When it comes to agentic AI, a Newhart Airline is the best is the best case scenario.

In a previous post, I discussed the idea of a steam airplane (an impressive technology that still represented a soon to be abandoned dead end) and a Newhart airline (a genuine breakthrough prematurely commercialized).

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.

...

Are [LLMs]  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?

 

It is too early to say how LLM-based AI will play out, but I feel confident in saying that LLM-based agents are not ready for prime time. 
 

Julie Bort writing for TechCrunch: 

The now-viral X post from Meta AI security researcher Summer Yue reads, at first, like satire. She told her OpenClaw AI agent to check her overstuffed email inbox and suggest what to delete or archive.  

The agent proceeded to run amok. It started deleting all her email in a “speed run” while ignoring her commands from her phone telling it to stop. 

“I had to RUN to my Mac mini like I was defusing a bomb,” she wrote, posting images of the ignored stop prompts as receipts.  

... 

But Yue’s post serves as a warning. As others on X noted, if an AI security researcher could run into this problem, what hope do mere mortals have? 

“Were you intentionally testing its guardrails or did you make a rookie mistake?” a software developer asked her on X.  

“Rookie mistake tbh,” she replied. She had been testing her agent with a smaller “toy” inbox, as she called it, and it had been running well on less important email. It had earned her trust, so she thought she’d let it loose on the real thing. 

Yue believes that the large amount of data in her real inbox “triggered compaction,” she wrote. Compaction happens when the context window — the running record of everything the AI has been told and has done in a session — grows too large, causing the agent to begin summarizing, compressing, and managing the conversation.  

At that point, the AI may skip over instructions that the human considers quite important.  

...

The point of the tale is that agents aimed at knowledge workers, at their current stage of development, are risky. People who say they are using them successfully are cobbling together methods to protect themselves.

One day, perhaps soon (by 2027? 2028?), they may be ready for widespread use. Goodness knows many of us would love help with email, grocery orders, and scheduling dentist appointments. But that day has not yet come. 

  And we haven't even gotten into prompt injection.

Old Sheldon

This is an extraordinary speech by Sheldon Whitehouse on the Senate floor a few days ago. It is largely free of rhetorical flourishes, is often dry, drags in places, and is long, but riveting nonetheless. I started it assuming that I would drop out after 10 or 15 minutes, but once I got into it, I was never really tempted to quit.

Whitehouse spent a little more than half his working life as a practicing attorney, and it shows. This is constructed like a highly effective closing argument after a long and complex trial, with every thread laid down for the jury leading to a damning conclusion.

Josh Marshall had a similarly positive reaction.

The speech runs almost an hour long. But it’s worth it. There’s so many details in the speech it defies easy summary. The best overview is to think of all the ways Donald Trump was and is connecting to the Russian government and the oligarch para-government. Whitehouse then shows that Jeff Epstein is right there at almost every point of contact. It’s a mix of old information, new investigating and a pretty close analysis of emails in the Epstein Files that wouldn’t really jump out at you on their own but become quite interesting when lined up with other outside information which places them in context.

But that’s not why I’ve linked to it here. Instead, I want to highlight the Russian connection with respect to two companies—Palantir Technologies and SpaceX—and three individuals: Peter Thiel, Elon Musk, and Kimbal Musk.

Kimbal is often left out of this conversation, but he does serve on the boards of both Tesla, Inc. and SpaceX and has extensive access to the companies. He is also, as previously mentioned, extraordinarily intertwined with the saga of Jeffrey Epstein.

Add to that Elon’s extensive involvement with radical white nationalist groups in Europe, and you have the kind of stories that would normally rule out a high-security clearance—yet these companies have access to some of the most sensitive national security data imaginable.

Seems like something someone should look into.  

Sen. Whitehouse to uncover connections between Trump, Russia, and Epstein.

Strategic Airpower

We've recommended military historian and blogger Bret Devereaux before -- he's an exceptional writer and pretty much anything he posts is worth you time -- but this detailed (over 9,000 words) overview of the limits of Airpower from WWI to Ukraine might be the most timely piece of analysis you'll read about the war in Iran, despite being published in 2022.

Excerpts from Strategic Airpower 101

Before we dive in, we need to define what makes certain uses of airpower strategic because strategic airpower isn’t the only kind. The reason for the definition will emerge pretty quickly when we talk about origins, but let’s get it out of the way here: strategic airpower is the use of attack by air (read: bombing) to achieve ‘strategic effects.’ Now that formal definition is a bit tautological, but it becomes clarifying when we talk about what we mean by strategic effects; these are effects that aim to alter enemy policy or win the war on their own.

Put another way, if you use aircraft to attack enemy units in support of a ground operation (like an invasion), that would be tactical airpower; the airpower is a tactic that aims to win a battle which is still primarily a ground (or naval) battle. We often call this kind of airpower ‘close air support’ but not all tactical airpower is CAS. If you instead use airpower to shape ground operations – for instance by attacking infrastructure (like bridges or railroads) or by bombing enemy units to force them to stay put (often by forcing them to move only at night) – that’s operational airpower. The most common form of this kind of airpower is ‘interdiction’ bombing, which aims to slow down enemy ground movements so that friendly units can out-maneuver them in larger-scale sweeping movements.

By contrast strategic airpower aims to produce effects at the strategic (that is, top-most) level on its own. Sometimes that is quite blunt: strategic airpower aims to win the war on its own without reference to ground forces, or at least advance the ball on winning a conflict or achieving a desired end-state (that is, the airpower may not be the only thing producing strategic effects). Of course strategic effects can go beyond ‘winning the war’ – coercing or deterring another power are both strategic effects as well, forcing the enemy to redefine their strategy. That said, as we’ll see, this initially very expansive definition of strategic airpower really narrows quite quickly. Aircraft cannot generally hold ground, administer territory, build trust, establish institutions, or consolidate gains, so using airpower rapidly becomes a question of ‘what to bomb’ because delivering firepower is what those aircraft can do.

