Chad Horn, CFA

[Michael Zuber @1RentalataTime]

Clearly setup for a massive 38% Housing Crash any day now

Time for Warm Chocolate Chip Cookies

[Marсo | Not-Ideal Investor @b_co_co]

Half of American homeowners have a mortgage under 4%.

Let that sink in.

They're not selling to buy at 6,5%.

Why would they?

The "frozen market" isn't a phase.

It's math.

And it’s going to last years.

[Logan Mohtashami @LoganMohtashami]

We have experienced many recessions and foreclosure cycles, and only once in history have we seen a major national nominal home price crash.

[Carl Quintanilla @carlquintanilla]

$2 trillion deficits — in visual form.

(via B of A)

[Elon Musk @elonmusk]

Grok 4.5 and Opus 5 are alone on Pareto frontier

[Colin McCarthy @US_Stormwatch]

This map shows the best weather in the entire country is along the California coast.

What do you think?

[Bryan Johnson @bryan_johnson]

sauna is great

everything you need to know...

0. sauna is a top longevity therapy
1. dry sauna is best
2. wet & Infrared saunas lack longevity evidence
3. aim to do 4-7 sessions per week
4. the body takes time to acclimate to sauna
5. expect sleep & HRV to be wrecked in first 2 weeks
6. after workouts is ideal
7. avoid polyester clothing & towels
8. wear as little as possible & 100% cotton
9. heat wrecks male fertility
10. men should ice their balls
11. women don’t need ice
12. wear a sauna hat to avoid hair/scalp irritation
13. 11 min @ 176°F (80ºC) is when benefits start
14. 20 min @ 195°F (90.5ºC) is ideal
15. pro move: core body temp to 102.2°F (39ºC) 
16. this takes me 34 minutes @ 200°F (93ºC)
17. be careful, that’s hot as hell & not necessary
18. don’t cold plunge after
19. never sauna dehydrated
20. drink electrolytes before and after
21. sauna’s good for muscle recovery
22. it may remove microplastics from body
23. don’t water rocks, avoid aerosolizing contaminants
24. measure the air quality in your sauna (if you can)
25. remove potentially toxic materials from your sauna
26. sauna with a friend creates joy

[Marсo | Not-Ideal Investor @b_co_co]

Homeowners spent five years celebrating a 40% gain.

Priced in gold, they lost half.

The greatest wealth transfer of our lifetime happened silently, to people who thought they were winning.

[Cheddar Flow @CheddarFlow]

This is insane

[Jim Bianco @biancoresearch]

There's an old adage that goes, "When the Fed starts panicking, I can stop panicking."

If the Fed takes inflation seriously, bond investors can stay calm. If the Fed wants to continually rationalize that inflation is not a problem, bond investors might panic. Is this why bond yields are at 5.15%?

So, if the Fed panics a little and hikes next week, bond investors can calm down. Otherwise, if the Fed fights rate hikes, the slow panic among bond investors could heat up.

[SightBringer @_The_Prophet__]

⚡️The opportunity is real.

A 30-year TIPS yield near 3% means the United States is offering investors roughly CPI plus 3% for three decades, backed by the federal government. That is an extraordinary real return for sovereign debt.

The deeper signal is even larger.

The state is being forced to pay equity-like real returns to secure long-term capital.

That is a confession from the bond market. Capital is no longer abundant enough to finance government deficits, AI infrastructure, energy, defense, housing, and industrial reconstruction at the old price. The future and the federal government are bidding against each other.

At 3% real, a patient investor can approximately double purchasing power every 24 years before taxes. Inflation can run at 2%, 4%, or 7%. The principal adjusts. The real coupon survives. The central promise is measured in purchasing power rather than dollars.

That is why this could become a generational entry point.

The United States cannot comfortably sustain 3% real funding costs across the curve while refinancing an enormous debt stock. If real yields remain this high, interest expense compounds, deficits widen, issuance grows, and political pressure on the Fed intensifies.

Eventually, the system chooses repression.

Cuts.

Liquidity support.

Regulatory demand for Treasuries.

Balance-sheet intervention.

Some form of yield suppression once the fiscal consequences become intolerable.

