"SoftBank profit more than triples to $12 billion on OpenAI stake gains"

From Reuters, May 12/13: 

• Vision Fund booked 3.1 trillion yen quarterly gain
• OpenAI investment gain totals $45 billion
• SoftBank says FY profit is highest in Japan corporate history
• Son is an enthusiastic supporter of OpenAI
• Backing is raising concerns about financing pressures 

Technology investor SoftBank ​Group (9984.T) reported on Wednesday that its net profit more than tripled to 1.83 trillion yen ($11.60 billion) in the January-March quarter, ‌as it booked gains on the value of its investment in ChatGPT-maker OpenAI.

It was SoftBank's fifth consecutive quarterly profit, with the Vision Fund investing arm booking an OpenAI-driven gain of 3.1 trillion yen in the quarter. 

Chief Financial Officer Yoshimitsu Goto said SoftBank's annual profit of 5 trillion yen was the highest ever by a Japanese company.

 

Founder ​and CEO Masayoshi Son is one of OpenAI's most enthusiastic backers, with the group saying its cumulative gains on the investment ​total $45 billion.

But the scale of the OpenAI wager - SoftBank's most ambitious spending programme since the launch of the Vision ⁠Fund investment vehicles in 2017 and 2019 - has raised questions about financing pressures on the group.

Critics also say OpenAI no longer enjoys a ​dominant position among large language model developers as peers such as Alphabet's (GOOGL.O) Gemini and Anthropic's Claude grab market share, while the cost to train ​and run AI models is also rising.

"It's a good thing for the industry that competitors are refining business models and providing new services to new users," Goto told an earnings briefing.
"Overall that increases the value of the industry."

In March, S&P Global Ratings revised its credit outlook for SoftBank to negative, saying that OpenAI was exposed to ​fierce competition and the size of SoftBank's investment would affect the asset quality and liquidity of its portfolio.

FINANCING POSSIBILITIES
SoftBank has sold off stakes in ​holdings such as T-Mobile (TMUS.O) and Nvidia (NVDA.O) issued bonds and taken out loans, backed by its holdings in chip designer Arm and its domestic telecommunications arm SoftBank ‌Corp (9434.T)

SoftBank arranged ⁠a bridge loan agreement totalling $40 billion in March. On Wednesday, it said $20 billion was drawn down in April, primarily for the OpenAI investment, and $2.5 billion had already been repaid....

....MUCH MORE 

As noted introducing April 22's "SoftBank Seeks $10 Billion Margin Loan Backed by OpenAI Shares": 

This is where the risk to the AI juggernaut and possibly the world economy is lurking.

Should SoftBank be unable to repay or refinance the debts it is taking on, the risk goes from theoretical to kaboom pretty fast and all the other daisy-chain financings get stress-tested in a real-world cascade. 

And unfortunately chatbots in general and OpenAI/Sam Altman in particular may not be the future that Mr. Son seems to think. 

Before that it was February 12's "Where Will SoftBank Get The Money To Fund Their Commitment To OpenAI?":

By writing-up their stake in OpenAI, naturellement.

And March 27:

"SoftBank Obtains $40B Bridge Facility for Additional OpenAI Investment"

Of all the possible weak links in the daisy-chain, and there are a few, SoftBank's increasingly central role is the most concerning.

Mr. Son's history, going back to the time he briefly held the title of world's richest person, is leveraged beta. No great technological insight (largest investor in WeWork) no fancy risk mitigation, just leverage in all its forms and like Sam Insull, at every level of the organization.

Throw in the fact that OpenAI and their ChatGPT may not be the ultimate winner of this unprecedented build-out and there are reasons to be hyper-aware. Stay tuned. 

That said, this loan should be okay (barring a depression where it can't be re-financed, à la Insull) it's all the other borrowings and what Mr. Son will do in the next couple years, that could cause worldwide problems.

And last year:

November 2025's - "SoftBank shares slide as Nvidia stake sale highlights AI funding needs"

That was a rookie fund manager's move, using your most liquid asset to fund your least liquid.

In the olden days proprietary traders/stock jobbers/proto-market makers would keep their share and bond certificates in a box—hence short against the box etc. And in that box the most speculative, least-liquid-in-a-crash certificates were on top ready to be tossed into the maw of a descending market, with the highest quality, most liquid shares at the bottom of the box.

It was a tell as to either the individual trader's finances or to the depth of a downturn to see certs from the bottom of the box coming onto the market.

As a side note, you can still get your stock in certificate form but it will cost you at least $500 per cert. The powers that be, Depository Trust, the brokers et al. really prefer you don't ask for the paper.

And dozens more. 

CIA Response To Whistleblower Claim Of Covid Origin Coverup

From Fox Congressional reporting hotshot* Bill Melugin:

BREAKING: CIA statement to @FoxNews on the active CIA employee testifying in the Senate Homeland Security Committee this AM on the origins of the COVID-19 pandemic & a possible government coverup.

“The Committee acted in bad faith by subpoenaing an Agency officer for testimony…

— Bill Melugin (@BillMelugin_) May 13, 2026

Continues:  

“The Committee acted in bad faith by subpoenaing an Agency officer for testimony today without notifying CIA, despite having already obtained closed-door testimony from the individual previously. The witness testifying today is not appearing as a whistleblower in pursuit of the truth, but instead in response to the subpoena issued by Chairman Paul.

This proceeding amounts to nothing more than dishonest political theater masquerading as a congressional hearing. As the CIA has already assessed, COVID-19 most likely originated from a lab leak, and efforts to undermine that conclusion are disingenuous.” – Liz Lyons, CIA Director of Public Affairs 

*"Congressional correspondent for @foxnews in DC. 4x EMMY winner, 3x Edward R. Murrow winner, 4x RTNA Golden Mike winner.@Cronkite_ASU grad & SoCal native."

Also:

.@SenRandPaul: "CIA scientists from an early time…were concluding that a lab leak was the most likely hypothesis?"

CIA whistleblower James Erdman III: "There were agencies within the IC circulating papers…that said that all the conditions were present for a lab leak." pic.twitter.com/ozjQ59PORJ

— CSPAN (@cspan) May 13, 2026

We'll have more after the Memorial Day holiday. 

"Producer Price Inflation Explodes as the Services PPI Blows Out on Top of the Energy Price Spike "

From Wolf Street May 13:

This is a massive amount of inflation that companies are passing on to each other through much of the economy. 

The Producer Price Index final demand (PPI), which tracks inflation in prices that companies pay each other, spiked by 1.38% in April from March (+17.8% annualized), seasonally adjusted, the worst since the historic one-month spike in March 2022, driven by services and energy.  It had already spiked by 8.7% annualized in March – and by 7.0% and 6.6% annualized in February and January before the energy price spike hit (blue in the chart).

Year-over-year, it spiked by 6.0%, the worst since December 2022, according to data from the Bureau of Labor Statistics today (red in the chart).

The shocker is the spike in services, and services dominate the PPI. The services PPI weighs 68% of the overall PPI, and it completely blew out – that was in addition to the spike in energy prices, and it also shows how some of the energy price increases have moved into other parts of the economy.

The services PPI spiked by 1.18% (+15.1% annualized) in April from March, seasonally adjusted.

Year-over-year, the services PPI jumped by 5.5%, the worst since November 2022. The low point, the point of the coolest recent services PPI inflation, was in December 2023 at 1.8%. The inflation rate has multiplied by more than three since then.

