Somewhat of a casino
Genuinely summoning aliens
Reality continues to be more ridiculous than satire, so there’s that. Lots of eclectic items that caught my eye this week lie below. Hopefully a few will interest you.
The Kucinich and Jay Singh podcasts were probably my favorites, but it’s all good.
Since it’s Sunday (or Monday in Adelaide), I might as well clear the deck before next week’s onslaught of new absurdity (and it’s FED WEEK®!!!!).
“War doesn’t cause the fragilities; it merely exposes where they already existed.”
France investigates suspected tampering with weather sensors after Polymarket bets
A weather sensor in France’s busiest airport, Paris-Charles de Gaulle, has been tampered with in what a French weather association says it suspects to be a betting scam.
France’s national meteorological agency, Meteo France, said in a statement sent to CNN on Thursday that it has formally filed a complaint regarding the “tampering of an automated data processing system” located in Charles de Gaulles Airport, used to measure daily temperatures for Paris.
On two separate occasions in April, users of American betting platform Polymarket placed successful bets on unexpected temperature spikes in the French capital, CNN affiliate BFMTV reported. Launched in 2020, Polymarket allows users to place bets on future events, such as the highest temperature in a city on a given day.
On April 6, around 7 p.m. local time (2 p.m. ET), the temperature sensor at Charles de Gaulles Airport rose suddenly to 22 degrees Celsius (about 71.6 Fahrenheit) before dropping back to cooler spring temperatures, according to BFM.
The unusual spike was flagged by members of the French climate nonprofit association Infoclimat, when around 9:30 p.m. local time (4:30 p.m. ET), Meteo France recorded 22°C for Paris despite temperatures averaging 18°C (64.4°F) all afternoon. A Polymarket user then won $14,000 for placing a successful bet on 22°C.
The second unexpected spike took place nine days later on April 15, when the temperature recorded by the Charles de Gaulle sensor once again reached 22°C, four degrees higher than the day before. This time a user on the Polymarket site won $20,000 for successfully betting on the 22°C reading.
Infoclimat said it once again flagged the spike to Meteo France, with some climate enthusiasts speculating on the association’s forum that a battery-powered hairdryer may have been used to tamper with the sensor, French newspaper Le Monde reported. The exact cause has yet to be confirmed.
US soldier charged with making prediction-market bets on Maduro’s seizure
US prosecutors charged a soldier involved in planning the January raid to seize Venezuela’s strongman Nicolás Maduro with placing prediction-market trades on the mission that netted more than $400,000.
“You know, the whole world, unfortunately, has become somewhat of a casino, and you look at what's going on all over the world, in Europe and every place, they're doing these betting things. I was never much in favor of it. I don't like it conceptually, but it is what it is."
Our media in a nutshell…
"In our world today you don’t have to get your facts straight. As long as someone big enough says it then that is good enough for the internet. It then gets repeated over and over and over until people agree that it is true."
Why did the U.S. attack Iran?
"…the United States is engaged in this conflict at the request of and in the collective self-defense of its Israeli ally…"
- U.S. State Department
Iran caused more extensive damage to U.S. military bases than publicly known
Anyone following non-U.S. media over the past month would have known a month ago.
American military bases and other equipment in the Persian Gulf region suffered extensive damage from Iranian strikes that is far worse than publicly acknowledged and is expected to cost billions of dollars to repair, according to three U.S. officials, two congressional aides and another person familiar with the damage.
The Iranian regime swiftly retaliated after the Trump administration attacked on Feb. 28, hitting dozens of targets across U.S. military bases in seven Middle East countries. Those attacks struck warehouses, command headquarters, aircraft hangars, satellite communications infrastructure, runways, high-end radar systems and dozens of aircraft, according to the U.S. officials and an assessment by the American Enterprise Institute, a conservative think tank in Washington, D.C.
In the initial days of the war, an Iranian F-5 fighter jet bombed the U.S. base Camp Buehring in Kuwait, despite the base having air defenses, a rare breach that marked the first time an enemy fixed-wing aircraft has struck an American military base in years, according to two of the U.S. officials.
