The tech right and fascism—Peter Thiel, Elon Musk, and Marc Andreessen have been checking this Overton window for years.

And for the most part, no one seemed to care.

It was this exchange on Fox News about the forced detention and possible euthanasia of the homeless and mentally ill that got me thinking along these lines. While Brian Kilmeade’s lethal injection comment proved to be outside of the Overton window, the earlier part of the exchange, which has gone largely ignored, had even clearer antecedents in Nazi Germany.

Brian Kilmeade endorses euthanizing homeless people: "Involuntary lethal injection, or something. Just kill them."

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— Aaron Rupar (@atrupar.com) September 13, 2025 at 7:56 AM

In the aftermath of the Kirk assassination, we are seeing a number of people on the right testing just how extreme and overt a fascist position can be without prompting mass disapproval. Kilmeade was outside of the pale, but it’s shocking just how much has managed to get through.

While it is possible to make too much of a few brief comments from a couple of Fox talking heads, the comments of the world’s second-richest man in Britain over the weekend had the same disturbing historical precedents and were far more potentially catastrophic.

Elon Musk is trying to violently overthrow the government of the UK and replace it with a far-right racist regime, a fact that will not inform how US elites see him at all

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— Will Stancil (@whstancil.bsky.social) September 14, 2025 at 7:28 AM

Elon Musk spoke by video to Tommy Robinson's anti-immigrant rally in the UK today. "You're in a fundamental situation here where, whether you choose violence or not, violence is coming to you," said Musk. "You either fight back or you die."

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— Matt Novak (@paleofuture.bsky.social) September 13, 2025 at 11:20 AM

Elon, fresh off attempting to incite race riots in England is now trying to incite pogroms against trans people.

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— Alejandra Caraballo (@esqueer.net) September 14, 2025 at 7:10 AM

These are deeply held and long-standing beliefs for Musk, most tracing back at least one and in some cases two generations, going back to his Hitler-loving maternal grandfather.

Along with credulously accepting every self-serving and delusional claim the man made, the mainstream press’s canonization of Elon Musk depended on willfully disregarding heaps of damning evidence that reporters like Lynette Lopez, Lora Kolodny, Michael Hiltzik, and Ed Niedermeyer were diligently uncovering.

Musk has always had, at the very least, serious fascist leanings, but that put him squarely in the mainstream of the Silicon Valley tech right. Racism and anti-feminism have been steeped into the culture from the very beginning, and yet, though this was reported, the editorial offices of places like the New York Times or NPR still aggressively promoted the tech Messiah narrative, which is one of the reasons we are in our current situation.

In case you’ve forgotten, here’s what Peter Thiel said in a widely disseminated Cato Institute essay from 2009. (Ever since then, Thiel and his apologists have been dancing around what he said about women's suffrage. It's best to ignore the distractions and focus on his actual words.)

Even beyond the fascism, these are bad people—greedy, power-hungry, devoid of empathy, and so convinced of their own worth, intellect, and general superiority as to often suggest messianic delusions. And yet, the press was so enamored of the story it was telling itself of a techno-optimist revolution that it ignored all evidence to the contrary.

They should have been calling out these people in real time. Having failed to do that, they need to start now.

p.s. I was going to talk about Andreessen here, but he probably merits a post of his own.

Insider trading is bad and other quaint notions

From Matt Levine's newsletter.  

OpenSea was, and as far as I can tell still is, a big marketplace for trading nonfungible tokens. These tokens had a vogue in crypto a few years ago, when NFTs from popular series like Bored Ape Yacht Club would sell for millions of dollars. Anyone can create NFTs, and they generally have no intrinsic value; their value is strictly memetic. If a lot of people have heard of Bored Apes and think they are cool, then they will be valuable; if not, not.

Given this, OpenSea played an important role in the NFT boom. Specifically, OpenSea has a website, and it would feature some NFTs prominently on its homepage. People would go to OpenSea’s website to buy NFTs, and they would see the NFTs featured on the homepage, which would make them more likely to buy those NFTs, so those NFTs’ prices would go up. So if you could buy an NFT before it was featured on the homepage, and then sell it after it was featured, you could pretty reliably make money. It is hard to convey how weird 2021 was.

...

But today the US Court of Appeals for the Second Circuit overturned his conviction. Here is the opinion. “Insider trading,” I like to say, “is not about fairness, it’s about theft.” Lots of people trade securities with an information advantage; you are very much allowed to trade while knowing things that other people don’t know. What makes insider trading illegal in the US is mostly that you are misappropriating that information from someone else. [1]  As I put it last year:

In the US, most of the time, it is illegal to trade on inside information about a company not because that’s unfair to everyone else who doesn’t have the information, but because you have some duty to somebody else not to misuse their information. So if you work for a public company, you have a duty to the shareholders not to trade on inside information before disclosing it to them. Or if you are the spouse or golf buddy or therapist of an executive at a public company, and she tells you about an upcoming deal, you have a “duty of trust or confidence” to her not to go trade on it, and if you do that’s a crime.

 The same logic applies to wire-fraud insider trading in NFTs. Chastain’s alleged crime is not quite “he ripped off NFT holders by trading on inside information.” It’s “he ripped off OpenSea by misusing its confidential information.” The wire fraud statute forbids “any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises.” You might think “yes, insider trading on NFTs is a scheme to defraud the people on the other side of your NFT trade,” but that is not how lawyers apparently think about it. Insider trading on NFTs is a scheme to steal OpenSea’s property, which is its confidential information about which NFTs will be featured on the website.

