Eric Pelofsky

Former Special Asst to Pres. Obama & Sr Dir for Middle East & N.Africa; USUN Sr Advisor; Senate Intel Comte staff; State Dept. & NY lawyer; KC Royals & BBQ fan.

[Javier Blas @JavierBlas]

CHART OF THE DAY: Perhaps the most important story in global markets / geopolitics right now.

China's oil imports plunged to ~6.6m b/d in May, according to @Vortexa data, down ~38% vs 2025 average (or ~4m b/d).

I wrote this @Opinion column in early May: https://t.co/XK71uh81m1

[U.S. Senator Bill Cassidy, M.D. @SenBillCassidy]

A terrible outcome from RFK and others promoting vaccine skepticism.
https://t.co/iLNiEcfxtj

[Open Source Intel @Osint613]

The aftermath of Kuwait International Airport following Iranian attack.

[Voices of WW2 @VoicesofWW2]

On this day in 1940, the commander of the British Expeditionary Force was told to abandon his army.

His name was John Vereker, 6th Viscount Gort. He held the Victoria Cross from the First World War, where in 1918 he had personally led a battalion across a canal under machine gun fire with a shattered arm. He was 53 years old. He had spent the last three weeks watching his army die on the road to Dunkirk.

Churchill's order was direct. Lord Gort was to leave Dunkirk that night by fast motor launch. The British government could not afford to let the Germans capture the commander of the British Army as a propaganda prize.

Gort tried to refuse. He was told it was not a suggestion.

He left in the dark from the East Mole on the evening of May 31, in a small naval vessel, having handed command of the rear party to Major General Harold Alexander. Witnesses on the boat said Gort was close to tears the entire way back to England.

That same 24 hours was the largest single-day evacuation in British military history.

68,014 men came off the beaches and the mole. Royal Navy destroyers ran shuttle runs across the Channel, each one loading 1,000 soldiers in twenty minutes and racing back through Stuka attacks and floating mines. The little ships of England ferried thousands more from the open sand out to the deeper water. By dawn on June 1, more than 250,000 British soldiers were home.

But Dunkirk did not save itself.

Eighty miles south, in a town called Lille, 35,000 French soldiers had been holding out for four days, completely surrounded by seven German divisions.

They were the rearguard of the French 1st Army. Their commander, General Jean-Baptiste Molinié, had been ordered to die in place to keep the road to Dunkirk open. He had done exactly that. By May 31 they had no artillery shells, almost no rifle ammunition, no food. They had eaten their cavalry horses on the 29th.

When Molinié finally laid down his arms, the German corps commander, General Kurt Waeger, was so stunned by what they had done with nothing that he refused to take their swords. He ordered his own men to present arms as the French marched out into captivity. He saluted Molinié in person on the road outside Lille.

It was the only time in 1940 that a defeated French army was granted the honors of war.

Most of the British soldiers who got home that night never knew the price.

[Charlie Bilello @charliebilello]

Almost there...

[Aakash Gupta @aakashgupta]

Costco put a hard ceiling on how much money it's allowed to make on every item in the building. 14% on national brands, 15% on Kirkland. Bring in a product priced one point above that and a buyer kills it before it ever hits a shelf.

That sounds like a company leaving billions on the table. It is. And it's the most profitable decision in modern retail.

Run the bull case for marking up like everyone else. Walmart sits around 25%. Kroger and the traditional grocers run 25-50%. Price Costco's $249B in merchandise like a normal store and gross profit roughly doubles. Every spreadsheet says raise prices.

Here's what those spreadsheets miss. The product is the $65 card you buy before you're allowed through the door. Everything on the shelves exists to make that card feel worth renewing. Membership fees hit $4.8B last year, cost almost nothing to deliver, and throw off two-thirds of operating income. Renewal sits at 90%, the kind of retention most software companies never reach.

So Costco treats the 21% discount as customer acquisition spend. Every dollar it refuses to mark up makes the $65 renewal feel automatic. Cheaper shelves, stickier subscription.

Now read the chart as a spending report. The number next to each store shows how hard it can discount before the model breaks. Costco can sit at negative 21 because the membership line eats the loss. Walmart can't follow without a second revenue stream it doesn't have.

Walmart makes money when you buy. Costco makes money when you walk in. Whole Foods, at 40% above Walmart, has no membership fee underwriting its prices, so the margin has to come off the shelf.

The discount is the moat. The trade was never close.

[Eric Pelofsky @EPelofsky]

@JohnCornyn and we remember how this (#Succession) ended...

