Friday, October 30, 2026

Elon Musk's Endgame

If Republicans keep the Senate, if they perform better in the House than people expect, a lot will come down to one man, and that man is not Donald Trump. It’s Elon Musk.

At this point, Musk has given around $450 million to the Republican campaign effort. That makes him the single largest donor in any election cycle ever.

Musk’s contributions are now one-quarter of all campaign donations Republicans have received. And yet the size of this, and what it throws into relief, is how hard it is to conceptualize how much money he really has.

Because for Musk, with a net worth of around a trillion dollars, giving $300 million, $400 million, is like the median American household giving, like, $100. It is for him nothing, and yet it is reality warping for the rest of us.

But his money is not Elon Musk’s only source of power. There’s his control of X, of Starlink, of SpaceX, of Neuralink, of Tesla. He has power over wealth, attention and critical infrastructure that no human being has ever had at this level, at least once you’re outside the range of, say, a Donald Trump or a Xi Jinping — somebody who controls a superpower as a state.

That’s not what Musk has, and yet he has this almost statelike thing that is completely pursuant to his whims.

So what does he want to do with it? What is he doing with it? What is this world he is flexing his power and taking real risk to build?

by Ezra Klein, NY Times |  Read more:
Image: Anna Moneymaker/Getty Images

Silke Mühlematter
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Binance Bitten

In February 2025, a team of North Korean hackers stole $1.5 billion from the cryptocurrency exchange Bybit — a dark day for the industry and the largest crypto heist ever recorded.

Now that number looks paltry.

Binance, the world’s biggest crypto exchange, set an unwanted record on Thursday, losing $6.3 billion to hackers in an eye-popping attack that highlighted the deep vulnerabilities in crypto’s financial infrastructure.

For years, the industry has struggled to prevent thefts. Now, the risks are growing even more extreme as attackers use artificial intelligence and other advanced techniques to steal funds and quickly launder them, crypto analysts and security experts said.

The Binance attacker used “laundering patterns we have not seen before,” the crypto analytics firm Chainalysis wrote in a blog post on Friday. “Thousands of transactions in a short period suggest that the attackers are using automation to obscure the trail of funds.”

The details of how Binance was breached are still coming into focus. Both Chainalysis and TRM Labs, another analytics firm, attributed the hack to North Korea, which has targeted crypto companies for years. Binance initially said that the attacker appeared to have compromised a laptop belonging to one of its engineers, before clarifying that further investigation had uncovered “additional points of breach.”

Binance has promised to make customers whole and said it had set aside more than $6.3 billion in company funds to cover the losses. (Binance processes billions of dollars in transactions every day.) Of the total that was stolen, $3 billion has been frozen by other companies, including Circle and Tether, two large issuers of digital coins that have the ability to stop the movement of stolen funds.

That means North Korea won’t have access to those coins, and Binance said it was working on recovering them. But the hackers have already moved $2.4 billion in crypto “beyond any issuer’s reach,” according to TRM.

Those losses may be only the beginning, as the crypto world reckons with an era of fast-evolving hacking techniques and growing risks. Even as President Trump has endorsed the industry and sought to bring it into the mainstream, some crypto firms still struggle with the basic work of any financial company — keeping customer money safe.

“A.I. is undoubtedly turbocharging the ability of hackers to find and exploit subtle flaws in various parts of the crypto ecosystem,” said Eswar Prasad, a Cornell University economics professor who tracks the crypto industry. “The scale and scope of such attacks is likely to intensify.”

Still, North Korea’s inventive army of hackers could probably have pulled off the Binance heist without A.I., even if the technology proved useful during the operation, some cybersecurity experts said.

“North Korea had sophisticated threat actors that could have done this pre-A.I.,” said Joshua Saxe, the chief technology officer of the A.I. security firm Abundant Security. “That said, it’s hard not to think about the relationship between mega-heists like this and what A.I. is doing to democratize advanced hacking. Many more actors can attempt this kind of thing now, thanks to A.I. tools.”

Crypto has struggled with major thefts since the technology’s inception in 2008.Industry pioneers viewed digital coins as a renegade alternative to banks — a type of money outside the supervision of governments or big businesses. From the beginning, that philosophy made crypto vulnerable.

Many crypto investors keep funds in their own online wallets. But if they lose a password, the money is gone forever. Others rely on exchanges like Binance, which behave something like banks, storing funds for customers. But exchanges are not subject to the same regulatory systems that govern banks and other traditional financial companies, and have often lacked effective guardrails against crime.

In February 2025, North Korean hackers tricked the chief executive of Bybit, Ben Zhou, into authorizing a seemingly routine transaction that handed them control of the exchange’s system. They had exploited a gaping hole in ByBit’s defenses — a free software product that the company used to protect customer deposits. The thieves extracted $1.5 billion in digital coins.

At the time, a security firm called the losses “completely preventable.” Ultimately, Bybit weathered the crisis by drawing on corporate reserves and borrowing funds from other crypto companies.

The attack on Binance appears more serious.

After it was founded in 2017, the exchange quickly became the largest and most important company in the crypto industry, processing as much as two-thirds of all digital currency transactions. It provides a marketplace for people to buy popular coins like Bitcoin and Ether, converting traditional currencies into crypto.

On Thursday, as soon as Binance’s system was breached, its founder, Changpeng Zhao, assured customers that they would not lose any money.

“It hurts, but we will survive,” he wrote on X, adding a muscle emoji.

Mr. Zhao has a long history of legal and regulatory problems. Binance pleaded guilty to money-laundering violations in 2023 and paid a $4.3 billion fine to the U.S. government. After serving a four-month prison sentence, Mr. Zhao was pardoned by Mr. Trump last year. Binance also forged a business relationship with World Liberty Financial, the Trump family’s crypto company.

by David Yaffe-Bellany and Dustin Volz, NY Times |  Read more:
Image: Tyrone Siu/Reuters
[ed. Probably more of this soon as the AI cat and mouse game kicks into gear. See also: What happens to your money when an exchange gets hacked (CNBC).]

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Wednesday, October 28, 2026

Twilight of a Grifter

Trump’s increasingly erratic and corrupt behavior condemns Republican leaders who continue to support him.

At 8:00 last night, he posted on social media his longest entry ever: an emotional 1,323-word screed attacking late-night host Bill Maher. While the screed was directed at the comedian, it seemed really to be a cry of fury at his loss of control over his base and over the country.

Giant turnout for rallies by former president Barack Obama in Ohio and Michigan on Saturday illustrated the changing mood of the country. In Cleveland, Obama rallied voters behind Democratic candidate for U.S. Senate Sherrod Brown and gubernatorial candidate Amy Acton. In Michigan he rallied voters for Democratic gubernatorial candidate Jocelyn Benson, Michigan’s current secretary of state, and Democratic candidate for the U.S. Senate Dr. Abdul El-Sayed.

Obama told attendees that El-Sayed is “fighting for change, real change, that will get money out of politics and put money in your pocket” and would “finish the job we started with the Affordable Care Act and guarantee quality, affordable healthcare to every single American.” He called out Trump’s corruption, “enriching himself and his family” and “selling favors.”