When that turn arrives, long-duration TIPS can produce substantial capital gains on top of the locked real yield. A decline in real yields from roughly 3% toward 2% would create a major price move because the duration is enormous.

That same duration is the danger.

If real yields rise toward 4%, the bond can lose roughly a fifth of its market value before the inflation protection matters. TIPS protect against inflation. They do not protect against rising real rates. This instrument can be financially safe at maturity and violently unstable along the path.

The bond is cheap because the regime is unstable.

The raw pattern says real yields near 3% will eventually break the fiscal machine before the fiscal machine breaks the bond.

That makes long TIPS a wager on one brutal truth:

Washington will sacrifice the price of money before it sacrifices the state.

[Claude @claudeai]

You can now ask Claude about the Anthropic Economic Index, our public dataset measuring how AI is used across the economy.

Ask which occupations use AI the most, or what kinds of tasks people are automating, and the answers draw directly from the Index data.

[Molly O’Shea @MollySOShea]

BREAKING: David @friedberg on America vs Socialism

FULL INTERVIEW

Exposing the underlying problems no one wants to talk about.

How the bottom 50% got left behind.

"I don't blame Americans for finding themselves in the situation that they're in. I blame the bad policy that brought us to this moment."

"Americans should feel good about America. We just have to fix the policies."

"This can't just be a CCP psyop. It's coming from a place of hurt, of turmoil, of fundamental struggle."

"I'm saying everyone is right, but we need to be honest about what has happened to get us here & what the right path is to get us out of it."

We cover:
› Real wealth data: $183T total US net worth, $8T held by billionaires, $4T by the bottom 50%
› The 1982 Social Security mistake that cost the bottom 50% an extra $37 trillion (vs bankrupt !!!)
› Why capital gains & labor taxes should reverse
› Wealth tax as asset seizure
› Invest America for Children, a 401(k) from birth, & flipping Social Security into equities
› Joe Lonsdale: paying taxes that actually work

𝐓𝐈𝐌𝐄𝐒𝐓𝐀𝐌𝐏𝐒
(00:00) David Friedberg, CEO at Ohalo Genetics & Co-Host at All-In
(01:11) Is California functionally bankrupt?
(02:28) The real reason Americans can't afford anything anymore
(12:13) Why a wealth tax is really government theft
(21:22) Why blaming billionaires is a political strategy, not a solution
(25:33) How Socialism grows like a virus
(30:40) Inside Trump Accounts: a 401(k) for every American
(34:22) Why rational arguments can't compete with viral outrage
(40:56) Jeff Bezos's radical fix for the wealth gap
(45:47) 5 years till Social Security is bankrupt
(46:35) Is AI actually coming for your job?
(50:29) The K-shaped economy
(55:39) Five things America needs to fix to survive
(59:21) David's research process
(1:02:54) "It's about making Americans feel good again"

[dnap @dnapway]

David Friedberg says the greatest lie of the 20th century was putting all your net worth in your home

"When you do that, then the only way to keep Americans wealthy and to keep the middle class stable is to keep the price of homes going up, because that’s the only asset."

“So if you want your net worth to go up every year, they need to have policies that drive the price of homes up every year. That ultimately leads to a point where we're at today where young people can’t afford those super expensive homes."

“Back in the day, 30, 40 years ago, you got a good job, you could buy a home. Today, because we made everyone put all of their net worth in their home and we had to keep home prices going up, people got screwed."

“So these are the fundamental issues, the mistakes that were made over the last couple of decades that lead to this great socialist wave that’s underway right now.”

[Cursor @cursor_ai]

Introducing Cursor Router, our intelligent model router that selects the right model for the task at hand.

Router delivers frontier-quality results at 60% lower cost.

[Director Michael Kratsios @mkratsios47]

We have information that Moonshot AI distilled Anthropic’s Fable for the development of its K3 model.

To do this they developed a sophisticated internal platform to conduct large scale distillation against U.S. models, allowing them to quickly switch between multiple methods of access to avoid detection. Moonshot AI has also acquired GB300-equipped servers and has accessed GB300s in Thailand, likely to train its AI models.

