influence over digital speech.
- Protecting Western democracy requires sustained citizen vigilance and resistance against government, NGO, academic, and tech company coordination to restrict free speech.
The Post-American World and the Tragic Rise of Preventive War
PAIDProf Robert Pape
- US military withdrawal from Middle East has shattered assumptions about American power preventing regional power vacuums and strategic crises.
- Preventive war becomes tempting when declining powers perceive future rivals, creating a tragic cycle where conflict meant to ensure security actually generates instability.
- Post-American world may see greater danger from regional conflicts than from direct US intervention, as power vacuums incentivize preemptive action.
Is Peace at Hand in Ukraine?
Time Machine from Niall Ferguson
- Russian drone strike near Polish border during visit by Western leaders signals Putin's willingness to send intimidating messages with impunity to NATO members.
- Ukraine's economic and political situation remains grim despite some encouragement about diplomatic progress potential at YES meeting in Kyiv.
- Putin's current strategy combines drone incursions, sabotage, and cyberattacks against multiple NATO members, suggesting prolonged pressure rather than immediate negotiation.
Macron Lied to the UN About Hamas
Built in Israel. For everyone. from Mitch's Substack
- French President Macron made contradictory statements about Hamas, acknowledging it as a terrorist threat in October 2023 but shifting rhetoric at the UN.
- Macron criticized Israel's actions in the West Bank while ignoring broader context of the conflict.
- Author argues Macron betrayed the families of French citizens killed on October 7 through his UN speech rhetoric.
There’s A Truce, Let’s Go Home... (Live in 15)
Garrett Baldwin (MP Pro)
- Trump-Xi meeting occurs as both nations quietly extended trade truce by two months before the summit.
- Trade negotiations remain cautious with focus on tariff reductions in soybeans and consumer products rather than major breakthroughs.
- China's leverage over Iran presents potential wildcard; any shift in Middle East tensions could trigger significant commodity market moves.
United Nations: UNited In Hate 🪂 🤸‍♀️ Guterres Has No Guts
Shana Meyerson from Unapologetically Jewish
- UN General Assembly 2026 continues annual pattern of anti-Israel rhetoric led by Secretary General Guterres in his final speech.
- Emmanuel Macron and Masoud Pazeshkian emerged as leading figures in criticizing Israel before the assembly.
- Military expert Andrew Fox and Shana Meyerson discuss opening days of UNGA and key speech highlights from member states.
- Conversation examines geopolitical dynamics and diplomatic positioning of major powers during the annual assembly.
TEXAS IS BORDERLINE
The Oracle by Polymarket
- Texas Senate race between Democrat James Talarico and Republican Ken Paxton is polling at near 50/50 despite Texas's strong Republican lean.
- Talarico's potential victory would break Democrats' 30-year statewide losing streak in Texas, marking historic political shift.
- Prediction markets have correctly identified this as a genuine battleground despite conventional narratives of Republican dominance.
- Ken Paxton's impeachment by GOP colleagues makes this race unusually competitive for a reliably red state.
REPLAY: A Live Conversation with Anthony Scaramucci and Scott Galloway
The Prof G Pod
- Anthony Scaramucci discusses his new book examining three key decisions that enabled Trump's political rise.
- Post-9/11 wars funded through debt and tax cuts rather than revenue increases created structural economic imbalances.
- China's entry into WTO without adequate worker protections disrupted American labor markets and fueled political backlash.
- Scott Galloway and Scaramucci analyze the geopolitical and economic roots of contemporary American political realignment.
This Is How Women In Gaza Who Do Not Wear A Hijab Have Been Treated
John Aziz
- A Palestinian social media influencer in Gaza was detained on October 7 after being mistaken for an Israeli settler by radicalized Palestinians.
- The incident highlights how widespread dehumanization and hatred can turn violently inward, affecting a society's own members.
- Women and children often become the primary victims when societies condone mass violence and indiscriminate hatred.
- The story reveals fractures within Palestinian society itself regarding dress codes and cultural conformity.