The U.S. bases that came under attack are home to thousands of American troops, and in some cases their families, though they were largely cleared out in the days and hours before the U.S. and Israeli went to war with Iran.
Podcasts
Jay Singh, with one of the best geopolitical macro takes I’ve heard lately. Recommended. (Host David Lin seems remarkably uncurious)
Chris Bloomstran on Excess Returns A rare remaining “value” investor.
Is Berkshire Hathaway Undervalued Right Now? (Chris Bloomstran Explains) TL;DR: He sees the B shares worth about $570 ($469 as I type this).
Banker Next Door: Has Private Credit infected insurance companies? I enjoy his brief commentaries.
Is There a Way out of the Iran War? John Mearsheimer) and Chris Hedges
Dennis Kucinich
Trump’s Iran War Blunder & Its Threat To The American Way Of Life “Our involvement in Iran is being propelled by the influence of Netanyahu on Donald Trump…”
I ran as an independent in the last election as a way of demonstrating my discuss with the two-party system and because it it doesn’t really provide people with a choice. You choose Democrats, you choose Republicans, you you still get war, you still get poverty, you still get systems that don’t serve the people.”
Sitting on a sofa on a Sunday afternoon
Going to the candidates debate
Laugh about it, shout about it
When you've got to choose
Every way you look at this, you lose
“California made itself so dependent by its own policies on imports from foreign countries, specifically in Asia, that…prices are going to surge even higher, and within three or four weeks California is going to start to experience shortages across the board. Shortages of gasoline, shortages of jet fuel and shortages of diesel. That’s because 40% of our fuel is made in Asia.”
Rory Johnston
“We have never experienced the degree of verbal market intervention in the oil market and the broader equity markets than we have experienced thus far over the past seven weeks from the White House in the Iran war.”
“I am deeply confident that Trump never meant for this to happen. That was not his intention to have to be six, you know, seven going on eight weeks of a war in Iran, a mess in the Middle East, a closed strait…This is not at all within the kind of core Trump MAGA framework. This was something else.”
“The Chavista1 regime is effectively a gang. It’s a bunch of people who have side businesses - it’s a kleptocracy. Trump understands kleptocracy very intimately. But when it goes to Iran, the political culture of Iran could not be more different from the kind of kleptocratic Chavista regime in Caracas.”
Echoes of the John Kiriakou interview I posted a couple weeks ago.
Trump "seems very desperate in these negotiations."
Here’s Trump himself in Art of the Deal:
The worst thing you can possibly do in a deal is seem desperate to make it. That makes the other guy smell blood, and then you’re dead. The best thing you can do is deal from strength, and leverage is the biggest strength you can have. Leverage is having something the other guy wants. Or better yet, needs. Or best of all, simply can’t do without.
“I’ve heard many people here in the Middle East region talk about price manipulation and I used to dismiss it…I’ve been completely dismissing these comments for years until today, where I’m actually seeing this happen and being realized in front of our eyes. Stories every day, Rory, about people who’ve made millions of dollars 20 minutes ahead of an announcement. I mean that’s just happening repeatedly. And I even know people that they receive messages like, OK, get prepared. There’s going to be an announcement or a tweet or just position yourself. It’s happening, it’s real. I’ve seen some of these messages. So manipulation is happening to to a great degree, and that’s what’s kind of distorting what we know.”
- Amena Bakr, Head of Middle East Energy and OPEC Plus Insights at Kepler
The global aluminium market is experiencing a “black swan” event as disruptions due to the Middle East war trigger a supply shock that will lead to major shortages this year, according to the top metals analyst at commodity trader Mercuria.
The region accounts for about 7 million metric tons of annual aluminium smelting capacity, or roughly 9% of the estimated global supply this year. Aluminium is a key material for the transport, construction and packaging industries.
Trump’s decision to venture into the war surprised many who knew him best. “Blood and sand,” he told advisers in his first term to describe the region, explaining why he wasn’t interested in getting drawn into any Middle East conflict.
