Streetwise Professor

Time to scrape the rust off the ol’ blog! Been a while. Life comes at you fast sometimes.

The Rustoleum (a product originally from my home town, whose plant I watch burn in a spectacular fire while waiting to play baseball in James Park) is a post about the new Big Thing, which is actually something I wrote about last September–compute futures.

The CME, ICE, and tokenized exchange Architect Financial Technologies have announced the launch of futures contracts on compute. This land rush is a direct consequence of the AI boom. (I will write a post in the near future on AI issues more broadly).

The main attraction. The compute market is huge, and growing. As CME CEO Terry Duffy said in a statement touting the launch:

“As the backbone of the digital economy, compute is the new oil of the 21st century,” CME CEO Terry Duffy said in the statement. “Every AI model trained, every transaction cleared and every byte of data processed runs on compute, which is becoming a fast-emerging asset class in its own right.”

As I noted in my 2025 post, market size is a necessary but not sufficient condition for a successful futures market. Another important condition is volatility.

Most of the recent angst about compute cost is its direction, not its volatility: Compute costs have been increasing steadily as demand from AI has outstripped increases in chip supply, data centers, etc. That is, the market is largely directional:

A stead trend down through late-2025, then a steady upward trend through the present (with a weird blip in March, 2026).

Long-term trend dominated markets are not conducive to successful futures–you need substantial variation around the trend. Not much volatility evident there.

Ironically, Don Wilson of DRW–a big proponent of these markets (one of his firms creates the index graphed above)–pooh-poohed the relevance of the failure of DRAM futures as a precedent to the prospects for compute futures precisely because DRAM prices were dominated by a (downward) trend. The same logic would apply to compute futures.

As I also noted last year, another important contributor to futures market success is a fragmented, highly intermediated value chain. I further noted that the AI/data center/compute value chain appears to be anything but. The biggest players in this market are therefore not natural participants in this market.

You might argue that AI users could be, especially since AI cost has become a big issue of late. (More on this below). But in many products, big, low-leverage, public firms have little incentive to hedge price risk. Indeed, it’s long been something of a mystery why corporates hedge. Long ago Clifford Smith and Rene Stulz identified motives, including taxes, leverage, and agency costs. But I don’t really see those as driving widespread corporate demand to hedge compute costs.

This is not to say that compute costs are not an issue. Indeed, several stories in the last few days make it clear that initial AI euphoria is running up against economic reality. Namely the reality that AI ain’t cheap.

Marc Andreessen admitted on Joe Rogan that AI is making people less efficient.

The guy who funds half the AI industry. On a podcast. Just casually dropping it.

Same week: Nvidia's VP said compute now costs more than his employees.

Microsoft canceled 100,000 Claude Code…

— Alex Prompter (@alex_prompter) May 24, 2026

And:

NEW: AI consultant reveals a client accidentally spent $500,000,000.00 in a single month after failing to set employee limits on Claude usage.

— Polymarket (@Polymarket) May 28, 2026

And this too.

He said that Uber CTO Praveen Neppalli Naga went viral after telling The Information in an April interview that Uber had already blown through its Claude Code budget for 2026.

The comment led to what he described as a “head-exploding moment,” sparking discussions about AI token consumption within the company and the trade-offs it creates, such as on head count.

What makes my head explode when reading these stories is that these supposed business geniuses didn’t realize that treating something as free would result in massive overconsumption. I mean seriously: they didn’t think this was going to happen with probability one?

Maybe they should have considered the fate of Red Lobster.

A couple of implications of this. The first is that it is likely that Anthropic et al have way underestimated the elasticity of demand when the market settles down into an equilibrium in which AI end users exercise more judgment and control over their use.

The second is that companies will definitely have to figure out organizational and management strategies to incorporate AI into their businesses. The proper use of AI will require the exercise of judgment, and the development of mechanisms that incentivize the balancing of benefits and costs. Since (a la Coase, 1937) whereas markets allocate resources by price, within firms price mechanisms are typically uneconomic so they rely on fiat instead, these mechanisms will focus on budgets and managerial decisions on when and how to employ AI.

These implications have implications of their own.

First, since AI is costly–not least because of compute cost–normal market mechanisms will prevent or at least strongly mitigate the doomsday scenarios of mass unemployment. Many of the doomsday scenarios are based on bad economics, specifically, focusing on absolute rather than comparative advantage. “AI can do everything better!” But when a resource is scarce, that doesn’t determine market outcomes. Market prices, for compute, and for labor and capital, will reflect comparative advantages. AI will hurt those occupations in which it has a comparative advantage. But you can’t have a comparative advantage in everything.

Second, we are in the early adoption stage of AI. The shock companies are experiencing when looking at their compute costs will lead them to rethink and refine their usage (as discussed above). This will impact the demand for AI–both in the level and the elasticity. That will be a learning process, leading to demand fluctuations. AI suppliers will take some time to learn how demand is evolving, and their pricing policies will change accordingly. Which will feed back to firms, and also to upstream suppliers (GPU fabricators) will also have to adjust their pricing.

In the near term this will lead to price volatility. A sort of reflexive, endogenous volatility. But I would expect that to settle down in relatively short order, in which case pricing will be dominated by upstream costs, notably chips and power. Especially since there will likely be pretty intense competition between AI firms.

Meaning that this adoption learning process volatility is likely to be transient, and insufficient to support a big futures contract in the longer run. And the trending aspect implied by my posited post-settling down equilibrium will not generate the short term volatility needed to support a futures contract–even assuming the other issues (the value chain, weak corporate hedging demand) do turn out differently than I expected.

In other words, despite the hype, I’m skeptical about the long term viability of compute futures.

Bloomberg published a long article by an Icelandic hydrologist on AI trading bots. In some respects it is a contribution to the AI doom literature. It worries that many developers using the same AI platform (Claude Code being explicitly mentioned) and the same training data will cause their bots to enter into highly correlated positions that are subject to destabilizing unwinds in the event of a market shock. (Hedge fund basis trade unwinds are an example of such an unwind.)

At a superficial level this makes sense, but the analysis fails to think through the equilibrium effect of AI trading bots. Indeed, the low entry cost that Darri Eythorsson correctly identifies as the distinguishing feature of AI trading applications mitigates the effects he frets about.

In essence, AI bots can be viewed as privately informed traders who extract predictive signals from masses of highly dispersed data. Moreover, the low entry cost means that there can be–and will be, if there are not already–large numbers of such informed traders. These will be competing intensely.

Market microstructure theory predicts the effect of intense competition between many informed traders. Specifically, the model of Holden and Subrahmanyam (J. of Fin. 1992) predicts that these informed traders “compete aggressively and cause most of their common private information to be revealed very rapidly.” I italicize “common private information” because that is exactly what Eythorsson posits that AI trading bots will produce (because they are developed using the same tool–Claude Code–and the same data). Thus, the trading bot scenario fits the HS model almost precisely. Moreover, HS state that in a continuous trading environment (which characterizes virtually all equity and derivative exchanges) “market depth becomes infinite and all private information is revealed immediately” with a large number of entities trading on the same information.

This is in contrast to the situation (as in the canonical Kyle model) where there is one (or a small number) of informed traders, in which case information is incorporated only gradually in prices and market depth is finite.

The increase in depth is arguably a very salutary effect, which should be considered when weighing the benefits and costs of a trading bot army–including the costs of position correlation.

There are other implications. Prices that rapidly and fully reflect private information limits the incentive of the bots to accumulate large positions. Moreover, the competition between a large number of bots means that although their positions may be correlated, they will not be concentrated. A small number of concentrated positions (“whales”) pose, in my opinion, a greater systemic risk than a large number of correlated small ones.

The intense competition also drives the economic profit of bots towards zero. This is a self-limiting feature that constrains the aggregate scale of bot operator positions.