...

Now before we move forward, I think we want to unpack that vision just a bit, because there are actually quite a few assumptions there. First, Douhet is assuming that there will be no way to locate or intercept the bombers in the vastness of the sky, that they will be able to accurately navigate to and strike their targets (which are, in the event, major cities) and be able to carry sufficient explosive payloads to destroy those targets. But the largest assumption of all is that the application of explosives to cities would lead to collapsing civilian morale and peace; it was a wholly untested assumption, which was about to become an extremely well-tested assumption. But for Douhet’s theory to work, all of those assumptions in the chain – lack of interception, effective delivery of munitions, sufficient munitions to deliver and bombing triggering morale collapse – needed to be true. In the event, none of them were. 

 ...

That of course isn’t how it turned out. While the Luftwaffe initially began with attacks against shipping, progressing to attacks on airbases and air production, beginning in August 1940 the Luftwaffe began escalating attacks on civilian areas (the degree to which that was intentional remains contested). The British responded with bombing raids against Berlin, at which point Hitler and Göring retaliated with an intensive campaign of urban bombing which would become known as the ‘blitz.’ Hitler would claim these attacks were reprisals (Vergeltungsangriffen, ‘revenge attacks’) for the British bombing Berlin, which was frankly pretty rich hypocrisy coming from the fellow who had terror-bombed the Poles in 1939.⁴ But that progression brings an interesting distinction here between intentional strategies of using bombing to collapse morale and the reversion to civilian bombing as pure punishment. As we’ll see, it is a predictable human response when an effort is failing to attempt to punish the opponent for the temerity of not losing; this behavior is especially pronounced in personalistic dictatorships but certainly not restricted to them. Naturally bombing against civilian targets, since its introduction, has often been the means of this sort of punishment response; more broadly this kind of thing fits into the error of ‘emotive strategy,’ which we’ve discussed before.

... 

But perhaps most ominously for the theory, the Blitz didn’t seem to have meaningfully dampened British morale. Indeed, to the contrary – and get ready to hear this phrase a lot – being bombed hardened civilian will to resist. This hardly discredited the theory though, least of all among the British (or the soon-to-be-in-the-war Americans) who promptly decided to test it themselves.

...

Overall then, the promise of strategic airpower, that it could win wars entirely or primarily from the skies, turns out so far to have been largely a mirage; in about 80 years of testing the theory, strategic bombing has yet to produce a clear example where it worked as intended. Instead, strategic airpower must be one of the most thoroughly tested doctrines in modern warfare and it has failed nearly every test. In particular, Douhet’s supposition that strategic bombing of civilian centers could force a favorable end to a conflict without the need to occupy territory or engage in significant ground warfare appears to be entirely unsupportable.¹⁰ Nuclear weapons do not seem, so far, to have actually changed this; nuclear deterrence does not aim at ‘will’ in the Clausewitzian sense (drink!) but rather on altering the calculus of leaders and politicians through the threat of annihilation. In the event of an actual conflict, the public’s desire not to be nuked – which would be the key target in a Douhet-style morale bombing campaign – appears to factor very little into actual decision-making. No one checks the polls before intentionally embarking on nuclear war or in the minutes a leader might have to deliberate on ordering a second-strike.

 

BTFD

 I have been meaning to give this thread a rest. We've written about it quite a bit, and it's a bit off topic for the blog. But then we got yet another iteration—perhaps even more dramatic than before—along with a new column from Allison Morrow on the subject.

Plus, I actually thought of something else I wanted to say about this.

Here's how things looked Monday morning before the markets opened.

 

And here's how they looked after they closed.

From Allison Morrow's newsletter: 

Investors have long viewed the prolonged closure of the Strait of Hormuz as a “tail risk” event — the kind of thing that was highly unlikely to happen but would be so catastrophic that you can’t afford to be unprepared for it. As black swans go, Hormuz closing for weeks or months would be an economic disaster on par with a global pandemic.

 

The nightmare scenario may be upon us, with the caveat that “nightmares” are relative.

 

Maritime traffic in the narrow waterway between Iran and Oman has ground to a halt since the US and Israel began attacking Iran on Feb 28. While there is no physical blockade in the strait, Iran has threatened to attack any vessels moving through it, and insurers have yanked their war-risk policies, leaving hundreds of tankers in limbo. An estimated 20% of world oil supply has been disrupted, my colleague Matt Egan writes. If that trend continues, the risks of a global recession compound. The war has already effectively wiped out the “spare capacity” that typically serves as a shock absorber in energy markets.

 

It’s not just oil supplies at risk: the Gulf is also one of the world’s top suppliers of nitrogen fertilizers that are essential for agriculture around the world.

 

... 

 

There are two major factors behind this pattern of selling in the morning and then getting a grip in the afternoon:

 

1. Equity traders are holding out hope for a swift resolution, confident that the US — a net oil exporter — can weather a short-lived shock better than most, and
2. They are buying the [expletive] dip, in meme parlance.

To be sure, stocks have fallen over the prospect of a longer Mideast conflict. But the S&P 500, the broadest gauge of US stocks, fell only about 2% last week, even as oil shot up 36% and an unexpectedly awful February jobs report raised concerns about the labor market. The index is still up about 20% from a year ago.

 

Investors have become conditioned to a trend in which morning selloffs attract bargain-hunters who swoop in and spark afternoon rallies. This strategy of “buying the dip” (of BTFD, for the extremely online retail crowd) has been a popular and fairly reliable trade for the better part of the past five years. Virtually every economic shock of 2025 — including Trump’s tariffs and a handful of surprise pullbacks in the tech sector — was followed by a rally, reinforcing a sense that there’s no point panicking.