After a persuasive February briefing from Israeli Prime Minister Benjamin Netanyahu in the Situation Room, and repeated conversations with a group of outside allies that included Sen. Lindsey Graham (R., S.C.), he said he trusted the military to pull it off. Look, he said to advisers, at how quickly they had “won” in Venezuela, where the U.S. had, in a matter of hours, captured its president and ended with his more compliant deputy in his place.
In Iran, the war started with the execution of Iran’s supreme leader, Ayatollah Ali Khamenei and other top Iranian officials. Trump was shown clips every morning of stunning explosions across the Iranian terrain. Advisers said Trump remarked to them how impressive the military was, seeming in awe of the scale of bombs.
But Trump had done little to sell the American public on the war, and soon grew frustrated that his administration wasn’t getting the same kind of external praise. Leavitt attributed his frustration to what she deemed unfair news coverage of the administration. His team showed him poll results for the November midterm elections that showed him the war was dragging down Republican candidates…
“What exactly are Christians in Lebanon supposed to make of an Israeli soldier smashing a statue of Jesus Christ? What are they supposed to make of churches damaged, priests killed, Christian villages bombed, and sacred symbols desecrated? Are these unfortunate misunderstandings inside the alliance? Are they regrettable exceptions? Or are they glimpses of the truth that the "Judeo-Christian" alliance was never really about Christianity at all, but about using Christians—especially American Christians—as political cover for an expansionist state?”
“Gold is now the chief monetary asset in the world. The dollar is number two…the U.S. effort going back to Franklin Roosevelt to get people to not think of gold as money failed.”
“Foreign flows into the US are at eye-watering levels. There never was a "sell America" trade and there's no "Hedge America" trade either. Markets ignore much of the political volatility and continue to see the US as the single best growth story out there.” - Robin Brooks
To quote myself from last August: “Do I want to invest in Germany, who closed all their nuke plants, or the UK, where they’re arresting people for saying “We like bacon”? No.”
How can you not love this chart?
Chris Whalen on the Fed
Julia LaRoche: “What was your assessment of Powell as Fed chair?”
“Uh, kind of mediocre to be honest with you. I don’t think he took his role as the government’s banker to heart, which means you have to go to Capitol Hill and lecture people about the federal deficit and things like that.
His conduct of quantitative easing was way, way too progressive. He kept the spigot open for a year or more than he needed to, and this caused home price inflation. You know I’ve always said that the Republicans, President Trump, should have hung the burning tire of home price affordability around Jerome Powell’s neck, because this is his fault. You can blame Janet Yellen too, and the other members of the board during that period because they all thought, believe it or not, Julia, that they could control the long end of the yield curve.
Remember yield curve control? The Bank of Japan thought they could do that. No, doesn’t work. So the hubris and the stupidity on the part of Fed governors that made them think that buying more securities and stoking home price inflation was somehow good for the economy I find just stunning.”
“Trump is not a conservative. He's kind of a corporate statist and he loves bailing things out.”
"There's nothing U.S. Treasury can do to save Spirit Airlines. Even if we give them the $500 million, I'll bet you right now, Julia, the thing is back in the bankruptcy category again in 18 months." - Whalen
“What we have is a whole period going back to covid of credit creation - public or private - that doesn’t make a lot of sense. We have an awful lot of credit out there that can’t be rolled over. It can’t be repriced at current interest rates. And that’s really the issue.” - Whalen
“When you’re getting a 20.75% yield on a bond, you mustn’t expect all smooth sailing.”
Shapoorji Pallonji Group, India’s biggest private credit borrower and issuer of one of its largest-ever junk bonds, has just reinforced that point. Holders of a high-yield note issued by a unit of the infrastructure conglomerate unanimously agreed to let the company delay paying principal and interest to June 30…
It was India’s biggest high-yield note when Goswami Infratech issued 143 billion rupees ($1.5 billion) of the zero-coupon securities in 2023. As of March 31, about 135.83 billion rupees was outstanding on the bond, including interest, according to a company statement on April 14.
The notes are held by a number of global private credit funds including Cerberus Capital Management LP, Varde Partners LP, Davidson Kempner Capital Management LP and Deutsche Bank AG.