...

Two points here. One, this is a strange result, because obviously the information about which NFTs would be featured on the website was valuable. You can tell because Chastain (1) traded on it and (2) made money. OpenSea itself did not regularly exploit this value — it didn’t itself insider trade on its homepage picks — presumably because it thought it was better business not to. [2]  This is a weird feature of “insider trading is not about fairness, it’s about theft”: Chastain was charged with stealing something from OpenSea (information about its homepage) that obviously had value (he made money from it), but the theft didn’t obviously cost OpenSea anything (it wasn’t making money from the information). Chastain didn’t exactly make his $57,000 at the expense of OpenSea; he made it at the expense of other NFT traders. And insider trading laws do not protect other traders.

Two: What does this mean for actual insider trading law? Maybe nothing; the wire fraud statute is different from the securities fraud statute. But there are connections. [3] And I wonder a little whether, in this more fraud-friendly era, courts will be more hesitant to convict people of crimes for misusing corporate inside information. In particular, I wonder if this decision will mean anything for “shadow trading” cases, where an insider at a company gets information about that company (a merger, earnings, etc.) and uses that information to make trades in another, correlated company’s stock. Does that deprive the insider’s company of a “traditional property interest”? Is information about a pending merger a traditional property interest? If insider trading is about theft, not fairness, do you have to prove that the insider stole something that the company was using? How do you prove that? Or is insider trading a little bit more legal now?

Since we're talking about NFTs here, it is difficult not to, somewhere in the back of your mind, think of the line from The Magnificent Seven: “If God did not want them shorn, he would not have made them sheep.” But there are larger issues at play here.

With the penalties for financial fraud being probably the lowest they have been in almost a hundred years, and the incentives continuing to grow, it’s reasonable to expect it to take up a greater and greater share of our economic activity. This would seem like a good time to ask if there’s a cost to fraud beyond its immediate, narrowly and somewhat artificially defined victims. 

 Fairness is a social good in and of itself. Insider trading—the very concept of insider knowledge—inevitably tends to favor the rich, powerful, and connected. Though you'll find the odd exception now and then, the kind of information we're talking about is overwhelmingly held by the people who already have too much of everything else.

Beyond fairness, there's also the matter of well-functioning markets. The bigger the role played by cheating, manipulation, and fraud, the less the markets are able to perform efficiently, to best allocate resources where they need to go. Instead of being institutions that ideally drive innovation and progress, they increasingly become zero-sum games where the scam and the bubble outperform worthwhile investments. 

"Wonderful news, comrade! Based on the results of your tissue match, you have been awarded an all-expenses-paid vacation to..."

It's a really bad sign when dystopian sci-fi tropes start showing up in the news and people just shrug it off..

From the Guardian:

The authoritarian strongmen Vladimir Putin and Xi Jinping have mused on how organ transplants might lead to immortality, during a brief exchange of small talk caught on a hot mic at a military parade. [If you're going to have this conversation, a military parade is the perfect backdrop -- MP]

The Russian president was in Beijing on Wednesday with the Chinese leader, who hosted allies for a ceremony to mark the 80th anniversary of the end of the second world war.

As Putin and Xi walked at the head of a delegation of foreign leaders, state media aired live footage that captured parts of what appeared to be a private conversation. While they made their way towards a raised platform in Tiananmen Square, Putin’s interpreter could be heard saying in Chinese: “Biotechnology is continuously developing.”

After a brief inaudible passage, the interpreter added: “Human organs can be continuously transplanted. The longer you live, the younger you become, and [you can] even achieve immortality.”

 

Also a familiar plot element from hard-boiled thrillers.

 

 

Tastes vary, but Get the Gringo is probably the better of the two. No one does a violent but charismatic borderline sociopath like Mel Gibson.

On Tuesday, the world’s richest man was a far-right, Ivermectin-loving loon who used his money to buy major media platforms. By close of trading Wednesday, the new world’s richest man was a far-right, Ivermectin-loving loon who uses his money to buy major media platforms for his son.

[Not sure whether to go with a snarky comment about all this additional wealth making Ellison less of a wacko, or with a joke about Elon Musk not being able to buy television networks for all of his children.]

Though Ellison has always been filthy rich, his obscene wealth is very much the result of the AI bubble.  

 

 

Let's zoom in. It's not often you get to see a company jump by hundreds of billions of dollars in under an hour. 

 

 

 

From yesterday's Nightcap newsletter by Allison Morrow:

The stock shot up more than 40% Wednesday morning, its largest single-day jump ever. It was such big leap that it minted Oracle co-founder Larry Ellison $100 billion in less than an hour, making him the world’s richest person and bumping Elon Musk to second place.

The catalyst wasn’t a flashy product rollout or a surprise earnings beat — in fact, Oracle’s quarterly revenue and profit came in below Wall Street’s expectations Tuesday evening.

Instead, the fire came from Oracle’s outlook for the next few years, which, if it pans out, would cement the company as a power player in artificial intelligence. That’s a big “if,” though — especially given that the bulk of Oracle’s rosy outlook hinges on revenue from one major customer, the unprofitable OpenAI, according to the Wall Street Journal.

Oracle’s outlook is “so exuberant that if we’d gotten this sort of prediction from a less established company it might have been shrugged off as either a lie or a misplaced digit,” Steve Sosnick, chief strategist at Interactive Brokers, told me.

