Aramco Says 2027

“You will not remember most of today. But someone in your life will remember the way you made them feel. Lead with that.”

Aramco's CEO warned oil markets will not normalize until 2027 if the Strait stays closed past mid-June. Goldman Sachs called the yuan 20-30% undervalued. The DRAM ETF hit $6.5 billion faster than any fund in history. The banking industry launched a last-stand lobbying blitz to block stablecoin yield before Thursday's Senate vote.

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Semiconductors at a record 17.4% of S&P market cap is the most concentrated sector since dot-com, built from all-time highs. The DRAM ETF hit $6.5 billion faster than BlackRock's Bitcoin fund; the instrument will soon move the stocks it measures. Oil above $98 with the dollar at a ten-week low is the divergence that appears only when both growth and real rates are falling. Gold at $4,717 with silver up 6.9% is a vote against the denominator.

Today's signals

The World's Largest Oil Producer Just Named the Date. Now Everyone Has to Trade Around It. Aramco's CEO Amin Nasser said markets will lose 100 million barrels per week and will not normalize until 2027 if Hormuz stays closed past mid-June. That is the first concrete timeline from the company that produces more oil than any other entity on earth. One billion barrels of cumulative supply already lost in two months. Even with the East-West Pipeline maxed at 7 million barrels per day, the tanker fleet is misallocated globally: a diplomatic resolution does not instantly restore supply chains that took decades to build. Mid-June is now the Schelling focal point. When the world's largest producer names a deadline, enough capital repositions around it to make it self-fulfilling whether conditions justified it or not. Meanwhile, Iran responded to losing its surface fleet by deploying domestically-built midget submarines into the Strait in a "trigger-ready" state. You do not eliminate a country's capability by destroying its ships. You change where the capability lives. The subsurface threat operates in shallow, high-traffic waters where sonar struggles, extending the damage Aramco warned about into a domain where military superiority provides less certainty, not more.

crypto · defi

Goldman Just Called the Yuan 30% Cheap. Three Independent Models Agree. Goldman Sachs estimated the Chinese yuan is 20-30% undervalued against the dollar, the largest single-currency revaluation signal since the Plaza Accord era. Brad Setser confirmed via IMF models: 25-30% undervaluation using realistic current account data. China's current account surplus sits at 3.7% of GDP versus the 0.8% norm. Beijing fixed the yuan at a three-year high ahead of the Trump-Xi summit opening Wednesday, a diplomatic signal that appreciation will happen on Chinese terms. Three independent analysts from three disciplines arrived at the same conclusion simultaneously: Tavi Costa's "dollar weakness no longer optional," Robin Brooks's "breathtaking" EM dollar decline, and Luke Gromen's data showing China shifting 22-25% of commodity imports to yuan pricing. The summit's outcome matters less than the structural fact it reveals: the country the US is trying to decouple from builds the physical layer underneath every AI system the US is trying to scale.

ai · tech

Four Banks Spent Six Months Failing to Sell One AI Loan. That Is the Whole Story. JPMorgan, MUFG, and Morgan Stanley have spent six months trying to distribute $38 billion in construction loans for a single Oracle data center project. They cannot move it. Some are selling at a discount. Others are exploring modified single-borrower risk transfer structures that resemble the bespoke credit instruments that preceded 2008. The FSB flagged that AI firms accounted for more than a third of all private credit deals in 2025. Oracle itself is running negative free cash flow. The structural problem: AI capex requires deal sizes that individual bank balance sheets cannot absorb, but the assets are too concentrated and too novel for traditional syndication. If a second $20B+ AI loan enters syndication before this one clears, lending terms for all data center construction tighten simultaneously. The binding constraint on the AI buildout may not be chips or community opposition. It may be the willingness of balance sheets to fund it.

ai · tech

Open-Source AI Is Improving Twice as Fast as Moore's Law. The Price War Just Changed. On the same MacBook Pro hardware from May 2024, the best open-weight model improved 4.7x in 24 months on the Artificial Analysis Intelligence Index. That is a doubling every 10.7 months versus Moore's Law's 24-month cycle. HuggingFace now hosts 176,000 public models with 55% month-over-month acceleration in March. When software improvements outpace hardware scaling by 2x, the strategic advantage shifts from organizations that can afford the biggest clusters to organizations that deploy models on hardware they already own. Shopify's internal AI agent authored 1 in 8 merged pull requests last week, and its merge rate climbed from 36% to 77% in two months without any model retraining. The bottleneck is not model capability. It is organizational adoption patterns. The closed-model ecosystem does not die. But it loses the ability to charge a premium for capability that open-weight models will match on a predictable timeline.

ai · tech

Banks Sent a Letter to Every CEO in America on Mother's Day. They're Losing. The American Bankers Association sent a letter to every bank CEO demanding "immediate engagement" on stablecoin yield provisions before Thursday's Senate markup of the CLARITY Act. The ABA warns deposit flight could reduce lending by one-fifth. The dynamics reveal the end game: banks refused to attend February meetings with the White House crypto czar, then scrambled for legislative intervention when the bill advanced anyway. Historical precedent is clear. Money market funds faced identical pushback in the 1970s and were eventually integrated rather than blocked. If the CLARITY Act passes Thursday with yield provisions intact, the stablecoin-as-savings thesis graduates from speculation to law.

crypto · defi

America's Peak of 18-Year-Olds Is Right Now. It Falls 14% From Here. The fertility rate peaked 19 years ago and collapsed during the 2008 financial crisis. The result arrives on an 18-year delay: the number of 18-year-olds entering the labor force, universities, and military recruitment will fall 14% over the coming decade. This is not a forecast. It is arithmetic. The babies were not born. They are not coming. Universities that expanded physical capacity during the enrollment boom face the cliff without revenue to maintain infrastructure. Military services already struggling to meet recruitment targets face a structurally smaller eligible population. The demographic constraint compounds with AI displacement: fewer young workers means AI substitution faces less political resistance but also less consumer growth. The 14% decline is the kind of number that looks manageable in aggregate and devastating in the specific communities built around institutions that assumed growth would continue.

ai · tech

Interesting things

Mississippi Was 49th in Reading. Now It's 9th. The Establishment Said It Was Impossible.

Mississippi mandated phonics, required 55 hours of Science of Reading training, and retained third-graders who could not read. Black students in Mississippi (median household income $37,900) now match Massachusetts ($67,000) in reading proficiency. Louisiana, Tennessee, and Alabama adopted similar reforms. England used the same methods and went from slipping to fourth in the world. The structural insight is not about education. It is about why institutions resist known solutions: the people who could pick up the $20 bill on the sidewalk do not benefit from doing so.

Lightning Shouldn't Exist. The Electric Fields Inside Storm Clouds Are 10-30x Too Weak to Cause It.

Physicists measured thunderstorm fields for decades and found them an order of magnitude below classical breakdown thresholds. Lightning strikes 100 times per second anyway. The resolution: cosmic rays knock electrons free, and in those modest fields the freed electrons trigger a chain reaction that amplifies exponentially. The observable input understates the system's actual capability by 10-30x because the feedback loop operates below the measurement threshold.