Jeff Snider mentioned this so I looked it up.
On Multi-Family real estate:
“One of the fellas that’s a competitor of mine has a very strong statement that he makes, and his statement is that every deal in written in 2022 and 2023 is in trouble.”
- real estate securities attorney Eugene Trowbridge
fyi Someone recommended this account, which appears to mostly document the ongoing rather quiet carnage in commercial real estate…e.g.,
The fallout in subprime mortgages is "going to be painful to some lenders, but it is largely contained."
Treasury Secretary Hank Paulson, March 13, 2007
Nationally, home prices dropped about 36% over the next five years.
Steve Eisman commenting on Hank Paulson’s 2007 quote: “Looking back, that’s about as bad a prediction as you can get.”
Nick Nemeth on Private Equity/Credit
One of two remarkable open letters he posted. These are just excerpts. The first letter is addressed to Scott Bessent:
“These People Are Not Investors.2 They are dealmakers. The distinction matters. An investor underwrites risk and lives with the outcome. A dealmaker builds the model, gets the deal done, books the fee, and moves on. The money is made in the doing, not in the being right.3
Private equity controls $9.4 trillion. Private credit has reached $3.5 trillion, nearly doubling in two years. They charge two percent management fees and twenty percent carry. On the private equity side alone, that extracts approximately $188 billion per year in management fees — before a single dollar is returned to investors. Then add the carried interest. Then add the bank fees — the origination fees, the syndication fees, the restructuring fees. Then add the advisory fees, the consultant fees, the legal fees. Then add the private credit management fees and the BDC operating expenses. Then add the auditing fees — for whatever those are worth. The all-in extraction across PE, PC, and the banking infrastructure that services both probably quadruples that number. We are talking about something approaching three-quarters of a trillion dollars per year pulled out of the system in fees — regardless of whether the underlying assets are worth what they claim.
The machine does not need performance. It needs assets. Assets need marks. Marks need methodology. Methodology needs assumptions. Assumptions need to hold. So they hold. Not because the evidence supports them. Because the fees depend on it.The industry designed the methodology. It hired the valuation agents. It reports the results. It collects fees on the marks it creates. This is not oversight. This is a loop. And the management fees and carried interest that have already been extracted will not be clawed back when the music stops. They never are. The extraction has already happened. The only question is who absorbs the loss.
And here is the unvirtuous cycle that makes this a matter of national concern. Private credit deployed $593 billion in 2024 alone — a 78 percent year-over-year increase. Morgan Stanley projects $5 trillion by 2029. You can safely assume that the fastest-growing, highest-margin, best-paying desks on Wall Street are exactly where the problems are most likely to be found. That is not a coincidence. That is the pattern. It has always been the pattern…
Let me be clear about something: there will always be a market to lend to a business that is not public. Private lending is not inherently wrong. It used to be that lenders would really dive in, find an interesting situation, do deep diligence, and fund it with strict covenants. Banks used to do this with a hundred mortgages on their balance sheet. They knew their borrowers. They had the financials. They had the guardrails.
That is not what is happening. What is happening is that we are packaging sausages. We are bundling up highly leveraged, mostly zombie companies with no free cash flow and playing hot potato on exits and refinancings. We are doing the worst part of lending with standards that are built on bad logic — and we are doing it at industrial scale. The idea that you take these businesses, lever them six or seven turns, charge them ten percent cost of capital they cannot service, strip them of covenants, and then call it a diversified portfolio is stupid. I do not care how many nose-down, acronym-heavy justifications you dress it up in…There are two ways this ends. I am writing to you because which one we get depends on whether people in your position act before the market forces the answer.
The first outcome is clean. It is 2008. Everyone ends up in the same room at Treasury at the same time, asking for help for the same problem…The second outcome is Japan. It is the nightmare…Seven hundred and eighteen billion dollars in American pension money is allocated to private equity and private credit. Oregon’s Public Employee Retirement System has 26.9 percent of its portfolio in private equity — the highest of any state pension in the country. $1.1 trillion sits in offshore insurance reserves, much of it in Bermuda, structured to avoid domestic regulatory scrutiny.