Obama’s jokes were even more calculated to get under Trump’s skin. As Joseph Gedeon of the Guardian reported, Obama mocked Defense Secretary Pete Hegseth’s fascination with testosterone levels and asked: “How much time do you think this man spends in front of the mirror every day?” He belittled Trump’s fight with “that well-known evil empire, Canada,” a poke reminding listeners that President Ronald Reagan had called Russia an “evil empire” while Trump is now in league with that regime. And Obama poked fun at Trump’s White House projects, saying “he should be on HGTV,” a cable network that focuses on home improvement and interior design.

Perhaps even more galling to Trump were the images that circulated on social media of Obama’s packed venues, comparing them to the dwindling crowds at Trump’s.

Trump’s post about Maher listed Trump’s own triumphs, beginning with The Apprentice, and claimed that Maher has been “DESPARATELY” [sic] begging him to come on his own show. Trump then tore into the idea that Trump’s popularity has dropped so far that even Republicans are abandoning him, reiterating that a CNN poll showed “I’m at 98 and 99% support within the Republican Party, an All Time Record High,” higher even than Reagan’s high-water mark.

The post felt frantic. In fact, the CNN poll to which Trump referred measured his popularity among his own base of self-identified MAGA Republicans, not the Republican Party as a whole. Trump went on to post videos to reinforce his claims.

Trump’s determination to keep Republicans in control of Congress seems to be about more than his refusal to accept that he isn’t always the winner. Since January, he has been warning that if Democrats take control of the House of Representatives, they will impeach him. Increasingly, it seems he is concerned about what such hearings will uncover.

On Saturday the Washington Sun reported that the White House has been evaluating whether to issue a blanket pardon for all junior staffers. Such a move would take away their incentive to cooperate with investigations, but it would also remove their ability to refuse to speak under their Fifth Amendment protections against self-incrimination.

The administration is already trying to hide documents, emails, and texts between Trump’s hand-picked Kennedy Center director Matt Floca and Trump’s executive assistant Natalie Harp about Trump’s sabotage of the Kennedy Center. They are also trying to shield messages between Floca and Commerce Secretary Howard Lutnick about the Kennedy Center when Lutnick was acting for Trump in discussions about the performance center.

Zach Everson of Public Citizen noted that Trump’s hotel in Washington, D.C., opened ten years ago today, and Republicans’ refusal to condemn the flood of money into that enterprise to buy his goodwill convinced him that there would be no repercussions for grifting off the presidency. Everson notes that at the opening Trump said, “Today’s a metaphor for what we can accomplish in this country,” and now, ten years later, he has made more than $1.4 billion off crypto while investors have lost $4.8 billion. [...]

At a rally yesterday, Trump told attendees if the Democrats win the midterms, “you will only have yourselves to blame.”

And so, he and his allies are trying to put their finger on the scales against Democratic voters.

by Heather Cox Richardson, Letters From an American |  Read more:
Image: Haiyun Jiang/The New York Times
[ed. See also: An Unpredictable President, a Grim White House (NYT).]

Tuesday, October 27, 2026

Desperation Time

Trump’s GOP Flailing as Campaign Nears Close

GOP strategy and POTUS Trump’s behavior are spiraling in parallel as the 2026 midterms come to a close.

The most obvious example came with a disastrous backfiring attack ad in Ohio, but can also be seen in Trump’s bizarre commentary in praise of higher gas prices and about the gluteus maximi of both men and women while on stage at multiple campaign events.

Trump Backs Ramaswamy Self-Defenestration
With former Presidential candidate Vivek Ramaswamy consistently behind his Democratic opponent Amy Acton in most Ohio gubernatorial polls, the campaign opted for a bizarre Hail Mary gambit on the 19th.

Ohio blogger D.J. Byrnes posted a video on X featuring Acton’s estranged mother, Donna Arthur, calling her daughter a liar about her childhood, including Acton’s account of having lived in a tent. Byrnes post racked up nearly 2M views.

The video didn’t mention what court records show: Arthur’s husband, Cledith Arthur, was charged with rape in July 1978 after Acton’s father reported that he had sexually abused her, was indicted that September, and the couple left town before trial. Warrants followed in 1978 and 1981, and he died in 2004. A 1982 police report and 1978 arrest paperwork back Acton’s account of living at a campground.

Of more interest was the unusual provenance of the ad, which initially included no disclaimer indicating who paid for it, via CNN:

When it first circulated, the video did not have the standard disclaimer that political ads carry saying who paid for or authorized them, nor did it show up Tuesday morning as a paid ad in the race on AdImpact, the political ad-tracking service.

And the first Ramaswamy campaign statement from Luck did not address whether it was responsible for the video. It suggested voters should consider the message from Acton’s mother and repeated her attack, asserting that “we know that Amy Acton is a serial fabulist who has some serious problems with the truth that the public needs to be aware of before deciding who to entrust as governor.”
…
An official with V-PAC, the main super PAC backing Ramaswamy, said it did not make the video. CNN has attempted to contact Arthur for more information about how the video came together.
…
Speaking with reporters after the event, Ramaswamy took responsibility for the ad and reiterated that voters should take into account what people who know Acton “well” are saying about her. He said he has never met the mother and that she was “not compensated” for the ad.
…
Ramaswamy’s campaign leaned into the controversy over the ad Tuesday night, announcing it would spend $4 million to run the spot.
…
The video was first published widely on Monday night by an Ohio political blogger, D.J. Byrnes, who is known as “The Rooster.” Byrnes told CNN he obtained the video from a voter who saw it as part of a poll and recorded it. On Tuesday morning, Acton’s campaign released a statement from her brother, Philip Stearns, denouncing the video and linking it to Ramaswamy.
The NY Times reported that the campaign had not even decided to release the ad when Byrnes dropped it online:
The Ramaswamy campaign was still testing the ad to gauge its effectiveness when the spot burst into public view late Monday.

D.J. Byrnes, a left-leaning local journalist known as the Rooster, published the ad online, calling it “loathsome.”
…
The ad served as an attempt to shift the focus of the campaign in its final days from frustrations about Mr. Trump’s economy to a referendum on Dr. Acton’s honesty. But in so doing, it placed Mr. Ramaswamy’s own morals and ethics in the spotlight, and reminded voters that Dr. Acton survived a seriously troubled childhood.
Most Ohio GOP politicians (and some national ones) distanced themselves from Ramaswamy and the ad, but not POTUS Trump or Vice President J.D. Vance — a close friend of Ramaswamy who both endorsed the campaign’s decision to run the ad.

Donald Trump, Jr even re-tweeted the ad.

Ironically, Trump and Vance coming out strong in support of the ad destroyed Ramaswamy’s ability to distance himself from the spot.

Ohio is not the only state where Trump’s GOP is indulging in ham-fisted attacks on Democratic candidates.

Trump’s GOP Goes Islamophobic in Michigan

Trump has attacked Michigan Democratic Senate nominee Abdul El-Sayed over his religion. Posting on October 7th that El-Sayed “goes back to the days of the Jihad” and is a “Terrorist Sympathizer” and saying “I call him Mohammed” on the 10th.

Saying “He’s a Muslim Brotherhood guy, 100%,” and posting that El-Sayed “wants our Country to go to Sharia Law. If it ever does, he should be the first that’s tried!”