 

It’s less of a stock market downturn, and more of a sale on stocks, goes the thinking.

 

“We’ve got this black swan event, and US stock markets have barely flinched because people are more focused on buying dips and not missing rallies than they are about existential concerns about risk,” Steve Sosnick, chief strategist at Interactive Brokers, told me. “The ‘fear of missing out’ is labeled as fear, but it’s really greed… I would argue, in terms of investor behavior, there’s still plenty of greed out there relative to fear.”

 

Of course, buying the dip works great until it doesn’t, and what comes next is entirely out of any investors’ hands.

 

It's true that the major economies are less dependent on Middle Eastern oil than they were fifty years ago, but this is still bad, with the chances of inflation or recession—or both—increasing every day.

While it's not a perfect mechanism by any stretch of the imagination—voters are notorious for blaming politicians for economic factors beyond their control—the understanding that recession, and probably even more to the point inflation, can force a party out of power is generally a good thing for democracy.

Of course, the economy is not the stock market, and the stock market is not the economy, but a market crash does generally indicate either that something is going wrong or that something that has been wrong for a while has just come to the surface.

To the extent that unthinkingly buying the dip keeps markets from pricing in bad news and disastrous policies, it undermines one of the few forms of feedback that Donald Trump has actually responded to in his second term. That's not the biggest of our worries, but it's not helping.

 

Buying the Dip

 

 

We have an explanation—or at least a credible hypothesis from a trustworthy source—about why the market under Donald Trump II always shrugs off even the worst news within 24 to 48 hours (at least so far).

From Matt Levine’s newsletter:

But that is famously no longer true, these days, in the stock market. Retail investors now love buying when the market crashes. The Wall Street Journal reports:

War in the Middle East. Artificial-intelligence jitters. A “SaaS-pocalypse” that wiped billions in value from software stocks. Whatever fresh shocks have rippled through markets, individual investors have fallen back on the same strategy: buy, buy, buy. 

Fears of economic disruption from AI and the conflict with Iran have sent stocks on a roller-coaster ride in recent weeks—but the everyday traders who play an increasingly pivotal role on Wall Street have remained the market’s most loyal buyers. February was one of the strongest months for retail buying since the meme-stock frenzy of 2021, according to a report from Citadel Securities, and the fifth-biggest month on record.

And on Monday, as major indexes slid in early trading during the first session since the conflict’s outbreak, individual investors poured $2.2 billion into stocks and exchange-traded funds, according to analysts at JPMorgan Chase. Stocks finished almost flat. Dip-buyers also helped pare Tuesday’s early drop.

This is an interesting stock market story: Are retail investors the ultimate value investors in the stock market? Does the constant retail buy-the-dip bid insulate the market against volatility? If you are a professional equity investor or market maker or options trader, are your models evolving because markets now can’t go down much before retail investors flood in and push them back up? Just a strange new way to think about stock markets, that passionate individual investors prevent crashes. 

I’m a bit surprised that retail investors have the money to move the markets like this, but I have to admit I’m not that knowledgeable on this subject, and my intuition doesn’t count for much. The increased power of retail could also reflect the fact that lots of smart money has been heading either overseas or to safer havens like Gold. The Dow Jones Industrial Average, NASDAQ Composite, and S&P 500 of 2026 belong to the people who chose to remain.

Part of the charm of Levine’s writing is his irreverent framing. This can occasionally tip over into the overly cute, which may be happening here. I assume describing the Robinhood crowd as the new value investors is meant to be at least a touch ironic and maybe openly sarcastic. The joke here is that retail investors—particularly in the age of HODL—are the absolute antithesis of a Warren Buffett. These are the people who brought us the meme stock and who, rather than seeking out low price-to-earnings ratios, embraced companies like Tesla, Inc. even after their sales collapsed. Buying the dip does have some occasional, superficial relationship to the strategy of value investing, but the similarities are coincidental. Robinhood retail is an investing philosophy based far less on Benjamin Graham’s fundamentals than on the 300.

What Is Value Investing?

Value investors believe that the market overreacts to good and bad news, resulting in stock price movements that don't correspond to a company's long-term fundamentals. The overreaction offers an opportunity to profit by purchasing stocks at discounted prices.

Warren Buffett is probably the best-known value investor today, but there are many others, including Benjamin Graham (Buffett's professor and mentor), David Dodd, Charlie Munger (Buffet's business partner), Christopher Browne (another Graham student), and billionaire hedge-fund manager, Seth Klarman.

(Seriously, these HODL/diamond-hands people are deeply weird.)

More importantly, I have real issues with the idea that retail investors are in any meaningful sense preventing crashes. Having markets shrug off bad news simply seems to mean that they are failing to price it in. That would seem merely to defer crashes, letting the market become increasingly unmoored from actual value until reality comes slamming down.

Keep in mind that what you’re reading here (excluding direct quotations) is the most ill-informed of opinions, so if you know something about markets and investing and you’ve caught me saying something that sounds stupid, you’re probably right—so please let me know in the comments section.

That said, it seems like a bad idea to trust our collective 401(k)s to these guys: 

 

Bit of a spoiler with the Silicon Valley clip, but it's a great gag

While I am by no means a fan of focus groups, I'm probably not quite as negative on the subject as most of the readers of this blog, for at least a couple of reasons.

First, I believe it's always a good idea to actually listen to your customers, even in a deeply flawed forum, and second, I have seen some spectacularly bad quantitative analysis, and what's worse, I have seen high-level executives credulously gobble it up.

I get the sense that management consultants can lie a bit more effectively with graphs and figures than with quotes and video clips, but that could just be because I know how to lie more effectively with the former rather than the latter.

Regardless, here are a couple of my favorite fictional treatments of the topic.