... 

• Oracle’s CEO, Safra Catz, said the company’s cloud infrastructure revenue would grow 77% to $18 billion by the end of May 2026. But that’s not all: It projects that revenue to hit $144 billion by 2030.
• Catz said Oracle had signed four multi-billion-dollar contracts with three different customers, giving the company $455 billion in “outstanding contract revenue” that it expects to collect on. That metric is up 359% from last year.

...

If Oracle’s head-spinning projections seem too good to be true, well, that’s all part of the fun-house mirror effect of the generative AI bubble (yes, I said “bubble”).

Because for any of Oracle’s future projections to make sense, its AI customers, including OpenAI, have to make, like, a lot of money — something the ChatGPT maker has shown no clear path to doing anytime soon. (The Information reported last week that OpenAI’s projected cash burn this year through 2029 will hit $115 billion — about $80 billion higher than the company previously expected.)

... 

“This data center buildout continues to be a major support to the US economy… so we of course hope that Larry Ellison is right and that this massive buildout is sustainable,” Peter Boockvar, chief investment officer of One Point BFG Wealth Partners, said in a note Wednesday.

But Boockvar also sounded a note of caution: “While Oracle just knocked the cover off the ball, when I see one-day market cap increases of such epic proportions, I can’t not think of what I witnessed in 1999.”

The bottom line is that if generative AI does not go from being a sector that is hemorrhaging cash to one that is turning in historic levels of profit—and do so fairly soon—companies like Oracle and Nvidia (which now has a higher market cap than any other company in history), though fundamentally sound enterprises, will almost certainly be trading at around a third or less of their current inflated valuations.

 

Everything about this feels bad. Analysts wholeheartedly believing that OpenAI and two unnamed companies will provide oracle with *more revenue than all of AWS* by 2029? Up from...$18bn in their next fiscal year? Come on man

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— Ed Zitron (@edzitron.com) September 9, 2025 at 8:34 PM

 

Also keep in mind that with one or two exceptions such as Apple, the top 10 companies in the S&P are all highly dependent on this bubble, and that the concentration in the sector is far higher than it was during the dot-com bubble. On top of that, the overall economy was stronger in the 1990s and was facing none of the unique challenges of 2025, including an administration that will almost certainly over-react to a financial crisis.

On the bright side, maybe the nepo baby will have to sell CBS/Paramount, and Stephen Colbert can keep his job. (Not going to happen, but I wanted to end on a cheerful note.)

It's not true that all techno-optimist ideas come from old sci-fi shows. Some of them come from old back issues of the National Review.

I’ve been blogging on, and some would say whining about, the cult of the tech messiahs for at least a decade now, but I’m still learning about new connections.

We’ve previously talked about Silicon Valley’s bizarre antipathy to the concept of experts and how it played out first with biohacking and then with the full-on crazy of ivermectin and hydroxychloroquine. We’ve discussed how Marc Andreessen singles out experts as villains not once but twice in his Techno-Optimist Manifesto. I believe we brought up the example of Steve Jobs basically killing himself with alternative medicine.

But this is not my day job, and even if it were, I doubt they could pay me enough to spend all my time going down these rabbit holes. As a result, mine is a layman’s grasp of the subject, and there are still lots of gaps.

For example, up until a few days ago, I had no idea how far back this hatred of credentialed experts could be traced.

This comes from a Bari Weiss interview with Andreessen. You can check out the whole thing, but I strongly recommend you don’t. I found it while researching this topic, read as much as I could stomach, and closed the tab. 

 James Burnham was super helpful on these topics. He was one of the smartest political scientists, philosophers of the twentieth century on American politics. He was a full-on communist revolutionary activist and a personal friend of Leon Trotsky in the 1920s and ’30s, and then he broke from communism in the ’40s, and he went hard to the right. And he helped found the National Review with William F. Buckley.

He wrote these two books in the 1940s, when the heart of the big three-way battle between communism, fascism, and liberalism was raging in the world. One’s called The Managerial Revolution. And it basically says, these movements have real differences, but there is something in common, which he called “managerialism,” which is the establishment of an expert class. The expert technocrats, who are assumed to be able to steer society in healthy and beneficial ways, and then often lead you in very bad directions. 

It took some tough bargaining, but the Tesla board managed to keep Musk's pay plan under $1 trillion

Tesla's nearly $1 trillion new pay plan for Musk would expand his voting power
Lora Kolodny

Tesla is asking investors to approve yet another outsized pay plan for CEO Elon Musk, according to a financial filing out Friday.

The total package is worth about $975 billion based on the maximum payout, assuming share count remains.

The proposed plan for Musk, already the world’s wealthiest individual, consists of 12 tranches of shares to be granted if Tesla hits certain milestones over the next decade. It would also give Musk increased voting power over the EV maker and aspiring robotics titan, which he has publicly demanded since early 2024.

Tesla Chairwoman Robyn Denholm told CNBC’s Andrew Ross Sorkin the plan was designed to keep the CEO “motivated and focused on delivering for the company.”

...

Denholm confirmed that the Tesla CEO pay plan, if approved by shareholders, would not put any limit on where and how Musk spends his time or require him to spend any minimum number of hours per week on Tesla business. 

To obtain the first award in the plan, Musk and Tesla would need to almost double their current market cap to reach $2 trillion. The final benchmark is reaching an $8.5 trillion market cap.