Republican nominee Mike Rogers and the NRSC put their money behind Trump’s Islamophobic rhetoric with a seven-figure buy for an ad saying El-Sayed is “connected to the Muslim Brotherhood and Al-Qaeda,” and the Senate Leadership Fund ran an ad built on a quote El-Sayed gave at 24 about a “Sharia-compliant” mortgage, set over an image of a woman in a niqab.

In Texas, they’ve gone in a different direction, but kept the hate consistent.

If It’s Texas, That Must Be Talafreako

Apparently having little else to work with, Republicans have made transgender issues the core of their attacks on Texas Dem. Senate nominee James Talarico. Of the $359 million (!) Republicans have spent on Texas ads since June, $119 million went to ads on transgender minors, transgender sports and LGBTQ+ rights, more than any other issue, with the biggest share going to the Senate race.

Texas PAC, which got $158 million from Elon Musk routed through the Senate Leadership Fund, opened its negative ads by attacking Talarico as being for “they/them, not you,” and a later Texas PAC ad claims he “supports parents being charged with child abuse if they do not support transitioning their children.”

In September, GOP Senate nominee Ken Paxton’s campaign ran an ad using an AI-generated Talarico delivering a fake sermon that opens “In the beginning, God was nonbinary.” Trump calls him “James TalaFREAKO,” and JD Vance branded him a “freak” and made a joke implying he is gay.

Somehow none of this is working as polls show Paxton consistently trailing Talarico.

Let’s go up to Maine and see what the GOP is up to there.

They’re Seriously Playing the Incest Card in Maine

In Maine, Republican groups have spent about $47 million attacking Troy Jackson, compared to the estimated $31 million Democratic groups have spent attacking Susan Collins.

The Senate Leadership Fund’s country-song radio ad calls Jackson “weird,” a “freak” and a “creep” because “he has two kids with his cousin,” with the chorus “If he’ll screw his own family, he’ll screw yours too.”

I have to give them points for giving me a cheap giggle, but I can’t fathom whom they think they’re persuading to vote for Susan Collins with that ad.

Collins’s campaign said it “should be taken down immediately,” though Collins herself raised the relationship with Politico on 2 September: “I’m not going to bring up the fact that the mother of his two children is his second cousin.”

Other SLF spots say Jackson “keeps it in the family” and call him a “Crook and a Creep“; another says an Allagash cell tower he touted was built on his family’s land.

Somehow this isn’t working and Collins trails Jackson in most polls.

But wait, it’s about to get even weirder.

Trump on the Upside of Higher Gas Prices

In Georgia over the weekend, Trump went full-on in praise of higher gas prices, per KARK (in a piece which chronicles Trump’s various comments about fuel prices over the course of 2026, it’s been quite a journey):
Over the weekend, Trump argued once more that the Iran war means profits for the U.S. oil and gas business — claiming that the country “is making hundreds of billions of dollars because of what’s happened in the Middle East.”

“My people said, ‘Please don’t mention that sir, because people are paying a little higher’,” the president said at a Georgia campaign rally on Saturday, adding that he can already see “fake news” headlines about consumers still suffering from steeper prices. “But I said I don’t give a damn. I’m going to say it. We’re making a freaking fortune. Our country is getting stronger and stronger all the time. And those pump prices are going to come down.”
by Nat Wilson Turner, Naked Capitalism |  Read more:

[ed. I'd be happy with someone who's just competent and authentic, who'll work diligently on my and the country's behalf (not just half the country, rich people, corporations and PACs). Even by those minimal standards most politicians are failing.]

The Smartphone Trap We Built for Ourselves

Here’s a non-exhaustive list of things that, as recently as seven years ago, we could reliably do without a smartphone:
  • Read a restaurant menu while seated inside, and pay your check.
  • Enter a concert or sporting event.
  • Use a parking garage or park your car on the street.
  • Receive packages or retrieve purchases.
  • Complete the sign-in process for work, banking, or government services.
  • Attend school events or communicate with your kid’s school.
  • Access health care and other kinds of appointments.
  • Take public transit.
  • Get a taxi.
  • Get into a gym or fitness class.
I’ve been thinking about this drift toward mandatory apps and QR codes a lot lately, as a new millennial parent unhappy with my addictive tendency to mindlessly scroll near my baby. [...]

You should not have to have an addictive device in your pocket at all times in order to do ordinary things. We should be pushing for a world where adults can meaningfully reduce their smartphone use, or quit it altogether if they want.

And it’s not just about personal self-improvement. The status quo has already been long untenable for many people, especially the elderly, the disabled, the unhoused, and anyone who just can’t afford a data plan.

Pushing for a non-smartphone option is about accessibility, affordability, and agency. It’s about demanding the kind of freedom in a society we deserve to have. There should never be any essential service that requires phones as the only way in.

We can fix this, and some people are already showing how.

How we got here

Even if it takes us another decade to unwind, it’s important to remember these changes are less than ten years old.

Smartphone ownership exploded over the 2010s, rising from 35 percent of US adults in 2011 to 81 percent in 2019, according to Pew. It has since climbed to roughly 9 in 10.


In other words, smartphones stopped being a device many people had and started becoming a device every institution could assume you had. What happened next was part real improvements in convenience, part cost-cutting that pandemic-era policy made easier to justify, and part what sociologists call “isomorphism” — organizations converging on a practice not because it works best, but because everyone else has adopted it.

Isomorphism is one of my favorite concepts I learned in college, and you know it when you see it. For example, you’re planning a conference, and somewhere along the way it became true that a “good” conference has its own app, even though nobody wants to download an app to learn when lunch is on the schedule. Or it’s the way every mission statement sounds like every other mission statement.

I’d say the charitable reason we drifted toward handling so much by smartphone is that a lot of it genuinely is better, faster, and harder to lose. Tapping a turnstile with my phone, and never wondering whether I left my DC metro card at home, has made my life easier.

The less benign reasons are that digital systems let companies and governments cut labor and operating costs. Apps and QR codes replace cashiers, waitstaff, printed materials, and customer service reps, and shift new work onto us, the customer. The smartphone systems also generate a lot of personalized data which companies love to collect, and sometimes sell.

Then there’s control, which companies certainly like. Not all of it is sinister. (Think blocking tickets from being resold, or prices and menus being updated instantly.) But when sellers control the interface and know a lot about us, two people can open the same app at the same moment and see different prices. Economists call this price discrimination, and it’s much easier to pull off when there’s no posted price we can compare against.

But just because inertia is leading us toward a universal smartphone society, that doesn’t mean it’s where we’ll end up. We have options to push back.

by Rachel Cohen Booth, Vox | Read more:
Image:Matteo Della Torre/NurPhoto via Getty Images
[ed. I've experienced this just trying to pay for a parking spot in Seattle. First, had to get the app. Then register. Then follow all the instructions for punching in a special code for my space, license plate number, and finally estimated time period of parking. Took me nearly 25 minutes. Not to mention trying to read the small type on the sign and memorizing the special app url. Suppress scream.]