Little Caesars



 

Silicon Valley

And to think of all the fun we made of Rumsfeld for known unknowns -- mostly trivial items for the penultimatepost of the week

Marco Rubio: "We went proactively in a defensive way"

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— Aaron Rupar (@atrupar.com) March 2, 2026 at 2:34 PM

Being wrong is bad enough, but it's the "BREAKING" that gives it that "DEWEY DEFEATS TRUMAN" flair.

In retrospect, using Speedy Gonzales cartoons in the training data...

Callers to Washington state’s driver’s license agency who select automated service in Spanish are instead hearing an AI voice speaking English with a strong Spanish accent.

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— The Associated Press (@apnews.com) February 27, 2026 at 9:30 AM

Another sportscaster turned politician, but sadly falling short of the Sarah Palin standard. 

Callers to Washington state’s driver’s license agency who select automated service in Spanish are instead hearing an AI voice speaking English with a strong Spanish accent.

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— The Associated Press (@apnews.com) February 27, 2026 at 9:30 AM

Credit where credit is due, the Iranian leader looked really good for someone 126 years old.

Mullin: We are not wanting regime change, but the person that's leading this effort is the ayatollah. Remember in 1979, when he came to power, he was saying that he wanted to be a nuclear Iran

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— Acyn (@acyn.bsky.social) February 25, 2026 at 6:28 PM

On a quiet night, if you listen carefully, you can hear Edsel Ford laughing.

Fewer than 39,000 Cybertrucks were sold in 2024, and just over 20,000 found homes in 2025.

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— Ars Technica (@arstechnica.com) February 20, 2026 at 10:40 AM

No one should engage in this kind of behavior. But probably especially if your last name is Dingus. www.theguardian.com/us-news/2026...

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— Josh Marshall (@joshtpm.bsky.social) February 21, 2026 at 5:24 PM

 

And finally, even my powers of sarcasm have their limits.

If nothing else, the image of Wall Street investors as extras from Oliver! was worth the price of admission -- updated

Following up on yesterday's post, here's Allison Morrow's actually informed take:

After more or less shrugging at the conflict Monday, stocks tumbled Tuesday, with the Dow down 1,200 before dip-buyers moved in. The Dow ended the day down 400 points, or 0.8%.  The S&P 500, which had been down 2.5% ended down 0.9%. The Nasdaq fell just over 1%.

 

Part of the problem for investors is the Trump administration’s murky timeline. Defense Secretary Pete Hegseth on Monday declared that this conflict “is not endless” like the Iraq War. But he also refused to offer details about an exit strategy, telling reporters he “would never hang a time frame” on the operation. 

 

President Donald Trump initially floated four to five weeks, then added that “whatever the time is, it's OK, whatever it takes.” Trump has also refused to rule out a boots-on-the-ground invasion. 

 

“The view of a short war been upended,” Thierry Wizman, global FX and rates strategist at Macquarie Group, said in a note.

 

Another problem for markets: Wars tend to be inflationary. (See: Oil prices surging as transit through the Strait of Hormuz has all but ground to a halt.) Higher inflation makes central banks less likely to cut interest rates, which means the prospect of the Fed doing two rate cuts this year is now in doubt. And that’s a certified bummer for investors who’ve been staring at the Fed's dot plot like a bunch of children Dickensian orphans eyeing a vat of porridge. Please, sir, may we have some more?

I don't believe the panic/denial cycle can go on forever. Eventually the markets are almost certain to run into news that can't be shrugged away. I 'm just nervous about what that news might look like.  

 UPDATE: Rule 2 remains unchallenged. 

 

 

We just point out the patterns; we don't try to explain them.

Once again, we’ve seen the two defining rules of markets in 2025 and 2026 (so far):

1. There is no jump scare so trivial and obviously absurd that it can’t panic investors, as long as it invokes the proper boogeymen.

Recent case in point: [discussed here and here.]

Allison Morrow of CNN: 

I put “report” in quotes because this 7,000-word screed amounted to little more than AI fan fiction — a dystopian thought experiment imagining a scenario in which AI is so successful it actually contracts economic growth and drives US unemployment rate to more than 10% by 2028. It went viral in a similar way as Matt Shumer’s similarly long-winded “Something Big Is Happening” blog post earlier this month, with people who are incentivized to make AI scary sharing it in “see I told you so” posts as if they were Prometheus bringing fire to the people. (I’ll get into this a bit more later this week, but suffice to say memos of this genre tend to have some blindspots, both substantive and stylistic). 

 

I could have spent my day debunking or otherwise making sense of the Citrini report but I — and I can’t stress this enough — did not want to. Instead, I’ll share some of the reactions from people much smarter than I am. 

 Matt Levine of Bloomberg:

I was writing specifically about a tiny company that had pivoted from karaoke to AI logistics and announced a disruptive AI logistics thing. (“I would probably be more inclined to be skeptical that this particular company is gonna be the one to disrupt the industry,” said an analyst, but added that someone probably will.) But of course you don’t even have to run the company that announces the disruptive thing. At this point, simply saying, publicly, “hey I think AI will disrupt _____,” for some company or industry or whatever, has a decent chance of driving down the price of _____. The market is really jumpy!

Obviously in all of these things it helps for your announcement to be well-written, well-reasoned and generally jazzy. But I have never seen a market where it has been so easy for an activist short to have a big impact. Like I feel like you could go on financial television today and say a company’s name, pause meaningfully, say “AI,” pause meaningfully, and walk off, and the company’s stock would drop 10%. Try it!  “DoorDash. AI. [grim nod].”

 

2. No matter how big the threat, or how serious the damage it can do to the economy and long-term corporate profits, investors will forget about it in less than forty-eight hours.