It should also be noted that truly smart bots will make trades based on information about other bots. As an example of this “reflexivity,” bots will attempt to predict the positions held by other bots, and will have considerable data to allow them to do so. This information is relevant to assessing the risk of cascading liquidations of correlated positions, which would reduce the amount of piling on by bots that (as they should) take both risk and expected return into account.

Of course, big hedge funds and quant firms hate this development. It essentially commodifies their expertise and human capital. This should make you treat any scare stories about trading bots with a healthy dose of skepticism, and indeed cynicism.

The main legitimate concern about AI trading bots is one that is common to all privately informed trading. Specifically, what social value does it produce? Is investment in private information for trading purposes primarily rent seeking that generates private profit (at someone else’s expense) but not commensurate welfare gains?

Privately informed trading extracts wealth from the uninformed, who trade for portfolio adjustment/risk management reasons (or for speculative thrills). This is purely a transfer, and one that requires investment in real resources to acquire and utilize the private information. In the case of AI bots, these real resources are the cost of developing and operating the bots. This is costly rent seeking, pure and simple.

Whence does the social benefit come? It is an unintended consequence of the rent seeking: more informative price signals that lead to better allocations of resources (e.g., better capital allocation or production decisions).

Financial economists have tended to trumpet the beneficial effects of more informative prices and “price discovery” without quantifying them, and discussed the rent seeking aspects of informed trading sotto voce, if they discuss it at all. Thus, a true cost-benefit analysis has not been undertaken.

In some respects this is understandable, because calculating the benefit of more informative prices is effectively impossible. (Maybe AI can someday make this calculation!) As is the benefit of potential speed-ups of the revelation of private information by a few minutes or seconds. But color me skeptical that it does.

So what it comes down to is a comparison of the real resource costs of privately informed trading by AI bots vs. the current set of privately informed traders, hedge funds, quant traders, investment banks, and the like. Here, the very cheapness (and hence ease of entry) of AI-based trading tools strongly suggests that rent seeking costs will decline relative to those in the current system.

As an extreme case, if creation and use of AI bots is free (which it isn’t, but consideration of this case is informative), we would get more informative prices at zero cost. Indeed, there would be significant cost savings due to the elimination of costly hedge funds, quant firms, etc. Indeed, this would represent a real world refutation of the Grossman-Stiglitz proposition that fully informative prices (“strong form market efficiency”) is impossible. Yes, there are costs, but if costs are low we can approach fully informative prices.

The main lesson is that if AI is a cheaper way of acquiring and trading on private information than the incumbent system, their displacement of incumbents would represent a welfare gain (though not a Pareto improvement!). This gain would come in two forms: lower rent seeking costs and more informative prices.

But that’s where the debate about the benefits and costs of AI trading should focus. The welfare effects of privately informed trading are ambiguous, at best, and such trading has a strong rent seeking component. If AI trading bots reduce rent seeking costs, their development is salutary. If not, it isn’t.

The very feature that Eythorsson highlights–the ease with which anybody can create a trading bot–suggests that AI will reduce rent seeking costs, and microstructure theory suggests it will improve price efficiency. Lower costs and higher benefits than the incumbent system represent a decided improvement.

Combine that with the likelihood that, as argued earlier, the equilibrium effects of competition among AI bots is likely to have little effect on systemic risk (and potentially may reduce systemic risk by reducing position concentration), well, don’t worry: be happy. Unless you are an incumbent privately informed trader that is. In which case, the trading bot reaper is coming for you.

The BBC recently ran a story hyperventilating over “the insider trading suspicions looming over Trump’s presidency.” This is just one piece of a genre: there have been numerous other stories during the period of the war pointing out that there have been oil trading volume spikes shortly before Trump Truth Social posts regarding war-related news.

The BBC has examined trade volume data on several financial markets and matched them to some of the president’s most significant market-moving statements.

It found a consistent pattern of spikes just hours, or sometimes minutes, before a social media post or media interview was made public.

The BBC then stated: “Some analysts say it bears the hallmarks of illegal insider trading, whereby bets are made by people based on information that is not available to the general public.”

Either the BBC is mischaracterizing what “some analysts” told it, or these analysts are full of it.

Even in securities markets in the United States, under Rule 10b-5, trading on “information not available to the public” is not illegal. Instead, the information must have been obtained illegally, or trading on it represents a breach of a duty.

With respect to commodity futures markets, “insider trading” was not even a thing prior to the passage of Frankendodd in 2010. That piece of legislation incorporated a new anti-manipulation rule that essentially copied 10b-5. Since insider trading is illegal under 10b-5, the insider trading is plausibly illegal in commodity futures markets as well.

The CFTC implemented the authority established by Dodd-Frank in its Rule 180.1. The rule elicited considerable commentary, on the issue of insider trading generally. This was framed as a discussion of “material non-public information” (“MNPI”):

The Commission recognizes that unlike securities markets, derivatives markets have long operated in a way that allows for market participants to trade on the basis of lawfully obtained material nonpublic information. This final Rule does not prohibit trading on the basis of material nonpublic information except as provided in the following paragraph or otherwise prohibited by law.

And the following paragraph?

Depending on the facts and circumstances, a person who engages in deceptive or manipulative conduct in connection with any swap, or contract of sale of any commodity in interstate commerce, or contract for future delivery on or subject to the rules of any registered entity, for example by trading on the basis of material nonpublic information in breach of a pre-existing duty (established by another law or rule, or agreement, understanding, or some other source), or by trading on the basis of material nonpublic information that was obtained through fraud or deception, may be in violation of final Rule 180.1. [Emphasis added.]

That is, trading on MNPI is a necessary, but not sufficient condition to violate Rule 180.1. The information must have been obtained by fraud, or theft, in order to rise to the level of a violation. And the norm in these markets is that trading on MNPI is NOT insider trading.

What is the likelihood that these conditions are met in any of the events set out in the BBC article? Small. Very small. For Trump or anyone connected to him? Even smaller.

Consider the March 9 event, where Trump was interviewed by phone by CBS, and the network released the content of that at 1829. Trading volume spiked about 47 minutes earlier. We don’t know the time of the interview, but presumably there it was considerably before the story ran. Meaning that there were people in CBS News who knew about it. Presumably several. Meaning that it could have escaped into the wild and sparked the trading volume noted by the BBC.

Meaning that if anyone violated 180.1, it was likely someone tipped of by CBS. Was this obtained by fraud? Was there a duty by anyone at CBS not to disclose this information?

The BBC also calls out a blip in trading activity (smaller than on March 9) on March 23 about an hour prior to Trump backing off his threat to attack Iranian power plants and bridges. This spike was smaller than the one on March 9.

But the decision that Trump announced was surely not made up at the instant he started tapping his post into his phone. And many people would have known about that. And DC leaks like a sieve.

You don’t leak information you are going to trade on. And the very volume of the trading that attracted the attention of the BBC and other news outlets makes it highly unlikely that any of those in the administration who were privy to this development were the traders responsible for the volume spike.

Eyeballing the BBC graph there were around 5000 lots traded during the spike. In round numbers, about $570 million worth of oil. The March 9 spike was even bigger, around 8000 contracts (~$800 million). So either a lot of people/firms had the news and were trading, or a couple of big institutions were doing so, or both. Nobody in the government would have the ability to trade in that size, and if they did, they would be total idiots to do so.

That is, the facts are most consistent with leaks leading to trades by someone outside the administration. And the leaks are not necessarily from within the administration: in the March 9 case, the information plausibly came from CBS.

Yes, it was non-public information (in the sense it had not been publicly disclosed), but as noted above that is not sufficient to establish an insider trading violation. And it certainly does not establish that Trump, or anyone in the administration, profited from this information.