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The Consequences of Abundant Intelligence

Macro Memo

February 22nd, 2026
June 30th, 2028


The unemployment rate printed 10.2% this morning, a 0.3% upside surprise. The market sold off 2% on the number, bringing the cumulative drawdown in the S&P to 38% from its October 2026 highs.

Traders have grown numb. Six months ago, a print like this would have triggered a circuit breaker.

Two years. That’s all it took to get from “contained” and “sector-specific” to an economy that no longer resembles the one any of us grew up in. This quarter’s macro memo is our attempt to reconstruct the sequence - a post-mortem on the pre-crisis economy.

The euphoria was palpable. By October 2026, the S&P 500 flirted with 8000, the Nasdaq broke above 30k. The initial wave of layoffs due to human obsolescence began in early 2026, and they did exactly what layoffs are supposed to. Margins expanded, earnings beat, stocks rallied. Record-setting corporate profits were funneled right back into AI compute.

The headline numbers were still great. Nominal GDP repeatedly printed mid-to-high single-digit annualized growth. Productivity was booming. Real output per hour rose at rates not seen since the 1950s, driven by AI agents that don’t sleep, take sick days or require health insurance.

The owners of compute saw their wealth explode as labor costs vanished. Meanwhile, real wage growth collapsed. Despite the administration’s repeated boasts of record productivity, white-collar workers lost jobs to machines and were forced into lower-paying roles.

When cracks began appearing in the consumer economy, economic pundits popularized the phrase “Ghost GDP“: output that shows up in the national accounts but never circulates through the real economy.

In every way AI was exceeding expectations, and the market was AI. The only problem…the economy was not.

It should have been clear all along that a single GPU cluster in North Dakota generating the output previously attributed to 10,000 white-collar workers in midtown Manhattan is more economic pandemic than economic panacea. The velocity of money flatlined. The human-centric consumer economy, 70% of GDP at the time, withered. We probably could have figured this out sooner if we just asked how much money machines spend on discretionary goods. (Hint: it’s zero.)

AI capabilities improved, companies needed fewer workers, white collar layoffs increased, displaced workers spent less, margin pressure pushed firms to invest more in AI, AI capabilities improved…

It was a negative feedback loop with no natural brake. The human intelligence displacement spiral. White-collar workers saw their earnings power (and, rationally, their spending) structurally impaired. Their incomes were the bedrock of the $13 trillion mortgage market - forcing underwriters to reassess whether prime mortgages are still money good.

Seventeen years without a real default cycle had left privates bloated with PE-backed software deals that assumed ARR would remain recurring. The first wave of defaults due to AI disruption in mid-2027 challenged that assumption.

This would have been manageable if the disruption remained contained to software, but it didn’t. By the end of 2027, it threatened every business model predicated on intermediation. Swaths of companies built on monetizing friction for humans disintegrated.

The system turned out to be one long daisy chain of correlated bets on white-collar productivity growth. The November 2027 crash only served to accelerate all of the negative feedback loops already in place.

We’ve been waiting for “bad news is good news” for almost a year now. The government is starting to consider proposals, but public faith in the ability of the government to stage any sort of rescue has dwindled. Policy response has always lagged economic reality, but lack of a comprehensive plan is now threatening to accelerate a deflationary spiral.

How It Started

In late 2025, agentic coding tools took a step function jump in capability.

A competent developer working with Claude Code or Codex could now replicate the core functionality of a mid-market SaaS product in weeks. Not perfectly or with every edge case handled, but well enough that the CIO reviewing a $500k annual renewal started asking the question “what if we just built this ourselves?” [...]

That summer, we spoke with a procurement manager at a Fortune 500. He told us about one of his budget negotiations. The salesperson had expected to run the same playbook as last year: a 5% annual price increase, the standard “your team depends on us” pitch. The procurement manager told him he’d been in conversations with OpenAI about having their “forward deployed engineers” use AI tools to replace the vendor entirely. They renewed at a 30% discount. That was a good outcome, he said. [...]

When Friction Went to Zero

By early 2027, LLM usage had become default. People were using AI agents who didn’t even know what an AI agent was, in the same way people who never learned what “cloud computing” was used streaming services. They thought of it the same way they thought of autocomplete or spell-check - a thing their phone just did now.

Qwen’s open-source agentic shopper was the catalyst for AI handling consumer decisions. Within weeks, every major AI assistant had integrated some agentic commerce feature. Distilled models meant these agents could run on phones and laptops, not just cloud instances, reducing the marginal cost of inference significantly. [...]

Over the past fifty years, the U.S. economy built a giant rent-extraction layer on top of human limitations: things take time, patience runs out, brand familiarity substitutes for diligence, and most people are willing to accept a bad price to avoid more clicks. Trillions of dollars of enterprise value depended on those constraints persisting.

It started out simple enough. Agents removed friction.

Subscriptions and memberships that passively renewed despite months of disuse. Introductory pricing that sneakily doubled after the trial period. Each one was rebranded as a hostage situation that agents could negotiate. The average customer lifetime value, the metric the entire subscription economy was built on, distinctly declined.

Consumer agents began to change how nearly all consumer transactions worked.

by Citrini Reserch |  Read more:
Image: uncredited

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Solid Lamp, RelvaoKellermann

Monday, October 26, 2026

This Boom Looks a Lot Like the Housing Bubble

Artificial intelligence is fast becoming the largest investment in U.S. history. As the money pours in, the companies involved are resurrecting bad old habits eerily reminiscent of the shenanigans deployed in the run-up to the financial crisis.

There are already signs that much of this investment may go bad. If it does, the consequences could rival what happened in 2008.

We know far too little about the financial plumbing propping up this surge. What little we do know looks remarkably like the tactics once employed by Wall Street firms like Lehman Brothers, the storied 158-year-old bank that collapsed in 2008, setting off a panic that ultimately cost taxpayers nearly $700 billion in bailouts in today’s dollars and nearly nine million Americans their jobs. Now as then, companies are hiding large amounts of debt off public balance sheets. Firms responsible for protecting our pensions and our insurance are again risking our money by snapping up complicated financial products backstopped by assets of uncertain value. A small group of companies are buying and selling large amounts of a hot product to one another, inflating demand for the product and obscuring the risks of the system in a web of complexity. The accountants and credit-rating firms that analyze the situation — and that are financially beholden to the debtors — are deploying shaky excuses to declare it all fine.

There are a few differences. With more U.S. funds in A.I.-heavy stocks than in homes, a crash could destroy more wealth than the 2008 financial crisis did. And the Trump administration, reportedly eager to prevent a bust, is making changes that inject new opacity and more risk into the situation.

There are already signs the nascent A.I. industry may not soon generate the trillions of dollars required to pay off all the huge debts it is incurring. Earlier this month, The Financial Times reported that the projected annual revenue at A.I. lab OpenAI was about $50 billion at the end of September, 28 percent lower than had previously been believed. Figures reported by The Wall Street Journal this month suggested that revenue growth at Anthropic, OpenAI’s chief rival, was softening. Markets are getting nervous, with the tech-laden Nasdaq falling over 5 percent over the last two weeks.

Anthropic and OpenAI are already so entangled in our economy (and in our national security) that if they sink, Washington will need a plan. Done right, any rescue would come with real safety guardrails, real insurance that we won’t cede control of the technology to China and real service to the public interest.