A very partial list includes:

Tariffs;

Attacks on the Fed;

Devastating the agricultural and construction workforce;

The kind of increasingly erratic behavior from a chief executive that ought to terrify investors;

And now a war that will almost certainly disrupt world trade, possibly for months to come.

 

Which brings us to Monday. 

If you would have checked premarket trading a few hours before the opening bell that morning, you would have seen all of the major indices down a little short of two points. 

Had you checked back later that day, you would have seen this:

 There is, of course, an upper (or should it be lower?) bound to the magnitude of badness that can be shrugged off, but I have a feeling we'll be getting to that later. 

The prediction market thread got very relevant very quickly.

Whether you're talking about the temptation to rig a traffic light or find a way to effectively sell government secrets, the potential to misuse these markets is huge.  

In case you were wondering, Polymarket had yet another spate of likely inside traders betting that the US would strike Iran by February 28. Per the due diligence investigation service Bubblemaps, the wallets used were created 24 hours earlier. The Pentagon Pizza Index has been replaced.

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— Matthew Sheffield (@matthew.flux.community) February 28, 2026 at 5:26 PM

“.. this is more or less offering a proxy market on assassination,” Amanda Fischer, a former chief of staff at the Securities and Exchange Commission, wrote on X .. @wsj.com www.wsj.com/world/middle...

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— Carl Quintanilla (@carlquintanilla.bsky.social) March 1, 2026 at 10:15 AM

It’s insane this is legal. People around Trump are profiting off war and death. I’m introducing legislation ASAP to ban this.

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— Chris Murphy (@chrismurphyct.bsky.social) February 28, 2026 at 6:09 PM

Emily Nicolle writing for Bloomberg:

As US and Israeli bombs fell on Iran this weekend, bettors on Polymarket — where $529 million was traded on contracts tied to the timing of the strikes — were cashing in. Almost immediately, blockchain sleuths began hunting for unusual patterns in recent bets.

Six accounts on Polymarket made around $1 million in profit by betting on the US to strike Iran by Feb. 28, according to analytics firm Bubblemaps SA. The accounts were all freshly created in February and had only ever placed bets on when US strikes might occur. Some of their shares were purchased, in some cases at roughly a dime apiece, hours before the first explosions were reported in Tehran.

These are the hallmarks that blockchain analysts associate with insider trading in prediction markets, an industry without widespread oversight and no agreed-upon methodology for distinguishing luck from leaks — and they’re far from conclusive on their own. Similar patterns suggested that an insider made a big profit betting on the ouster of Venezuela’s Nicolás Maduro in January, and have also been used to identify several other cases of alleged insider trading.

...

Kalshi Inc., a Commodity Futures Trading Commission-regulated rival, said Saturday it does not offer markets that settle on death. In the event of Khamenei’s death, it said it would resolve its contract based on the last price offered. Kalshi’s CEO Tarek Mansour later said on X that the platform would reimburse all trading fees from such bets.

Polymarket’s main trading platform is situated offshore and does not accept US-based customers, placing it outside the CFTC’s oversight. The company has argued that its contracts provide valuable data because they crowdsource information in volatile situations and help the public gauge risk, especially when conventional reporting lags.

Sidenote:

The Supreme Leader insisted on not taking special security measures even though he knew the attacks were about to start and was killed in his home. He wanted to die this way. The concept of martyrdom is an extremely potent, galvanizing force in Shia and Iranian culture.

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— Ali Ahmadi (@aliahmadi.bsky.social) March 1, 2026 at 2:42 AM

‪Ahmadi‬ continues.

There were def people in Washington who advised Trump not to do this, basically saying, "hes 90, hes had cancer twice, hes going to die soon anyway. Dont make him a martyr for the cause". He didnt listen. 

The very fact that this article calls to mind a Roald Dahl short story is probably a red flag

 Victor Tangermann writing for Futurism.

 New Platform Lets You Gamble on CCTV Footage

Thanks to the rise of sports betting and prediction markets, gambling has turned from an activity sequestered to casinos and scratch tickets into something that practically anybody with an internet connection can dive into headfirst — something that has experts warning of a surge in gambling addiction, especially among young, impressionable minds.

Platforms like Polymarket mean that gamblers are no longer limited to betting their hard-earned cash on red or black during a game of roulette or mindlessly pulling the lever of a slot machine — now they can bet on whether Jesus Christ will return before the long-awaited release of the video game “GTA VI,” or by what date the United States will strike Iran.

And now, a new gambling game called Rush Hour CCTV on the crypto casino platform Roobet is taking the phenomenon to an even more ludicrous conclusion. As casino publication Win.gg points out, gamblers there are betting on how many cars, trucks, buses, motorcycles, or pedestrians are crossing a specific point within a predetermined time period on a street in live, licensed CCTV footage being streamed from big cities, including Tokyo, Bangkok, New York, and London.

It may sound banal — and it many ways it is — but instead of relying on traditional random number generator mechanics (RNG) that determine the outcome in slot machines, the new game relies on the real world instead.

The game is deceptively simple. Each round kicks off with a simple message: “How many vehicles?”

Gamblers can then bet on how many vehicles will cross a point within the next 55 seconds. They can also give a range as an answer, which will give a significantly lower payout than guessing the exact number.

 

 The rest of the article focuses appropriately on the rise of gambling and gambling addiction, particularly among young men, but there’s another issue worth noting. (For more on that, check out this USA Today article.)

Whenever you can bet on something, there’s a temptation to try to rig the outcome. The best-known example is the almost universally condemned practice of fixing sporting events. As far as I can tell, even among the wackiest libertarians, there’s no great push to legalize point-shaving or to allow jockeys to bet against their own horses. Even compared to other forms of cheating, throwing a game—or even simply making sure your team doesn’t cover the spread—is seen as especially unacceptable.