Within the services PPI:

• Trade services (weigh 19% in overall PPI) spiked a huge +2.7% month-to-month not annualized in April from March.
• Transportation & warehousing services (weigh 4.9% in overall PPI) exploded by 5.0% not annualized in April from March.
• But “other services” (weighs 38% in overall PPI) ticked up only +0.1%, after no change in the prior month.

This is really bad.

Core PPI Final Demand, which excludes energy and food components, spiked by 1.03% (+13.1% annualized) in April from March, seasonally adjusted.

This shows the massive impact of the blow-out of the services inflation in PPI, since the price spike of energy components is excluded from the core PPI.

Year-over-year, core PPI jumped by 5.2%, the worst since December 2022....

....MUCH MORE 

Earlier today:

Inflation: Producer Price Index UP "PPI for final demand advances 1.4% in April; services rise 1.2%, goods increase 2.0% "

High Speed Rail: "Florida’s Ailing $6 Billion Rail Line Has Debt Vultures Circling"

From Bloomberg, May 11:

It’s becoming clearer by the day that Brightline, the struggling Florida private railroad, is shaping up to rank among the biggest municipal-bond restructurings ever, alongside the likes of Puerto Rico and Detroit.

But that’s where any clarity around the future of billionaire Wes Edens’ $6 billion passion project ends.

The Fortress Investment Group-backed railroad’s complex debt structure — a mix of municipal and corporate notes issued by four subsidiaries — is among the biggest challenges, as are the pack of firms jockeying for position in any workout scenario.

Invesco Ltd. and Nuveen LLC, giants in the world of tax-exempt securities, lead a group holding Brightline’s $2.2 billion of highest-priority debt that also includes First Eagle Investments. Bond insurer Assured Guaranty Ltd. looms large, too — it guarantees about $1.1 billion of senior securities, a majority, and must consent to any changes.

Meanwhile, distressed specialists Redwood Capital, Aristeia Capital and Nut Tree Capital Management lurk one rung below in the hierarchy. So does an entity of Israel-based Phoenix Financial Ltd., Bloomberg reported last week.

Both factions are angling for a way to wrest control of the railroad in exchange for a large investment, potentially in the form of senior loans to finance a bankruptcy, according to people familiar with the matter.

And then there are the wild cards: deep-pocketed infrastructure funds or strategic buyers that could also be in the mix to take over. One firm that had considered investing in Brightline, but has since moved on, was Italian infrastructure firm Mundys SpA, which owns airports and toll roads, some of the people said.

 

Source: Bloomberg, bond documents

These competing interests are all coming to a head. Brightline’s auditors Brightline Florida Warns of Likely Insolvency in Financial Audit recently that it doesn’t have the cash to service its debt and meet financial obligations over the next 12 months, raising “substantial doubt” about the 235-mile line’s ability to function without some sort of relief.

For now, the trains between Miami and Orlando are running — still with far fewer riders than projected — and the rail operator has tapped consultants in a renewed bid to find third-party investors and avoid a possible bankruptcy. But its creditors broadly agree that the situation is untenable, and that a debt restructuring, whether in or out of court, is coming within months.

“The debt that the company took out to pay for the project was too high for a realistic assessment of how much ridership they were going to attract,” said Yonah Freemark, a researcher at the Urban Institute. “This is why, generally, infrastructure projects come with public subsidies.”

Interviews with restructuring experts and people with direct knowledge of the Brightline situation describe the railroad plowing slowly into a cash crunch as high costs continuously outstripped revenue.

But its various creditors are now in a race to the finish, huddling with the company in confidential talks as Fortress prepares to relinquish an albatross that lost it $2.2 billion in equity over the course of more than a decade. In the same time span, Fortress itself underwent three ownership changes and a management turnover, and pivoted from its early private equity model to private credit and real estate investments.

A potential bankruptcy, in particular, could cast a shadow over Brightline’s more ambitious project located some 2,500 miles away — a $21.5 billion high-speed rail line between Southern California and Las Vegas called Brightline West....

....MUCH MORE 

If interested see also, May 3:

Florida High Speed Rail: "The Great Train Bankruptcy"

Following on April 30's "In Case You Missed It: The Cost Of California's High-Speed Rail Project Is Now Approaching A QUARTER-TRILLION Dollars"

I apparently have a fascination for train disasters, just not of the Gare Montparnasse variety:

Cameco Earnings call transcript, Q1 2026 - May 5. 2026 (CCJ)

Largest publicly held uranium miner, 49% owner of Westinghouse (nuke plants) bridge to flagship mine washed out, stock up 127% over the last year. $115.60 last.

 

TradingView 

From Investing.com, May 12: 

Cameco Corporation reported its financial results for the first quarter of 2026, surpassing earnings per share (EPS) expectations with an actual EPS of $0.3377 compared to the forecasted $0.26, marking a 29.88% surprise. Despite a slight revenue miss, the company’s stock rose 4.65% in pre-market trading, reflecting investor confidence in its strategic outlook and operational resilience.

Key Takeaways

• Cameco’s Q1 2026 EPS exceeded forecasts by nearly 30%.
• Revenue fell short of expectations, with a 1.24% miss.
• Stock price increased by 4.65% in pre-market trading following the earnings announcement.
• Full-year guidance remains unchanged, signaling stability.
• Strategic initiatives in nuclear technology and uranium production continue to progress.

Company Performance

Cameco’s performance in Q1 2026 was largely in line with its strategic expectations, as the company navigated typical sector dynamics such as the timing of customer deliveries and sales mix variations. The company’s ability to manage these variables effectively contributed to its earnings beat, despite a slight revenue shortfall. With a market capitalization of $52.35 billion and a PEG ratio of 0.67, InvestingPro data suggests the stock is trading at a low P/E ratio relative to near-term earnings growth, though current valuation metrics indicate the stock appears overvalued compared to InvestingPro’s Fair Value analysis. Cameco’s continued focus on operational efficiency and strategic investments in technology and production capacity positions it well against industry peers.

Financial Highlights

• Revenue: $607.22 million, slightly below the forecast of $614.85 million.
• Earnings per share: $0.3377, exceeding the forecast of $0.26.
• Consolidated uranium production guidance for 2026 remains at 19.5 to 21.5 million pounds.
• Fuel services production guidance is maintained at 13 to 14 million kilograms.

Earnings vs. Forecast

Cameco’s EPS for Q1 2026 was $0.3377, significantly higher than the forecasted $0.26, resulting in a positive surprise of 29.88%. This marks a notable achievement compared to previous quarters, indicating effective cost management and favorable market conditions. However, revenue came in at $607.22 million, slightly missing expectations of $614.85 million, reflecting challenges in sales timing and mix.

Market Reaction

Following the earnings announcement, Cameco’s stock price increased by 4.65% in pre-market trading, reaching $123.76 from a previous close of $118.26. This positive movement suggests strong investor confidence in the company’s ability to meet its full-year guidance and capitalize on its strategic initiatives. The stock remains within its 52-week range, with a recent closing price of $120.14. The company has delivered impressive returns with a 135% gain over the past year and a 31% year-to-date increase, while analysts project an 18% upside from current levels.