Lehman Brothers was born in 1850 as a cotton brokerage in antebellum Alabama. The A.I. chipmaker Nvidia was born in 1993 in a booth at a Denny’s in San Jose, Calif., and Meta in a Harvard dorm in 2004. And yet the financial circumstances surrounding those companies share an uncanny resemblance.

Start with hidden loans. A Wall Street Journal analysis in August concluded that the nine largest tech firms, Nvidia and Meta included, have managed to accrue $3 trillion of debt, or roughly 10 percent of the entire U.S. economy, off their balance sheets. Keeping the debt off the books (and away from the figures investors and regulators watch most closely) makes it easier for those companies to spend enormous sums constructing the data centers that drive A.I. — centers they believe will both improve the technology and satisfy an expected takeoff in demand.

Back in 2008, Lehman, too, accumulated lots of debt, primarily from buying subprime mortgages; those loans, which were targeted to home buyers with thin or imperfect credit histories, were the hot product of its day. The firm similarly avoided scrutiny by shuffling the debts off its balance sheet. When those mortgages went bad, so did Lehman, and its sudden demise nearly took much of the banking system with it.

Within days of its failure, Washington committed hundreds of billions of dollars to stabilize the financial system, and the Federal Reserve backstopped trillions more. Still, the rescue wasn’t enough to stave off the worst recession since the Great Depression. Millions of jobs and trillions in household wealth evaporated.

Now you might ask: Didn’t Congress pass legislation to prevent another crisis from occurring? Yes, but that law, known as Dodd-Frank, applied largely to lenders, which means banks and bank-holding companies. It left private creditors, back then a relatively small slice of the finance world, virtually untouched. In 2018, Congress, worried about the potential impact on small businesses, loosened rules to allow many private creditors to stretch their balance sheets. It ignored objections that money, like water, would always flow to the least regulated corners of finance.

Enter Silicon Valley. A.I.’s biggest players seized on the loosely regulated private credit industry to help finance their data center spree.

Another throwback to the bad old days of 2008: the way the A.I. firms and their main suppliers are buying and selling the technology and its infrastructure to each other, lending large sums to one another to fund the deals. Nvidia disclosed commitments and guarantees of over $530 billion to its own customers in July — more than triple the amount it was lending just three months earlier. Analysis by the asset manager Sona found at least 176 circular financing deals in the A.I. ecosystem that were worth $3.6 trillion over the past three and a half years.

Back in the housing bubble, major Wall Street firms came up with numerous complex ways to borrow from their rivals, with proceeds going to purchase even more subprime mortgages. The result made demand for those loans look greater than it actually was, and it built a financing web so tangled that it became difficult to parse any one firm’s exposure. As Lehman’s collapse later showed, such confusion meant that a problem anywhere can soon become a problem everywhere.

Then how about the fact that accounting firms, those given the job of calling out any warning signs, appear asleep at the wheel once again? Ernst & Young, which signed off on Lehman’s questionable accounting tactics before its collapse, is now being accused of offering more tautology than real comfort in its latest approval of Meta’s unusual accounting moves to fund its very expensive A.I. push. Everything is all fine, essentially, because Meta said it is.

Those are the similarities. Now for the differences.

This presidential administration, reportedly worried that any A.I. slowdown will beget a broader economic one (which, in turn, could worsen its political standing), is propping up the boom. Its measures likely goose the available money in the short term but will worsen the pain of any correction. President Trump wants to allow Americans to invest their retirement savings in private credit funds, ensuring they will lose directly if these data center deals go bad. The Securities and Exchange Commission has made it easier for data center owners and their lenders to slice and repackage this debt, which is exactly what banks did to subprime mortgage debts in the housing bubble. The S.E.C. is also proposing rules that allow newly public companies to disclose even less than they already do.

Another difference: This time, taxpayers are more clearly on the hook, because private creditors are more directly attaching A.I. debt to the financial products we need. Take annuities, which are often relied on by retirees. Because many Americans rely on such insurance products, their policies are usually guaranteed by the state should an insurer go bankrupt. Right now, private creditors like Apollo are funding the debt boom in part by tapping the money sitting in companies like Athene, the $470 billion insurer Apollo controls. Should the A.I. boom go bad and Athene go under, Apollo knows the state (i.e. taxpayers) will be on the hook for much of what it owes policyholders. (Athene’s opaque disclosures make it hard to know how much of its assets are in data centers.)

Private-capital-backed firms now own nearly 20 percent of the entire U.S. life insurance industry, with assets of nearly $1.5 trillion.

As bad as the financial crisis was, it began with a small slice of mortgages of a still-diversified economy. This time, the sector at risk is our economy’s growth engine. A.I.-related investment fueled an estimated one-third of the country’s recent economic growth, and the handful of companies most exposed to the A.I. build-out now comprise roughly one-third of the entire S&P 500.

In other words, the U.S. economy is fully hostage to an A.I. build-out laden with increasingly worrying financial engineering, all riding on a wager — that demand for A.I. will keep growing, that customers will soon be willing to pay what the technology actually costs to produce and that firms will manage to build the infrastructure required to supply it. Recent estimates indicate that A.I. would need to generate as much as $3 trillion annually in perpetuity to return the capital extended. That’s 9 percent of the U.S. gross domestic product, or twice what Americans spend on food.

Already, a closer look at the fundamentals of OpenAI and Anthropic, the most critical players in this bet, appears to be perhaps even worse than the headlines suggest. Right now OpenAI expects to lose $280 billion by 2030 even assuming revenues grow tenfold over the same period. And both OpenAI and Anthropic have already slashed prices 40 percent to 50 percent from early summer, perhaps because China’s Deep Seek, the leading “open weight” A.I. model, reportedly nearly matches their latest models’ performances at about 1.4 percent of the cost. Far less expensive open weight models have roughly doubled their share of token volume this year, according to OpenRouter, a service that tracks A.I. usage across all major providers. Prices and market share are shrinking; costs are not.

Such worries may explain why tech stocks have been taking a beating, and bond markets — normally where investors go for shelter amid financial turbulence — are volatile. Many of those private creditors — a sector that has grown sharply amid the A.I. boom, to between $2 trillion and $3 trillion — are showing classic signs of financial distress.

A final difference from 2008: The government deficit has reached historic highs.

by Jen Harris, NY Times |  Read more:
Image: Chuan Ming Ong
[ed. AI's already taken the world's economies hostage, without even being fully deployed yet. Sleepwalking into a disaster.]

How the Consulting Class Always Wins

Image: Doug Chayka
[ed. I'd say both parties. Do small donors really matter that much compared to their multi-billionaire counterparts? All that money spent on ads, does it really move the needle much? (It sure does for me - negatively.]

Obra de Ubé, proditio fraterna, (2026)

What’s Riding on Anthropic’s Market Debut? Nearly Everything

When Anthropic goes public as soon as next month, its initial offering will be more than just a coming-out party for the artificial intelligence company. It will also be a litmus test for the economy, with trillions of dollars at stake.