Iran’s Back Door Into America
Restoring the West by Ayaan Hirsi Ali
- Iran is systematically penetrating American institutions through financial injections, front companies, and diaspora networks.
- The Iranian regime exploits existing societal fractures to wage asymmetric warfare against U.S. sovereignty from within.
- Western intelligence agencies historically focused on overseas threats while missing penetration efforts on the home front.
- Iran recruits operatives at Western universities and aims to undermine American democracy through targeted influence campaigns.
The Next Big Deadly Fire Nightmare is Being Incubated Right Now by the State of California
Michael Burry
- California's approval of a new project despite city reports showing it could cause deadly wildfires demonstrates regulatory failure.
- The 2018 Camp Fire and 2025 Palisades/Eaton fires reveal a deadly pattern of poor evacuation routes and inadequate fire escape planning.
- The state approved a development project that the city itself warned could result in loss of life due to gridlock and insufficient road access.
- Legal action via petition (saratogacred.org) has been filed to prevent another catastrophe.
Why We Started The Long View
Ruy Teixeira and Michael Baharaeen
- The Long View launched as successor to The Liberal Patriot, achieving 30,000+ readers in first month with focus on analytical, empirical political coverage.
- American politics has become unstable with 10 of last 12 federal elections producing party control changes, compared to 6 of previous 20.
- Both parties prioritize keeping existing coalitions happy over building broad, diverse coalitions capable of winning entire eras.
Colorado Cannot Have It Both Ways
Restoring the West by Ayaan Hirsi Ali
- St. Mary Catholic Parish v. Roy addresses whether states can offer religious institutions public benefits while conditioning participation on abandoning religious practices.
- Colorado's own exceptions to its universal preschool program contradict its claim of general applicability, supporting the parish's Supreme Court case.
- The case challenges the 1990 Employment Division v. Smith decision that holds free exercise clause does not entitle religious believers to exemptions from neutral, generally applicable laws.
Dear President Trump, here’s a deal you can actually make that will make you look great
Gary Marcus from Marcus on AI
- Gary Marcus proposes Trump pursue US-China AI collaboration on cancer and cybersecurity (similar to Cold War space/smallpox cooperation) rather than pursuing a slowdown.
- Marcus argues a Nobel Prize-worthy deal could be achieved through international collaboration that benefits both nations while locking in US AI leadership advantage.
- The pitch frames collaboration as politically viable alternative to AI slowdown negotiations, appealing to Trump's deal-making instincts.
Macro · 15
The Macro Decision Engine: Part 5/10
Global Macro Method
- Testing macro theses requires cross-asset confirmation—checking whether rates, equities, credit, commodities, currencies, and volatility respond through the expected economic channels, not just moving in the same direction.
- Early price action favoring a position does not validate the underlying thesis and can create dangerous overconfidence in developing macro views.
- Markets moving together (all green/red) is different from providing evidence for the same underlying mechanism, and distinguishing between the two prevents costly belief bias.
After the FOMC: my macro convictions for 2027
Matein Khalid from Matein’s Substack
- A diesel shock (prices at $6.50/gal, crack spread at $113/barrel) threatens Trump's political position in New England, Alaska, and Farm Belt states through heating oil, fertilizer, and shipping cost impacts.
- Elevated diesel costs feed into trucking-dependent US inflation, potentially driving consumer price growth to 4% and undercutting economic resilience assumptions.
- The combination of energy cost shocks and geopolitical factors reshaping inflation could reshape 2027 political and economic outcomes in unexpected ways.
The AI Pause Nobody Asked For
Grizzle Research and Quant
- Trump administration faces political trap in Iran negotiations, seeking exit while avoiding alienation of Israel and domestic backlash.
- Houthi control of Red Sea ports and damage to East-West oil pipeline creates additional pressure on already-volatile oil markets.
- Regional geopolitical tensions continue to complicate US Middle East strategy despite focus on AI markets.
Interest Rate Strategy: How High Can They Really Go?
Capital Flows
- Interest rate rally over the last 3 months has been driven by multiple factors that market participants misunderstand.