Outlook & Guidance

Cameco maintains its full-year guidance for uranium and fuel services production, signaling confidence in its operational capabilities. The company’s strategic initiatives, including the development of Westinghouse AP1000 reactor technology and Global Laser Enrichment (GLE) technology, are expected to drive long-term growth and market leadership. InvestingPro assigns Cameco a "GOOD" financial health score, and subscribers have access to 13 additional ProTips beyond the two mentioned in this analysis. For deeper insights, investors can explore Cameco’s comprehensive Pro Research Report, one of 1,400+ available reports that transform complex data into actionable intelligence.

Executive Commentary

Cameco’s management highlighted the company’s robust balance sheet and strategic flexibility, stating, "Our strong financial position allows us to align our operational and capital allocation decisions with long-term market fundamentals." Additionally, the leadership emphasized the importance of maintaining a disciplined approach to supply chain management and market positioning.

Cameco Corporation reported its financial results for the first quarter of 2026, surpassing earnings per share (EPS) expectations with an actual EPS of $0.3377 compared to the forecasted $0.26, marking a 29.88% surprise. Despite a slight revenue miss, the company’s stock rose 4.65% in pre-market trading, reflecting investor confidence in its strategic outlook and operational resilience.

Q&A

During the earnings call, analysts inquired about the company’s strategies for navigating supply chain challenges and managing production costs. Cameco executives reiterated their commitment to maintaining operational flexibility and leveraging strategic partnerships to mitigate risks. Additionally, questions about the timeline for the Westinghouse AP1000 technology deployment were addressed, with management expressing optimism about ongoing discussions with international partners.

Full transcript - Cameco Corp (CCJ) Q1 2026... 

....MUCH MORE 

Inflation: Producer Price Index UP "PPI for final demand advances 1.4% in April; services rise 1.2%, goods increase 2.0% "

 From the Bureau of Labor Statistics, May 13:

PRODUCER PRICE INDEXES - APRIL 2026

The Producer Price Index for final demand increased 1.4 percent in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.7 percent in March and 0.6 percent in February. (See table A.) The April increase is the largest advance since rising 1.7 percent in March 2022. On an unadjusted basis, the index for final demand rose 6.0 percent for the 12 months ended in April, the largest 12-month increase since moving up 6.4 percent in December 2022.

Nearly 60 percent of the April rise in final demand prices can be attributed to a 1.2-percent advance in the index for final demand services. Prices for final demand goods moved up 2.0 percent.

The index for final demand less foods, energy, and trade services increased 0.6 percent in April, the largest advance since rising 0.6 percent in October 2025. For the 12 months ended in April, prices for final demand less foods, energy, and trade services moved up 4.4 percent, the largest 12-month increase since jumping 4.5 percent in February 2023.

Final Demand

Final demand services: The index for final demand services rose 1.2 percent in April, the largest increase since moving up 1.3 percent in March 2022. Two-thirds of the broad-based advance in April can be traced to a 2.7-percent jump in margins for final demand trade services. (Trade indexes measure changes in margins received by wholesalers and retailers). The indexes for final demand transportation and warehousing services and for final demand services less trade, transportation, and warehousing also rose, 5.0 percent and 0.1 percent, respectively.

Product detail: A major factor in the April advance in prices for final demand services was a 3.5-percent increase in margins for machinery and equipment wholesaling. The indexes for truck transportation of freight; fuels and lubricants retailing; health, beauty, and optical goods retailing; chemicals and allied products wholesaling; and legal services also moved higher. Conversely, prices for portfolio management fell 2.4 percent. Margins for food retailing and for metals, minerals, and ores wholesaling also decreased. (See table 2.)

Final demand goods: The index for final demand goods advanced 2.0 percent in April after rising 1.9 percent in March. More than three-quarters of the broad-based increase in April can be traced to a 7.8-percent jump in prices for final demand energy. The indexes for final demand goods less foods and energy and for final demand foods also moved up, 0.7 percent and 0.2 percent, respectively. 

Product detail: Over 40 percent of the April advance in prices for final demand goods can be attributed to a 15.6-percent increase in the index for gasoline. Prices for jet fuel, diesel fuel, fresh and dry vegetables, industrial chemicals, and residual fuels also rose. In contrast, the index for chicken eggs dropped 49.7 percent. Prices for nonferrous scrap and for residential natural gas also fell....

....MUCH MORE (narrative, tables)  

Capital Markets: "The Euro and Sterling are Threatening to Break Lower, while a Record Current Account Surplus Does not Prevent the Yen from Challenging Intervention Levels"

From Marc Chandler at Bannockburn Global Forex:

The lack of progress in re-opening the Strait of Hormuz has not prevented oil prices from stabilizing or risk-appetites improving today. Equities and bonds are trading with a firmer bias. The Trump-Xi meeting tomorrow is key talking point today. Ahead of it, the PBOC set the dollar’s reference rate at a new three-year low. US Treasury Secretary Bessent was in Tokyo earlier this week and today, Japan reported a record current account surplus, flattered by its largest trade surplus in five years. The dollar, which is firmer against most G10 currencies, is hovering near JPY158, where the BOJ is thought to have intervened a week ago.

Although economic theory puts emphasis on interest rate differentials, we find that the dollar is frequently sensitive to the direction of US interest rates. And the market is continuing to move against a Fed cut this year. The futures market appears to be discounting about a 35% chance of a hike this year. It was still pricing in a chance of a cut at the end of last month. In addition, the momentum indicators continue to favor an upside break for the greenback out of the recent consolidation....

....MUCH MORE 

BYD On Automobile Manufacturers: ‘Not all will survive’

From MoneyWise, April 30:

Executives at the world's biggest electric vehicle brand have confirmed the existential fears of their counterparts at Toyota, Honda and other U.S. automakers: that amid such a frenzy of global competition, some manufacturers will inevitably fall by the wayside. And the present trajectory doesn't exactly bode well for homegrown legacy names.

As the Beijing Auto Show kicked off on April 24, the executive vice-president of BYD (OTC:BYDDF), Stella Li, told the BBC (1) matter-of-factly that "history suggests not all will survive" in the sector.

Li and her team, at the top of the game, appear to have little worry. Yes, BYD's domestic sales have started to dwindle (2) as rivals strategize with lower prices and local demand eases. But, the Shenzhen-based industry leader sees its ample opposition (3) as the ones who will die out now that Chinese President Xi Jinping has imposed controls (4) to prevent them from selling their product for less than what it costs to make it.

Confident in the driving experience and technology that BYD vehicles offer, Li assured reporters that despite failing to capture the coveted American market, the company — which last year overtook Tesla (NASDAQ: TSLA) (5) to become the top seller of EVs worldwide — is set up for continued success.

"We survive and are successful without the U.S. market today," she told the BBC, adding that demand from the rest of the world, led by Europe and Brazil, is at this point "much higher than what we can supply."

She also lauded the company's foundation as a producer of batteries and other smartphone components, which has provided an "ecosystem" of market potential. It was only in 2003 (6), nearly a decade after it was founded, that the brand made its foray into automotive with the acquisition of Xi'an Tsinchaun Auto Co. (Its first model, the gas-powered BYD F3, was released two years later.)

It now splits its focus between automaking and other pursuits, including providing EV batteries to competitors (7), along with manufacturing solar panels and smartphone components. One of its latest innovations, flash charging technology (8), is being incorporated into luxury models to overcome a key barrier to EV adoption: charging speeds....