The operational milestones in the 2025 CEO Performance Award include: 20 million Tesla vehicles delivered, ​10 million active FSD Subscriptions, ​1 million robots delivered, ​1 million Robotaxis in commercial operation and a series of adjusted EBITDA benchmarks.

There's an old sales psychology trick where you start with the outrageous ask, then follow up with the merely exorbitant. While the full award is attached to a string of virtually impossible accomplishments, some of the lower tiers—each of which appears to come with its own absurdly generous payout—are within reach given creative accounting and assuming sufficient market irrationality and/or massive government corruption.

If Donald Trump were to announce a major initiative—buying robots, or a fleet of government robotaxis, or perhaps a joint project between Tesla and SpaceX to build an interstate hyperloop system—even if no real progress was ever made (a near certainty for the last example) and relatively little money actually changed hands, it is not difficult to imagine today’s febrile market pumping the stock up well past two trillion dollars. By way of precedent, remember that when last I checked, Tesla was trading at a price-earnings ratio of just over 200, while Musk’s longtime frenemy and classic Bond villain Peter Thiel’s company Palantir shot up to a P/E of over 500 shortly after the 2024 election.

As previously discussed, the idea that Elon Musk needs additional incentive to keep Tesla's stock price up is obviously absurd. He is the company's largest shareholder and, while the details can be a bit murky, certainly much and possibly most of his wealth would evaporate if Tesla implodes (i.e. starts trading at a reasonable level given the fundamentals). He quite literally has more to lose than anyone else if things go south.

He does, however, have real leverage here, though of a kind that no one involved with the company would ever admit: he is the face of the con. This is, and has been for years, the biggest and most brazen stock pump in history. Tesla is a 20-plus-year-old niche automobile company with a tiny product line and no new vehicles in the pipeline. The bull case for the stock is now based almost entirely on robotaxis and humanoid robots—despite the fact that the company is far behind the industry leaders in both fields in terms of technology, and even if it were somehow capable of leapfrogging the competition, those potential markets probably aren't big enough to justify Tesla's current market cap, let alone tell a story of explosive growth. 

In what should be related news... 

Tesla’s U.S. market share dropped to a near eight-year low in August as buyers chose electric vehicles from a growing stable of rivals over the aging lineup offered by CEO Elon Musk’s company, according to data from research firm Cox Automotive shared exclusively with Reuters.

The decline highlights the threat from automakers ramping up EV incentives at a difficult time for the industry. Analysts expect an EV sales bump to continue through September in the United States, then drop when federal tax credits expire at the end of the month, raising financial pressure on Tesla and other automakers.

Tesla, which once held more than 80% of the U.S. EV market, accounted for 38% of the total EV sales in the United States in August, the first time it has fallen below the 40% mark since October 2017, when it was ramping up production of the Model 3, its first mass market car, according to early data from Cox.

While other automakers are rolling out new EVs, Tesla has turned its focus to building robotaxis and humanoid robots, delaying and cancelling plans for cheaper electric vehicle models.

 

Not so much the fact itself as the fact people are talking about the fact

 

U.S. Stocks Are Now Pricier Than They Were In The Dot-Com Era - WSJ

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— Nicholas Brown (@nicholasabrown.bsky.social) September 1, 2025 at 5:38 AM

 

This story has been getting a lot of coverage, and I think it may be important, though not necessarily for the obvious reasons.

 

 

U.S. STOCK MARKET REACHES MOST EXPENSIVE LEVEL IN HISTORY, OVERTAKING DOT-COM ERA AND 1929 PRE-DEPRESSION PEAK

— FinTwitter (@fintwitter.bsky.social) September 1, 2025 at 7:07 AM

 

We've been running a lot of posts recently describing various worrying stats and trends for the markets and the economy in general, everything from attacks on the Fed to an apparent bubble adding more to growth than consumer spending to smart, experienced analysts start to to routinely use the word "stagflation." 

 Given all these previous alarming revelations, I’m not sure how big a deal this one additional statistic could be.

From a market psychology standpoint, however, this might be more notable. Recently, retail investors have come to make up a larger and larger chunk of the market. At the risk of being patronizing, I’m not sure how deep these people tend to dive into the economic news or how skilled they are in processing what they do read (it's worth noting that stagflation may be getting lots of attention among econ types but it hasn't been trending strongly on Google), but I’m betting most of them check The Wall Street Journal or the business section of CNN or subscribe to channels like FinTwitter.

I don’t have any special insight into the minds of retail investors and this is the most non-random of samples, but it certainly looks like the message that the music might be about to stop is gaining traction, and while that might not trigger an exodus, it seems likely to accelerate the slide if things go south.

 

 

 

 

Dispatches from a still-not-burning Los Angeles.

This is one of those times that you are faced with a lie so shameless, outrageous, and despicable that you need to step back for a moment and take it all in, letting the full weight of it settle on you. 

Kristi Noem: "I do know that LA wouldn't be standing today if President Trump hadn't taken action."

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— Aaron Rupar (@atrupar.com) August 31, 2025 at 7:37 AM

At the risk of pointing out the obvious, the little civil unrest that we did see here in L.A. was solely because the Trump Administration was doing everything in its power to provoke a reaction. Even with all that, the incidents (at least those coming from the people and not the ICE agents) were minor. Other than the vandalizing of a few unoccupied Waymos—it’s difficult to convey how much people around here hate those cars—the incidents were few and minor, leaving no residents feeling threatened (at least by the protesters). Noem is taking a few firecrackers and blocked streets and trying to convince people this was the second coming of the Watts Riots of ’92.