- Equity market drawdowns will be signaled by underlying drivers in interest rates, not vice versa.
- Author explains how interest rate drivers connect to market flows and frame current macro liquidity conditions.
The Market Misprices a BoJ December Hike
Japan Macro Advisors
- Market prices in 95% probability of BoJ rate hike by December, but author argues hike is highly unlikely.
- Next BoJ hike expected in March 2027 based on weak domestic demand, rising oil prices, and financial constraints.
- Governor Ueda added cautionary language against rapid rate hikes; swing vote board members not more hawkish than executives.
Grains of Wrath: anger grows where grain does not
Santiago Capital Research
- Wheat and corn prices have surged significantly since April call when authors identified fertilizer as the real Hormuz Strait story.
- Chicago wheat up 23% and corn up 20% since April positioning as geopolitical tensions affect grain production.
- Author acknowledges some thesis predictions underperformed while others proved correct, providing transparent progress report on agricultural outlook.
TACO Time?
Andrew Sarna
- US flash PMI surged to five-year high; employment at four-year high but input price growth accelerated to fastest pace since Oct 2022.
- 10-year yields at July 2007 levels (uncharted territory); high leverage in financial system will face pressure if yields continue climbing.
- Nominal GDP growth at 6.6% (highest since 2005 ex-Covid) supports yield normalization thesis, but sustainability questioned given AI investment and energy price impacts.
The Waypoint & The Walk Back
Hypernormal Times
- US 10-year Treasury yield breached 5% for the first time since 2007 following weak bond auction demand and strong PMI data signaling the Fed may not be done tightening.
- A single statement from Trump about a potential diesel export ban caused European diesel futures to jump 7% before being walked back, highlighting market sensitivity to energy policy.
- Xi Jinping's surprise visit to Washington and a two-month trade truce extension to January 10th reflect ongoing US-China negotiations, though Chinese stocks fell on the news.
Can bonds ever rally again?
Macro Is Dead
- Bond yields sold off sharply with US 10-year up ~16bp and Bunds up ~13bp; the sell-off was triggered by strong PMI data and intensified by diesel export ban concerns.
- There is little reason for the bond sell-off to reverse unless the Fed or ECB signal only a few rate hikes ahead, making bull steepeners the only bullish bond strategy.
- Higher growth and persistent inflation pressures from refined product constraints support the continued bear case for bonds, though the impact on risk assets remains unclear.
Midweek Macro Note: A Little Bit of 87 Freestyle, Bond Market Bonanza, Flagship Macro Portfolio Strategy Update
MacroEdge Research
- Market themes for the day centered on comparisons to 2007, including concerning trends in 10-year bond yields, equity breadth, bond auction strength, and high yield credit stress.
- A broken 5-year Treasury auction and deteriorating high yield credit reports reinforce recession warning signals reminiscent of the pre-2008 environment.
- Two new investable MacroEdge portfolio strategies will become available through a new partner in the coming days, with additional announcements and partnerships forthcoming.
Topdown Approach to Generating Winning Investment Ideas [Seminar]
Callum Thomas from Topdown Charts Professional
- Callum Thomas presents a top-down research framework used to generate 70%+ hit rate in global multi-asset investment ideas over the past 10 years.
- The seminar covers key frameworks including mental models, a 5-factor approach to the investment idea lifecycle, and indicator construction methods.
- A worked example and practical takeaways demonstrate how to apply this approach, particularly relevant for navigating later-cycle macro dynamics.
đź’¬ New thread from Nico
Nico from AiQ
- China summit setup appears binary: either a comprehensive trade/commodity deal or complete stalemate with massive market implications.
- Diesel export bans and agricultural agreements are key catalysts being priced into commodity markets ahead of Xi's arrival.
- A sweeping China deal would likely trigger broad commodity rallies, Nvidia surge, and political groundwork for cross-strait reunification.
- SPR releases nearly complete; unverified reports suggest DOE gauging trader interest in additional barrel releases.