....MUCH MORE

If interested see also:

April 28 ="Honda CEO Says Brand Has 'No Chance Against' Chinese Rivals After Seeing Factory"
But you knew that.*

December, 2023 - Western Legacy Automakers Probably Won't Be Long-Term Survivors
Because their current business is being mandated and legislated out of existence the Western marques, barring some serious breakthroughs in small-scale hydrogen or methanol, will have to pivot to EV's.

And they won't be able to compete.

It almost appears that the gifting of the electric vehicle and solar industries to the Chinese was deliberate.

First up, from Electrical Engineering Times, December 6:
Experts See Rapid Rise of Chinese EV Makers...

And at Fortune, November 30, 2-23:

Elon Musk suggests Tesla and 9 Chinese companies will be the top 10 carmakers
Tesla CEO sees big things ahead for China's electric-vehicle makers...

"What makes a winning bet in agtech? PitchBook crunches the numbers"

A superb overview from/via AgFunderNews, April 30: 

Firms in animal health, crop inputs & enhancements, and precision ag software, are "generating the strongest risk-adjusted outcomes," says Pitchbook

As EcoTech Capital MD Adam Bergman recently noted, a lack of exits has created a “vicious cycle” in agtech: limited investable capital as existing funds hit the end of their life and struggle to raise new capital, and few new funds emerging as LPs shy away from a sector with weak returns.

Against this backdrop, Pitchbook’s latest report asks the question: What does a successful VC-backed agtech investment actually look like?

According to authors Alex Frederick and Caleb Wilkins, who analyzed 1,197 VC-backed agtech outcomes as of Dec 31, 2025, VC-backed exits remain “concentrated in specific sectors, with crop inputs & enhancements, precision ag software, and select animal ag health companies generating the strongest risk-adjusted outcomes.”

Notably, the biochem and inputs space is a sound bet, they claim: “Regulatory pressure on synthetic pesticides is accelerating the shift to biological crop inputs, with the market forecast to roughly double by 2030.

“Bayer, BASF, Syngenta, Novozymes, and Corteva are repeat acquirers who have publicly named biologicals as a strategic priority, giving investors in this segment a pool of well-capitalized, strategically motivated buyers that no other agtech segment can match.”

According to Pitchbook:

Capital is consolidating around the strongest players: “Median pre-money valuations are at record highs even as disclosed deal counts have dropped 70% from their 2021 peak, reflecting capital concentrating in the most credible teams and business models. Median valuations and deal sizes are rising not because the market is broadly improving, but because weaker companies are no longer being funded at all.”

Meanwhile, young startups, including AI-native agtech firms, “have received an influx of seed-stage capital from multistage funds, elevating deal sizes and valuations.” What we don’t know, says Pitchbook, “is whether investors can systematically identify” the best bets within this growing pool.

Where the smart money is: “Seed or Series A entry below $20 million pre-money, technology-supplier models rather than capital-intensive operators, total capital raised under $30 million, and exposure to segments with robust strategic and private equity acquirer pools.”

For LPs: Pitchbook recommends backing specialists with “concentrated portfolios, 10-plus-year or evergreen structures, biochem or precision ag expertise, and proven relationships” with strategic acquirers such as Bayer, Novozymes, John Deere, and Zoetis.

For GPs: With half of companies expected to fail (of 1,197 VC-backed agtech companies with known outcomes, 683 are confirmed failures and 372 exited without a disclosed valuation), “funds must secure enough ownership in the one to two outlier exits at $500m+ that will define performance and avoid late-stage entries at software-style multiples into businesses that are likely to exit at 6x revenue.”

Among the 2,533 VC-backed companies founded between 2015 and 2020, 152 have a confirmed exit and 345 are confirmed failures (as of year-end 2025). Of the 29 exits with disclosed values, nine exceeded $100 million, and one exceeded $1 billion.

$8.2 billion destroyed: VC-backed confirmed failures destroyed a known $8.2 billion in capital....

....MUCH MORE 

"I Have My Doubts about NATO's Survival" Former German Foreign Minister Joschka Fischer

Fischer was an interesting guy. Kind of a wild child when he was younger, a literal political street fighter, sort of a Sturmabteilung-type but gussied up in grün. In his day he was probably the most popular politician in Germany.

From Der Spiegel, April 28: 

Joschka Fischer, born in 1948, was a key figure in the rise and success of the Green Party from the 1980s onward. From 1998 to 2005, he served as vice chancellor and foreign minister in the SPD-Green coalition government under Chancellor Gerhard Schröder. He shaped German foreign policy during the Kosovo War in 1999, after the terrorist attacks of September 11, 2001 and in the debate over the U.S.-led war against Iraq in 2003.

Joschka Fischer, a titan of Germany's post-reunification foreign policy, says he finds Trump "deeply distasteful," discusses the need for a European bomb and says he never trusted Putin.  

DER SPIEGEL: Mr. Fischer, if you were still Germany’s foreign minister, how would you be dealing with the current U.S. administration and President Donald Trump?
Fischer: I'm glad I don't have to, because I find this person deeply unpleasant. The German government has not done a bad job with him so far, and neither has NATO Secretary General Mark Rutte. They're often criticized for approaching Trump on a broad trail of slime. But in this situation, they don't have many other options. And (German Chancellor Friedrich) Merz has issued a clear refusal to participate in the Iran war – a wise decision.

DER SPIEGEL: Trump has obviously miscalculated with his war in Iran. How do you assess his actions?
Fischer: From my perspective, it was already a mistake in his first term to sweep the nuclear deal with Iran, negotiated by Barack Obama and the Europeans, off the table. With the current war, he has so far achieved nothing. The regime will most likely hold on to power, and the enriched uranium will remain under its control. The only regime change Trump has achieved in Iran: the mullahs have been replaced as the central power factor by the Revolutionary Guards. The regime has become even more radical.

DER SPIEGEL: Friedrich Merz currently seems to have little influence over Trump. Do you consider descriptions of him as a "foreign-policy chancellor" to be accurate?
Fischer: Every chancellor is a foreign-policy chancellor. I have never really been able to understand this distinction.

DER SPIEGEL: Does Germany need to involve itself even more strongly in global politics?
Fischer: Economically, Germany is a European middle power; in terms of power politics, it remains rather small. Now that the U.S. has fallen away as a protective power, Germany must first strengthen and improve its military position.

DER SPIEGEL: Could Germany’s Bundeswehr become part of a European army?
Fischer: That will be difficult to push through. We are under considerable time pressure. The simplest approach would be to assemble a coalition of those countries that feel threatened by Putin – which also means: making use of national strength. In Europe, Germany and France are vital in this regard. We simply cannot rely on the U.S. anymore in the future. I have my doubts about NATO’s survival.

DER SPIEGEL: You think the situation is so dire?

Fischer: At least as a trans-Atlantic alliance. I think it would be sensible for a European NATO to continue to exist.

DER SPIEGEL: In two years, the U.S. could have a new president who reverses Trump's course.
Fischer: Who can guarantee that another Trump won’t come along four or eight years after that? The trust is gone, and it cannot be restored through a different election outcome, as much as I hope for one. The stability of the trans-Atlantic alliance rested on this trust.

DER SPIEGEL: Does Germany also need to consider establishing its own nuclear deterrent?
Fischer: If Trump withdraws the nuclear umbrella – and that possibility exists – this debate will be unavoidable. There would have to be an attempt to create a European alternative, together with France and Britain. Those would, of course, be extremely challenging changes.