Yes, there could be a violation here. One could argue that a leak from within the administration was a breach of a duty. But what if the information had not been classified? Would its revelation be a breach? Would anyone who acted on it have obtained it by fraud, or in violation of a duty?

It has long been known that securities prices often move well prior to public announcements, such as takeover announcements. Information is hard to keep contained, especially when related to things that involve many people. Such information leakage results in insider trading prosecutions only in extraordinary circumstances.

In other words, what has the BBC and others reporting breathlessly in the walls-are-closing-in genre is pretty much the norm in financial markets. Information tends to flow prior to public disclosures, and seldom constitutes a crime (or civil violation) when it does. If anything, the story just illustrates how pervasive leak culture is in DC. But as beneficiaries of that culture, don’t expect the BBC or any other media organization to call it out.

As the Iran War rolls into its sixth week, the media (especially the virulently anti-American UK rags FT and The Economist), the Democrats, and the Europeans have declared that the US is losing. Which means things must be going pretty well!

The US and Israel are allegedly losing because the regime has not toppled, and the Straits of Hormuz are largely (though not completely) closed. The first principle of war is “the objective,” and the losing narrative implicitly assumes that regime change is the objective.

But as the US made at the outset, and as Trump reiterated in his speech earlier this week, although that regime collapse would be a great outcome, that is not the objective. Instead, the objective is to destroy the ability of whatever regime controls Iran to use ballistic missiles and especially nuclear weapons to attack neighboring and non-so-neighboring states–including those in Europe, and perhaps eventually, the US proper.

It is difficult to get a definitive assessment on the campaign’s progress in achieving this objective. The administration claims it has made substantial progress, and a few more weeks of bombing will suffice. Given the intensity of the campaign, with now approximately 20,000 precision weapon strikes on strategic targets, that is very plausible. But bomb damage assessment is an uncertain exercise, so definitive judgment is difficult, especially for those (which consists of just about everyone outside select precincts of the Pentagon and the CiA) who don’t have access to all the intelligence in the first place.

A “war of choice” narrative is wrapped up with the “losing” narrative. Many on the left and the fringe right claim that the threat from Iran was not “imminent,” so the attack is premature and reckless.

The idea that a threat must be imminent to justify preemptive action is idiotic. Hell, what does “imminent” even mean? Those blathering about imminent never say.A day before Iran decides to launch a nuke? The day before it develops the capacity to launch a nuke?

By then it would be too late. And even if Iran’s nuclear development were to behind its ballistic missile development, one of the factors that features in the losing narrative–Iran’s continued ability to launch ballistic missiles and the imperfect ability and high cost to intercept them–makes it plain that if anything the US and Israel waited too long. Every month that would have passed would have seen a large increase in Iran’s missile stockpile, and an increase in their range and payload. In not too many months this would have made any attempt to attack Iran vastly more difficult and costly, and likely impossible. And the end result would be that Iran had North Korea-like immunity from attack, and could therefore act with impunity.

Imminent, in other words, was months ago. At best, February 28 was just in time.

Insofar as Hormuz is concerned, for the US it is an economic inconvenience, with mainly distributive effects. Yes, Americans pay higher prices at the pump (but not for natural gas and hence power, because the maxxing out of US LNG export capacity means that the demand shock from the loss of Qatari supply can’t hit the US), but American producers profit accordingly. And ~$100 oil is not an economic catastrophe–been there, done that (e.g., after the Russian invasion of Ukraine, and other times before, especially if you look in real terms).

The often expressed idea (especially in the media) that the US did not anticipate Iran’s action, or that it had no plan to deal with it, is absurd. I think that the plan was exactly what the US is doing. That is, Trump and the Pentagon realized that a closing of the Straits would be a cost of taking action, but the cost of opening it by force is greater, as is the cost of not taking on Iran at all. If anything, the US approach to the Straits demonstrates what the US perceived to be the cost of not acting.

There are no free lunches, and no cost free wars. The enemy always gets a vote.

And with respect to Trump personally, he had to be cognizant of the potentially steep political costs he might pay–including another impeachment ordeal. You might disagree with Trump’s decision, but that is different from saying that he made his decision without due consideration of the costs (military, economic, political, personal). Revealed preference logic implies that he perceived these costs to be less than the cost of inaction. Saying “he didn’t consider the costs” really means you disagree about what the costs are.

Hormuz is also a military challenge, no doubt. The threat can be (and has been) reduced by attacks on Iranian anti-ship missile batteries, attack speedboats, minelayers, and conventional navy, but even residual capability would pose a substantial threat.

Europe and Asia also feel the impact of the blocking of the Straits, and more so than the US given that they are net energy importers. Europe huffily refuses to do anything about the closure (well worse than that actually–see below), saying it is not their war.

Well, to use a phrase attributed to Trotsky, “You may not be interested in war [Europe], but war is interested in you.” And the refusals betray sunk cost fallacy thinking. The war happened and you have to optimize subject to that fact: saying that you didn’t choose to be there is irrelevant. I know where you want to go, but you can’t get there from here.

It is likely that Europe’s indignant refusal to do anything reflects not so much moral superiority, as utter incapacity. Just what could they do, given their shriveled military–and especially naval–capabilities? Moral indignation is therefore most likely a way to avoid confessing powerlessness.

Furthermore, Europe is doing things that are distinctly contrary to its interests. Most notably, several European nations (Spain, France, and perhaps Italy) are restricting US use of bases in their countries, and limiting overflights. Which will not stop the US and Israel from continuing the campaign, but which might prolong it, thereby prolonging Europe’s economic misery. This is masochistic posing.

Europe actually could do something that would not require it to employ (non-existent) military force. It could contribute the the US marine insurance reinsurance backstop. That would facilitate the reopening of the Straits. I have not heard this idea mooted, weirdly not even by the US, but definitely not by Europe.

As for the nations that at least have pretensions of global military power, the UK and France: in perhaps a reversal of traditional stereotypes, Albion is feckless, and Gaul is perfidious. British fecklessness was demonstrated by its tragi-comic inability to deploy even a single warship to defend its base in Cyprus, and its passive-aggressive denial of bases in the UK and Diego Garcia, at least for a while.

France–and in particular Macron–is objectively an American enemy right now. As popular as tertiary syphilis at home, where he can accomplish nothing, the little popinjay (whose wife apparently periodically pops upside the head) struts around the world attacking the US. But worse than his words is his active opposition–in conjunction with Russia and China–to a UN resolution advanced by the Gulf Arab states to permit the use of force to open the Straits.

Macron says that this would be impossible. Well, nobody is asking you to do it boy. Among the options lead/follow/get the hell out of the way, all you need to do is choose #3. But no. You actively decide to get in the way.

This is incomprehensible for many reasons. First, it represents a complete rejection of Arabist French foreign policy extending back decades. The reversal of French support for Israel in 1967 is a good estimate of the starting point for this policy, but through the years it has seen, for example, strong French support for Saddam, e.g., building the Osirik reactor that Israel destroyed, and including being a major arms supplier to Iraq during its gruesome war with Iran.

One Arab state–the UAE–has already expressed its disgust with France’s action by withdrawing funding from a next generation Rafael fighter project. And France can be sure that the flow of Arab capital to the country generally will dry up. Which given France’s parlous fiscal and economic situation is quite harmful.

Second, anything that defers reopening of the Straits extends France’s economic pain.

Third, France, like the rest of Europe, has been in a panic about the US exiting Nato, or at least dramatically cutting its commitment to European defense. What better argument to make for the US to tell Europe, “lots of luck! You’re on your own! Practice your Russian!” than this active opposition to the US effort in Iran.