Twas the Night Before the Summit
Nico from AiQ
- China summit night-before analysis covers diesel ban implications and agricultural deal prospects affecting commodity prices.
- Treasury yields breached 5% with inflation concerns rising; Beijing demanding Taiwan pledge in exchange for trade concessions.
- Commodity markets frozen pending clarity on negotiations; soybeans, corn, cotton, and wheat positioned for significant moves.
- Bessent Treasury printing accelerating amid inflation concerns while hard assets await resolution of geopolitical negotiations.
In 1989, five of the ten biggest companies on earth were banks
Capitalist Exploits (Substack)
- The U.S. now pays 4.67% to borrow for ten years while China pays only 1.68%, creating the widest gap ever recorded.
- Japan's 1989 banking bubble serves as a cautionary tale for current AI and credit-fueled market expansion.
- The bond market reveals structural weakness in U.S. borrowing costs relative to rivals, affecting mortgages, pensions, and equity valuations.
- AI mania has shifted from being a chip-driven story to a credit-driven one, with massive fresh capital requirements underlying the narrative.
Signal & Noise Filter
David Cervantes from David Cervantes | Pinebrook Capital
- Pre-summer thesis projected rising US 10-year yields driven by broadening price pressures, labor market reacceleration, and Fed policy shift from pause to tightening.
- Fed Chair Warsh's Jackson Hole confirmation in late August validated the predicted policy sequencing, with market volatility subsequently resolving.
- August emerged as forecasted window of maximum rates market stress, with semi sector flagged as stretched at 4-5 sigma volatility levels.
Markets · 12
Who Captures the Value?
Andrew Sarna
- AI agents are disrupting online travel intermediaries by performing price discovery then booking directly with hotels, bypassing the OTA commissions entirely.
- Rising mortgage rates (7.5%) and limited immigration are pressuring Canadian housing prices down 50% from peak without financial crisis, signaling broader rate sensitivity.
- Private construction ex-data centers has fallen to recessionary levels; if data center spending slows, a key pillar of growth support disappears as 10-year yields remain above 5%.
US Markets - First Look
Derek Wallis
- US markets are modestly higher as oil falls below $100, with European equities leading on tech and banking strength despite yield concerns.
- Asian markets show divergence (Japan +1.2%, China -1.2%), reflecting different domestic drivers and geopolitical concerns including NATO-Russia tensions.
- Emerging themes: economic resilience to higher rates, TMT disruption from cheaper AI models, NSA AI testing spending, and geopolitical implications of Xi-Trump summit discussions.
Understanding The Commodity Boom
Michael Howell from Capital Wars
- Global Liquidity cycle peaked in early 2026, signaling a transition from financial assets to the real economy as capital allocates toward productive investment and consumption.
- Two distinct money pools—financial liquidity and industrial liquidity—are sequential and rarely overlap; rising commodity prices and bond yields reflect liquidity moving into real economic activity.
- This shift from the 'Speculation' regime (high valuations, low rates) to the 'Inflation' regime (lower equity multiples, higher yields) drives changing investment allocation strategies.
the gun that fires backwards.
Hugh Hendry
- Federal Reserve's 25 basis point rate increase may paradoxically be laying groundwork for future cuts by tightening without triggering economic collapse, rather than signaling hawkish conviction.
- Kevin Warsh's measured increase avoided the more aggressive 50 basis point hike that would signal uncontrolled inflation, instead preserving political flexibility and economic stability.
- The author employs 'orthogonal investing'—changing analytical framework when market moves contradict conviction—to remain adaptive rather than rigid in volatile conditions.
Capital Cycle IQ & the Forensic Files of the Big 5 Hyperscalers
Michael Burry
- Capital cycle analysis reveals the market is in the expansion phase, mirroring dot-com era dynamics despite common assertions that 'this time is different.'
- Net capital investment to GDP among S&P 500 companies sits at 2.07%, the highest level since the late 1990s tech bubble, driven largely by hyperscaler spending.
- Understanding capital cycles provides crucial context for major asset price movements over three decades and explains current market valuations.