DER SPIEGEL: Is Europe ready for Germany to become a military power again, to build the strongest conventional army on the continent, as Chancellor Merz is demanding?
Fischer: Only if the Berlin conducts foreign policy with historical sensitivity. Twice in the 20th century, Germany was thwarted in its bid for world power. We don't seem to think about that as much anymore, but our neighbors have not forgotten this past, even if Chancellor Konrad Adenauer created a European postwar Germany through Western integration. That ultimately made unification possible and created a certain trust among former wartime adversaries.

DER SPIEGEL: What does that mean for today? What does that mean for a Germany in which the right-wing Alternative for Germany (AfD) party is gaining strength?
Fischer: If we have our country’s best interests at heart, we will remain committed to the principle of never again going it alone as a nation. That is also the great danger that the rise of the AfD brings with it: that we suppress our own history and once again develop fantasies of becoming a great power. The AfD wants to return to a pre-Adenauer Germany, a nationalist Germany. Doing so, in my view, would be quite simply insane. Europe is the only option remaining to us.

DER SPIEGEL: You were once a militant opponent of the Bundeswehr, and you took part in demonstrations against rearmament and NATO. What was your path to the peace movement as a young man?
Fischer: My generation was raised by the surviving veterans of Adolf Hitler's Wehrmacht. In primary school back then, it was customary for teachers to tell stories of their war experiences before report cards were handed out. Our playgrounds were the remnants of bombed out buildings. Materiel left over from the war was also still lying around – steel helmets, ammunition and so on.

DER SPIEGEL: That made you a pacifist?
Fischer: It was also, to some extent, a stance against the older generation. But I wonder these days: Was I ever in the peace movement? After all, I was no pacifist. I never rejected violence per se. But I was firmly convinced that, against the backdrop of German history, a lasting peace was needed....

....MUCH MORE

As I said, interesting guy.

"Is your Porsche Taycan too slow at the Nürburgring? You need this Manthey Kit.

From Ars Technica, May 7:

Nordschleife-specialist Manthey has developed an upgrade package for the Porsche EV. 

Porsche is known for building cars that really are extremely good right out of the box. Yes, they tend to be more expensive than the other German luxury car brands, particularly once the option list comes out. But it doesn’t take very long behind the wheel before the driving experience reveals why they’re so good. And that’s just the regular models; the stuff that comes out of the motorsport department in Weissach—like the sublime 911 GT3—is even more focused.

But for some drivers, those who choose to spend their spare time enjoying track days at places like the legendary Nürburgring Nordschleife in Germany’s Eifel Mountains, even cars like the razor-sharp GT3 RS make too many compromises for the road. For those people, there is Manthey Racing.

Based at the industrial estate alongside the ’Ring, Manthey is a highly successful racing team—majority-owned by Porsche since 2013—that applies its years of experience making Porsches go even faster around the 12.9-mile (20.8 km) circuit known as the Green Hell to create upgrade kits that will turn the dials all the way up to 11.

Manthey’s newest upgrade kit is not for the 911 or 718, but the electric Taycan. Specifically, the Manthey Kit is an upgrade to the Taycan Turbo GT variant that Porsche introduced in 2024. More specifically, it requires the Taycan Turbo GT to also have the factory-installed Weissach package: this saves weight with carbon-fiber trim, thinner glass, a lighter sound system, and even loses the second charge port and the rear speakers to cut kilos. So equipped, the 0–60 mph (0–97 km/h) time falls from 2.2 seconds to 2.1 seconds.

But a more impressive statistic is how little time it took Porsche factory driver Lars Kern to lap the Nordschleife—in 2024, he completed a lap in 7 minutes, 7.5 seconds.

 So the 12 seconds he shaved off with the Manthey Kit, setting a time of 6:55.553, should underscore just how much faster the car can now go. There’s more aerodynamic downforce courtesy of wild new body extensions, with louvers on the front wheel arches (presumably to let air escape the wheel well), a larger rear wing, new underbody diffusers, and aerodisc rear wheels. And the car’s downforce levels are tunable, so you can optimize it for whichever track you happen to be blistering this week....

....MUCH MORE 

"China-US trade talks kick off in Seoul ahead of high-profile leaders’ summit"

From the South China Morning Post, May 13: 

Trade deals, export controls on critical minerals and the Iran war likely to be talking points as senior officials sit down for negotiations 

Senior officials from China and the United States have started a new round of trade talks in Seoul, South Korea, hours ahead of US President Donald Trump’s scheduled arrival in Beijing.

The delegations – led by Chinese Vice-Premier He Lifeng and US Treasury Secretary Scott Bessent – arrived at Terminal 1 of Incheon Airport around noon on Wednesday Seoul time.

The two officials had both paid courtesy calls to South Korean President Lee Jae Myung in the morning.

This is the seventh round of negotiations between He and Bessent since Trump returned to office and launched a global tariff war last year, with the talks setting the stage for the meeting between Trump and his Chinese counterpart Xi Jinping.

Unlike previous meetings that have usually lasted around two days, this round of talks is expected to only run for a few hours. Bessent will head to China in the afternoon to join Trump.

Trump is set to visit Beijing from Wednesday to Friday, China’s foreign ministry confirmed on Monday. This will mark the first trip by a US president to China in over eight years, after a state visit during Trump’s first non-consecutive term in 2017.

Bessent and He are expected to discuss a number of issues, including Chinese purchases of American soybeans, beef and aircraft, as well as China’s export controls on critical minerals, for which a key suspension is set to expire in November....

....MUCH MORE 

Also at the SCMP: 

Xi-Trump meeting could lift Chinese stocks 12%: Morgan Stanley 

Nvidia’s Jensen Huang joins Trump’s trip to China at last minute 

"AI Is Starting to Build Better AI"

Not there yet but some very smart people think it's close.

From IEEE Spectrum, May 7: 

Recursive self-improvement is emerging, but humans are still in the loop

The field of artificial intelligence was built on the premise that machines might someday improve themselves. In 1966, the English mathematician I. J. Good wrote that “an ultraintelligent machine could design even better machines; there would then unquestionably be an ‘intelligence explosion,’ and the intelligence of man would be left far behind.” AI researchers have long seen recursive self-improvement, or RSI, as something to both desire and fear. Today, advances in AI are raising the question of whether parts of that process are already underway.

RSI means many things to many people. Some use the idea as a bogeyman to scare up regulation, while others brandish it in marketing. For some, it means a fully autonomous loop, while for others it’s nearly any use of tech to build tech.

Safest to say it’s a spectrum. At its strictest, researchers use the term to describe systems that can improve not just their outputs but the process by which they improve—generating ideas, evaluating results, and modifying their own methods with zero human direction. By that standard, many of today’s systems fall short. They can help build better AI, but they still rely on humans to set goals, define success, and decide which changes to keep. The question is not whether self-improvement exists in some form today, but how much of the loop has actually been closed.

Stepping-Stones to Self-Improvement
Researchers have spent decades putting in place the elements of RSI. Machine learning (ML) algorithms automatically tune the parameters of programs that can play games or even create new programs. ML methods called evolutionary algorithms diversify and iterate on design solutions, including other algorithms. Over the last decade, “AutoML” has automated aspects of the pipeline in which ML models such as neural networks are structured, trained, and evaluated.