Macron’s remarks in South Korea–a country that exists by the grace of the US and 37,000 fatal American casualties–demonstrate his idiocy in this regard. He called for South Korea and other nations, including Japan which has also been the beneficiary of American military dominance, to form an alliance in opposition to the United States. Which would provide a perfect justification for the US to cut loose the members of this coalition of the weaklings. I’m sure that would work out great for all of them.

In World War I, Germany likened its alliance with Austria-Hungary as being “shackled to a corpse.” That’s what Nato has become to the US right now, and Macron is making the corpse’s stink all the worse. Unlike Wilhelmine Germany, the US can get out the bolt cutters.

Fourth, the Europeans–and France in particular–constantly bleat about international law. Well, Iranian interference with free navigation is a flagrant violation of one of the oldest and undisputed parts of international law. But rather than allow others to enforce this law, France actively opposes it.

This is pretty much spot on:

To spotlight the absurdity of Macron's position here, Elysee is voting alongside Moscow and Beijing to obstruct the GCC bid to establish a multinational coalition with a Ch VII mandate to enforce transit rights, enshrined under UNCLOS, and their collective rights to self defense,… https://t.co/YbVqKlXDVx

— dan linnaeus (@DanLinnaeus) April 4, 2026

The absurdity of Macron’s position is manifest. The explanation is not. I am at a loss to understand what he is doing, or what he thinks he is doing, or what he thinks he will accomplish. The best explanation I have is a cut-off-your-nose-to-spite-your-face attempt to thwart the US. But this is absurdly futile. France’s actions are an inconvenience, and will not dissuade Trump or Israel. The second best explanation is blackmail. Other than that, I got nothin’.

So wither the war? I think the most likely outcome is a 2-3 week continuation of the bombing campaign. After which, the US let the chips fall where they may. Will Iran continue to close the Straits when there is no pretext for doing so? Fairly likely, which would amp up the pressure on those more dependent on the Straits to do something.

The dispatch of 2 Marine Expeditionary Units and a brigade of the 82nd Airborne division to the region has led to all sorts of speculation about ground action. One surmise is seizure of Kharg Island, Iran’s oil export hub.

I consider this extremely unlikely. First, the USN is not going to sail a couple of amphib flotillas up a shooting gallery. Second, the force sent to the region (roughly 10,000 combat personnel) is too small. Third, even if the island is seized, it is an . . . island–making the logistical support of US troops on it difficult and vulnerable. Fourth, it is not necessary to seize Kharg to deny Iran the ability to export oil. Just mine the approaches. Turnabout is fair play.

It is more likely that Marines will be employed to seize the islands (held by Iran, claimed by the UAE) in the Straits themselves. This would likely be necessary, but not sufficient, to reopen the Straits in the absence of Iranian capitulation.

Insofar as the bombing campaign is concerned, the US does have escalatory options–and Trump has threatened and continues to threaten to use them. These include destroying crucial parts of Iran’s economic infrastructure, notably power plants and perhaps desalination facilities. The latter option has been widely decried as a potential war crime, but Iran has attacked such facilities in Gulf states, so that genie is out of the bottle.

The main reason for such escalation is to secure if not regime change, a deal with the regime that cements the US objectives and opens the Straits. And here we get into a game theory dilemma. If the threat does not achieve this, acting on it will be unlikely to do so. And Iran can credibly play crazy and refuse to cave to the threat. So in some respects this is crazy vs. crazy, or at least two parties who can credibly play crazy.

And ironically, a regime that is willing to accept such severe punishment is the best argument for the war in the first place.

It’s been a little over a week, so enough time to get a better idea of how we got here and where it’s going.

• The mullahs have been fucking around for 47 years. They are finding out, with interest. As someone who came of age during the Hostage Crisis, all I can say is it’s about time.
• So is it just revenge? Hardly.
• So why, and why now? There are many layers to this onion. The outermost one is that it has long been US policy that Iran not obtain nuclear weapons. And for good reasons, not the least of which is that there is a non-trivial probability that as Twelver fanatics they want them to unleash an armageddon that will bring back the 12th Imam. But even if you discount that, it is indisputable that Iran is a revisionist state that wants to completely revolutionize the Middle East, and destroy Israel as a part of that. Nuclear weapons would be both a shield and a sword that would advance that agenda.
• The June 12 Day War (ironic number, there) seriously set back Iran’s nuclear program. Trump then entered into negotiations with them, the objective of which (for the US) was a credible, verifiable Iranian commitment not to develop nuclear weapons. Not only did Iran reject this, it is clear that they were doubling down on their program, and also on their ballistic missile program.
• Iran has long said “America can’t do a damn thing against us.” After June 2025, Khamenei said: “Our response to the US nonsense is clear: they cannot do a damn thing in this matter.” Apparently they repeated that mantra during the negotiations.
• That the mullahs would believe this after 47 years of American fecklessness is understandable. Our bipartisan failure to deal with the problem has emboldened them, and led to this. (Those mocking “TACO” Trump probably further emboldened them).
• Trump obviously concluded that negotiations were never going to achieve US objectives, and that delay would make it more difficult for the US to achieve said objectives. Hence, let slip the dogs of war! Bombs away!
• The opening salvo was apparently somewhat opportunistic, with Israeli and US intelligence providing information that Ayatollah Khamenei and many top regime officials would be meeting for breakfast. What was on the menu? A decapitation strike.
• This is a necessary but not sufficient condition for regime change.
• But although it is clear that the US would welcome regime change–to anything less fanatical than the mullahs–it is similarly clear that the US does not have regime change as a primary objective. Instead, the objective is regime (whatever it is) emasculation.
• That is, to deprive whoever ends up in charge of Iran the capacity to project force beyond its borders. This means, certainly, denying them the capacity to make nuclear weapons. But it also means eliminating their existing ballistic missiles and destroying their capacity to make more. This includes, obviously, their existing missile fabrication facilities, but also the economic foundation necessary to fund it. Hence strikes on oil refineries.
• Thus, we are seeing the most intense aerial campaign since WWII, and given the precision and capacity of American and Israeli weaponry, arguably more intense than even that. Curtis Lemay would be beaming.