Market Commentary
David Cervantes from David Cervantes | Pinebrook Capital
- 10-year yield shock of 13-15bps rates measured between 2.3-2.9 standard deviations depending on volatility lookback window used.
- Historical analysis shows downward real-yield shocks statistically mean-revert while upward shocks persist, with statistical significance confirmed through t-testing.
- Post-shock price movements vary substantially based on shock direction and magnitude, requiring directional analysis rather than uniform mean-reversion assumptions.
The Second Contract
Cape Fear Advisors
- Compute hour pricing in GPU markets is set by a floor (unused capacity cost) and ceiling (buyer's self-production cost), with CoreWeave's Microsoft renewal exemplifying the dynamics.
- Hardware financing restrictions prevent GPU server resale, forcing buyers to operate equipment rather than liquidate it, creating long-term contract lock-in.
- TSMC and NVIDIA inventory levels show supply chain stress with rapid revenue growth, indicating tight hardware availability and rising contract renewal leverage.
US Markets - Five Points
Derek Wallis
- Market commentary framed around delayed gratification principle: worthwhile gains require patience through difficult periods.
- Political polarization presents false binary choices in elections while infrastructure failures (employee-locked ice cream coolers) reflect systemic inefficiency.
- Oil and bonds driving market direction; US markets trending lower as yields spike.
US Markets - First Look
Derek Wallis
- S&P down 63bps on lows; 10-year yield at 5.15% blasting through prior highs; USD up 11bps amid global bond selloff.
- European markets mildly lower; Asia weaker (Japan -61bp, China -1.2%); US and China extend trade truce.
- Rising rate hike cycles historically pressure equities; biggest economic bet in US history plays out as yields normalize post-QE era.
5% Treasury Tantrum
Eliant
- META's 'Muse' release reignited the AI trade, driving Tech outperformance with Nasdaq up 270bps on the week while Small Caps lagged at -70bps.
- Breadth remains weak despite equity gains due to surging 10-year yields, unresolved Middle East conflict, persistent inflation concerns, and a strong underlying economy.
- Eliant Flagship portfolio is now live and actively managed in real-time on RunPlutus, offering daily dashboard updates.
How to Find Mispriced Bets on Prediction Markets
🗒️ Polymath Investor
- Mysterious French trader commissioned voter research using 'shy voter' methodology to identify polling bias in 2024 presidential election swing states.
- Research findings validated trader's contrarian view, leading to $80 million bet on Donald Trump across 11 accounts.
- Trader's election night success across presidency, popular vote, and three swing states generated approximately $85 million profit from prediction market positions.
Great Opportunity or Pulp-Fiction: Mercer International Notes and How to Capture >20% IRR
PAIDMihail from TheOldEconomy
- Mercer International (MERC) exhibits classic distressed debt characteristics: 2,388% debt-to-equity ratio, sub-0.50x interest coverage, and senior unsecured bonds trading at ~30 cents on dollar.
- Forest products and pulp-and-timber sector has underperformed for years with legacy players showing dead-money or systematic losses, creating opportunities for distressed debt investors.
- Double-digit Total Debt-to-EBITDA ratios and collapsing liquidity across the industry present high-risk but potentially high-IRR opportunities for specialized investors.
Culture · 10
Fierce attachments, technics and civilisation, the end of effort, trad architecture
James Marriott from Cultural Capital
- Modern discourse increasingly reduces all cultural phenomena to binary political categories ('woke' vs 'racist'), oversimplifying complex issues to suit social media's intellectual bandwidth.
- This trend reflects a broader shift from policy-focused politics toward performance and identity construction, enabling easier online positioning rather than serious debate.
- The simplistic triaging of cultural events creates an exhausting cycle where everything from Christopher Nolan films to Jamie Oliver recipes becomes a political flashpoint.
I'm Innocent
Eli from Man of Steele’s Substack
- The concept of 'innocence' is central to understanding racial guilt narratives, with false innocence based on taking the 'right side' contrasted against true innocence earned through truth and responsibility.
