They're just a bit of magic in there, isn't it? Well, John, before I send you off, uh, to get married to the enemy, um, would you please tell us, uh, what you think of The Crusade?

Um, I, I think like Toby, I didn't particularly enjoy the book when I first read it, because it's, it's very much about kind of a different generation to me.

It's, it's w- written for an audience 20 years older than me.

So it, it's a bit dense.

It's a bit loose.

I didn't know what was going...

I wasn't particularly interested, because it is, it is, I think, the first time that this, the series dips into some British history.

Fair, fair, fair enough.

You must say something fabulous

...

I'm gonna go with Jeremy Davies, the designer here, because I think he does a bang-up job for this whole story.

It's, it's that, it's that lovely thing of the actual Ionized complex is integrated into that house.

It's a nice mix of technological and the old.

The ca- the actual cave sets look good as well.

Not much you can do with that Ogrion ship, unfortunately, but you can't have everything, so-Yeah, I, I, I think the design work on this is really nice, um, and really helpful to the director and the whole damn story.

Mm

[singing] Hamster with a blunt penknife.

Hamster with a blunt penknife.

Hamster with a blunt penknife.

[screeching]

This is a great concept, this, where, where he's saying, "No, we're asking the computer to commit suicide by making it make a choice." That's really interesting.

That's, that's re- that's really the thing with this kind of strange Doctor Who, because it's all Kit Pedler influenced, and it's where Doomwatch goes.

It's not Luddism, it's what, what about the questions and downsides? Just considering the downsides of the technology.

It's like outsourcing decisions to computers.

I'm not a big TA guy, but looking at the long-term charts on a lot of these, these, uh, yield curves, it looks like they wanna break out to the upside and higher for longer in terms of structural rates, uh, for, for government bonds seems, seems to be like a, a call that I, I feel more comfortable making by the day here.

Yeah, definitely.

Look, that's the, uh, you know...

We, we can all be line drawers and line squigglers on our own capacity, but the...

some of these are not super hard to read.

I will say the, the, the US ten-year, you don't, you don't see it on here, but, uh, you know, broke the four and a half percent level, which last week, which seems to have been kind of a line in the sand for, uh, what are popularly called taco moments, which I think are a little overstated, but either way, we haven't seen it get much above four and a half.

We did last week.

Like, is that-- does that become the norm moving forward, right? The, the-- does the Treasury yields disconnect from the federal funds rate? And if so, what, [chuckles] what are the repercussions there?

And the silhouette is great.

Yeah.

'Cause you had Bernard Bresslaw, who's what, 6'6", 6'7"? And the, all the regulars and all these actors are ti- are actually of shorter stature, shall we say.

I mean, it's too in-

...

most shouting each other in r- uh, rooms, just big rooms, in big scientific sets which are quite dull usually.

Not in this one, I admit, not in the Earth Warriors, but, uh-

There, there are other scenes where-

where-Where Sophie Aldred's enthusiasm is greater than her acting ability, shall we say.

Joe might put that less politely, but-

Yeah.

They front-loaded that first...

The first episode I think is genuinely a good piece of Doctor Who, but I, I don't know if it's the fact they moved from, you know, two animation for this, which...

And they do try and give it constant movement to keep it going, but it's already just in a, a loop waiting for the story to progress.

So you...

And again, a con-confirmation of, of the fact that we are really not kidding, not kidding when we say we're gonna reindustrialize or at least attempt to reindustrialize the US economy.

Yeah.

I, I think that's right.

Um, I remember...

I don't think we were doing the show yet, but I remember writing about it in the newsletter, and I think we talked about it on Bitcoin Alpha RIP, the, the predecessor of this show, um, when the initial Intel, Intel deal came out in like September of, uh, the administration converting grants to, to equity.

Uh, stock popped then.

You can barely even see that pop on the chart now.

And you don't have it here, but in the industry last week, Coinbase cut, I believe, fifteen percent of their workforce.