Anthropic, which makes the Claude chatbot, is a tent pole of the AI industry. Valued in the private markets at nearly $1 trillion and backed by more than $130 billion in funding, it could raise $100 billion in its offering and promptly become one of the world’s biggest public companies. But the stakes are even higher than that.

Anthropic and OpenAI, its chief rival, sit atop a pyramid of business partners and suppliers — infrastructure providers, chipmakers, energy companies and AI startups — that have all spent heavily over the last four years because they believe demand for AI products will keep growing.

Anthropic’s listing will provide the first in-depth look at the health of a key business underlying the AI boom — and will be a test of its durability. Is there unending appetite for AI services to justify the spending on chips, data centers and other infrastructure? Or will Anthropic’s performance show that there are limits?

“For the market, it’s a bellwether,” said Umesh Padval, an investor at Seligman Ventures, who has worked in tech for nearly 40 years.

If Anthropic disappoints in its public debut, that could hurt investor confidence and cascade into a wider market sell-off, casting doubts on how much longer the AI boom can go. A successful offering could lift the market and pave the way for more AI companies to go public.

Stock markets are already on edge, with technology stocks broadly falling this month, led by a sell-off in the companies that design and produce the computer chips that power AI. The Philadelphia Semiconductor Index is in a bear market, defined as a decline of 20% or more from a recent high and a sign of significant investor angst, after falling 26% from its June peak.

Over the last couple of weeks, Microsoft canceled a deal with Nscale, a provider of data centers. A report from the research firm Gartner predicted that 80% of “neoclouds,” the companies that provide data and computing power for AI firms, could be forced out of business. And Ken Griffin, the billionaire owner of the hedge fund Citadel, said AI investors were “almost certainly” in a bubble.

Those negative signals have added to fears about the huge piles of money being spent on AI infrastructure. Amazon, Meta, Google and Microsoft have said they plan to spend at least $740 billion on AI infrastructure, including data centers, this year. Private market investors have poured $1.1 trillion into Anthropic, OpenAI and other AI companies since 2022, according to PitchBook, which tracks investments.

As spending and investment have risen in private markets, public investments have grown, too, increasing the stock market’s reliance on the performance of the AI industry. The top 10 stocks in the S&P 500 are worth more than $1 trillion together, with eight of them being tech companies. Combined, the top 10 account for over 40% of the index, up from less than 20% a decade ago.

When Anthropic is added to the index, it is likely to displace either Berkshire Hathaway or Eli Lilly, the only non-tech companies with valuations above $1 trillion, from the top 10.

“There is a lot riding on this one,” said Brad Gastwirth, the global head of research and market intelligence at Circular Technology, a supply chain services firm. “If it goes bad, it’s going to bring down the market.”

by Erin Griffith and Lauren Hirsch, Seattle Times/NY Times | Read more:
Image: Dustin Chambers/The New York Times
[ed. House of cards. Too many moving parts, with precarious circular financing, locked-in future contracts, uncertain political and regulatory climate, and a product that could kill everybody. Plus, no signs of AI payoff outside the tech sector so far. So, more than a little liability baked in. See also: Wall Street prepares for AI's "day after"  and, Anthropic to investors: Trump hates us so much (Axios).]

Comcast Loses More Customers, Claims Cheap Prices are “Irrational”

Comcast reportedly plans significant job cuts in its cable division as the firm continues to lose residential broadband and TV customers. Comcast lost 144,000 residential broadband customers in Q3 2026, up from a 91,000-customer loss in the same quarter a year ago, the company said in its earnings report today.

Comcast historically capitalized on a lack of competition for high-speed wired broadband. But now it faces stronger competition from fixed wireless providers and from fiber providers in parts of its cable territory.

“Fixed wireless remains aggressive and continues to take share, while fiber construction remains elevated, with pockets of irrational pricing and promotional activity,” Comcast co-CEO Mike Cavanagh said today in an earnings call.

Comcast CFO Jason Armstrong said “irrational pricing” from fiber operators includes $30 to $40 monthly broadband offers “in specific markets in the third quarter.” He said $30 to $40 pricing is irrational because deploying fiber costs $1,500 or more per home, and is “getting more expensive with construction costs up as you get into more suburban and rural areas.” [...]

Armstrong said more Comcast customers are leaving when they face “pricing transitions,” apparently referring to the price hikes customers get when promotional offers expire. “We’ve been refining our offers and retention strategies to better manage these transitions and strengthen customer retention,” he said. [...]

Fewer Jobs, More AI Agents

It appears likely that job cuts will affect Comcast’s famously frustrating customer service division, replacing some number of humans with AI agents that already handle some customer interactions. “As personal AI agents reshape how consumers discover, purchase, and manage services, we’re positioning Comcast to capitalize on that shift,” Armstrong said.

by Jon Brodkin, Ars Technica | Read more:
Image: Getty Images | Smith Collection/Gado
[ed. Comcast/Xfinity has been ripping off its captive audience for decades. Anybody shedding a single tear for them today? Ha! They upped my monthly internet bill by $10 in August, then another $10 in September, one month later. Guess they thought people on autopay wouldn't notice. I went in and told them I was leaving for a new fiber service in town and they promptly halved my bill.]

Sunday, October 25, 2026

Fish, Family, Freedom

Alaska’s Senate Race Could Be Decided by Salmon

Perhaps the most important thing to know about Alaska’s Senate race, a close contest between the Republican incumbent, Dan Sullivan, and the former congresswoman Mary Peltola, is that salmon are pretty amazing fish. There’s the swimming upstream, the spawning, and the dying. Bears love salmon. Orcas love salmon. People love salmon. Without salmon, the first Alaskans, crossing the Bering land bridge some fifteen thousand years ago, could not have survived. On a recent trip to Alaska, I was, at various points, fed salmon for dinner, offered salmon as a gift, and given salmon for barter. Directly or indirectly, salmon feeds almost everything in the state, including its politics. Alaska’s bid for statehood, in the late nineteen-fifties, was in part a matter of keeping the hands of Seattle businessmen off local salmon stocks. Business deals are hammered out at fishing retreats. In 2010, a seaplane carrying Ted Stevens, likely the most powerful politician ever to come out of Alaska, crashed en route to a salmon lodge near Bristol Bay. He died wearing his waders.

People in the Lower Forty-eight care a lot about Alaska’s Senate race. This cycle, it has been twice as expensive, per capita, as Michigan’s, and eight times Texas’s. The attention is unusual. In federal elections, Alaska reliably votes Republican; every time Donald Trump has been on the ballot, Alaska has voted for him by ten points or more. But, amid historically low approval ratings for the President, the Democrats are hoping to flip the seat, an essential part of any attempt to wrest back control of both houses of Congress. Trump, meanwhile, is clearly nervous about holding the seat. He recently headlined a rally for Sullivan in Wasilla, a small city north of Anchorage. “This is worth the eight hours on a plane,” Trump said. “And don’t forget, I got eight hours going back, too.”