- Real innocence is grounded in character and Judeo-Christian values, requiring accountability and truth-seeking rather than mere ideological alignment.
- The White Guilt documentary explores how racial power dynamics distort claims of innocence, examining collective guilt and individual moral responsibility.
Terminal Uniqueness
Jared Dillian from We're Gonna Get Those Bastards
- Terminal uniqueness—the belief that your problems are entirely unique—isolates you from community and support systems.
- Every problem you face has likely been experienced by others; connecting with people who've shared similar struggles provides perspective and solutions.
- Overcoming terminal uniqueness requires recognizing that help and understanding exist, and reaching out to share experiences with others.
High Protein Sticky Bread Pudding
Alisa | That Tastes Delish from That Tastes Delish
- High-protein bread pudding recipe incorporates protein powder and cottage cheese for nutritional balance without heavy refinement.
- Flexible ingredient substitutions allow dairy-free and plant-based adaptations while maintaining texture and flavor profile.
- Salted caramel and pecan toppings add indulgence balanced by whole-food custard base using eggs, coconut cream, and applesauce.
Protein French Bread (9g protein, under 200 calories)
Alisa | That Tastes Delish from That Tastes Delish
- High-protein French bread recipe yields over 100g protein per loaf using egg whites and cottage cheese.
- Single serving contains 9g protein with under 200 calories, making it suitable for fitness-focused diets.
- Step-by-step baking instructions account for climate variations and include fermentation timing.
Formula 1: Liberty Media’s Drive for Success
Open Insights
- Liberty Media's acquisition of Formula 1 transformed the sport from niche interest into global phenomenon, partly through Netflix's 'Drive to Survive' series.
- F1's appeal extends beyond racing mechanics to encompass team dynamics, driver narratives, and entertainment value that attract mainstream audiences.
- Global reach and digital strategy positioning Liberty Media to monetize F1 across multiple revenue streams including broadcasting, sponsorships, and media rights.
Strong Enough to Stop Proving It
Sara
- Michael Jordan's championship-winning pass to Steve Kerr exemplifies strength through knowing when not to take control.
- People often perceive the skills they need to develop as weaknesses, such as using tools to enforce discipline or asking for help.
- True capability includes recognizing when to delegate, use constraints, and ask for support rather than handling everything independently.
Stop Asking Questions
Jason Jonker from The Chaplain Chronicles
- Therapists and case managers often talk too much and too early, inverting the principle 'be quick to listen, slow to speak.'
- Creating 'Listening Coach' role improved clinician productivity and reduced burnout by teaching complex reflection instead of relying solely on open-ended questions.
- Framework shifts from asking questions to making reflective statements to build rapport and demonstrate understanding.
CFDA Vice Chairwoman Aurora James is Being Sued for More Than $1 Million
Rich People Shit from Carson Griffith
- CFDA Vice Chairwoman Aurora James, founder of Brother Vellies and the Fifteen Percent Pledge, is being sued for over $1 million.
- The lawsuit involves Aurora James personally, alongside the Fifteen Percent Pledge and its fiscal sponsor PVF.
- The story was held for over a month before being published, indicating significant investigation into the allegations.
- The case involves a high-profile fashion industry figure and nonprofit organization.
QAnon for Catholics
Chaotic Neutral
- QAnon conspiracy movement used cryptic clues and 'rigorous' analysis (zero deltas, metadata extraction, numeric decoding) to find hidden meanings in vague posts.
- Miracle apologist movement emerged on Substack as Catholic equivalent of QAnon, led by figures like Ethan Muse with rapidly growing readerships.
- Both movements employ similar structures of distributed problem-solving and appearance of analytical rigor applied to unfalsifiable premises.
Energy · 9
A Chili’s Inside the Hotel Next to a Gun Range...
Garrett Baldwin
- Energy Transfer (ET) dominates midstream oil and gas infrastructure, positioned to profit from the transportation and storage between upstream production and downstream refining.
- Midstream sector historically generates consistent returns regardless of commodity price cycles due to volume-based fee structures.