Today, large language models (LLMs) such as GPT, Gemini, Claude, and Grok extend this trend. One of their biggest use cases is to write code, including the code to produce future versions of themselves. In February, OpenAI reported that GPT‑5.3‑Codex was instrumental in creating itself, helping to debug training, manage deployment, and analyze evaluation results. Anthropic claims that the majority of its code is now written by Claude Code. These systems still rely on humans to direct and verify the work.

Last year, Google DeepMind announced a system called AlphaEvolve, “a coding agent for scientific and algorithmic discovery.” It uses LLMs to guide the evolution of solutions, such as optimizing neural-network architectures, data-center scheduling, and chip design. It’s not a fully recursive loop, as people still need to decide what problems AlphaEvolve should solve and how to evaluate its performance. But each breakthrough enhances scientists’ ability to make further AI breakthroughs.

“It’s also a very collaborative process” between humans and machines, says Matej Balog, a computer scientist at Google DeepMind who worked on AlphaEvolve. “Often you look at what the system discovers, and you actually learn from that discovery.” The system has already surprised the team. “Our mission is to use AI to discover new algorithms that have evaded human intuition,” Balog says. “I think we have the first demonstrations that this is not a wild dream.”

Meanwhile, the co-leads of Google DeepMind’s earlier chip-design system, AlphaChip, have launched a startup called Ricursive Intelligence to use AI to design AI chips. “We expect that we can dramatically reduce the design cycle from one or two years to days,” says cofounder Azalia Mirhoseini. Phase 1 is to help human designers. Phase 2 is to automate the process for companies without in-house designers. In Phase 3, the company will recursively use AI to design better chips to train better AI—though still under human supervision, says cofounder Anna Goldie....

....MUCH MORE 

Recently:

January 28 -  So it Begins: "Silicon Valley Wants to Build A.I. That Can Improve A.I. on Its Own"

May 8 - AI: "Are we just 18 months away from everything changing?"

And related:

December 2025 - Introducing Unified Model Collapse

Possibly also of interest:

May 2025 - News You Can Use: "....How AI-enabled coups could allow a tiny group to seize power"

"Mystery of sunken Russian ‘ghost ship’ grows after explosions reported while carrying alleged nuclear reactors to North Korea"

From the New York Post, May 12:

The mystery of how a Russian cargo ship sank deepened after it was revealed that the vessel suffered multiple explosions while allegedly carrying two nuclear reactors believed to be bound for North Korea, according to a new report.

The prevailing theory suggests that the West might have been involved in the incident that saw the Ursa Major sink 60 miles off the coast of Spain on Dec. 23, 2024, CNN reported.

The ship, also known as the Sparta 3, appeared to have been hit by a rare type of torpedo that breached the ship’s hull and forced it to sink to the bottom of the Mediterranean Sea, according to Spanish investigators.

The investigation suggested that the only thing that could have breached the ship was the Barracuda supercavitating torpedo, a powerful weapon of which only the US, a few NATO countries, Russia and Iran are believed to be in possession....

....MUCH MORE 

note to self: if the pescado is glowing probably best to switch back to the tapas. 

"US Power Prices Climb 61% Faster Than Inflation as Demand Surges"

Lifted in toto from Bloomberg, May 12:

Consumer prices climbed last month by the most in three years, but prices for electricity surged even more, highlighting an intensifying battle between utilities, consumers and power grids.

Electricity prices jumped 6.1% last month compared to a year earlier, according to Bureau of Labor Statistics data published on Tuesday. That’s well above the overall consumer price index, which rose 3.8%, the most since May 2023. 

 

Mounting electricity demand from data centers has strained US energy grids, and customers are feeling the impact from soaring wholesale power costs. Lawmakers have attacked utilities and grid operators over higher electricity bills, while utilities and regulators are calling into question the design of the US grid. Concerns over energy affordability are emerging as a critical issue in this year’s midterm elections.

Read more: Soaring Electric Bills Unleash Voter Fury Before US Midterms

To answer voters’ complaints, politicians are working to reform the utility model and tamp down rates. The New Jersey Board of Public Utilities, for example, announced last week New Jersey to Complete Utility Revenue Reform Study by July 19 different ways to reward utilities based on performance, including affordability and reliability, instead of the current model that ties their profit to investments in infrastructure.

Also at Bloomberg May 12:

Here Are the Key Takeaways for the US CPI Report for April

Earlier:

Inflation: "CPI for all items rises 0.6% in April; shelter and gasoline up "

Inflation: "CPI for all items rises 0.6% in April; shelter and gasoline up "

From the Bureau of Labor Statistics, May 12:

CONSUMER PRICE INDEX - APRIL 2026

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6 percent on a seasonally adjusted basis in April, after rising 0.9 percent in March, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.8 percent before seasonal adjustment.

The index for energy rose 3.8 percent in April, accounting for over forty percent of the monthly all items increase. The shelter index also increased in April, rising 0.6 percent. The index for food increased 0.5 percent over the month as the index for food at home rose 0.7 percent and the index for food away from home increased 0.2 percent. 

The index for all items less food and energy rose 0.4 percent in April. Indexes that increased over the month include household furnishings and operations, airline fares, personal care, apparel, and education. Conversely, the indexes for new vehicles, communication, and medical care were among the major indexes that decreased in April.

The all items index rose 3.8 percent for the 12 months ending April, after rising 3.3 percent for the 12 months ending March. The all items less food and energy index rose 2.8 percent over the year, following a 2.6 percent increase over the 12 months ending March. The energy index increased 17.9 percent for the 12 months ending April. The food index increased 3.2 percent over the last year....

....MUCH MORE, tables, narrative. 

And more to come. 

Earlier this morning Bloomberg Economics expected: 

Headline CPI to increase 0.58% and core CPI rise 0.36%. On a year-over-year basis, headline probably climbed to 3.7% and core to 2.7%.

Energy should add 24 bps to the headline, driven by a 7% increase in gasoline prices. Electricity likely rose 0.9%, and natural gas 0.7%.

Core services likely reaccelerated to 0.4%, with rents the biggest contributor to the firm reading. We expect primary rents to increase 0.45% and owners’ equivalent rent (OER) to advance 0.57%. Unlike most CPI categories, shelter inflation was not fully “caught up” after the October shutdown because rent and OER are measured on a six-month property rotation. That left index levels artificially depressed until the affected units were resurveyed in April.

So A Sea Captain And A Cambridge Don Came To The Same Realization: "The Hormuz Hypothesis"

This is old news but I thought I should mention some of what's been guiding our thinking on events over the last  2 1/2 months.

First up, Cambridge Uni. Professor of Political Economy Helen Thompson at MarketWatch, April 11:

What if Trump actually wanted this Hormuz outcome all along?
Cambridge professor Helen Thompson says the consistent ‘thread’ through the second Trump administration has been resetting the energy part of the world geopolitically

Since the start of the Iran war, the conventional wisdom has been that the whole thing is a hot mess. The argument is that President Donald Trump either blundered into a strategic situation he didn’t understand or was suckered into it by Israeli Prime Minister Benjamin Netanyahu, with disastrous consequences.

These range from the humanitarian — starting with the killing of around 165 Iranian schoolgirls, apparently by a U.S. missile — to the economic and even geopolitical. Oil is up to $100 a barrel, gasoline is nearly $4.20 a gallon nationally, and — irony of ironies — the enemy regime in Tehran has been left with control of the Strait of Hormuz and about 20% of the world’s oil supply.