But just to play devil’s advocate, isn’t this level of social opprobrium a bit excessive given the actual social harm? Sports, despite all the mythology we build up around them, are fundamentally trivial. Historically, the primary victims of things like point-shaving schemes have been people who were engaging in the generally illegal activity of sports betting. Yes, the winners were even less sympathetic—professional gamblers and organized crime—but we’re not exactly talking about bilking widows and orphans out of their life savings here.

We can certainly be impressed by the skill and dedication of a performer. We can appreciate the aesthetics of a great athlete (Muhammad Ali, Wayne Gretzky, my personal choice, fourth-quarter Joe Montana). But we could make a similar case for almost any form of entertainment. It’s not unheard of for an actor who is pissed off at the producers of a film to deliver a bad performance, but I’ve never heard of anyone suggesting they should be banned for life from the movies.

When, however, you start betting on real-life events, the potential consequences of rigging the outcomes can get very big very quickly. I can think of lots of ways to guarantee low traffic at a given intersection at a given time. None of them are things we would like people doing.

Roald Dahl explored this idea—and the possibility of its unintended consequences—in his classic short story “A Dip in the Pool.” It’s well worth checking out. You can find it in many anthologies online, including the Internet Archive, or you can check out one of the adaptations. It was filmed for Alfred Hitchcock Presents, starring Keenan Wynn (though that version does not appear to be streaming). If you don’t mind ’80s videotape cinematography, I’ve embedded a version from Tales of the Unexpected starring the fine character actor Jack Weston.

Good analogy, though under the circumstances, I'm a bit surprised he didn't go with Zelig.

Ed Niedermeyer, the journalist who wrote what is still the definitive book on Tesla specifically and on any Musk enterprise in general, and who is doing the ugly but necessary job of digging into the Epstein files to see what they tell us about the world’s richest man in an ongoing thread. 

Musk-Epstein: Year One
February 10, 2026

The rolling release of the Epstein Files is nothing short of a seismic event, throwing open the very ground we walk on and opening staggering new vistas into the ways in which our world actually works. Though much of work on the files so far has focused on Epstein’s trafficking of women and girls, for good reason given the horrors his victims endured and their inability to obtain justice thus far, the files illuminate far more about our fallen world. A kind of Forrest Gump of our hideously venal and corrupt elite, Epstein’s dealings are a skeleton key for an almost impossible number of terrible yet difficult-to-explain phenomena at the highest levels of wealth and power.

My little corner of that world centers on Elon Musk, whose empire of deception and greed has become something of a fascination for a decade now, starting as a simple automotive story. With the benefit of so much context, I’ve found a lot of material in the most recent releases of the Epstein files that make sense to me, but which might not mean anything to people who have managed to live their lives free of such sordid obsessions. With the first rounds of media and congressional reporting managing to avoid a lot of the Musk connections, I feel called to share what I’ve learned in my digging.

First, though, an important caveat: what follows is a limited first look at a massive corpus of evidence, which itself only offers a limited glimpse of events, and which has obviously been compromised by agenda-driven redaction. This is my best effort at putting elements from the Epstein Files into order and context, but should not be viewed as a comprehensive or final accounting of all the facts. I offer it here to help the public make the most of this unique moment of transparency, without malice toward anyone referenced within it. Though I personally believe that Jeffery Epstein and Elon Musk are among the worst individuals humanity has recently produced, they have the same right to the truth as everyone else. If anything, my time with the Epstein Files have only further convinced me that the worst of us deserve the truth most of all.

One of these days, there will be a serious, definitive biography of Jeffrey Epstein and one of Elon Musk. We are considerably closer to the first than the second. With Epstein dead and disgraced, and with most of his life now in the public record, it’s just a matter of letting the dust settle and finding a biographer who is up to the enormous task.

Musk is currently at the peak of his wealth and political power, and an alarming number of influential people still somehow buy into the personal mythology on which he built his empire, though the cracks in the façade are growing rapidly.

When the two books are finally available, you probably won’t see a lot of Epstein in the Musk biography, and vice versa, except for their mutual association with Donald Trump (who will be all over both books). This does not mean those overlaps will not be important. In Epstein’s story, Musk tells us a great deal about how one courted the rich and well-connected, while Epstein’s role in Elon’s story tells us a lot about Musk’s businesses, his tendency toward revisionism, and perhaps most of all, the underreported role that Kimbal Musk played.

In an age full of Fredos, Kimbal may be today’s definitive example—weak, ineffectual, easily influenced, and a general source of embarrassment. In his defense, he has been more loyal than the original Fredo Corleone (though that really hasn’t been tested so far). As a member of the handpicked boards of both Tesla, Inc. and SpaceX, he’s been a reliable rubber stamp whenever his brother decided to loot either company.

Kimbal’s Fredo tendencies have recently come into high relief thanks to the release of the Epstein files, largely due to the diligent work of Ed Niedermeyer, the journalist who wrote what is still the definitive book on Tesla specifically and on any Musk enterprise in general, and who is doing the ugly but necessary job of digging into the Epstein files to see what they tell us about the world’s richest man.

Epstein seems to have immediately zeroed in on Elon’s younger brother as the most vulnerable point of attack.

The origins of the Musk-Epstein relationship are one of the most important ways to understand who Jeffery Epstein was and how he operated. Though widely depicted as a sub-literate lecher, and certainly not the kind of intellectual he liked to court, Jeffery Epstein was not stupid. His casual, text-y (probably dyslexia-inflected) email style makes him easy to dismiss at first glance, but after reading enough of his email it eventually becomes clear that Epstein was in fact a remarkably sophisticated operator. Learning to appreciate Epstein’s actual abilities–the ability to spot opportunity, insinuate, flatter, hype, build intimacy, and connect–leads to a far more important lesson: these, and not any actual intellectual abilities, are the tools that our elite run on.

...