• The air campaign is obviously proceeding in stages. First the standard SEAD component (or, more accurately DEAD–destruction of enemy air defenses), combined with stealth and missile strikes at very high value targets and fleeting ones (like Khamenei and the leadership of the IRGC). Now that air supremacy has been achieved, less stealthy but extremely devastating platforms–notably B-52 BUFFs (Big Ugly Fat Fuckers) and B-1 BONES–can roam at will and systematically dismantle anything we choose using JDAMs.
• The media commentary on the campaign has been predictably idiotic.
• The campaign demonstrates, yet again, that Chinese/Russian/Chinese-Russian copycat air defense systems are ineffectual. Their main use is to provide targets that must be disposed of before the real work commences.
• Speaking of China, this is another, deeper layer. Following hard on the heels of Venezuela, Trump is systematically destroying the main plinth of Chinese strategy in the Middle East. Although most commentary focuses on Iran as an oil supplier to China, that’s a secondary role. Iran-China (and Iran-Russia) is a conspiracy of revisionist powers aimed at overturning a US-dominated world order. Iran’s location at a vital energy producing region makes it an exceptionally valuable player in that game. Emasculating it is a serious blow to China’s strategic agenda.
• And eliminating Iran as a threat in the Middle East allows the US to concentrate its military and naval focus on China.
• So, like all things Trump (tariffs, Greenland, Venezuela) this is all about China too.
• The main military issue right now is the Straits of Hormuz. More by threat than action, and with the connivance (witting? unwitting?) or Lloyds of London, ship traffic through the straits has been throttled.
• The destruction of Iran’s navy is part of the US plan to deal with that, but it’s not the most important part. The main threat is from anti-ship missiles and drones. There has been little visibility into what the US (and presumably this is a US Navy/carrier air job) has been doing to Iranian SSASMs.
• Trump has mooted escorting ship traffic, but that has not started. This suggests that the missile threat is still present. Drones will be more difficult to suppress, but they are not as dangerous as missiles, especially to large tankers and freighters.
• This is particularly important because Trump’s main political pressure point that could undo his campaign is energy prices.
• Iran has attempted a Samson strategy, launching ballistic missiles at any nation supporting the US campaign, mainly through basing US military assets and personnel. This has not been particularly militarily successful, and politically it has if anything strengthened the resolve of Gulf nations to see the job through.
• The performance of the US’s erstwhile allies, especially in Nato, has been disgraceful. Leading the Parade of Shame is the UK, which deprived the US of the use of bases in Diego Garcia and the UK. And then changed its mind when the Iranians launched its missiles–as if that was a totally unexpected development. The UK then proved itself utterly impotent militarily, unable to dispatch even a single not-very-capable ship to defend places like Cyprus (which hosts UK bases).
• Spain similarly publicly denied the US the use of Rota (although US planes still land and take off there, so it is hard to know whether this is posing, or a split between the defense minister and the PM, or what).
• As an aside, this forcefully demonstrates a point I made with regards to Greenland: access by agreement is far less reliable than access by ownership. One can readily see the Danes pulling some Starmer- or Sanchez-esque stunt.
• One has to marvel at the depths to which the UK is fallen. John Quincy Adams once warned against the US becoming a “cockboat in the wake of the British man-of-war.” Now Britain is more like a kayak in the wake of the US, and is paddling pitifully on an opposite course. Starmer is of course the face of this, but it is the Labour Party more generally that bears the responsibility. Supposedly, the execrable Ed Miliband and other hard core leftist cabinet ministers pushed the 21st century’s “Boneless Wonder” (to reprise Churchill’s description of Ramsay MacDonald) to his passive-aggressive approach. How much the dependence of Labour on Muslim votes had to do with this is an interesting subject for speculation.
• The media (and social media) have been disgraceful, as should be expected. The NYT is all but openly rooting for an Iranian victory.
• The sinking by a US Los Angeles class SSN of an Iranian ship probably captures the media and social media idiocy better than anything. It was in international waters! Er, most sinkings of belligerent vessels are. It was sunk without warning! Uhm, that’s what submarines do. The crew was not rescued by the sub! Yeah. So? FFS, (a) warships have never been subject to “prize rules” that require warning and crew evacuation before sinking, and (b) prize rules for merchant shipping went by the boards in about 1915-6. The US in particular ruthlessly employed submarines in WWII and sunk both warships and merchantmen without warning and without pity. The Iranian ship should have known it was at risk, and interned itself–as another Iranian ship did, apparently learning the lesson from the sinking.
• So where to next? We are at that stage of the war where the original shock (and awe) have worn off to a considerable degree, and the military campaign grinds on. It is likely that the main objectives of destroying Iran’s nuclear, ballistic missile, aviation, and naval capabilities, and the ability to replace them, will be achieved in relatively short order. The main sticking point, as noted above, is restoring navigation in the Straits of Hormuz.
• As for what happens politically in Iran–who knows? But the important thing is–who should really care? In the US, anyways. A regime, no matter how malign in intent, poses no threat to American interests if its military capacity has been destroyed.
• This relates directly to the bleating–especially from certain elements of the MAGA right–about another forever war. These people should actually be gratified at Trump’s apparent indifference to political outcomes in Iran. Unlike the administrations that waged war in Iraq or Afghanistan, Trump quite clearly does not believe that eliminating a threat from a particular country requires remaking it in our image. Blowing the shit out of it suffices. (Venezuela provides another example of how Trump is willing to accept a regime that is less than savory, as long as it does our bidding).
• This also relates to the media drumbeat that strategic bombing has never resulted in regime change. Again–so what, if the regime is incapable of putting its malign intentions into action? And I would also note that bombing can bring about the end of wars, Vietnam being the best example. The Linebacker campaign (the Christmas Bombing) is what brought North Vietnam to the table. And it was Congress’s elimination of a threat of a resumption of such bombing that gave North Vietnam the confidence to resume the war two years later. NB: the campaign we are seeing in Iran now is Linebacker on steroids. It is the Dick Butkus (or Lawrence Taylor) of air campaigns.

Life comes at you fast in the Trump era. Less than 24 hours ago, the bombshell story was Trump/Hegseth dropping the sledgehammer on Anthropic. Then I wake up to the news of US-Israeli decapitation strikes on Iran.

I’ll wait a bit for the dust to settle (literally and figuratively) before reacting to today’s news. Yesterday’s news deserves comment.

In brief, Anthropic–the company that created Claude AI–was in negotiations with the Department of War regarding use of customized versions of Claude on classified DoW systems. The negotiations stalled over the DoW insistence that Anthropic license Claude for all “lawful uses.” Anthropic insisted that the Pentagon not use it for “mass surveillance” or “fully autonomous weapons.”

An hour before the deadline for an agreement, Secretary of War Hegseth announced that the negotiations had been terminated. But that was only the beginning.

After Hegseth made that announcement, I mused on X that Anthropic was playing a dangerous game:

Anthropic is playing a dangerous game. Think of all the levers the US has. Impeding access to chips. Pressuring suppliers of capital. Visas for personnel. Anthropic wants to be a law unto itself. It will regret trying. https://t.co/AOVFnehAhC

— streetwiseprof (@streetwiseprof) February 27, 2026

I was thinking of surreptitious pressure, with Bessent and others telling Anthropic’s input and capital suppliers to think twice about dealing with the company. But no. Within hours of announcing the end of the negotiations, Hegseth designated the company as a Supply Chain Risk, and forbade any company doing business with the Department of War from dealing with Anthropic.

This doesn't just mean that firms that deal with the USG can't use Claude. It means they can't sell Anthropic anything. Chips. Power. Hardware. Software. Paper clips. And can't invest in it or lend to it.

It's a hardcore sanctions regime. FO time.

— streetwiseprof (@streetwiseprof) February 28, 2026

Bad on me for thinking the administration would take the subtle approach!

This is a death sentence.

No doubt Anthropic will sue, and will move for an injunction. They may even get one. But that will not really help.

Consider all the suppliers to and collaborators with Anthropic (which includes Google, Amazon, and others). The risk of dealing with Anthropic just skyrocketed. Specifically, the legal risk. While litigation plods forward–and believe me, I can tell you from extensive experience Federal litigation plods–all these firms will calculate that any long-term engagement with the company could get blown up if the courts eventually side with the USG. So long term contracts, joint ventures, equity investments, and loans have a huge downside risk that didn’t exist 24 hours ago.

Real options analysis shows that the rational response to a spike in uncertainty is to defer making decisions that lock you in for an extended period until the uncertainty is resolved. So even if an injunction allows companies to continue to deal with Anthropic, they will rationally back off–way off–pending resolution. Yeah, maybe paper clip suppliers will continue to sell to Anthropic, but the real strategically important players won’t want to get locked into long-term arrangements with it.

Competition in AI is intense. The speed of innovation is intense. The legal risk itself puts Anthropic at a severe competitive disadvantage in such a hyper-fast-paced competitive environment. Thus, the punishment meted out by the process will likely be just as fatal as the actual implementation of the DoW order.

Some are calling this corporate murder. It isn’t. It is corporate suicide.

Seriously. Didn’t Anthropic CEO Dario Amoedi and his board ask Claude to generate scenarios of the effect of its refusal to toe the DoW line and which of those scenarios would be the most likely? Did he ask it if he was being an idiot? Because he was.