The Iranians are now reportedly charging a toll of $1 a barrel — payable apparently through nontraceable cryptocurrency or in Chinese yuan Trump, who has repeatedly called the regime evil and worse, was left surprised that it acted in such a “dishonorable” manner with regard to the cease-fire.

But what if the conventional wisdom is wrong?

That’s the hypothesis of one of the world’s shrewdest and most respected analysts of geopolitics and energy, Cambridge University political-economy professor Helen Thompson. In a couple of recent broadcasts, she has argued that this entire outcome — including the apparent closure of the Strait of Hormuz — may not be a bug of the war at all but a deliberate feature.

Thompson argues that driving up the worldwide price of oil and keeping it there may be a core war goal of the Trump administration. That hurts China, which depends on imported energy, and helps America, which is a net energy producer. And if that’s the case, then Iranian control over the strait would, ironically, be a desirable outcome.

“The Trump administration thinks through the lens of resource competition,” Thompson explained.

“You have to consider the possibility … that actually part of what’s going on isn’t just about Iran, it’s about the Trump administration trying to hurt China,” she told the conservative-leaning website UnHerd.

The Iran war may be “part of an attempt by the Trump administration to reset the energy part of the world geopolitically,” she told Bloomberg Podcasts.

That, according to Thompson, is the consistent “thread” running through the second Trump administration’s foreign policy — including the intervention in oil-rich Venezuela and the attempt to destabilize resource-rich Greenland. It is also, she said, part of a geopolitical blueprint that the administration laid out last fall.

America, Thompson pointed out, may be a “beneficiary” of the war economically because it will be able to sell more liquefied natural gas at elevated prices, especially to the Europeans.

She added that, right now, competitive thinking between the U.S. and China focuses on artificial intelligence, which uses a staggering amount of energy. Driving up China’s energy costs hurts its AI ambitions.

Thompson also pointed out that it wasn’t just the Iranians who “closed” the Strait of Hormuz. Western shipping insurers became worried about the risks, especially after the Iranians attacked some ships. And after initially floating the notion of stepping in and providing insurance to ships through the U.S. government, the Trump administration soon walked away from the idea. That would be consistent with the theory that the administration does not want fuel to flow freely through the strait, because it wants oil and gas to remain expensive....

....MUCH MORE 

And at gCaptain, March 18:

The Hormuz Hypothesis – What If the U.S. Navy Isn’t in a Hurry to Reopen the Strait? 

By Captain John Konrad (Opinion) – The Strait of Hormuz is twenty-one miles wide. Two shipping channels, each two miles across, separated by a two-mile buffer. There is no alternative. Saudi Arabia’s East-West Pipeline to Yanbu and the UAE’s pipeline to Fujairah can handle maybe five million barrels combined. The math doesn’t work. The bottleneck is not political. It is geological and hydrographic.

Every TV analyst in America is talking about minesweepers and carrier strike groups. They are asking the wrong questions. The binding constraint on Hormuz was never a minefield or insurance. It is the US Navy’s willingness and ability to reopen it.

Every talking point suggests the White House and Navy are working hard to reopen the strait but progress is slow. A new posts on Truth Social suggests we may have to considet a new hypothesis.

“I wonder what would happen if we “finished off” what’s left of the Iranian Terror State, and let the Countries that use it, we don’t, be responsible for the so called Strait?” wrote President Trump in a psot this morning. “That would get some of our non-responsive “Allies” in gear, and fast!!!”

Which leads to a question, White House may have no intention of reopening the Strait of Hormuz?

The Insurance Kill Switch 
When the seven P&I clubs belonging to the International Group issued 72-hour cancellation notices for war risk coverage in the Persian Gulf on March 5, they did not just raise costs. They made transit impossible.

P&I clubs insure roughly 90 percent of the world’s ocean-going tonnage. Without their coverage, ships cannot sail. Port authorities will not let them dock. Banks will not finance the cargo. Charterers will not book the vessel. The entire system, from loading berth to discharge terminal, is underwritten by a chain of contracts that begins with a club in London, Oslo, or Tokyo. When the clubs pulled war risk extensions, that chain broke. Not for a few ships. For the global fleet.

War risk premiums jumped from 0.25 percent to 1 percent of hull value, renewable every seven days. VLCC charter rates quadrupled to nearly $800,000 per day. Over 1,000 vessels are now trapped in the Persian Gulf, burning charter costs with nowhere to go. By March 3, only four ships crossed the Strait, down from a seven-day average of seventy-seven.

Then Trump did something that almost nobody in the press understood.

He ordered the U.S. International Development Finance Corporation to create a $20 billion maritime reinsurance facility, with Chubb as lead underwriter, making the United States government the insurer of last resort for Gulf shipping. A sovereign nation positioned itself as the backstop for war risk insurance on the world’s most critical maritime chokepoint. The DFC facility, coordinated with US Central Command and Treasury, offers hull, machinery, and cargo coverage on a rolling basis to eligible vessels.

The United States now controls the on/off switch for the Strait of Hormuz. Not through naval firepower. Through insurance.

Read the latest MARAD advisory carefully: U.S.-flagged, owned, or crewed commercial vessels operating in these areas should maintain a minimum standoff of 30 nautical miles from U.S. military vessels.

And read this part of the DFC announcement again… “coordinated with US Central Command.”

They cannot pass without the Navy permission.

The green light has not appeared.

The Maritime Dream Team That Was 
To understand why this matters, you need to understand what Trump built and what was destroyed.

Trump came into his second term determined to restore American maritime power. He assembled the greatest collection of maritime minds in key government positions since Nixon. He put Mike Waltz, creator of the SHIPS for America Act, as head of the National Security Council. He created a Maritime Office in the White House. He appointed maritime advocates to key positions throughout the administration. He signed a sweeping Maritime Executive Order in April 2025 directing a Maritime Action Plan across Defense, State, Transportation, and Homeland Security.

He started targeting chokepoints: Panama, the Red Sea, Suez, the Greenland-UK Gap. He launched investigations into Gibraltar and Spain. He created USTR actions to tariff Chinese-built and operated ships. He called CMA CGM’s CEO Rodolphe Saadé to the Oval Office and secured a $20 billion commitment to American maritime investment.

The ambition was real.

So was the pushback.

Shipowners lined up outside USTR to protest the China shipping tariffs. Nearly every economist on the planet lined up against the maritime tariff proposals. The entire U.S. tech sector asked for China concessions, and what did China want in return? A pause to USTR.

Then Signalgate. The media leaked a private conversation about attacking the Houthis and reopening the Red Sea. The operation was stunned. Signalgate forced a reorganization. Waltz was moved to the UN. The Maritime Office was downsized. The NSC was gutted.

That was the moment every maritime initiative began to stall.

What collapsed: Panama did not follow through on free transits for U.S. ships. CMA CGM’s $20 billion commitment evaporated as the company ordered vessels from China and India instead. Congress stalled on the SHIPS Act. The UK traded the Chagos Islands, including Diego Garcia, to Mauritius for a sweetheart deal, putting a critical naval base at risk. Key Navy appointees were slow-rolled or blocked in the Senate.