On September 18 [2012], Boris Nikolic (a medical doctor who worked with the Gates Foundation at the time) formally made the first connection between the Musks and Epstein in the files, in one of the more disturbing emails I’ve personally read. Nikolic’s entire email [PDF] reads as follows:

Hope you are having fun and getting adjusted to living a simple life [wink emoji inserted here -- MP]

Just talked to Kimbal. His actual bday is on Thursday night (although
his party is on Saturday).

Kimbal, Elon and few of their closest friends will go out that night.
I told him that I am going w Mette [Ed:likely the crown princess of Norway] for that Gala and that after we
wil join them somewhere — or even easiest that they should come to
Boom Boom Room.

I told him that you will join us as well. Also I told him that you are
coming with [victim redacted] and that he might want to ditch his ex/or current
to be. He said yes and is looking so much forward.

So please prepare [victim redacted]—;)
She might like Elon as well.

The overall image of Epstein that emerges in the files is of a man who understands connections in a world that runs on them, and already we have a good picture of how he operated. His connections allowed him to understand the preoccupations of his fellow elites, understand who they wanted to meet, work his own relationships to get into a room with them, and then use women as currency to win them over. In the very first reference to Epstein’s path crossing Musk’s we see him leveraging Nikolic’s relationship with Kimbal to reach Elon, and “preparing” a woman as the bait for his hook. In the meantime he had already informed [PDF] Jes Staley, head of private wealth management at Deutsche Bank, who Epstein appears to have served as a client funnel for, of the Musk’s presence in New York.

Kimbal, it seems, was easily hooked. A recent Guardian piece fills out the story: the woman was in fact a victim, who has said through a lawyer that she was trapped, coerced, and abused by Epstein. As the email makes clear Kimbal was both aware that Epstein wanted to meet him, and willing to “ditch his ex/or current to be” for a woman to be provided by the man who had been convicted of procuring a child for prostitution four years earlier. That initial hangout appears to have been jovial enough for Kimbal to email Nikolic on the 21st: “Fun time last night! Let Jeffrey and his friends know they are invited tomorrow night.”

 

 

 One essential bit of context that needs to be kept in mind when reading anything about connections between Epstein and the Musk family is that this all starts in 2012, four years after Jeffrey Epstein’s first arrest.

One of these days, when we have more distance from recent events, we should probably have a discussion about what the ethical or honorable thing to do is when we learn that a friend or someone we had admired has done something horrible. It is not a straightforward question; it is a complex one. But it’s not a question that applies here. Elon and Kimbal Musk knew they were dealing with a sex offender before they had any exchanges with Epstein.

Along similar lines, we should probably revisit the old debate (going back at least as far as Shaw's Major Barbara) about the ethics of accepting charitable donations from reprehensible people and, more to the point, about how far we should go in allowing these people to launder their reputations through such donations.

Once again, though, none of this applies to the Musk brothers, who, as far as I can tell, never showed any interest in charitable causes during their interactions with Epstein.

The files also give us additional insight into (or at least confirmation of) Elon Musk’s almost pathological arrogance and dishonesty, possibly even toward himself, regarding his decision to aggressively push for opening the files during his bitter, albeit brief, feud with Donald Trump a few months ago.

I previously suggested that Musk was so blind with rage over having someone in the White House drop the dime on his drug use and bizarre behavior in that The New York Times story that he simply didn’t think things through, particularly given his long history of evading consequences for his actions.

I’m still certain that’s at least part of the explanation, but having seen the relevant emails, I suspect that he had convinced himself that they weren’t all that damning. We are all revisionists when it comes to personal memories, something that heavy drug use can only exacerbate. It’s true that Musk was sometimes brusque with Epstein and had more than once rejected his invitations. For someone with a lifetime of seeing events through the most self-serving lens possible, it’s not difficult to see how he imagined himself getting out from under this one.

By early November Musk was “looking forward to” visiting Epstein’s island [PDF], by the end of the month he was infamously asking [PDF] about “the wildest party on your island,” and by December it was just a matter of discussing logistics [PDF]. It appears that Musk may not have actually made it to Little St James that winter, despite Epstein’s urging to clear customs in St Thomas [PDF], but it didn’t prevent Epstein from bragging to the Norwegian Crown Princess [PDF] that he would in fact be having lunch with Musk. One of the major impressions one gets of Epstein from his emails is that, like Musk himself, the gap between perception and reality is irrelevant. What seemed to matter to him was that people believed he was close to Musk, whether they were actually meeting or not.

Clearly Musk and Epstein were getting closer, as just months later the two mens staffs were coordinating a visit by Epstein to SpaceX, with three of “his girls” in tow. In the meantime, a series of puzzling emails [PDF] hint at a possible motivation on Epstein’s part for pursuing Musk, beyond a generically valuable social connection and/or a promising lead for Deutsche Bank’s wealth management department. This exchange, between Epstein and a redacted party that has been widely identified through redaction errors as Svetlana (“Lana”) Pozhidaeava, is one of many in the files fitting a pattern of women complaining to Epstein about his treatment of them. “I thought you went to califomia and want to be with elon now,” Epstein seems to tell her. “You have told me as much. So you confuse me.”

This cryptic exchange is made more compelling by an email from roughly three months earlier [PDF], in which Pozhidaeva recounts a long exchange between herself and one Joshua Fink, who “asked 6 times if Elon has given me anything? and what did elon give me?” Public photos of Joshua Fink, son of Blackrock CEO Larry Fink, with Svetlana Pozhidaeva at a 2011 gala provide a very real context for one of the more surreal references to Musk in the files. Reporting linking Pozhidaeva and other young Russian women in Epstein’s orbit with Putinist organizations and potentially Russian intelligence, provides yet another layer of context for a woman who the files suggests became close with Elon Musk as well as the son of one of Wall Street’s largest financial institutions.