The marks determine the NAV. The NAV determines the fees. The fees come from the pensions. The pensions come from paychecks. The paychecks come from firefighters, teachers, and nurses who will never read a private placement memorandum in their lives…”
The second letter is to Speaker Mike Johnson, on the insurance company threat. Again, check out the whole thing:
“I want to be precise about what this means for the teacher. Her $200,000 — saved over thirty years — lands on a balance sheet levered 69 to 1. Invested in a portfolio that is 72% privately placed. Managed by Apollo, which earns fees on both sides. She was sold safety. She got leverage. She will never know unless somebody tells her.”
“Corporations do not do wrong. Individuals do wrong, the individuals who direct and use them for selfish and illegitimate purposes, to the injury of society and the serious curtailment of private rights. Guilt, as has been very truly said, is always personal. You cannot punish corporations. Fines fall upon the wrong persons; more heavily upon the innocent than upon the guilty; as much upon those who knew nothing whatever of the transactions for which the fine is imposed as upon those who originated and carried them through upon the stockholders and the customers rather than upon the men who direct the policy of the business. If you dissolve the offending corporation, you throw great undertakings out of gear. You merely drive what you are seeking to check into other forms or temporarily disorganize some important business altogether, to the infinite loss of thousands of entirely innocent persons and to the great inconvenience of society as a whole. Law can never accomplish its objects in that way. It can never bring peace or command respect by such futilities.”
William Z. Ripley, Main Street and Wall Street (1927)
A.I. ‘Hallucinations’ Created Errors in Court Filing, Top Law Firm Says
An elite Wall Street law firm has apologized to a federal judge for submitting a court filing replete with errors created by artificial intelligence, including “hallucinations” that fabricated case citations.
The A.I.-generated errors came in a recent motion in U.S. Bankruptcy Court in Manhattan and were discovered by lawyers from an opposing firm, Andrew Dietderich, a partner at Sullivan & Cromwell, wrote in a letter to Judge Martin Glenn on April 18.
“We deeply regret that this has occurred,” Mr. Dietderich wrote.
The firm provided a ledger of the errors, which spanned three pages and totaled around three dozen. A number of them involved the citation of seemingly imagined passages from real cases.
This is the only reason people live in California (besides the scenery):
“There are two things that bestow consequence; great possessions or great debts.”
“We’re building portals from which we’re genuinely summoning aliens”
“The truth of this is, we’re building portals from which we’re genuinely summoning aliens,” a former OpenAI executive said. “The portals currently exist in the United States and China, and Sam has added one in the Middle East.” He went on, “I think it’s just, like, wildly important to get how scary that should be. It’s the most reckless thing that has been done…
A.I. doomers have been pushed to the fringes, but some of their fears seem less fantastical with each passing month. In 2020, according to a U.N. report, an A.I. drone was used in the Libyan civil war to fire deadly munitions, possibly without oversight by a human operator. Since then, A.I. has only become more central to military operations around the world, including, reportedly, in the current U.S. campaign in Iran. In 2022, researchers at a pharmaceutical company tested whether a drug-discovery model could be used to find new toxins; within a few hours, it had suggested forty thousand deadly chemical-warfare agents. And many more mundane harms are already coming to pass. We increasingly rely on A.I. to help us write, think, and navigate the world, accelerating what experts call “human enfeeblement”; the ubiquity of A.I. “slop” makes life easier for scammers and harder for people who simply want to know what’s real. A.I. “agents” are starting to act independently, with little or no human supervision. Days before the 2024 New Hampshire Democratic primary, thousands of voters received robocalls from an A.I.-generated deepfake of Joe Biden’s voice, telling them to save their votes for November and stay home—an act of voter suppression requiring virtually no technical expertise. OpenAI is now facing seven wrongful-death lawsuits, which allege that ChatGPT prompted several suicides and a murder. Chat logs in the murder case show that it encouraged a man’s paranoid delusion that his eighty-three-year-old mother was surveilling and trying to poison him. Soon afterward, he fatally beat and strangled her and stabbed himself. (OpenAI is fighting the lawsuits, and says that it’s continuing to improve its model’s safeguards.)”