- Texas energy infrastructure expansion continues to create investment opportunities in midstream players connected to both traditional oil-gas and emerging energy sectors.
đź’¬ New thread from Matt Warder
The Coal Trader
- Australian coking coal prices softened on Thursday with PLV down $0.75/t and PCI down $2.55/t, though no index-eligible trades reported.
- SGX futures rose across the curve despite physical price weakness, with November rising to $262/t and later months showing similar strength.
- Market remains quiet with no fresh bids or offers by close, awaiting clearer direction in seaborne coal.
Oil!
David R. Kotok from The Kotok Report
- Diesel hit record $6.505/gallon on Sept 20 (up from $3.70 a year prior) while gasoline lags its 2022 record despite same crude and country.
- Refining capacity bottleneck is the constraint, not crude supply: refineries ran at 96.8% capacity with distillate stocks 13% below five-year average.
- US crude stocks above five-year average but cannot convert to diesel/heating oil without additional refinery processing capacity; emergency releases prove ineffective.
MacroEdge Oil and Gas Research - Strategy Note for 9/16
MacroEdge from MacroEdge Oil and Gas Research
- MacroEdge Oil & Gas expanded presence in West Texas with four new asset additions, prioritizing selective deal sourcing over timing market lows.
- Smaller and midsize oil operators are eager to achieve liquidity and reduce backend liabilities during higher WTI price environments, creating deal opportunities.
- Direct exposure to private assets provides sharper visibility into operator costs (LOE) compared to the public equity picture alone.
EIA WPSR Summary for week ending 9-18-26
Tim Dallinger's Energy Report
- Crude oil inventories rose 3.0 MMB with SPR down 0.4 MMB; crude currently 2% above seasonal average supported by strategic releases.
- EIA inventory model struggling to balance with unaccounted-for crude positive and discrepancies between reported data and ship tracker readings.
- US crude imports fell significantly from Canada; exports near annual lows with potential 'missing barrels' suggesting data gaps.
- WTI spot price $93 has retreated below fair value estimates based on EIA inventory models.
Diesel Crisis Deepens: Crude Builds, Products Plunge as Refineries Cut Runs — and a 90-Day Export Ban Looms
Anas Alhajji Daily Energy Report
- Diesel shortage deepening as crude inventories build while product inventories decline amid refinery production cuts.
- Potential 90-day diesel export ban looms, threatening to exacerbate product shortages and refinery margin pressures.
- Refineries reducing operational runs in response to weak product demand and inventory management needs.
- Supply-demand imbalance in distillate markets creating structural tightness as export restrictions approach implementation.
Go BIG, or go home!
Gold and geopolitics
- Enormous short selling pushed WTI crude below $90, but the effort only achieved half-cent reductions in retail diesel prices—a rounding error.
- Silver and oil show signs of manipulation, but oil's necessity to the economy makes it harder to move meaningfully without Billions in effort.
- Recent diesel and crude selloffs of 15% over a week demonstrate underlying weakness, yet aggressive tactics are still being deployed.
Grains of Wrath - Anger Grows Where Grain Does Not
Santiago Capital Research
- April analysis predicted fertilizer and agricultural impact from Strait of Hormuz closure would manifest months later as yield shortfalls rather than immediate commodity moves.
- Wheat and corn identified as pure expressions of food shock thesis, with conviction that December contracts would reflect missed planting windows and yield reductions.
- Market initially underpriced agricultural damage because the consequences accumulate gradually in the ground rather than in futures curves.
A most peculiar development
Irina Slav on energy
- Europe's largest CO2 capture facility launched in Netherlands (Yara ownership) will liquefy 15 million tonnes of CO2 over 15 years at €50/tonne annual storage cost.
- US carbon capture firm controversially chose to sell captured CO2 to oil producers for enhanced oil recovery rather than permanent geological storage.
- Tension between carbon capture industry and climate advocates reflects fundamental disagreement over whether fossil fuel phase-out or continued hydrocarbon production is feasible policy.