At this point in the story, we all need to acknowledge that there is no apparent lower bound here—that while there might be lines that members of the administration would not cross, we shouldn’t assume that any specific act or position is beyond the pale.

I’m not going to delve into the questions of psychopathy or moral character. I do, however, have something to say about this specific lie, how it’s part of a larger myth, one for which the Establishment press has considerable culpability.

Through a combination of sensationalism, laziness, provincialism, various prejudices and bigotries, and a willingness to let conservatives dictate the narrative, the Establishment press (and, as always, the New York Times in particular) have done everything they could to propagate a fantasy of cities—especially Los Angeles—as post-apocalyptic hellscapes.

Before going on, our standard note on these stories: the relevant unit in almost all these cases is L.A. County versus the city of L.A. The city is large; the county is huge. It covers thousands of square miles and is home to almost 3% of the United States population—more than even NYC. That footage you saw of burning buildings during the Black Lives Matter protests? Entirely outside of the city. Most of the casualties from fires a few months ago? Mostly outside of the city.

The New York Times has a history of reporting on California—and especially Los Angeles—disasters with a barely concealed sense of glee. This extends to disasters that haven’t actually happened yet and which, if anything, threaten NYC more than they do the West Coast. Case in point: numerous stories on rising sea levels that ignore the fact that Los Angeles has an elevation much higher than that of New York City. Furthermore, the West Coast seldom faces hurricanes and the storm swells that often follow them.

The wildfires of earlier this year provided a perfect example of the paper’s coverage of these stories. The fires were horribly destructive. Dozens of people lost their lives. Millions had to deal with heavy smoke for days, serious enough to be life-threatening for people with pre-existing conditions. All that said, however, only about one-half of 1% of the county was caught in the fires. Despite this, the New York Times ran a series of sensationalistic stories with headlines like “Can Los Angeles Ever Recover?”

The coverage of the wildfires also put the class bigotry of the Establishment press on full display. Though the fire in Pacific Palisades was less deadly than that in Altadena, it got the overwhelming majority of the attention because the residents there were rich and famous.

That was, however, far from the most embarrassing display of the press’s bigotries. For that, you need to look to the Black Lives Matter protests. Despite this being, given its tremendous scale, one of the most peaceful mass protests the country has ever seen, the coverage often made it seem like angry mobs of Black people were coming for the readers. Go back and look at Tom Cotton’s dangerous and dishonest piece in the New York Times and then read the paper’s opinion editor defending the decision to run it. While Cotton did not speak for the paper, its leaders were disturbingly close to his point of view.

Recently, quotes from Marc Andreessen emerged talking about how he was supposedly radicalized by the Black Lives Matter movement. This is, to a degree, disingenuous—we now know that Andreessen has always been a bit of a white supremacist, not to mention a hardcore anti-feminist—but his statement that Black people were declaring war on the rest of us would have been remarkably easy for New York Times readers to hold.

Nothing to worry about here -- Nvidia edition

As this chart dramatically illustrates, the story of Nvidia is the story of the AI bubble. This is a 32-year-old company which, up until 5 years ago, never traded at more than $6.50 a share.

While a price-to-earnings ratio of 50 is nowhere near the eye-popping excess of a Tesla or a Palantir, it’s not small either. It suggests the market believes the company is on track for substantial growth in the next 5 to 10 years.

That P/E ratio reflects the astounding rivers of money that are being poured into data centers by companies like Microsoft and Meta. If that level of spending has plateaued—or, worse yet, peaked—Nvidia is substantially overvalued. If the current push for AI is a bubble and we see a substantial rollback in capital expenditures combined with a more conservative consensus on the company’s growth potential, it’s not difficult to imagine the stock dropping by a factor of two or more. 

 And a big drop in this stock has even bigger implications for the wider market and the economy.

 

From the invaluable Allison Morrow's newsletter (I love that monopoly disclaimer): 

Here are some of the reasons people are beginning to worry about the Nvidia story.

 

Reason No. 1: Nvidia is huge. But not just, like, “Oh, it’s a big company!” It is bigger, in terms of market value, than any public company ever. We often toss around its market capitalization — $4 trillion — as if that number makes any sense.

Consider that the world had never seen a $1 trillion public company until Apple crossed the threshold in 2018. Now we have nearly a dozen, almost all of them in the American tech sector.

 

Reason No. 1(a): That size makes Nvidia (pronounced in-vid-ee-uh) on its own account for 8% of the S&P 500. So, even if you don’t hold Nvidia shares, you gotta watch its results because they could swing the entire market. Zoom out even further: Nvidia’s market cap accounts for 3.6% of global GDP, according to Deutsche Bank. Yes. One single company, which gets half its revenue from just three customers, is that huge.

 

Reason No. 2: When we talk about the AI industry, we’re mostly talking about Nvidia. If you use ChatGPT, that’s powered by Nvidia chips. The same goes for Anthropic’s Claude, Google’s Gemini, Amazon’s…whatever Amazon’s chatbot is called — all of those products are powered by the processors made by this company that up until a few years ago was just a tech workhorse churning out processors that make video games look cooler.

 

(You may be thinking, Hey, Nvidia sounds kinda like a monopoly, to which I say, Please do not use the m-word around here, or else I’ll have to call the lawyers. Let’s just say Nvidia almost exclusively controls the supply of vital resources to an entire industry and enjoys monopoly-esque profit margins.)

