Yesterday's discussion about US debt topping $40T and debt to GDP approaching 130% brought out a lot of default fears. So I wrote a short paper on it (link below). The quick version is that 130% isn't a cliff for a country that issues its own currency, and the nuance matters for anyone consuming in USD, holding cash equivalents or govt bonds. Start with the balance sheet. Federal debt held by the public is about $35T. US household net worth is about $196T, roughly 6x GDP and 5x the federal debt. And a big chunk of that wealth is the federal debt itself, sitting in portfolios as safe savings. Federal debt is large, but the asset side of the ledger is massively larger and is the main thing that allows such large govt debts in the first place. The uniquely wealthy and productive asset side is what makes the USA very different from almost every other country in the world. Now the mechanics. The government funds its spending by taxing and borrowing from the wealthiest economy that ever existed. That's a massive collateral and revenue stream supporting the debt. And unlike a household or Greece, it can create the currency its debt is in. So the real risk to a bondholder isn't getting stiffed in nominal terms. It's getting paid back in dollars that buy less. Hyperbolic narratives about default gloss over the balance sheet AND the mechanics that make the USA unique. But debt to income is high and rising, Cullen! Of course it is. That risk is real and should be measured with nuance, not panic. But the historical utility of debt to GDP ratios as a predictor of default is mixed at best and useless at worst. History backs this up. About half of all sovereign defaults since 1970 happened with external debt below 60% of GNP. The UK hit 252% in 1946 and never defaulted on its own currency debt. And we all know the Japan story. Hyperinflations are driven by collapsing output and debts owed in foreign currencies, not by crossing a debt ratio. And the popular "51 of 52 countries defaulted above 130%" stat comes from a report that counts inflation and devaluation as "default." Its own examples list wars, revolutions, droughts and export collapses as the causes, and the actual missed payments were on foreign currency, gold standard or euro debt. Debt to GDP wasn't even the causal factor! And those causal factors aren't what the USA faces today. It doesn't borrow in a foreign currency and it isn't losing a world war. The bigger risk isn't default or hyperinflation. It's that aging, inequality and technology keep dragging on growth and prices, pushing debt higher as the govt fills an inequality gap the private sector won't. That leaves a fragile economy with sticky inflation that's exposed to disinflationary shocks. The distinction is important, and hyperbole doesn't help anyone untangle the risks. For portfolios, default hits all bonds, but persistent above-target inflation hits long bonds the most. So the question isn't whether to own USD or Treasuries. It's how much duration you own, matched to real liabilities, and how to diversify around that for the inflation protection long-term T-bonds can't provide. Full paper:

🚨 JUST IN: Nick Shirley MIC DROPS NY Gov. Kathy Hochul's office for attacking HIM over exposing childcare fraud, and an adult daycare claiming to have over 7,000 patients in ONE BUILDING 🤯 SHIRLEY: "Nobody ever LOOKED! [...] It's super funny that they had attacked the person who's exposed the fraud versus trying to support him!" "And that happened actually when I exposed them in a soda fraud, and they had just given $2 billion to 2-year-olds." "They have all these weird initiatives, especially when we see all this frauds that you can place inside these welfare programs, but then they continue to give even more money to them instead of cracking down on the fraud. They actually ask us for more money to fuel the fraud!" Democrats = party of fraud @nickshirleyy @kayleighmcenany

Something that has genuinely changed. People give away good option structures publicly, for nothing. The edge is no longer knowing a strategy exists. It's testing it, knowing what it's exposed to, and deciding whether it fits how you trade. Ideas are free. Judgement isn't.

A Reddit user recently shared that they nearly caused a fire with the Steam Controller charging puck after a metal watch strap accidentally touched the puck’s exposed charging contacts while it was plugged in. The contact created a short circuit, causing heat, sparks, and some melting before the user noticed and stopped it. Shared photos showed visible damage to both the watch strap and the charging puck. If you use the Steam Controller puck, keep it in an open area where metal objects cannot accidentally touch it while plugged in.

asked codex to try something or abandon it if it can't find a reasonable solution, and it created a goal with a token budget. so that's a feature. i don't think it's exposed in the ui yet, but you can say like "create this and that goal with a 50m token budget".

you are in business, in competition with another business: would you prefer that your competitor were using the most performant intelligence to try to win share in the head-to-head, or would you feel more vulnerable if they were economizing on their AI spend? To me it's fairly obvious that you would rather they economize. One almost inarguable byproduct of the AI capability explosion: business dynamism is going to increase. Steady state cash-flowy businesses will become harder to maintain because that cash-flow will beckon a competitive hoard that enjoys a lower upfront cost to launch and accelerate its piratical skiffs at the business's exposed broadside. If the framework for AI optimization is to use the frontier intelligence to unlock the hardest business patterns and then transmute those into less intelligence-expensive repeatable cashflows, most of the economic spend still sits at the frontier as those repeatable cashflows come under continual threat.