... that's generated to where it needs to go?

Yeah.

So I, I think there is this need for public and private to work together.

Again, for a data center to get sited today, they have to come in and say like, "Not only are we not gonna make kind of the grid and the power system worse for residents, but we're gonna improve it." And that's possible, right? So if, if a data center is coming in and building the new generation and connecting to the grid, and whenever the data center is not at 100% utilization, it now has excess generation capability that can be used to make the grid more reliable, more, more affordableAnd so there are ways for the, the data centers and the hyperscalers to improve the electrical system.

Um, and I think that's where we are now.

That's kind of a- the, the stakes to even build one today is, is that requirement.

I think there was kind of this transition period where they were working-- where we had the older rules before, we were talking about half a gig, gig, three gigawatt data centers coming in, um, where there was spare capacity in the system, and communities were welcoming in data centers because b- because there was spare generation, there was, uh, room on the grid.

Yeah.

And maybe crucially, is the way the oil market is behaving in response to the Strait of Hormuz closure and this kind of prolonged ceasefire that may be breaking down literally as we record this, should oil be higher, and is the movement of oil confusing you, or do you think it kind of makes sense?

Yeah, there was this, man, market chaos whenever I think there was the understanding that the strait was gonna be closed for some period of time, and that's when you saw Brent shoot up to a hund- $120 plus at least, you know, intraday, and really had the whole panic, because this is what the oil market has been fearing for decades.

And, you know, obviously in retrospect, you know, that move had gone too far.

I think a few things happened.

One was-It's three weeks to get cargoes from the Middle East to either East Asia or to Europe.

It took three weeks for the end user to really stop receiving new cargoes.

The market was already soft at the time so that there was some kind of looseness in the market.

Are there particular policies you would like to see or that you think would solve these issues relatively quickly or at least provide a big boost?

With everything going on in the Middle East, and I think more importantly, the race to win the AI wars, the, the Trump administration has identified key parts of our economy, our industry, and the supply chain that, that need to be bolstered if we are going to win that race, and this particularly revolves around energy, which is the base of everything we're gonna be doing here.

Yeah.

And, you know, this isn't even all of the, the EOs from two weeks ago.

Like, I couldn't even cram them all on the slide.

Like, there are several more.

But yeah, it's all related to critical infrastructure, grid capacity, oil and gas transmission development assets.

A-all the things that are basically like the, the base load, uh, infrastructure and, and kinda layer one of civilization that we've spent the last few decades, for various reasons, kind of deprioritizing and, and hollowing out in the US.

I, I like free markets, um, but I do think the recognition of the, um, the inefficiencies, the sort of inadequacies of, of the grid in the United States and power generation more broadly, identifying that and focusing on it is, is worthwhile.

U.S. Rare Earth announces definitive agreement to acquire Sarah Verde Group for two point eight billion, creating the global rare earth leader.

Yep.

Yeah, this wasn't in the, the issue, uh, this past weekend, but it hit this morning, and I thought it's, you know, exactly aligned with everything we've just talked about and stuff we talked about in-- over the past few months as well.

Um, I think, you know, this-- the headline kinda speaks for itself.

We know rare earths are, uh, important.

We know the U.S. is, is behind in rare earth refining capacity relative to China, which has thus far a relative chokehold over the, over the whole world, and we saw that, you know, how that could play out last fall when they announced some major export restrictions.

Uh, so it's clearly been a, a priority of, of the U.S. and the Trump administration to ameliorate that and address that.

I've, I've, uh, I've highlighted it many times over the last year and throughout the years, but it seems like the de-dollarization narrative is being challenged in real time as well.

And one thing you highlighted this week is that it seems that the oil, the balance of power in oil markets is, is definitely shifting towards the US, and I saw this map floating around over the weekend, and we see a bunch of ships going around the Horn of Africa.

Yeah.