 

So, if you follow the Gospel of AI and believe that the technology has the power to dismantle the entire global economy, Nvidia is your clear picks-and-shovels play. 

...

But — and here’s why the focus on Nvidia is getting even more intense — what if the technology Nvidia is powering turns out to be, I dunno, not quite the revolution that your Sams Altman or Darios Amodei have promised? What happens to the picks and shovels when the gold rush goes bust?

If you want to delve further into the different ways a next-big-thing can under-perform, we've got a couple of metaphors for you here.

 

 

 

More (non)weird weather

We’ve been having one of those Labor Day heat waves so common in Southern California, so I spent the afternoon in the vicinity of the air conditioner and only ventured out when the sun was finally getting low and the temperature started to drop. Right before I left my apartment, I checked the current weather and saw this extremely unexpected forecast.

When I stepped outside 15 minutes before the promised shower, the skies were a bit hazy but basically cloudless. My destination was about a 10-minute leisurely walk. When I got there, I ordered an iced tea and picked a seat outside in the shade that seemed likely to catch some breeze. The sky still looked the same, as it did except for going from sunset to moonlight until I finally got back home. Not a single likely rain cloud the whole time. 

As previously discussed, I’ve been noticing lots of not just inaccurate but erratic and highly improbable forecasts from Google, The Weather Channel, et al., always showing up on just one site at a time. Maybe I’m just paying more attention these days, or maybe there’s a growing quality-control issue with the algorithms that drive these sites. It's probably too early to have anything to do with the decline and fall of NOAA, but I don't see that making things better. 

This is probably a non-story, old news about the president's health blown up by internet buzz and wishful thinking, but it's also a reminder of how strange and unstable the dynamic of this White House is and of the gaping double standard in recent press coverage.

From The Daily Beast: 

Conservative political consultant Rick Wilson says a “MAGA Hunger Games” is playing out in Washington as President Donald Trump, 79, shows his age.

Wilson said “rumors from the Trumpverse” indicate that Vice President JD Vance is “moving fast” in this shuffling of power behind the scenes, positioning himself to take over the MAGA movement sooner rather than later, according to Wilson’s Substack.

“Slow or fast, he’s headed down,” Wilson said of Trump. “The circle who knows what’s up is very, very small and very, very paranoid. JD Vance knows, and he’s moving fast.”

Wilson pointed to Vance’s interview this week with USA Today—in which he said he is prepared to take over the presidency, having received “on-the-job training” in the first seven months of this term—as further proof of jostling behind the scenes.

The White House did not respond to a request for comment. Reached by the Daily Beast, Vance’s office did not address the allegations made by Wilson.

Trump said in May that it was “far too early to say” who might succeed him. However, he noted that Vance was “doing a fantastic job” and that Secretary of State Marco Rubio was “great.” Of course, the 25th Amendment stipulates that, should anything happen to Trump during this term, Vance would become president.

This Daily Beast piece in still an outlier.  The establishment press has always been bizarrely reluctant to discuss Trump's health issues, going back at least to their deafening lack of interest in the 2018 diagnosis of a type of heart disease associated with dementia, a blink-and-you'll-miss-it story.

This is in sharp contrast to the nonstop speculations that marked Biden's time in office, even after he stepped down from the re-election campaign. The obsession ran so deep that Biden's health continues to be a major story, including a heavily promoted book by Jake Tapper. If anything, the former president's decline continues to get more attention than that of the current president.

 

Donald Trump’s rumored death raises new questions about Joe Biden’s health

— NY Times Pitchbot (@nytpitchbot.bsky.social) August 30, 2025 at 6:46 PM

 

While this far from the most egregious example of the Trump/Biden double standard, it may be the sharpest reminder of the strange POTUS/VPOTUS dynamic of the current administration. 

Here's a question I ran past a student of presidential history shortly after the Trump/Musk feud erupted: 

For months now, maybe even before the inauguration, we've been talking about how fundamentally unstable the dynamic in the White House was—having JD Vance, hand-picked candidate of Peter Thiel and Elon Musk, as the vice president. Now that Musk and Trump have had their unexpectedly fast but by no means surprising falling out, the tensions between the president and the vice president have gotten extraordinary.

My question for you is: have we ever seen anything like this before? Obviously there have been tense relationships and ideological differences between the two offices—Reagan and Bush, Kennedy and LBJ, going all the way back to Adams and Jefferson—but have we ever had a situation where the VP was not just a rival, but had the support of this powerful and ruthless a faction?

His reply:

And, while I don't know about pre-Civil War history, there has been nothing like this in my memory or knowledge.

 

 While many tickets are marriages of convenience, few if any have ever taken it to this degree. If you could tap into the private chats of Thiel, Musk, Andressen, et al., I suspect most of the conversations are about the 25th amendment and what they'll do after Vance takes the oath. 

It's too early to say if a Presidential health crisis is imminent, but if one does occur in the next three and a half years, given the players and the situation, it is certain to be... interesting.   