The United States strongly supports the free and fair development of AI, including a thriving competitive ecosystem that spans frontier models, specialized systems, open-source frameworks, and open-weight models. Legitimate AI distillation used to create smaller, more efficient models plays a vital role in this open innovation ecosystem. However, large-scale, covert industrial distillation aimed at stealing proprietary U.S. technology and undermining American research is unacceptable.

[Rick Palacios Jr. @RickPalaciosJr]

Land prices are opaque on the data side, but D.R. Horton’s $DHI earnings commentary today, “lot costs were up 5% YOY in the quarter,” aligns with our residential land survey below.

[Mike Simonsen 🐉 @mikesimonsen]

Narrative Violation!

This Visa report on wealth transfer points out that Gen X and Millennials have MORE real wealth than Boomers did at the same age. (Due to things like earlier access to 401Ks and lower investing costs)

[Wilfred Frost @WilfredFrost]

🚨NEW EPISODE🚨

60 minutes with JAMIE DIMON

- wouldn't buy long bonds or SP500 here
- "risks are bigger than people think"
- "I want @AndyBurnham to succeed", but Banks Levy is "wrong"
- Leadership masterclass - breaking bureaucracy; overcoming insecurity; loneliness at top

STOCK MARKET: "In general would I be a buyer at this price? No."

BUYER OF LONG DATED BONDS? “Personally, no. I would not be a buyer and part of it is interest rates. I mean even if inflation was 2%, the 10-year bond should probably be at 4-4.5%. And the short rate should be at 3.25-3.5%. And they're almost there today. So I don't understand what the upside is, even if you think inflation going to go to 2%. But being an economic historian, I can't take out of my mind what happened after the great recession of 74. Deficits were less…And it climbed from 3.5% to 5% to 7% to 9% to 11%.”

ECONOMY/MARKET RISKS: “Make a list of all those really complex long-term geopolitical tectonic plates things that affect the market or may not… I do think those risks are probably bigger than other people think.”

MARCH 2020 NEAR DEATH EXPERIENCE: “So I knew at that point in time that there might be goodbye. Yeah.” And what stood out for you in the life that you'd led in that moment? “I remember I spoke to my wife and I told her to call their company and tell them exactly what's happening so they can do what they got to do. But the good news is I didn't have any great regrets. I would be leaving behind great children, great wife, great company. I did the best I can. Of course I made mistakes. But fortunately I recovered from all that.”

ON ANDY BURNHAM: “I want him to succeed. I want to see the UK thrive. I want London to succeed. But the UK, like everybody else and like my own country…you need a strong economy to do that. So the new Chancellor going to need good policies that actually cause growth. So I'm praying that they get policy right and government after government get it wrong.”

ON BANKS LEVY: “I have always thought it was wrong. JP Morgan did not damage the UK and I called the Chancellor at the time. We're a great citizen there. We hire people there. We want to be bigger there. We train people there. We hire veterans there. All of our people get medical and all that stuff like that. And I just thought it was a lack of principle to punish a company that had nothing to do with the crisis. And it's still there seventeen years later. Is that fair to a shareholder? I mean, it may sound great, 'tax the banks', but it's $5 billion that my shareholder's paid on that extra tax. And I just think things like that have adverse consequences.”

Timestamps:
0:00 Intro
2:14 As good as it gets environment
3:08 Risks bigger than people expect
4:28 Resilience despite Iran
9:21 Would not buy bonds here
12:50 AI risk & opportunity
15:16 Not buyer of SP500 here
16:02 SpaceX valuation
17:45 Lessons from Financial Crisis
19:09 Don’t expect success
21:00 Loneliness of leadership
23:25 Commitment to NYC @NYCMayor
25:03 I want @AndyBurnham to succeed
26:40 UK Banks Levy is wrong
29:14 Fighting bureaucracy
33:20 Character most important trait
35:26 Insecurity ruins leaders
39:46 Success is not just your own
43:15 Politics is a very tough game
47:55 Dimon’s founder-like impact & succession
51:30 Near death experience
53:05 Family
56:34 Learn, learn, learn – from history & people

@jpmorgan @Chase @chase_uk @JPMorganAM

[nic carter @nic_carter]

havent seen one person from OAI or Ant address Jon's argument here.