So this is a map from, I call out on the bottom, Rory Johnston, a great kind of oil data analyst that everyone should follow on Twitter.

The president is now apparently following him as he retweeted or, or quote tweeted or something on, on Truth Social, this, this map, and, um, as evidence that, uh, you know, the, the US is, is winning bigly.

Um, but I do think it's y- an interesting data point showing a bunch of large tankers headed to the US to the, the...

I was gonna say the Gulf of Mexico, but it's now, I guess, the Gulf of America, kind of on, on the way in this caravan to...

These are empty tankers largely.

So what are your thoughts on this?

There are obviously multiple players and different incentives at play, and I think the most important incentive that was highlighted by Citrini in their report was that Iran wants to keep the strait open because they need to project that they actually have control and are acting as a responsible actor in that part of the world, um, sort of enticing countries that need oil to, to work with them to create this tollway that that many people have discussed.

Yeah, for sure.

It's a great piece.

Everyone should, should go read it and highly recommend paying for a Citrini subscription to, to do that.

But yeah, I think it's the, the big takeaway, you know, if you...

This, this won't be spoiling anything and, you know, there's a lot more alpha in there that you can go read about, but I think the big t- interesting takeaway from it is the-- everyone on the ground seems to think both that we're going to get messy military escalation that will not end soon, and more oil is going to, uh, progressively flow out of the strait.

Um, because as you said, there are a lot of interests aligned on all sides to keep oil moving through the strait.

Um, what are your thoughts on the quantum debate?

Why, why are you drawing this line?

Yeah.

I mean, to some extent, this week's newsletter is the result of me being tired of schizo-posting about different things that could happen in the Strait of Hormuz, and, and I f- I feel like everyone's tired of reading about that.

So I tried to take a bit of a different tack this time.

But I actually think this was maybe one of the more interesting and underreported stories of last week as everyone stays focused on, you know, minute-to-minute updates out of Iran.

Yeah, a-as you said, market increasingly looks to be pricing higher odds, and at one point late last week, basically coin flip odds of at least one, if not two rate hikes by the end of the year.

I mean, you can see that on the, the chart here.

Global supply chain infrastructure is massive, but I think there's just gonna be forces, whether it's the war itself or a potential liquidity crisis in the back end of the financial system here in the US that spreads globally, that's gonna dictate the, the Fed needing to be more accommodative.

And then Iran came out rather, rather quickly and said, "Hey, these talks did not happen." Uh, so what is your reading on this? [chuckles]

Yeah.

I mean, my only, my only reading is that there is no reading, right? Like, I, I lead off with this because I-- fog of war is exactly the right way to think about it and, like, you'll see people on both sides of that kind of general bifurcation that I laid out.

It's like, you know, w-when, when Trump says something that's totally credible and should be completely believed, and when Iran says something, they're just lying.

Or when China comments on something, they're just, you know, lying or trying to manipulate or using propaganda tactics or whatever.

A-and there are other people who think the exact opposite, right? Like, and anything Iran says is, is totally correct and accurate, and they're the ones telling the truth, and Trump is just making everything up.

And I think we should all just be in the mode of everyone is, if you pardon my French, bullshitting right now.

And I think this is one thing that markets are beginning to price in is what is the long-term ramifications of this, this disruption to the supply chain, and how do we reorient the energy industry based off of the, the destruction of this infrastructure.

If, if you believe this is playing into the AI race, this is a good way to slow down what the U.S. and the current Trump administration deems as its biggest foe in this, this race to, to win the AI war.

Yeah, for, for sure.

I mean, I think over the last, like, year, and especially the last few weeks, it feels like you've had two kinda camps emerging.

If you're, if you're, if you're a professional situation monitor, there's the kinda like, "USD is dead, U.S. can't win, China's gonna eat our lunch." You know, I'll loosely attribute this to, like, kind of a Lou Grohman type of framework.

Um, I agree with much of what he says, but that's kinda one, you know, caricature of a, a viewpoint you see a lot on, let's say, financial Twitter and financial press.