In January, Chuck Schumer recruited Peltola to run, calling her the “last piece to the puzzle” of his midterms plan. Peltola, the state’s former at-large House member, launched her campaign with the slogan “Fish, Family, Freedom.” To most outsiders, this read as folksy branding for a race that would inevitably be dominated by Donald Trump. But Peltola really wants to talk about fish. Recently, I saw her speak at the elementary school in Utqiagvik, an Arctic town at the state’s northern tip. It was a very unusual stump speech. She apologized for the “super negative, toxic ads” flooding the state, including her own. She mentioned her opponent just once: a flattering anecdote about his advocacy for an oil project she supports. She didn’t mention Trump at all. And even though, compared with the rest of the state, salmon is not so big in Utqiagvik, Peltola still mostly talked about fish.

This piscine primacy is relatively new in Alaska’s politics. In past election cycles, fish have always been one issue among many. But Alaska’s fish are in crisis. In recent years, runs of Chinook, or king salmon, the biggest and most revered species on the Yukon River, have been down as much as eighty per cent from average levels, according to the National Oceanic and Atmospheric Administration. Chum salmon, a more ordinary variety, have had an O.K. year, but they’ve been down as much as ninety per cent. Some species and some areas are worse off than others, but the general trend is bad, including for the state’s other two iconic seafood catches, halibut and crab. As I travelled around the state, I was surprised to find that virtually everyone I talked to was upset about the fish situation. One political consultant explained, “A lot of people come into the state, and they’re, like, ‘Why the hell is Mary Peltola “fish, family, freedom”?’ I’m a white guy who lives in Anchorage, and my freezer is currently full of rockfish, halibut, and salmon that I’ve caught because that’s just what we all do.”

The crisis is worst up rivers such as the Yukon and the Kuskokwim. For many thousands of years, entire Athabascan and Yup’ik villages have subsisted on salmon. ... But stocks have got so low that, in 2024, the Alaska government, in conjunction with Canada, shut down fishing for king salmon on the Yukon River and its Canadian tributaries for seven years—one complete king-salmon life cycle. The fish camps stand empty. [...]

Research scientists with the N.P.F.M.C. and N.O.A.A. attribute the die-off, primarily, to climate change. But activists in Alaska have mostly focussed their ire on a type of fishing known as trawling. In the Bering Sea and the Gulf of Alaska, the main target of commercial fishing boats is pollock, a medium-sized, mild fish that swims in fantastically vast schools. Trawlers catch pollock by dragging enormous nets; some open wide enough to swallow a thousand M.T.A. buses. Any net you put in the water will incidentally catch other, non-targeted fish. This is known as bycatch. Every year, the Alaskan pollock industry brings up around twenty thousand king salmon and around a quarter million pounds of halibut as bycatch. Recently, anger at this collateral damage, heightened by the fish shortage, has evolved into a political movement. [...]

I’d assumed that pollock people—businesspeople—would lean Republican, and the salmon people—the conservation-oriented—would lean Democratic, but that’s not really the case. “There’s nothing partisan about it,” Peltola told me recently. “When you ask folks who are MAGA why they’re splitting the ticket and voting for me, it’s largely because of trawling.” (The campaign later pointed out that a lot of those voters are also animated by high fuel prices.) Politics in Alaska are idiosyncratic. They rarely map onto a national partisan model. Republicans outnumber Democrats two to one, but independent voters outnumber both. “Partisan politics doesn’t work that well for a candidate,” Tony Knowles, the last Democrat to serve as governor, told me. A government staffer in a remote region put it to me, “Locally, no one gives a shit about the parties.”

One oddity of Alaska politics is that, though only twelve per cent of voters identify as Democrats, both the State Senate and the State House of Representatives are currently controlled by coalitions made up mostly of Democrats and independents, with some Republicans. Coalition governments are not uncommon in the state, where politicians are fond of saying that pragmatism trumps partisanship. Sometimes it’s more about vibes. “Somebody is a magnificent pain in the ass, and we don’t want them in our caucus so we build a caucus to exclude them,” Joelle Hall, a longtime union leader, told me. Imagine a congressional coalition formed by kicking out the lawmakers, on either side, who are annoying—the Ted Cruzes and the John Fettermans. Peltola tried to explain this unique approach by telling me that the current coalition “took the hardest people to work with and just put them to the side, and then everybody else joined as a majority to move forward and solve problems. And that is a model I am hoping we can export to every state in the nation.” [...]

“Alaskans consider themselves more Alaskan than Republican, and more Alaskan, quite honestly, than they are American,” Scott Kendall, an attorney and longtime G.O.P. political consultant in the state, told me. “We like each other. To me, it’s kind of a beautiful thing. And I’ve been back to D.C. and elsewhere enough to know how good we’ve got it.”...

As I spoke with Peltola voters across Alaska, I noticed a split between those who think she is talking too much about fishing, when a stronger message would be the war in Iran or gas prices, and those who worry that the outside strategists urging the Peltola campaign to focus on national topics will drown out her winning message. Alaska’s core constituency is composed of Natives, fishermen, rural legislators, and unions, with some chamber-of-commerce types mixed in. Peltola is a gun-owning, fish-catching Alaska-bush native, who has worked for mines and supports oil drilling, and is allied with the state’s largest labor unions. “You’ve got a once-in-a-generation candidate who is all the pieces of that coalition as one person,” the strategist told me. “You worry that the federal PACs will come in and fuck all that up. What’s actually somewhat surprising to me is that we’re here in October, and the dominant issue of the race is still trawl bycatch and local fisheries, which says they didn’t fuck it up that bad.” [...]

Trawling is a wedge issue in Kodiak. Many people rely on trawling, directly or indirectly, for work, but small seiners, long-liners, and crab fishermen have major issues with it. (“There’s five different fisheries groups, and they all basically think the others are stealing fish from them,” Hackney, the G.O.P. political consultant, told me.) ... We were at the brewery in town with the mayor, Terry Haines, who is also a retired fisherman, and the host of the Alaska Fisheries Report on KMXT, the local radio station. (He also d.j.s a half-hour spot of soul music every week.) “Bycatch is not the driver of our stock crashes,” he said. “It is simply the only lever that we have to pull. So that makes it a valid reason to look at pulling that lever. But you have to realize that you can pull that lever all the way down to the floor, and you’re still not going to change the environment that’s causing the fishery collapses.”

Peltola insists on what is called “rural preference”: in times of shortage, subsistence fishing must come first. Carrie Stevens, the representative for the Council of Athabascan Tribes, told me, “If people on the rivers have a moratorium to stand down, why is it so obscene to ask others to bear any brunt of conservation?” The tribes contend that the government’s scientists are underestimating the effect of trawling. One argument is that it’s not just the bycatch but the catch itself. Salmon eat juvenile pollock—or would, if they didn’t become fish sticks. Jim Balsiger, who retired as NOAA’s top fisheries official in Alaska in 2021, said recently, “Removing three to four billion pounds of fish from the Bering Sea every year for four decades is not a benign activity.” [...]