 

 

 

It's Labor Day, so we're taking time off and running a repost

 

It's Labor Day weekend so let's stop by Emma Goldman's ice-cream shoppe in Worcester for a hot fudge sundae and some anarchy. pic.twitter.com/LgPLuxkmWG

— Charles P. Pierce (@CharlesPPierce) September 4, 2021

Look for the Union Label

The ILGWU sponsored a contest among its members in the 1970s for an advertising jingle to advocate buying ILGWU-made garments. The winner was Look for the union label.[9][10] The Union's "Look for the Union Label" song went as follows:

    Look for the union label
    When you are buying a coat, dress, or blouse,
    Remember somewhere our union's sewing,
    Our wages going to feed the kids and run the house,
    We work hard, but who's complaining?
    Thanks to the ILG, we're paying our way,
    So always look for the union label,
    It says we're able to make it in the USA!

The commercial featuring the famous song was parodied on a late-1970s episode of Saturday Night Live in a fake commercial for The Dope Growers Union and on the March 19, 1977, episode (#10.22) of The Carol Burnett Show. It was also parodied in the South Park episode "Freak Strike" (2002).

Are LLMs a Langley steam plane? A Newhart airline? What's the best metaphor for the current state of AI?

The technology of the late 19th and early 20th centuries is filled with neglected but interesting bits. One that I come back to frequently is the steam-driven airplane. While the idea seems an obvious non-starter today, this was an active line of research which produced some surprisingly successful aircraft.

The most impressive of these were the unmanned aircraft of Samuel Pierpont Langley, which made multiple flights three to five times further and eight years earlier than the Wright brothers. Langley's plane may now be best known due to a slanderous TED Talk from a hack motivational speaker, but it was a marvelous piece of engineering. 

Here's how Scientific American put it in March of 1904.

In 1896, for the first  time in  history, a mechanical  structure, free of any attachment to the  ground and wholly without any supporting power but its own engines. made several flights of  over one-half mile each. Mr. Langley had at this point reached the original aim of his researches in  this direction---that of demonstrating, as a  question of mechanical engineering, first. the conditions for, and second, the possibility of accomplishing, mechanical flight. 

He was remarkably close to building the first working manned aircraft, and it's fun to speculate, in an alternative-history kind of way, about how things might have been had events broken more his way. But in terms of the history of aeronautics, it would have made little difference. Internal combustion was the future of flight. Steam was a dead end.

The Wright brothers' plane was the very opposite of a dead-end technology. The basic principles and design choices were all completely sound, and you can trace a fairly direct line from those first models to the passenger planes and military aircraft of two or three decades later.

That said, for all the excitement, no serious person looked at this and said this is commercially viable technology. As with Edison’s phonograph, which had also shocked the world 30 years earlier, while virtually everyone recognized this as a breakthrough, it was also clear that the technology would have to evolve considerably before it could be rolled out for widespread business or military applications.

On his seminal album The Button-Down Mind, Bob Newhart imagined a conversation between the Wright brothers and a post-war era corporation trying to monetize their breakthrough. The humor of the monologue came partly from the absurdity of trying to stack multiple passengers on the wing of the Wright Flyer or making a coast-to-coast trip taking off and landing every 105 ft, but much of it also came from the banality and shortsightedness of 60s-era corporate culture in the face of a stunning, world-altering step forward. It’s a comparison that’s, if anything, even sharper in the age of venture capitalism.

Which brings us around to the original question. Are LLMs a steam airplane—a wonderful piece of engineering and a major advance, but still a dead-end technology doomed to be pushed aside by something better before it makes its mark?

Are they Newhart’s airline—a viable and important technology that isn’t ready yet to support the commercial applications that people are trying to impose on it?

The mountains of money that are being poured into AI in 2025 are mind-boggling, and if either of these possibilities turns out to be true the economic implications are stunning.

I’m inclined to believe that one of these two possibilities is true (leaning more toward Langley than Newheart) , which would be very bad news for a lot of people—perhaps, depending on how it plays out, for most of us. Obviously that’s just an opinion, but given the stakes, these questions would seem to be worth asking.

 

Shadowy surveillance company started by a reactionary Bond villain suddenly started trading at a P/E over 500 shortly after Trump was elected -- probably nothing to see here

 

In case you missed it.  

 

 Palantir is pretty much exactly the company you would expect from the cartoonishly evil Peter Thiel: ethically and morally questionable and badly run (if you’re doing all the sleazy things your competitors shy away from and you still can barely turn a profit, you’re probably not a business genius). But of course, Thiel has always made his money the old-fashioned way: getting people to give it to him, and Palantir has been spectacularly successful at attracting investors, first through funding rounds then very recently through the stock market.

As the Economist puts it:

 

 Palantir generally gets grouped in with the AI boom, and while that's reasonable, the real story here is clearly about Trump.Thiel is one of the most influential Republican donors. The vice president owes every aspect of his professional and government career since graduating law school to either Thiel or to the rest of the PayPal mafia. 

Palantir stock had been basically flat for the years since its IPO. It was only when the Trump/Vance ticket started gaining momentum that the company's valuation began to climb, with a notable jump the first week in November. 

 

The market is clearly anticipating that the administration will pay back its friends by pumping hundreds of billions of dollars into their coffers, and Palantir appears to be first in line.

This is an extraordinary story of corruption and conflict of interest, even by the Hieronymus Bosch standards of 2025. It's true that there's a lot going on out there, but there is still no excuse for how little attention this has gotten.

  

Whether it's due to battered spouse syndrome or dumb money, the entire stock market is now one big this is fine meme.

Monday night...

In a sane world, this kind of attack on the Fed would cause market panic.

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— markpalko.bsky.social (@markpalko.bsky.social) August 25, 2025 at 6:39 PM

Tuesday afternoon...
 