The Founding Drinkers
This was the bar tab on Sept. 14, 1787, three days before the Constitution was signed, at City Tavern in Philadelphia.
Apparently one of the Constitutional Convention delegates, John Lansing, later vanished and was murdered.
“Years after that event, the mystery surrounding Chancellor Lansing’s fate was communicated to Mr. Weed, by a gentleman of high position, who submitted ‘also certain papers, not only showing that, and by whom, the Chancellor was murdered, but explaining the motives which led to the crime, and describing the circumstances under which it was committed. At the same time an injunction was added that he should make all the facts public in case he survived those whom his information implicated, — men who lived useful lives, and died with | unblemished reputations.”
"I am one of those who do not believe that a national debt is a national blessing—but rather a curse to a republic, inasmuch as it is calculated to raise around the administration a moneyed aristocracy dangerous to the liberties of the country."
Andrew Jackson, April 26, 1824
Proof that there was never a real Federal investigation into the Wexner Maxwell Epstein operation is the fact that, as of 2026, the FBI and DOJ have never contacted Leslie Wexner.
Kevin Warsh refuses to say if he has investments connected to Donald Trump or Jeffrey Epstein. His manner of speaking is also exceedingly smug and weaselly, which is typical of Fed officials.
Germany’s Phantom Serial Killer: A DNA Blunder
“The police thought they’d been looking everywhere. But it turns out they should have been looking down — at the cotton swabs they were using to collect DNA samples. On March 26, German police revealed that the cotton swabs they use may have all been contaminated by the same worker at a factory in Austria — and that the Phantom of Heilbronn never existed.”
MALE BYSTANDER: Was that a secondary explosion?
JOHNSON: Yes, it was. Definitely a secondary explosion. We was inside waiting to go upstairs and on our way upstairs the whole fucking thing blew. And it just collapsed on everybody inside of the lobby.
MALE BYSTANDER: That must be the first tower coming down—
JOHNSON: I don’t know about the first one, but the second one . . . It was terrible. Then there was a third one, too, after that one.
MALE BYSTANDER: There was an explosion after that?
JOHNSON: Yes, there was. Everybody was just inside the building, waiting to go upstairs and it just let loose. Everything just let loose inside the building.
MALE BYSTANDER: So what you’re telling me is that there was the plane or whatever hit the building, then a secondary explosion—
JOHNSON: There was like three explosions after that. We came in after the fire—We came when the fire was going on already. We was in the staging area inside the building, waiting to go upstairs. And then an explosion. The whole lobby collapsed on the lobby inside.
See also Random Memories of 9/11.
Posted within minutes of whatever it was that happened at the Washington Hilton. Probably should mute all of these people:
This Scammer Used an AI-Generated MAGA Girl to Grift ‘Super Dumb’ Men
Though Sam has never lived in the United States, he became an assiduous student of MAGA ideology. “Every day I’d write something pro-Christian, pro-Second Amendment, pro-life, anti-abortion, anti-woke, and anti-immigration,” he tells me.
The grift seemed almost too obvious, but to Sam’s astonishment, he says the account “blew up.”
See also “These People Are Not Investors”
“As someone who got into the public markets really young and ended up working in PE and speaking to many of these people in PC too. I never could articulate what was wrong and what I didn’t like about it. But this is it. There is no investing process. There is no thought behind the numbers on the model. No concern for risk. I would always ask the “why” behind things and there never was one. It was so stupid that it made me feel stupid. Shoutout to Nemeth for shedding light on this. Same stuff that was going on leading up to the GFC. In a different form.” - Outlier Capital
Legal questions: 1. If the soldier charged with using inside info to place bets to win $400,000 was a US Congressman, would he have been charged? 2. If that soldier had been Nancy Pelosi's' husband, would he have been charged?
Asking for a friend.
that little scam on the Paris airport weather sensor is a microcosm of the exponentially larger "climate crisis" scam. At least anyone betting on the temperature at the Paris airport is a voluntary player in the insanity. What about the rest of us who only play at the point of government guns?