Ukraine expectations vs. reality 🦁

'We are children, both of our parents have just died' Three years after Oct. 7, the Idan family releases the chilling call Michael, 9, and Amalia, 6, made to police after their parents were murdered in Kfar Aza. Their younger sister, Avigail, was abducted to Gaza.

Probably nothing…

What a chart:

Sure, saving everyone aboard Flight FZ1073 was nice. But Mehdi Hasan getting absolutely pulverized by the internet in response is still far and away the best part of this whole thing

Upgraded to buy

new quant indicator: mortgage rate + gallon of gas

Yesterday marked one year since the last rocket fired from the Gaza Strip crossed into Israeli territory. A full year without rockets or missiles from Gaza, for the first time this century.

Like a clock..! The man is the magician

“Overall, the probability that a plane full of Israelis will contain a trained assault team, two additional pilots, and, statistically, at least one cardiac surgeon, psychologist, lawyer, and diamond dealer is substantially higher than 50%.”

Palestinianism is a Soviet product line that turned a lost war into a religion. Academia, media, and the Western left now treat the liturgy as history. The KGB did not invent Arab grievance. It rebranded it. After Soviet-armed Arab states were routed in 1967, Moscow needed a story that could hit America, isolate the Jews, and keep the Arab street pointed west. Stop saying “throw the Jews into the sea.” Start saying “decolonization.” Stop making it a war against a sovereign state. Turn it into a struggle of “indigenous Palestinians versus European settlers.” It did not matter that half of Israel’s Jews came from Arab and African countries, or that the Arab war against Jewish sovereignty was obvious to nearly everyone before 1967. The conflict was recoded as racism. In 1975 the UN made the recoding official: “Zionism is a form of racism” (repealed only in 1991 after the fall of the USSR). The hinge of the faith is the “Nakba,” and the word’s history gives the game away. Syrian historian Constantin Zureiq coined it in 1948 in “The Meaning of the Disaster.” He was not writing about refugees, but was expressing the humiliation felt by the Arab world as seven Arab armies failed to strangle the Jewish state at birth: they “declare war on Zionism ... stand impotent before it, and then turn on their heels.” Decades later, the same word was given a rebrand and became about refugees. The religion of Palestinianism has a very specific dialect. For example, “occupation” can describe Gaza with zero Israelis and zero Israeli soldiers in it. “Resistance” can mean blowing up a bus, a disco, or pizza shop filled with civilians. Somehow “nonviolent popular resistance” includes a knife attack on a random civilian. Bayt al-Maqdis is Arabic for the “Jewish Temple,” but in the new liturgy, the Temple never existed. Arabs who were simply called Arabs (a people who arrived with the 7th-century conquest) were reintroduced as Canaanites, a population that vanished more than 3,000 years ago. Zuhair Mohsen, on the PLO executive committee, said the quiet part out loud in 1977: there is no difference between Jordanians, Palestinians, Syrians, and Lebanese. A separate Palestinian identity “serves only tactical purposes ... The establishment of a Palestinian state is a new weapon in the ongoing battle against Israel.” Once you see the theology, the immunity to evidence stops being mysterious. Palestinianism promises “return” and issues the same instruction, generation after generation: the Jews leave or die, and until then the wound must not close. You cannot negotiate a people out of a faith that made Jewish existence the original sin. You can only refuse to speak the dialect.

An inside look at future Treasury strategy meetings.

In the early days of Trump’s second term, his economic advisers laid out a simple theory: Show the bond market that Washington was serious about closing its gaping deficits and long-term interest rates would fall on their own. Trump could leave the Fed alone. It hasn’t worked out that way. The White House theory rested on fiscal restraint that never arrived and overlooked how much of Trump’s own agenda would feed the price pressures now pushing rates higher. Tariffs raised the cost of imported goods. The war with Iran sent oil and diesel prices soaring. wsj.com/economy/trump-econom…

We’re launching the Army of Robots. In 2022, we launched the Army of Drones. Today, drones account for over 95% of battlefield strikes, and Ukraine has more than 700 UAV manufacturers. Now we need the next technological breakthrough: the robotization of warfare. The goal is simple — save lives. Robots should take on the most dangerous missions: evacuating the wounded, delivering ammunition, mining and demining, reconnaissance, defending positions and engaging targets. The Army of Robots is not one company. It’s an ecosystem. We will invest in defense tech companies, launch our own technology projects, test them with the military and scale what works on the battlefield. We’re now looking for defense tech companies and engineers working on robotic technologies — as well as a CTO / Tech Lead for the Army of Robots. Join us: thearmyofrobots.com/en

GS: We estimate that hyperscaler capex is driving roughly half of S&P 500 earnings growth this year. As hyperscaler capex growth slows and depreciation expenses rise, the impact of AI investment spending on S&P 500 earnings growth will begin to fade and eventually become a drag.

Par for the course in Londostan

This is a chart showing implied and actual total returns using Shiller PE. It assumes mean reversion to average valuations over ten years. Blue: actual total return (10-year CAGR). Each point is the annualized return, dividends included, that you'd have earned by investing on that date and holding for ten years. The line stops around 2015 because the ten-year results after that date aren't known yet. Red: implied total return. This is a model's forecast, made at each date, of the next ten years' annualized return. Yellow: average total return. This is the long-run average up to each point, settling around 9–9.5% a year. It's the "normal" baseline. Cheap markets imply high future returns and expensive markets imply low ones. The model has worked reasonably well. Red and blue move together through most of the 20th century. The model flagged low returns before the 1929 crash, high returns out of the Depression lows, high returns from the cheap markets of the late 1970s and early 1980s, and near-zero returns at the 2000 dot-com peak. Actual returns then came in slightly negative for 2000–2010. The current reading is extreme. The red line ends near 0–1%, the lowest level on the entire chart and at or below the 2000 bubble peak. It sits far below the ~9% historical average.

The spread between the S&P 500's earnings yield and 10y Treasury yield has made a new 24-year low

no significant deliverables from the trump-xi summit. but the most extraordinary photo (via chip somodevilla)

Jerome Powell watching bond yields skyrocket and inflation explode right after leaving the Fed

We live in a simulation.