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The market has managed to take in stride things like massive regional wars, Constitutional crises, attacks on law and order, illegal tariffs, and the cracking of the foundation that underpins the modern global order. Even with all these factors at play, nothing moves the market like AI news. For a while, that meant that any press release indicating a company was digging deeper into AI led to a share price boost. More recently, many of the bigger movements have been reactions to the threat posed by AI. The Saas-pocalypse hit many big tech players when investors worried that their functions would be replaced by OpenAI and Anthropic. So tech companies know they have to play the AI market right, and that they have to play the AI news and hype cycle right. And, as is the case with many of the answers you get from LLMs, it can be almost impossible to dissect reality from hallucinations (some of which are intended).
At this point, there’s little doubt that the AI revolution will have an outsized impact on white collar jobs, from how they’re done to how many of them will survive. We’re already seeing worrying signs in the job market. But we’re also seeing signs that corporate CEOs looking to lighten costs via layoffs might use the emergence of AI as an excuse for doing so. This can play as good news in the investment world, which loves lowering costs through layoffs and loves any signal that a company is becoming an AI company. Thus, telling the market you’re preemptively laying off thousands of employees and replacing them with AI can create a perfect storm for a company’s share price. For employees, it’s more of a shitstorm.
Aaron Zamost, a former employee of Block, examines that company’s recent layoffs made in the name of AI, and what they might mean for both the future of public companies and the stories they spin. “Look closer at specific cuts — like shrinking the policy team and eliminating diversity and inclusion roles, former colleagues told me — and Block’s latest reorganization reads like standard prioritization and cost management, not an A.I.-driven reinvention ... Fear that the A.I. tsunami will destroy the traditional software field has led investors to pummel the valuations of long-established companies like Salesforce and Adobe. Like those businesses, Block is not an A.I. company. It is a financial services tech business, and it understandably wants to avoid ‘software dodo’ extinction before it comes for its industry. In that respect, A.I. is both a story line and a survival strategy.” NYT (Gift Article): I Worked for Block. Its A.I. Job Cuts Aren’t What They Seem. Of course, in the market, news is like stock shares. The only thing that matters is what investors buy. And they bought Block’s story. “Wall Street rewarded Block handsomely, sending the company’s stock up 24 percent after the announcement. That incentivizes the rest of corporate America to follow Block’s lead and announce traditional layoffs while playing the A.I. card. I’m sure it will.”
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Fluid Dynamics
The situation in Iran and the region is fluid. Two fluids in particular might drive the course and duration of the war. You can probably guess the first one. WSJ (Gift Article): Strait of Hormuz: The Oil Bottleneck Threatening the Global Economy. But there’s another fluid that could also be at risk. Javier Blas in Bloomberg (Gift Article): The Iran War’s Most Precious Commodity Isn’t Oil. “The CIA calls it the ‘strategic commodity’ of the Middle East. But it’s not referring to oil or natural gas. What the American spy agency has in mind is far more prosaic: drinking water. Don’t underestimate it, though, because if military hostilities continue to escalate, water could become the geopolitical commodity that decides the war between the US and Iran.”
+ “The president specializes in exploiting the weaknesses of his opponents; having watched Israel decimate Iran’s proxy armies and air defenses over the past few years, he sought to capitalize on the regime’s moment of maximum vulnerability. Other countries—most notably Israel and Saudi Arabia—potentially stand to benefit from Trump’s war. But the decision to start it was his alone, and no amount of spin from his surrogates should obscure this fact.” Yair Rosenberg in The Atlantic (Gift Article): The Real Reason Trump Went to War. (I don’t pretend to be able to understand the inner workings of Trump’s mind. But there’s no doubt that the 12-day war showed the region and the world how weak and vulnerable Iran is. Whether this invasion was the best way to respond to that weakness remains to be seen.)
+ The U.S. has been remarkably effective at blocking attacks from Iran. But doing so, at this point, requires the use of expensive munitions to block cheaper ones. That could be a factor as this war plays out. And it is very likely on the minds of America’s stronger and more dangerous adversaries. The Dangerous Munitions Mismatch Between America and Iran.
+ “The U.S. has torpedoed an Iranian ship in international waters in the Indian Ocean, among 20 vessels the U.S. military says it has struck.” And bigger strikes may still be coming. According to Hegseth, America and Israel would soon be able to deliver “death and destruction all day long.” (Which is exactly how you don’t want your secretary of defense to talk.) Meanwhile, “NATO air defenses had shot down a ballistic missile fired from Iran that had been heading toward Turkish airspace.” Here’s the latest from NBC, ABC, and NYT.
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The Road Taken
“A lingering question is why the group was clustered together if the guides knew the group was traveling below avalanche terrain. Standard backcountry protocol is to expose only one person at a time if traveling through an avalanche path.” There were several small decisions that led to a massive disaster in the Sierras. The Atlantic (Gift Article): California’s Deadliest Avalanche Turned on One Choice.
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You Can Follow the Sunny or the Money, Honey
“One senses that the climate crisis is not only threatening to destroy property, but is also challenging the confidence of both the insurers and the insured, perhaps providing a hint at fault lines in the economic system.” In fact, economic dangers go hand in hand with climate dangers. Here in California, we’re already seeing insurance companies flee or move customers to much higher-priced and less secure plans. I’ve said it many times. If you want to know how real the threat of climate change is, just follow the re-insurance companies. Aeon: The insurance catastrophe.
+ The sea is higher than we thought and millions more are at risk, study finds.
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Extra, Extra
Talarico-Dependent: There were several primaries across the country on Tuesday, as the 2026 midterms officially kicked off. None were more watched than the ones in Texas, on both sides of the aisle. Does a matchup between James Talarico and either Ken Paxton or John Cornyn suggest the state may really be in play for Dems? Politico: ‘A perfect storm is lining up for Texas Democrats’
+ Trans Parent: “An emergency Supreme Court ruling to temporarily bar California from enforcing a state law that prevents public schools from outing transgender students has advocates raising concerns about its potential to further roll back protections for transgender youth.” (This SCOTUS may surprise us occasionally on economic issues like tariffs, but never when it comes to the religiosity war in America.) Advocates Fear Supreme Court Is ‘Going After the Transgender Community Deliberately.’
+ That’s What Kalshi Said: “On Kalshi, people have placed bets on everything from football games to foreign affairs. The prediction market’s CEO, Tarek Mansour, says this doesn’t count as gambling—and is actually good for society.” Let me counter slightly. It is gambling. And, along with the sports betting sweeping the country (particularly among young men), it is terrible for society. And I’d bet on that. Steven Levy in Wired: How Is Kalshi Not Gambling?
+ Destigmatize: “This government initiative, called One of Us, works with people who have mental health challenges — the program calls them ambassadors — to share their stories in schools, hospitals and police stations, with a focus on their recovery.” NYT (Gift Article):