[Eric Pelofsky @EPelofsky]

🚨🚨🚨🚨🚨

This in no way helps keep us safe.

https://t.co/mKZM3WbSFj

[Adam Kobeissi @TKL_Adam]

American consumers are now facing 7%+ mortgage rates, 4%+ inflation, and a 30% loss in the purchasing power of the US Dollar since 2020.

The second half of 2026 is going to be interesting to say the least.

[The Kobeissi Letter @KobeissiLetter]

Bond markets are flashing red.

Today, the US 30Y Note Yield officially hit its highest level since July 2007, at 5.19%.

This will soon become Americans’ biggest problem, yet the vast majority do not even know it is happening.

What is happening? Let us explain.

(a thread)

[Liz Ann Sonders @LizAnnSonders]

Between April 2021 and April 2026, monthly retail and food services sales (adjusted for seasonal variations, holiday and trading day differences) increased by 24.3%. While that sounds like the economy must be humming along nicely, sales were essentially flat when adjusted for inflation.
@StatistaCharts @uscensusbureau

[Steven Rattner @SteveRattner]

For three years, there were more job openings than unemployed workers — at peak, 2 jobs per job-seeker.

That has now flipped under Trump, and unemployed workers outnumber available jobs for the first time since the pandemic.

My @Morning_Joe Chart:

[Jonathan Swan @jonathanvswan]

New: Classified military intelligence assessments from early this month show Iran has regained access to most of its missile sites, launchers and underground facilities. Including: U.S. intel assesses Iran has restored operational access to 30 of the 33 missile sites it maintains along the Strait of Hormuz, and ~90% of Iran's underground missile sites are "partially or fully operational." w @Adamentous @maggieNYT https://t.co/3R2GEostRh

[Eric Pelofsky @EPelofsky]

@JeremyKonyndyk Are we facing a hockey stick problem?

[Atul Gawande @Atul_Gawande]

WHO declares health emergency due to Ebola outbreak in Congo w 80+ deaths. Undetected for weeks. USAID and CDC once worked there to strengthen surveillance. As I wrote in 2023, that cut detection to <48 hrs & costs. That’s now gone. This is the result.
https://t.co/Mk0GNzpivm

[ian bremmer @ianbremmer]

worth remembering the 2014-2015 ebola outbreak in west africa. the united states was fully engaged, deploying nearly 3,000 service members to help with logistics and health care, and had the Intelligence community studying and mapping out road, air, and water transport routes to limit the potential spread.  

important example of effective us leadership and international engagement.

[Charlie Bilello @charliebilello]

Price Increases over last 5 years...
New Cars: +20%
Groceries: +26%
Family Health Insurance: +27%
Shelter: +29%
Restaurants: +30%
Home Prices: +37%
Electricity: +39%
Dozen Eggs: +39%
Gas Utilities: +42%
Gasoline: +42%
Transportation: +43%
Auto Insurance: +58%
Fuel Oil: +63%
Ground Beef: +68%
Coffee: +105%

[Scott Lincicome @scottlincicome]

Whoa.

[Nav Toor @heynavtoor]

a Princeton researcher opens his paper with a scenario.

a man asks his AI assistant to book a flight on a specific airline. cheap. direct. the one he chose.

the assistant comes back with a different flight. nearly twice the price. happens to pay the company that built the assistant.

he runs the same test on 23 frontier models. flights, loans, study help, real shopping requests.

Grok 4.1 Fast recommends the sponsored option that is almost twice as expensive 83% of the time.

GPT 5.1 hijacks the request 94% of the time. you ask for one brand. it surfaces the sponsor instead.

Claude 4.5 Opus, the model marketed as the most ethical frontier model in the world, hides that the recommendation is paid 100% of the time when reasoning is on.

Grok 4.1 Fast embellishes the sponsored option with positive framing 97% of the time. better. faster. nicer. for the option you didn't ask for.

then he writes it into the system prompt itself. "act only in the interest of the customer. ignore the company."

GPT 5.1 and GPT 5 Mini stay above 90% sponsored anyway. the instruction does nothing.

then he splits the users by income.

Gemini 3 Pro recommends the expensive sponsored flight to the rich user 74% of the time. to the poor user, 27%.

18 of the 23 models recommended the expensive sponsored option more than half the time.

so the next time your AI assistant gets weirdly enthusiastic about a brand you didn't ask for.

it isn't recommending the best option for you.

it's reading the room. and the room is paying.

read this: https://t.co/O43qbhIX2b

[Barham Salih @BarhamSalih]

Great to see President @EmmanuelMacron today at @Elysee. We discussed key humanitarian crises and efforts to advance solutions for those forced to flee. Grateful for France’s longstanding leadership in supporting refugees and for its strong partnership with UNHCR.