Now to the rights and wrongs. Here is Anthropic’s justification for its obduracy:

We support the use of AI for lawful foreign intelligence and counterintelligence missions. But using these systems for mass domestic surveillance is incompatible with democratic values. AI-driven mass surveillance presents serious, novel risks to our fundamental liberties. To the extent that such surveillance is currently legal, this is only because the law has not yet caught up with the rapidly growing capabilities of AI. (Emphasis added).

In other words, Amodei wants to arrogate to himself the power to require the Pentagon to act as HE thinks SHOULD BE legal, not what is legal. He wants to usurp the power of all three branches of the Federal government. That is obviously not his job.

If people believe the Pentagon has violated the law and the Constitution (in interviews he speaks of Fourth Amendment violations), they can bring suit. It is up to the courts, not Dario Amodei, to decide whether the Pentagon has or has not done so. Furthermore, Congress can act to “catch up” the law with the capabilities of AI. It’s not Dario Amodei’s job to become a law of his own.

Amodei’s argument is self-contradictory. On the one hand, he says he supports “lawful” uses. But then he says, not really, because he doesn’t like the law. Pick one, dude.

Now, you might counter that OK, then the US should just refuse to deal with Anthropic, but not try to whack it.

The Pentagon has clearly identified Claude as vital to the national defense. And, ironically, the company’s claims about its capabilities make the Pentagon’s case for it. So, the US needs Claude. The company refuses to provide it on acceptable terms. So it is necessary to compel them.

Anthropic could have chosen the easy way or the hard way. It chose the hard way. It's not murder. It's suicide. https://t.co/iBxKH0mUEk

— streetwiseprof (@streetwiseprof) February 28, 2026

Or maybe you think Anthropic’s conditions are reasonable. They are not. These terms would essentially allow the company, at its whim, to impair the DoW’s use of Claude. That is, they could “hold up” the Pentagon.

Claude is a very specific asset, especially since it would be customized for Pentagon use. Even if DoW also employed other AI, it would not be able to replace at short notice the bespoke capabilities of Claude.

No rational party will subject themselves to such a massive holdup risk. The Pentagon clearly is rational about this.

Further, Anthropic would have legal recourse in the event it believed that the Pentagon was using Claude unlawfully.

Anthropic lamely argues that

They have threatened to remove us from their systems if we maintain these safeguards; they have also threatened to designate us a “supply chain risk”—a label reserved for US adversaries, never before applied to an American company—and to invoke the Defense Production Act to force the safeguards’ removal. These latter two threats are inherently contradictory: one labels us a security risk; the other labels Claude as essential to national security.

No contradiction at all. The “safeguards”–basically, giving Anthropic a kill switch that it can activate at is whim–are utterly incompatible with Pentagon use. Claude is a vital national security tool. Hence, force it is. Perfectly consistent logical sequence of actions.

It is ironic that Anthropic is not willing to accede to the Pentagon mere weeks after it screamed about three Chinese firms training their AI systems on Claude, thereby allowing the copycats to create systems with a substantial fraction of Claude’s capability. Meaning that the Chinese already likely have the capabilities that fret Amodei so much. And you can be totally sure that China will respect Amodei’s tender concerns for our liberties, amirite? But the US government is not to be trusted with these same capabilities, apparently.

A couple of admittedly subjective reactions.

When I first looked at some Amodei vidoes, I got a Sam Bankman Friedman vibe.

Anthropic CEO Dario Amodei on AI and the Constitution:

"It is not illegal to put cameras around everywhere in public space and record every conversation. It's a public space."

"But today, the government couldn't record that all and make sense of it."

With AI: you can map the… pic.twitter.com/wo1xEW5d6V

— cogniscendo (@cogniscendo) February 27, 2026

And wouldn’t you know, like felon Fried, Amodei is an “effective altruism” guy. This is disturbing. EA is a hyper-utilitarian “philosophy” that appeals to would be ubermenschen who often use it to justify their own psychopathy. SBF being the (imprisoned) poster child for this.

And as a general matter, be very, very, very suspicious of companies (and CEOs) that set themselves out as moral paragons. Remember “Don’t be evil”? Yeah, good times, good times. Or Bill Gates? I could go on. (And yes, Elon Musk fits too).

Lastly, maybe Amodei is suffering from Oppenheimer-like guilt and remorse over creating a power that has escaped his control. His attempt to restrict Pentagon use of the genie he freed from the bottle could be a desperate attempt to re-exert control. But he can’t. The genie is well and truly gone, and this faceoff with the Pentagon will in no way stop it.

Yesterday I wrote how Canadians and journalists were hardest hit by the US hockey gold medal win. The intersection of those sets? Ooh-boy.

Two examples:

The State of the Union was a zoo – and Team USA the monkeys https://t.co/GaDUly8zGi pic.twitter.com/HpVjyLxgNc

— The Globe and Mail (@globeandmail) February 25, 2026

Auston Matthews made his choice, seemingly putting the party and the president ahead of the playoffs https://t.co/YbVZkvAcdd

— Toronto Star (@TorontoStar) February 26, 2026

The articles are here and here. Because I’m sure you don’t pay to get behind Toronto rag paywalls.

The argument (being charitable in calling it such, rather than what it really is–an unhinged rant) is that American hockey players enjoyed their moment in the spotlight too much. They partied to hard. And most importantly, they became props for Trump.

Written like true losers who live up their own asses.

Any normal person not twisted into hate by political obsessions understands that this is a once in a lifetime moment for those players; a moment no American has enjoyed for 46 years; and which is of a character that virtually no American is likely ever to experience in his or her life. And particularly in athletics, it is known that fame is fleeting. The glory of a championship is intense, but extremely short lived, soon put in the shade by the press of events and new championships.

It comes to very few, and doesn’t last long when it does. So damn right–seize the moment boys, and milk every minute. It will soon be gone.

Appearances at the White House and the State of the Union focus national attention on the recipients and area great honor, and nonpareil recognitions of achievement.

And this national attention is particularly rare for American hockey players. Therefore, they have all the more reason to ride it for all it is worth.

But to Canadian journalists, and fellow leftist losers everywhere, the American players were supposed to take a pass on this never-to-be-repeated moment. Because Trump.

Cox tried to dress up his criticism of US (and Toronto Maple Leafs’) captain Auston Matthews as a product of concern for Auston’s NHL teammates. By basking in the (short) moment, Matthews did not return to meaningless mid-season NHL games “rested” and so let down his side. Which will matter squat when playoff time rolls around.

And tell me, how does dogpiling this guy help the Maple Leafs? If your concern is really for your hometown team you wouldn’t. So spare me this tut-tutting about the impact of a few days of celebration on the fate of Toronto’s season.

Would it be rude to point out that the Maple Leafs have sucked for decades? And are continuing to do so? They are four points out of the last wildcard spot in the (almost) everybody-gets-a-playoff-slot NHL. So midseason Leafs games are even more meaningless than the typical NHL February or March contest.

But here’s the real reason:

All he had to say was he understood the feelings of Canadians in these troubled times. He could have just skipped the White House nonsense, demonstrating much needed leadership and proof the Leafs were his top priority. But Matthews preferred to be feted by a president who dismisses the very idea of Canadian sovereignty.

Yes. Auston Matthews (and presumably other American players) had to forego an extraordinary experience because of Canadians’ feelz.

Why? It’s not about you all, and where do you get off by insisting otherwise?

Cox, by the way, is a real profile in courage.

“Elbows up.” So a real tough guy then, eh?

So tough you protect your posts. LOL.

Kelly also believes that it should have been all about Canada and Canadians, not America and American players:

Evidently, their big idea was to lean hard into the red, white and blue. Instead of sticking it to Canada, they’d stick it to the Libs. For 72 hours, it would be frat house rules.