Then it came to a head at the International Maritime Organization in London. In April 2025, sixty-three countries voted to approve the Net-Zero Framework, a global carbon pricing mechanism on every ship over 5,000 tons. What did Trump’s negotiators ask for? That America’s tiny fleet of merchant ships be exempt. Europe refused, claiming American maritime interests are “irrelevant” and that we lack the leverage or votes.

The U.S. walked out. In October, at the adoption vote, Trump called it a “Global Green New Scam Tax on Shipping.” Trump played hardball. The State Department threatened sanctions against any country that voted yes. Fifty-seven countries voted to delay.

A pyrrhic victory. The carbon tax was dead in the water, but we did not get exemptions for U.S. ships, and the White House began losing the wider war for chokepoints and maritime trade with the City of London, Europe and China.

Then two body blows in quick succession.

On February 20, the Supreme Court ruled 6-3 that IEEPA does not authorize the President to impose tariffs, invalidating the “Liberation Day” reciprocal tariffs and the China, Canada, and Mexico trafficking tariffs. An estimated $160 billion in tariff revenue, gone. Trump imposed 15 percent global tariffs under Section 122, but those are capped at 150 days and require Congressional extension.

His most powerful tariff tool was taken away by the courts. If you cannot tariff your way to compliance, you need another form of leverage.

And then the Golden Fleet.

In December, Trump announced a new class of Trump-class battleships at Mar-a-Lago: 30,000 to 40,000 tons, armed with hypersonic missiles, railguns, lasers, and nuclear cruise missiles. Twenty to twenty-five hulls. The most ambitious surface combatant program since World War II.

Within 72 hours, every national security think tank and academia – which all have close ties and funding with NATO nations – lined up to kill it. With no time for due dillegence CSIS published the hit piece “The Golden Fleet’s Battleship Will Never Sail” and estimated $9 billion per hull and predicted cancellation before the first ship hits water. The Foundation for Defense of Democracies called it a waste. Retired admirals on defense baords lined up to say the Navy should buy small distributed platforms instead. Every defense analyst competed to be quoted saying it was impossible.

The same establishment that produced three Zumwalts instead of thirty, and thirty almost useless Littorial Combat Ships instead of none, the same think tanks that has presided over the smallest Navy since World War I, lined up overnight to explain why America cannot build big ships anymore.

The same people who have no plan to close the destroyer gap that is right now undermining convoy escort operations in the Gulf.

The think tanks did not offer an alternative. They offered learned helplessness. And that helplessness is the context in which Hormuz is now playing out.

The Leverage Hypothesis 
Now connect the dots.

Strike Iran, and Europe either bends or goes dark in an energy crisis.

The European shipping community and political establishment spent the past year dismissing, undermining, and mocking every Trump maritime initiative. They scoffed at the USTR tariffs. They laughed at the SHIPS Act. They blocked the IMO exemptions. They refused to take American maritime policy seriously.

Now their energy supply runs through an insurance facility controlled by Washington.

“Let their navies figure it out.” Except everyone knows they cannot. European naval forces are too small, too slow, and too poorly equipped for sustained convoy escort operations through a contested strait. All the European navies combined could not send more than three ships at a time to defend the Red Sea. An entire German task force sailed around Africa to avoid it....

....MUCH MORE 

So we don't have a lot of Taco Tuesday posts. One

 On May 6 because in was in Marc Chandler's headline. 

But speaking of Mexican food we have on offer, from a couple years ago:

"The first Mexican taco stand to get a Michelin star is a tiny business where the heat makes the meat"

Capital Markets: "Ceasefire is on "Life Support": Saps Risk Appetites, Buoys the Greenback"

From Marc to Market:

The uncertainty about the US-Iran fragile ceasefire, which President Trump has said is on “life support” is weighing on risk-taking appetites today. Brent and WTI are up over $3 and bonds and stocks have been sold. The US dollar is firmer against the G10 currencies but the Norwegian krone. Most emerging market currencies are lower. Ahead of the Xi-Trump meeting later this week, the PBOC continued to gradually lower the dollar’s reference rate. Treasury Secretary Bessent is in Tokyo, and the media reports he ‘understands” Japanese exchange rate policy. This is a far cry from having the Treasury Department use the Federal Reserve to check prices as it did in January. The dollar reached a new five-session high against the yen. 

The US reports April CPI today. The headline rate is seen rising to around 3.7% from 3.3%. And as Warsh’s confirmation process continued to make progress, the swaps market has boosted the chances of a rate hike this year to around 31%, the highest since last March. Still, the other major central banks are expected to raise rates sooner and by more....

....MUCH MORE 

News You Can Use: "Want to track the apocalypse? One theory: Follow the billionaires’ jets"

From the Washington Post, May 9:

An artist made a warning system to notify you if the ultra-rich flee city centers en masse. 

They have endless amounts of money. Sophisticated bunkers. Private jets. Might the oligarchs of the world know — or be warned — in advance of a nuclear apocalypse?

So goes the theory underpinning the newest project from Los Angeles artist and coder Kyle McDonald, who has created what he calls an Apocalypse Early Warning System by tracking private jets around the world. If a large number of jets suddenly flee city centers, transporting their likely affluent passengers to bunkers and isolated resorts, he figures it might be a warning sign for the rest of us.

“I want people to laugh. I hope they see it and they feel the sort of humor of our situation — that we’re locked in a battle between the ultra-wealthy and the working class,” McDonald said. “And remember, there’s still things we can do. We’re not completely downtrodden and lost of all hope.”....

....MUCH MORE 

For a graphic the paper uses a picture of private jets at Le Bourget but I was thinking of the overflow parking at the Swiss Air Force base down the road from Davos:

 

That was at the Guardian in 2019, the year that David Attenbourough came to talk about Global Warming.

New York's Mayor Mamdani And The Curley Effect

Following on the post immediately below, "Fun Fact: "New York City spends more per homeless person than the median NYC household earns. $81,705 per person in FY2025" a bit of scholarship from the National Bureau of Economic Research:

James Michael Curley, a four-time mayor of Boston, used wasteful redistribution to his poor Irish constituents and incendiary rhetoric to encourage richer citizens to emigrate from Boston, thereby shaping the electorate in his favor. Boston as a consequence stagnated, but Curley kept winning elections. We present a model of the Curley effect, in which inefficient redistributive policies are sought not by interest groups protecting their rents, but by incumbent politicians trying to shape the electorate through emigration of their opponents or reinforcement of class identities. The model sheds light on ethnic politics in the United States and abroad, as well as on class politics in many countries including Britain. 

NBER download page.

Both the authors have those "@harvard.edu" email addresses.

Enough appeal to authority? I've got more if it is desired. Here's Mom:

A Mother's Love, Letter To Arthur Schopenhauer

‘All your good qualities,’ she wrote on 6 November, ‘become obscured by your super-cleverness and are made useless to the world merely because of your rage at wanting to know everything better than others … If you were less like you, you would only be ridiculous, but thus as you are, you are highly annoying.’

—Aeon,  The semi-satisfied life

....MUCH MORE 

Now THAT'S authority. But in Arthur's defense our post goes on to look at his "Die Kunst, Recht zu behalten" with its thirty-eight stratagems for making an argument including:

#30 - Appeal to Authority Rather Than Reason and: 

#38 - Become Personal, Insulting, Rude (the Ultimate Stratagem)

And that, children, is why we study philosophy.