...

The day after the SpaceX tour [February 27, 2013 -- MP]  Epstein emailed Musk [PDF], writing “thanks for the tour , you would have had fun at xmas,” to which Musk replied “I see [smiley emoji]”. In the weeks that followed, a pattern would emerge in the two mens relationship, with Epstein gently but persistently insinuating himself into Musk’s good graces, and Musk responding in a brief but friendly manner, always referencing his workload. One particularly solicitous March 2013 exchange [PDF] even sees Epstein suggesting “nuvigil” (Armodafinil, a relative to Modafinil, a potent non-stimulant eugeroic) as a way to offset his lack of sleep, a rare exception to Epstein’s horror of drug use.

...

A couple of months later, Epstein attempted to reconnect [PDF] with Musk on the same level, asking “will you come to caribean [sic] this xmas? woody allen with me, you might enjoy.” “Yes,” Musk replied. By mid-December the strategy had worked, and now, at long last, Musk was the one emailing Jeffery Epstein [PDF]. “Will be in the BVI/St Bart’s area over the holidays,” he wrote the convicted sex offender. “Is there a good time to visit?” 

 

 

Of course, this story is still in the process of being told, with journalists only beginning to dig through these documents and who knows how many still waiting to be released. Aspects such as Russia using connections with Jeffrey Epstein for spying and influence have only begun to be explored.

The Epstein files are also opening up considerable insights into the role that countries like Saudi Arabia and Dubai have been playing behind the scenes for decades. That is a topic that Niedermeyer is currently exploring later in the thread.

 

More takes on Citrini (I'm not the only one using scare quotes around "report")

 Yesterday we discussed this:

From CNN:

Fears of AI disruption continue to weigh on markets. Citrini Research on Sunday published a report on Substack laying out hypothetical scenarios for how developments in AI could disrupt certain parts of the economy. Stocks that were mentioned in the report tumbled on Monday.

American Express shares (AXP) sank 7.2% and had their worst day since April. Shares of DoorDash (DASH) and private equity firm KKR (KKR), two other companies named in the post, sank 6.6% and 8.89%, respectively.

 In a post with the somewhat overlong title:

 Traders who have ignored threats to Fed independence, erratic trade policy, and the deportation of much of the American labor force just panicked over a citation-free piece of fan fiction.

Now two of my favorite financial journalists have weighed in (both from newsletters so no links).

Allison Morrow of CNN: 

I put “report” in quotes because this 7,000-word screed amounted to little more than AI fan fiction — a dystopian thought experiment imagining a scenario in which AI is so successful it actually contracts economic growth and drives US unemployment rate to more than 10% by 2028. It went viral in a similar way as Matt Shumer’s similarly long-winded “Something Big Is Happening” blog post earlier this month, with people who are incentivized to make AI scary sharing it in “see I told you so” posts as if they were Prometheus bringing fire to the people. (I’ll get into this a bit more later this week, but suffice to say memos of this genre tend to have some blindspots, both substantive and stylistic). 

 

I could have spent my day debunking or otherwise making sense of the Citrini report but I — and I can’t stress this enough — did not want to. Instead, I’ll share some of the reactions from people much smarter than I am. 

 Matt Levine of Bloomberg:

I was writing specifically about a tiny company that had pivoted from karaoke to AI logistics and announced a disruptive AI logistics thing. (“I would probably be more inclined to be skeptical that this particular company is gonna be the one to disrupt the industry,” said an analyst, but added that someone probably will.) But of course you don’t even have to run the company that announces the disruptive thing. At this point, simply saying, publicly, “hey I think AI will disrupt _____,” for some company or industry or whatever, has a decent chance of driving down the price of _____. The market is really jumpy!

Obviously in all of these things it helps for your announcement to be well-written, well-reasoned and generally jazzy. But I have never seen a market where it has been so easy for an activist short to have a big impact. Like I feel like you could go on financial television today and say a company’s name, pause meaningfully, say “AI,” pause meaningfully, and walk off, and the company’s stock would drop 10%. Try it!  “DoorDash. AI. [grim nod].”

 

 

Traders who have ignored threats to Fed independence, erratic trade policy, and the deportation of much of the American labor force just panicked over a citation-free piece of fan fiction.

  

From CNN:

Fears of AI disruption continue to weigh on markets. Citrini Research on Sunday published a report on Substack laying out hypothetical scenarios for how developments in AI could disrupt certain parts of the economy. Stocks that were mentioned in the report tumbled on Monday.

American Express shares (AXP) sank 7.2% and had their worst day since April. Shares of DoorDash (DASH) and private equity firm KKR (KKR), two other companies named in the post, sank 6.6% and 8.89%, respectively.

Calling this a report is really stretching things. It is another one of those bloated “letter from the future” fanfics that are alarmingly common in the tech visionary world. Despite its absurd length, there is virtually nothing of substance here. I’m not going to attempt any kind of comprehensive takedown (fortunately, Ed Zitron has taken care of that in an annotated version I’ll be quoting from).

I tried to read the original first, but I only made it about a third of the way through—I don’t get paid for doing this, but if I did, you would not be paying me enough to do that—but with the snarky comments from Zitron reminding me that I was the one who was crazy, I managed to make it to the end.

There is not a single page here that doesn’t say something worth criticizing, so I’ll limit myself to the passage that caused so much damage in the financial services sector today.

 

 

 

 [Friction going to zero is a favorite incantation of the singularity crowd, but we'll have to come back to that in a future post.]

It should go without saying that a rational market would not rush to dump financial services companies because someone claims (with no support whatsoever) that AI is about to replace credit cards with crypto.

There is nothing of value in the Citrini "report," nothing useful to be learned, but the fact that people are listening to it tells us a great deal, none of it good.