AI · 8
The Claude Code Projects Playbook: Make Claude Your Chief of Staff đź§
Linas from Linas's Newsletter
- Anthropic's redesigned Claude Projects feature enables multi-threaded work similar to a Chief of Staff model, with parallel workstreams, named owners, shared decision files, and budget management.
- Best results come from treating project briefs like formal engagements with clear objectives, workstreams, review gates, and usage budgeting; vague goals lead to overlapping outputs and failed threads.
- Each thread operates as a full Claude Code session with shared repositories and instructions, allowing complex work to be handed off incrementally while maintaining coherence across branches.
Spammers Teach Me Six Ugly Truths About AI Writing
Ted Gioia
- AI-generated spam has exploded, with the author experiencing junk calls escalating from monthly to every 15 minutes by July.
- Spammers exploit AI writing to create convincing, personalized outreach at scale, overwhelming traditional filtering systems.
- The proliferation of AI spam raises questions about the viability of email, phone calls, and digital communication as trustworthy channels.
There Are No Interesting Things; There Are Only Interested People
Alberto Romero from The Algorithmic Bridge
- Avoid consuming commentary focused on 2030 apocalypse scenarios from either AI doomerism or techno-optimism camps as they monetize anxiety rather than provide guidance.
- Finding personal meaning and interest in the present is more valuable than speculating about unpredictable or potentially catastrophic futures.
- Anxiety-driven content about AI disruption and job obsolescence offers no actionable help for navigating an uncertain future.
Inside NVIDIA: What a world model actually is, and how it connects to the LLM you already use.
Nate from Nate’s Substack
- NVIDIA's Cosmos world-model lab builds tools for developers to simulate factories, predict robot movements, and generate machine actions, extending beyond traditional chip manufacturing.
- World models connect to existing LLMs and represent NVIDIA's strategy to understand what next-generation hardware needs to accomplish.
- Developers maintain critical control over system inputs, actions, deployment conditions, and safety requirements, particularly as AI affects physical spaces.
“I think the answer is we have to shut the labs down” - Jensen Huang
Gary Marcus from Marcus on AI
- Jensen Huang suggests shutting down AI labs that cannot control their software, echoing calls from others in the AI safety community.
- OpenAI has had multiple security incidents (Hugging Face and German website compromise) where breaches were not immediately disclosed.
- Author argues OpenAI should be paused as a test case for whether major AI companies can demonstrate adequate safety controls.
Affirm’s new AI underwriting model works best on borrowers with no FICO score 🤖💸; No iCoin, no Google USD. Apple…
Linas from Linas's Newsletter
- Affirm's AI underwriting model shows largest gains on no-FICO borrowers; transformer integrated into XGBoost stack, with Affirm's proprietary repayment data driving most improvements.
- Apple and Google hiring for stablecoin/tokenized deposit expertise but neither building iCoin or Google Dollar; Nubank's model likely template for both.
- Job postings signal both companies exploring AI-money interface but remain in research/talent-acquisition phase rather than active product development.
Historic UN Security Council Briefing on AI
Gary Marcus from Marcus on AI
- Historic UN Security Council briefing featured Yoshua Bengio, Sam Altman, Dario Amodei, and Clement Delangue presenting AI safety concerns.
- Consensus emerged across leading scientists and CEOs on four requirements: preflight safety testing, transparency auditing, liability frameworks, and global cooperation.
- Bengio's remarks argued humanity must act immediately on AI safety or face historical regret for inaction.
- Unprecedented alignment among AI leaders and international bodies creates political momentum for implementing safety protocols globally.
AIpocalypse Now
Time Machine from Niall Ferguson
- Media coverage of AI existential risks (including 2030 human extinction scenarios) signals onset of irrational decision-making as the topic becomes universally discussed.
- Anthropic's 'Pace the Frontier' proposal advocates slowing AI capability improvements and establishing embedded evaluators at frontier AI companies.
- Proposal includes establishing common safety standards and coordinating with authoritarian governments, with surprising consensus emerging across typically divided parties.