the point is simple: the USG does not owe either of the large labs a business model. if the economics of selling tokens don't work due to distillation/cheap clones/Chinese AI magick, the American enterprise and consumer will be A-OK. they will benefit from hyperdeflation in the cost of digital cognition just like everyone else. the hyperscalers will be fine. it's just OAI and Ant that won't be – in their current forms at least. if they are willing to adapt, they can develop new business models.

so what if the token merchants don't do well? the neoclouds will be fine. the internet companies will be fine. the consumer gets cheaper queries. the enterprise will still incorporate AI.

the only world in which this isn't fine, is if you hold a quasi-religious belief that we're on the cusp of a kind of AI rapture in which one of the labs Logs On And Wins Forever, namely hits RSI and we enter some kind of sublime post economic society run by GEOTUS Dario. so to accept that Ant's business model might be suboptimal or impaired by China's commoditization is to accept the unacceptable; namely that someone other than the anointed might kick off the runaway feedback loop and that they, instead might log on and win forever.

this appears to explain the discrepancy in reaction to Deepseek Moment v254 Kimi edition. everyone has bag bias, of course. but leaving that aside, most people think it's pretty much ok if Ant and OAI suffer margin compression due to Chinese distillation / industrial sabotage via open weight models. the American economy is not reliant on those two firms. they could blink out of existence and we would pretty much be ok. the AI capex supercycle will still produce tokens, closed weight or not. American firms will consume those tokens. OAI and Ant would probably still scratch a living, due to the latent preference of some token consumers to buy domestic and face off against a known entity.

this is only unacceptable if you think AI is strongly path dependent; that is, if it really matters who the market leader is when AI reaches a breakout level of capability. this is true both in the good case (superintelligence, singularity, etc) and the bad case (this is the essence of safetyism). but if this sounds more like wishcasting than forecasting, you probably don't mind the labs being pressured economically.

now you can clearly tell which side I'm on. I think AI is a fantastic technology which is hyperdeflating the cost of cognition and will fundamentally reshape society but there are real reasons why it wont diffuse as fast as the AGI people think it well. I would prefer an American firm achieve RSI relative to a Chinese one but I think either outcome would be suboptimal; better that we don't end up with a closed oligopoly composed of Ant/OAI. China by crushing the margins of the labs is doing everyone a favor by eliminating their pricing power and empowering the buyers of AI, namely, everyone.

objections:

-but you can't celebrate America losing to China!
- in my opinion this is a minor victory for China but not necessarily an enduring one. USA still has the chip, datacenter, and neocloud advantage, not to mention, it still has the best frontier models. Chinese labs releasing open weight models have no business model of their own. so even if they hurt the US labs, they have nothing to show for it. it's profoundly unlike their successful dumping campaigns with solar panels, batteries, drones, etc where they eventually built big domestic industries. (if China kills American AI with open weight models, we can even the score the moment they try and release a proprietary model). even if open weights win, the USA can still leverage AI extremely well and potentally retain the aggregate compute advantage. yes, the US would be more assured of victory if OAI or Ant won forever, but I don't know if I want to live in that world.

- no one will ever train a model again
- this is where I think the concern is unwarranted. let's say distillation really is a golden bullet and kills big training runs. that doesn't advantage either China or the US. that's a stalemate. not to mention, the trend seems to be less focusing less on massive pretraining budgets and more on finetuning for specific genres of tasks, thinking machines style. and lastly I find it hard to believe that training runs will stop altogether. the labs can probably develop anti-distillation techniques. you could adopt a whitelist style permission for everyone using your model. different consortia could be put together to share in the cost of training a model, if it is seen as too expensive for an individual firm.

- the AI buildout is path dependent and OAI/Ant are now load bearing GDP infrastructure
- it would be a significant setback for investors if they had to cancel their IPOs and suffered big markdowns, and some neoclouds with lab based RPOs would suffer for a while, but everyone would be fine, really. does Microsoft need OAI or Ant? does Meta? does Google? ordinary Americans have ~no exposure to either OAI or Ant. would the world want any less compute if it turns out to be another order of magnitude cheaper? certainly not. as we all know at this point, consumption would go up. I don't think the economy is so dependent on the labs that it couldn't handle their margins compressing.