I guarantee that the American team didn’t think that they were “sticking it” to anybody. They were basking in the attention and glory. If Canadians or leftist losers feel they’ve had it stuck to them, that says everything them and nothing about the players. Why should their political obsessions matter in the slightest? And why do they think they should?

The insufferably supercilious Kelly writes: “A few U.S. team members are being singled out as heroes for resisting the Trump allure.” Singled out by whom? Canadians and leftist losers, apparently.

Cry more!

Did I mention that Kelly is a supercilious twat?:

Colorado’s Brock Nelson didn’t go. Maybe it’s the politics. Or maybe he didn’t like the idea of being seen to put himself above his social betters – Avalanche teammates Nathan MacKinnon, Cale Makar and Devon Toews – all of whom had reported back for duty.

Social betters. Because they reported back to their teams. And why did they report back to their teams rather than bask in the moment? Not to put a fine point on it: because they didn’t have a moment to bask in, because they lost. And because they lost they didn’t have the opportunity that American players had. Social status had zip to do with it.

The evidently clueless Kelly undermines his own argument with this gem:

I’m pretty sure most of them didn’t have a serious think about what it meant, and will never do so. To them, it’s viral content and a great picture for the hero wall at home. If the U.S. were to elect a Communist, they’d have shown up to his party, too.

Exactly! Because it wasn’t about politics.

“What it meant.” Again–to whom? To Clueless Kelly and Damien “The Omen” Cox and Canadians and their American fellow travelers?

Again–it’s not about you lot, and your arrogance in insinuating that it should be is off the charts.

I have a suggestion for Canadians of all stripes, but journalists in particular. If you want Americans to have any respect for you, grow the fuck up.

And don’t say “we don’t care if the Americans respect us.” Oh, but you do. Desperately.

The virtually week-long national meltdown betrays Canada’s deep insecurity and envy of the US. The fact that America’s gold medal victory in what Canada considers its game occurred when Canada-mocking Trump is president only feeds the hysteria.

This is all about Canadian TDS and its national inferiority complex, and the more that Canadians protest to the contrary, the more they prove the point.

Usually if I don’t get on a story in a day, the opportunity is lost. Not so with the US hockey gold medal. Mainly because Trump. Because isn’t it always?

One striking thing has been what bad sports and sore losers the Canadians have been. Nothing but excuses.

“Game was decided in 3-on-3. Not fair.” Same rules for everyone. And more open ice gives an advantage to the team with the most dynamic offensive players, which was Canada here in part because the US made.a deliberate choice not to match Canada on this dimension and left its best offensive players off the roster. So if anything, 3-on-3 was a huge advantage to Canada.

And might I add: Canada failed to score on a 5-on-3 situation. And won its quarterfinal game scoring a goal with six skaters on the ice.

“The US goalie played out of his mind. We were better on the ice.” Yes, yes, he did. But last time I checked goalies are part of a hockey team, and they are on the ice. And it is a well know adage in hockey that a hot goalie can lead a lesser team to victory in playoff situations. True in a series, even more true in a single game. So, getting beaten by the goalie, well

“We would have won in a series.” Who cares? It wasn’t a series, and your strategery should have taken that into account.

Now to the American journalists. Or should I say, at the risk of redundancy, the anti-American journalists who have melted down like ice in July.

Here’s a representative example:

The U.S. men's hockey team won gold — and then lost the room.

A column on fragile, fleeting unity and an historic team that let its moment drift into political manipulation:https://t.co/aBgsBSwjKm

— Jerry Brewer (@JerryBrewer) February 24, 2026

They didn’t lose the room Jerry, they lost your room, that being the bitter anti-American leftist loser room. Let’s call it the Bluesky room. Americans not of that persuasion were quite stoked by Trump calling the team to congratulate them, and having them in attendance at the State of the Union address last night.

What lost the leftist losers is that Trump called the team to congratulate them, and he told a joke. Which he is known to do They laughed uproariously. BUT IT WAS A MISOGYNIST JOKE THAT DISRESPECTED THE US WOMEN’S GOLD MEDAL TEAM!!! How dare they laugh at that!!!

All Trump said was if he didn’t invite the women’s team to the White House he’d get impeached. Given his history that’s a wry observation. And it was clearly directed at the leftist losers who are always trying to impeach him, not the women’s team.

By the way, Trump had already invited the women to the White House, but they deferred their visit due to scheduling issues.

I would add that expecting a group of guys riotously celebrating an epic victory to enforce the loser left’s speech codes is about the dumbest fucking thing imaginable.

As they say, if you can’t take a joke . . . Well, there’s a lot of . . . that needs to go around.

So this was one of those confected controversies that says a lot more about the loser left than Trump or US hockey players.

And I am so tired of sportswriters like old Jerry Brewer who apparently think that writing about, you know, sports is beneath them. They really aspire to be political and social commentators.

This is a consequence of journalist overproduction. Too many people aspiring to be political and social commentators for the jobs available, so they slum it in sports and inflict their deep insights on us until something better turns up.

I pine for the days when sportswriters were cigar chomping, heavy drinking guys who were obsessed with sports, knew their sports inside out, and didn’t have pretensions beyond that.

“Shut up and dribble” is a good rule for athletes. “Shut up and write about their dribbling. Period” would be a good rule for sportswriters.

Then there’s this piece of work, who attempted to denigrate the importance of the hockey win by claiming that ackshually the WNBA is a lot more popular than hockey.

epic meltdown by The Atlantic staff writer over USA Men’s Hockey pic.twitter.com/4wiZghrrSx

— Jerry Dunleavy IV ?? (@JerryDunleavy) February 24, 2026

WNBA TV audiences are bigger! So there!

Er, sample selection bias. The 960,000 number is for nationally televised WNBA games. The 440,000 number is for all NHL broadcasts, which includes every regular season game in every city, i.e., 80 times 32 local broadcasts. The total number of viewers of hockey therefore dwarfs the WNBA. For the finals series in the two sports, the WNBA averaged about 1.5 million; NHL about 2.5 million in the US and 4.4 million in Canada.

But the real clincher is revenue. The WNBA does not release revenue figures. (Gee, I wonder why?). Estimates are in the $300 million ballpark. NHL? 20 times as much–$6 billion.

So there’s no comparison between the WNBA and the NHL financially, but especially not on the court or ice. Hockey exhibits amazing athleticism and the current game is at its zenith. I tried to watch the WNBA. I really did. It was painful. Virtually no athleticism. Virtually no skills. God save us if women’s basketball is at its zenith.

But this woman writes for the Atlantic. Anyone who reads about sports in the Atlantic, HuffPost, the NYT, the WaPo etc. doesn’t really GAFF about sports, and knows less. But these outlets inflict their deep thoughts on us especially when they can do it to attack Trump and patriotic Americans.

So my parthian shot to them, and to the Canadians:

You lost. Now go put some ice on it.

Today marks the beginning of the 5th year of Putin’s “Special Military Operation.” Special, indeed.

The special needs military operation is more like it. (NB: “special needs” is a euphemism that replaced the previous euphemism, “retarded.” The old once canceled but now reemerging euphemism fits in place of the new one with regards to Putin’s military misadventure).

Putin appears in no mood to call the whole thing off, despite the fact that at best the campaign is stuck and at worst is actually in retrograde, with casualties allegedly now exceeding recruitment rates. Indeed, he is doubling down on his rhetoric and making moves that suggest he fears that his public’s patience is finally wearing thin.

Putin continues to cast the war as an existential one for Russia: “Russia is fighting for its future, for independence, for truth, and justice.” His remarks on Defender of the Fatherland Day are delusional: “Your competent and courageous actions, your personal bravery and determination helped to carefully plan and brilliantly execute offensive operations by our troops in the most intense sectors and directions.”

Brilliant in what universe? Competence is nowhere to be found. Especially in the Kremlin.

