Three things were announced this week, and all three were priced as though the mechanism already existed. The Treasury said it would roughly double its long-dated buybacks, and the long end rallied. Washington threatened an economic campaign against Iran, and crude advanced a fifth straight session. Europe answered a drone over a Romanian gas platform with up to 800 billion euros of rearmament. Only one of the three carries a date, a size and a counterparty. The market it was built to help took the whole move back in a day.
Every American index fell on Thursday, the biggest one-day equity loss in three weeks, and the Russell 2000 fell as hard as any of them while still holding a 20.6 percent gain for the year. October Brent rose 1.5 percent to $93.01, a fifth straight advance. Long-dated Treasury yields rose on the same day, so oil and bonds punished a balanced portfolio together instead of one cushioning the other. Bitcoin has not stopped: Wednesday's close was a 5.8 standard deviation move out of a quiet tape rather than off a crash, and it was trading $77,600 by 5:00 Friday morning, up 8.5 percent on the day before. That says more about sellers than about demand.
On July 14 the largest electricity market in America offered the highest price its own rules allow and drew 525 megawatts of new generation, roughly one large gas turbine. The same auction finished 6,831 megawatts short of its reliability requirement, the third running to clear at the cap. Call it the Purchasable Lead: when two inputs substitute, an advantage in one is worth only what the rival pays for the other. Efficiency and electricity substitute in making compute. A market at its legal ceiling that attracts one turbine is not an expensive price, it is a waiting list. We expect it to clear at the cap and miss again in 2027, which makes the American chip lead a depreciating asset on a schedule written in Harrisburg and Austin.
On clear, calm, cold nights, water vapour deposits onto the snow surface as surface hoar: feathery, upright, almost entirely unbonded. The next storm buries it, and months later it is still there, unbonded, and it is the plane a whole slab releases along. Avalanche forecasters stopped calling a snowpack a condition and started calling it a stratigraphy, naming each weak layer by the date it formed. Inspecting the surface tells you nothing, because the surface is the one part not holding anything up.
A 1956 faction tried to remove Kim Il-sung and failed, and he faced no serious challenge for thirty-eight years. Sanctions models price balance sheets.
Hal Finney, who received the first bitcoin transaction, was a member. Ask of any fringe group not whether its loudest claim is right, but what else it believes.
“The chief enemy of excellence in morality, and also in art, is personal fantasy: the tissue of self-aggrandizing and consoling wishes and dreams which prevents one from seeing what is there outside one.”
– Iris Murdoch, The Sovereignty of Good (1970)
Notice what Murdoch does not say. Not a waste of time, not a weakness you indulge when tired. The chief enemy, and she says exactly what it does: it prevents you from seeing what is there.
The conversation you have run eleven times in the shower, in which you finally say the sentence that makes them understand, and which you have not had. The apology you have composed, revised, and not sent.
Each started as preparation and became the thing itself. The tell is that they improve. A rehearsal gets better the longer you avoid the real event, because nothing in it pushes back. By the eleventh run you are further away, and you have a better script.
Today's practice: take the thing you have been rehearsing longest and give it a time today, before you have finished preparing. Not a condition, a time. The rehearsal will ask for one more pass at the fiftieth run too.
In 1961 a physicist at IBM named Rolf Landauer asked what it costs, in joules, to forget something. It is not a metaphor. A bit of information is never floating free; it is carried by something physical, a voltage on a capacitor or the position of a molecule. Most logical operations can in principle be run backwards and need dissipate no energy at all. Erasure cannot. Map two states onto one and you have destroyed the information about which one you started in, and that must be paid for in heat somewhere else. Bérut and colleagues measured that floor in 2012, with a single bead in an optical trap.
The decision tool: when anything is described as free, ask what physical state changes when it happens, and who pays for the change. If you cannot name the state, nothing happened.
Explore this model →Three announcements, one test, and the test came back no. Worth remembering the next time something is priced off a press release. See you tomorrow.