 

For months now, we've been talking about the market’s curious lack of reaction to what would normally qualify as ominous or even terrifying economic news. We suggested that the constant battering and uncertainty had created a market psychology that was bizarrely complacent in the face of anything but the most imminent threats. We wondered if the increasing role of retail investors meant that the market was increasingly being moved by dumb money. Whatever the reason, the problems have gotten so bad and the disconnect has gotten so obvious that smart and sober commentators from across the political spectrum have started to raise the alarm.

Allison Morrow (from her newsletter):

 Federal Reserve independence is sacrosanct, the free-market wisdom goes. So why is Wall Street not freaking out about the Trump administration’s campaign to infiltrate the central bank?

 

The answer, in part, is that investors have made a lot of money betting on the idea that Trump will back off, reined in by some combination of the law, advisers who know better, or those mythical market “vigilantes.”

 

It’s a strategy that risks blowing up in their faces.

Federal Reserve independence is sacrosanct, the free-market wisdom goes. So why is Wall Street not freaking out about the Trump administration’s campaign to infiltrate the central bank?

 

The answer, in part, is that investors have made a lot of money betting on the idea that Trump will back off, reined in by some combination of the law, advisers who know better, or those mythical market “vigilantes.”

 

It’s a strategy that risks blowing up in their faces. 

From Marketplace:

“In the longer term, the issue is whether the Fed is able to act independent of executive influence,” said Matthew Paniati, a senior analyst at Capital Advisors Group.

“Because if they can’t, that has very significant macroeconomic implications in my view,” said Paniati.

If people believe the Fed is influenced by a president more than by inflation data, the less faith they have that inflation will be managed well.

“That sends a signal to the bond market that there’s more risk of inflation going forward,” said Kathy Jones with the Charles Schwab Center for Financial Research.

And inflation is an investment killer.

“Investors want to be compensated for tying up their money for longer periods of time, because there’s always some risk that inflation will erode those returns,” said Jones.

So when investors are more worried about inflation, they charge more. They charge higher interest rates in the bond market, which the Fed does not control — it only controls short-term interest rates. The market controls long-term rates, that affect everything from car loans to mortgages to government debt.

“That’s the irony of this whole battle, I think, is that the more the president pushes on the Fed to cut interest rates, the more risk is that long-term rates go up,” said Jones.

It is also possible that concerns over inflation and Fed independence are just peanuts, that this whole brouhaha is ignoring an even bigger risk to long term interest rates.

“The main issue is just the budget deficit,” said Gershon Distenfeld, director of income strategies at Alliance Bernstein. 

He said the government is getting in over its head when it comes to debt, and because of that, investors will charge higher long-term rates. Either way, markets have not panicked just yet. 

“And I think it’s because you’ve had decades of Fed credibility that have kept the market believing that Fed independence is still there,” said Marvin Loh with State Street Markets.

I really should get around to that post on generalizing Minsky moments.

Trump is hostile to the Fed’s independence. He wants to bend the central bank to his will. He is willing to threaten officials with criminal prosecution to get his way. We are in dangerous territory. My @nationalreview.bsky.social column. www.nationalreview.com/corner/the-s... #econsky

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— Michael R Strain (@michaelrstrain.bsky.social) August 26, 2025 at 3:15 PM

More from TNR's Strain:

Eroding central bank independence will make investors, businesses, and households less confident that the Fed will be able to keep inflation low and stable because they will expect that the president will be able to bully the Fed into keeping interest rates lower than is merited, juicing demand and creating inflationary pressure. Higher expected future inflation will put upward pressure on long rates. In addition, the erosion of central bank independence and the willingness of the president to criminalize policy disagreements will increase the perceived risk of holding U.S. Treasury debt. That too will push up long-term interest rates. 

Needless to say, the New York Times recognized the gravity of the moment and rose to the occasion... I kid, of course.

They’re not making the slightest pretense of doing anything but weaponizing a federal agency against Trump’s enemies, and the New York Times’ response is “Well played, sire!”

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— Will Stancil (@whstancil.bsky.social) August 26, 2025 at 2:08 PM

And this bit of understatement.. 

The Federal Reserve Board of Governors has been around for 111 years. In that time it has had more than 100 members (en.wikipedia.org/wiki/Federal...). No president has ever fired (or claimed to have fired) one before.

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— Adam Keiper (@adamkeiper.com) August 25, 2025 at 7:53 PM 

While the stock market was feelin' fine, other financial markets were paying more attention.

(Bloomberg) -- Long-dated US Treasuries fell as President Donald Trump intensified efforts to oust Federal Reserve Governor Lisa Cook, deepening concerns his attacks on the central bank’s independence and lobbying for lower interest rates will fan inflation. www.bloomberg.com/news/article...

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— Carl Quintanilla (@carlquintanilla.bsky.social) August 26, 2025 at 5:47 AM

Dollar, longer-dated Treasuries slide as Trump escalates attack on Fed; gold rises reut.rs/4lE8QAd

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— Reuters (@reuters.com) August 25, 2025 at 10:45 PM

It's really kind of beautiful how his flunkies do these little maneuvers and then he explicitly blows them up less than an hour later. 13:49 *BESSENT: PUBLIC TRUST GIVES FEDERAL RESERVE ITS CREDIBILITY 14:44 *TRUMP: WILL HAVE MAJORITY SHORTLY ON FED

— George Pearkes (@peark.es) August 26, 2025 at 11:46 AM