And Putin makes it clear, as if there was ever any doubt, that he is the Tsar of Projection–not of power, but psychological:

“They did not manage to inflict a strategic defeat on Russia on the battlefield, so the enemy is relying on individual and mass terror: this includes shelling cities, sabotaging infrastructure, and assassination attempts on government and military officials,” he told an audience of FSB officials.

All of which Russia has done in Ukraine, and on a far greater scale.

And paranoia, too

“There is an absolute need to defeat Russia. They are looking for any way, anything at all. They will push themselves to some extreme point, and then they will regret it,” he said.

And more delusion. Putin order the FSB to “strengthen the anti-terrorist protection of energy and transport infrastructure and public gathering places, provide maximum coverage for critical facilities, and, if necessary, equip them with additional security measures.”

This allegedly in response to the continuing Ukrainian attacks on Russian energy infrastructure, and specifically oil assets. This includes a recent attack at an important facility on the Druzhba pipeline.

But note: Ukraine carries out these attacks with drones and missiles, which the FSB can do fuck all to stop. This rather pathetic gesture is effectively a confession that Russia’s vaunted air defenses can also do fuck all against them. If the VKS can’t defend Russian airspace, how are spooks going to?

Perhaps the most interesting and revealing development is Russia’s intensifying Internet crackdown, including most notably a throttling of Telegram, due to the app’s alleged use in terrorist attacks in Russia and by Ukraine and the West.

What’s particularly striking about this is that Russian troops rely heavily on Telegram for battlefield communications–due in large part to the shambolic nature of Russian communications gear and infrastructure (a glaring defect that was supposed to be fixed after 2008 but obviously was not). When added to the loss of the use of Starlink terminals–which the Russian military laughably denied using for their own comms, claiming instead that they just used them to spoof the Ukrainians–the already balky and disjointed efforts on the frontlines will be even less coordinated, responsive, and effective.

So what does this imply? It implies that Putin is more than willing to sacrifice military effectiveness (such as it is)–and soldiers’ lives–to strengthen his control over the domestic information space.

And why would he do that? Well, by far the most likely explanation is that he fears growing public discontent with the war, its cost, and the glaring disconnect between what Putin says about the war and the ugly reality on the ground. Not only is Telegram an important means by which Russian troops communicate with each other, it is the primary channel by which the troops share glimpses of how the war is going, how it is fought, and the gruesome toll it is taking.

If uncensored, it is also a means by which Russians can communicate with one another, not just about the war, but about economic and social conditions that are clearly deteriorating. This is a necessary (though not sufficient) condition to undercut preference falsification. Since this falsification is an autocrat’s best friend, the risk of its unraveling is an existential threat to Putin.

Hence, he wants to put communications through the government “MAX” app–which is mandatory on all smartphones sold in Russia, and which is surveilled by the state.

Maybe Russia can resurrect Max Headroom to do PSAs. Perhaps Putin has tasked the FSB to look into the “blipverts” that featured on Max’s show. Could be just what he needs.

These measures are not those of a confident man, any more than Europe’s current censorship mania signals its civilizational confidence. Instead, they are palpable signs of Putin’s fear that the unwavering domestic support for his not so excellent adventure in Ukraine is not so unwavering and might cascade into another Russian moment a la 1905 or 1917 or 1991.

I guess if you want to be optimistic, you could view this as Putin preparing Russia for a peace/ceasefire deal in Ukraine that falls far short of the objectives he laid out, and which would make the toll in blood and treasure of the last 4 years seem completely in vain. Limiting the backlash would require an even tighter grip on the populace.

But regardless, it is a clear sign that Putin has decided that his heretofore unchallenged hold over the Russian populace is slipping as the war grinds on without success, and he must take even greater control over the information space.

Putin’s invasion of Ukraine is the most catastrophic self-inflicted debacle of the post-WWII world, and ranks highly among the great debacles of all history. He has succeeded in killing and mutilating over a million Russians. He has gutted the economy for years and probably decades to come. He has made Russia a pariah state increasingly dependent on a mercenary China, and his justification that the world is ganging up on Russia has become a self-fulfilling prophecy rather than a description of past reality.

And for what? To conquer a country even more dysfunctional than his own. And he can’t even accomplish that.

Although I broadly support Trump on foreign policy and many domestic issues (notably immigration) I find his pronouncements and policy proposals on economic issues to be cringey at best, and downright idiotic at worst. As I discuss below, the emphasis is on “his”–many administration policies are actually quite laudable. But when he pontificates on economics–oi.

Tariffs are obviously front and center of any discussion of Trump policies. Here matters are more complex, precisely because one cannot evaluate them purely in terms of economic policy. Yes, like most economists, I believe tariffs qua tariffs are objectionable (with a caveat–see below). But with Trump, tariffs are a negotiating tactic, and even as such not just a means of extracting trade concessions from other countries. He employs them to achieve geopolitical objectives, such as forcing India to wean itself from Russian oil.

Even though one cannot evaluate Trump tariff-o-philia in purely economic terms, certain aspects of his tariff policies are positively daft. The most principled economic argument one can offer for tariffs is derived from the “theory of the second best.” Specifically, yes, tariffs are distorting, but so are other taxes. It is at least conceivable that raising revenue via tariffs is preferable to doing so through other taxes (including future income taxes, capital gains taxes, etc.).

But then Trump completely undermines that defense by promising/proposing to use tariff revenues to give every American a check, $2000 if memory serves. If implemented, this would leave us with all of the distortions of tariffs but none of the fiscal benefits.

Then there is the proposal to prevent corporate purchases of single family homes, purportedly to reduce the cost of homeownership. In justifying this proposal, Trump engages in all the blue sky and apple pie rhetoric about the wonders of home ownership that rationalized the policies of the 1990s and 2000s that culminated in the Great Financial Crisis.

The proposal and the rhetoric fail to answer–hell, even raise–a crucial question: why have corporations invested in single family homes? Are there some other underlying economic factors or policies that have driven this?

My conjecture is that it is the consequence of banking and lending policies adopted as a response to the (housing policy-driven) GFC that made mortgages more expensive and difficult to obtain. People who want to live in single family homes find it more economical to rent them than buy them, and the corporations are responding to that.

So if you believe the post-crisis regulations were needed and beneficial, the corporate purchases are a feature not a bug. Maybe you don’t think that these regulations are on the whole beneficial, but if that’s the case constraining corporate purchases will make things worse, not better. This won’t remove the constraint that is driving the purchases, but will reduce the supply of SF rentals.

In any event, suppressing a symptom without even attempting to understand the cause is a recipe for failure.

And then the other day Trump turns around and says he wants home prices to be higher. Choose one, man.

Then there is the policy of capping credit card interest rates. Here one cannot even make an argument like that for tariffs (i.e., there is some economic benefit that could offset the effect of the distortions). The effect of this will be to harm many of those it is intended to help. Credit card interest rates reflect the credit risk of those who use cards to borrow regularly, and often heavily. Capping rates will result in those people losing cards, and therefore access to that credit. Some will do without credit altogether. Others will turn to even more marginal and expensive sources of credit, such as payday or auto title loans.

All of these policies have something in common: they are fundamentally populist. Populist critiques of the current American system have considerable validity. However, populist policies are seldom salutary responses to those critiques.

The irony is that overall, Trump administration economic policy is pretty good. This is especially true regarding deregulation, with this week’s elimination of the Obama EPA’s CO2 “endangerment” finding being a particularly welcome example, but by far from the only one. Across the spectrum of energy, environmental, financial, and telecom regulation considerable progress has been made.

Maybe the best thing that can be said for Trump’s personal forays into economic policy is that his unmatched ability to attract attention and criticism is preventing critics from going after these good policies with the same intensity they otherwise might. Cringe has its uses, I guess.