There's another side which kinda takes the opposite view.

We can call it kind of the Brent Johnson framework maybe, the dollar milkshake theory, that, you know, the U.S. is top dog, gonna remain top dog.

It seems like from an energy perspective, we can be inoculated from any, any problems that may persist after, after this disruption in the Middle East because we have the resources on our continent.

[laughs]

... keeps getting cheaper, mostly in China.

And so the cost to develop a solar panel keeps falling.

Now, a solar panel doesn't get you what you want.

You want electrons at the location that load is at.

And so there's a lot of steps to go from a solar panel to electrons in the right location.

Some of those are inflationary.

So yeah, maybe before getting to some of the things that you focus on, just frame why have a foundation if you just want it to get weaker over time.

What are the last seventy-two hours? What are, what are the implications of what's happening right now in your mind?

Yeah.

I mean, if anyone's familiar with the, uh, the great movie Airplane! It increasingly feels over the last year like every week is the wrong week to have stopped sniffing glue, like the air traffic controller constantly, constantly feeling that way.

Um, and I see all, all the people can see that, uh, M-Marty has already migrated to, uh, greener pastures to, to ride out the, the impending doom that we're all facing now.

So that's probably something I should have done.

But yeah, it's cra-crazy, crazy week among many crazy weeks.

And I think it was, it was just an interesting set of headlines that came across the wire over the course of the week, and tried to, tried to connect them a little bit in the timestamp this week, at the risk of sounding or becoming a little too much like a Charlie Day in front of the Petty Sylvia board.

So that's another big thing where we have the Department of War basically trying to industrialize this budding AI industry in the United States as well, which will have some pretty profound impli-implications if they're, um, able to do that effectively.

[laughs]

You have to go to Vegas.

You have to get in a plane or go in a car and go there, or you'd see things that were kind of, um, kind of, that had less friction but low speed of play.

So even, like, you know, sports gambling of yesterday was, you'd call your bookie, and you'd bet, you know, on the outcome of the game, and you- four hours later, you'd find out if you won.

But what we're seeing today is just a completely different product because the...

I think the online sports gambling companies have realized that if you're just betting $10 on the line once a day, yeah, they make 40 cents or so on that.

That doesn't pay the customer acquisition cost.

Um, if you had grown up with all these things available to you, do you think you would have gotten hooked?

What was your first business?

First business.

So probably mowing lawns.

I was sitting around one summer and said, "I wanna make some money." So what can a 12-year-old do to try to make a dollar? Not much.

And so went knocking on every neighbor's door and tried to find a lawn to mow, and realized that everybody either cut it themselves or had a lawn service already set up, and so that wasn't gonna be my path to riches.

And then kind of around age 14, I ended up getting into the baseball card business pretty actively.

So this was right around 1988, '89, '90 when the sports card business was taking off, and I had a small collection at the time but I always thought of it more as an asset rather than a collectible that I wanted to put on my desk and look at every day.

Again, given your understanding of energy, which is, you know, at least a third of the problem, tell me how that's come across your radar?

In a modernist home most of all.

Yeah.

You know, I think the collection Laura and I have built has really tried to look at kind of the history of art and especially figuration over time.

And from the birth of art until maybe 1500, there was this trend of how do we, we the art community, we artists try to cre- create representation of the figure more and more realistically? And this probably peaked with Leonardo, right? Who then masters even musculoskeletal components of the body.And then, you know, once he's mastered it, then there's a big question about, where do we go from here, right? And it's, now you have to tell a different story, you have to bring emotion into art.

You have to start doing abstraction or, or bring a new voice or style into the body.

And so, I love that arc of art history of, you know, trying to perfect the body and then trying to move forward.

And so we've built this collection of objects that are largely around, kind of, the figuration and the, like, you know, as you go from the perfection of it and then to the abstraction of it.

Do you agree or disagree?