Fishing jobs like these are essential to Alaskan identity and have been declining across the state. Gunnar Knapp, a professor emeritus at the University of Alaska Anchorage and a prominent fishery economist, told me that the trawling issue has become about more than just fishing regulations. “A lot of this is symbolic. There is a vision that the world economy has been moving inexorably toward this dystopia controlled by large corporations, capitalism, and global enterprises, where the individual is marginalized and means nothing,” Knapp said. “If you’ve ever seen a trawl net when it comes in, it seems so appalling. You think, ‘You won’t have any fish left in the ocean!’ Well, it actually is sustainable, for pollock. But it’s not noble like a guy holding up one subsistence salmon.” The choice for Alaskans is difficult: crack down significantly on trawl, and you’ll limit global food supply and inflict significant damage to the state economy. In return, you’ll possibly get small gains upriver. “It’s less economic than moral or ethical,” Knapp said. “What costs are worth it for even a marginal improvement to the salmon runs? I think some people would say anything is worth it.” As a friend in Anchorage put it, “Trawling is our version of data centers.”

by Zach Helfand, New Yorker | Read more:
Image: Clara Mokri / NYT / Redux

The Hackening

Last week at a small conference, there was talk about a future event referred to as The Hackening. As in, within 6-12 months, many predicted that due to advanced AIs and AI agents the internet would become a severely hostile place. Some worried that this could rise to the level of ‘assume any phone connected to the internet is rooted’ and several people urged doing general crisis preparations on a personal level, in case of disruptions in supply lines, power, water or internet.

It did not take long for things to escalate.

The biggest hack is a flaw in PHP, which can be exploited to take control of the computer running any website using an unpatched version of PHP. There are many others.

On a personal level, you want to do at least some basic prep and get your security in order. It is cheap to do as a form of insurance, and being caught not having it when you need it is a large mistake. That doesn’t mean you should panic, or cancel travel plans or anything like that. But there is low hanging security fruit out there. Pick it.

And So It Begins: PHP

Joshua Achiam (Formerly OpenAI): Feels like March 1, 2020 for Cyber. Not normal, something is happening. Internet lockdowns in a couple of months?

Multiple sources using GPT-5.6 Sol identified a critical flaw in PHP. Okay, identified two critical flaws in PHP. The plan was to deploy the patch first before announcing the flaw, but the embargo on the fix got broken more than six hours in advance, so here we are.
Dan Lorenc: I wanted to share what happened with the PHP embargo, our role in it, and my decision process last night to ship the fixed builds early. First of all, the PHP Foundation and maintainers did an amazing job here in a high stress situation. I'm sorry that my decision led to even more stress for them.

We first got read in that there was something coming up in PHP last Friday by one of the original researchers that discovered this issue. That night we were able to independently discover the same issue using our harness and a frontier model with a basic prompt of "find bad vulnerabilities in PHP".

We got fully read in Saturday and confirmed that some our findings matched those from the initial report, and worked to help test the fixes.​
They may have been in a rush due to attackers finding the exploit. Amazon reports that this was happening as early as October 17, four days before disclosure. We are fortunate that this did not scale far larger than it did. [...]
Jonny G: Can somebody explain this to me like I’m 5 years old please? Ta.

BRYNMAWR ∴ SHERLOCK: Websites are files on a computer. When you view a website, you are asking the computer to send you the files, then your browser shows them to you.

70% of the websites you see use PHP to make them interactive. So you can send things to the website too and it can respond. E.g. filling in a comment box and hitting ‘post’ adds the comment as a row to a spreadsheet.

PHP has a flaw in its code that allows anyone to gain control of the computer that has the website on it.

The organisation that provides PHP announced the vulnerability before a patch was available, meaning we’re in a window where everyone knows about it (including baddies) but the good guys don’t have an official solution.

Some are just turning off their websites and waiting for the solution. Others are trying to fix it themselves. General chaos and lots of stressed techies across literally the entire planet because this affects the entire internet.

The bug has been there for 14 years and was discovered in 2024, but it was not considered significant at the time. A lot more bugs are significant now.
The PHP Bug Was Kind of a Big Deal

Things could have gone very, very badly, the same way Y2K could have gone quite badly if we had not done the work to prevent it. These days we are on rather tighter deadlines.
Internet Archive: https://Archive.org is currently offline. We are working to restore service now.

Brewster Kahle (21 hours later): Internet Archive ops staff were heroes last night.

PHP vulnerability announced, soon saw attacks, isolated the vulnerability, used Claude to make fixes for our older php versions, used local models to run simulated attacks, deployed.
In summary:
j🫪e: ICYMI: Today was basically the worst day of the year for cyber security incidents
On Your Marks

Now the race is on to patch all the systems before attackers can go on the offensive. OpenAI is helping race to get that done to the greatest extent possible, and are looking for better methods for fixing vulnerabilities in time.
John David Pressman: I know everyone is rightfully freaking out but it must be noted that the worst case scenario isn’t you receiving lots of patches you have to apply, the worst case scenario is receiving zero patches and waking up to everything having been stolen.

John David Pressman: My takeaway so far is that we do not have a good way to coordinate the distribution of patches to vulnerable software.
This one was important enough the NSA got in on the act.
NSA Cyber: Effective Immediately, all organizations using PHP for their systems are advised to be prepared for an update addressing two critical vulnerabilities. PHP is widely used for web applications. These vulnerabilities often provide a direct path to the server’s file system or database. If an immediate update is not feasible, it is recommend that organizations take the system offline until it can be fully mitigated. NSA will follow up shortly with more specific guidance.
We are going to need better procedures for updates.

The best case scenario is that a defender finds the bug first, has enough time to figure out a solution and creates a patch. Then, the moment the patch is rolled out, every attacker gets what are effectively very clear instructions on how to exploit any unpatched systems.

by Zvi Mowshowitz, DWAV |  Read more:
Image: The Simpsons; uncredited
[ed. So far, zero coverage in the mainstream media. [Update: Ars Technica has a story here.] See also: If the vulnpocalypse is the apocalypse, where are the agentic attacker hordes? (Joshua Saxe):]

*****
We’ve ignored how cybercriminals are unskilled and get arrested a lot

Here’s the first part of my theory: cybercriminals are not the organized geniuses we implicitly imagine. Anyone building a criminal gang has to find candidates willing to forgo more stable opportunities in the formal economy. My modeling estimated that something like 720,000 people are involved in the online criminal economy, 90% of them in scam and fraud call-center type operations, some of them human-trafficked. Of the 76k or so actual hackers, the vast majority work for governments. Of the remaining few thousand criminal hackers, most work in ransomware. 

Friday, October 23, 2026

Alaskan Gasbags

A $54 Billion Exercise in Revisionist History

So here we have Republican former legislator Charisse Millett claiming that President Donald Trump never claimed that a deal had been approved with Korea to pay $54 billion for the Alaska LNG project.

Millett claims that Trump, Sen. Dan Sullivan, Rep. Nick Begich the Third, Gov. Mike Dunleavy and Glenfarne did not portray the Korean “investment” as a done deal.

Perhaps Millett was fed bad information by Sullivan.

Perhaps she failed to do any homework.

Perhaps she didn’t pay attention to what Trump said.

Perhaps she thinks she can get away with rewriting the history of the past three weeks to improve the campaign picture for Republicans.

What’s certain is that her analysis is completely wrong.

Larry Persily wrote a good column in the Anchorage Daily News in which he told the truth about the gas line campaign fraud perpetrated on Alaskans right before the election.

The column obviously touched a nerve with Sullivan, who had been hoping to ride to reelection on the basis of winning the gas pipeline deal to end all gas pipeline deals.

Millett’s response in the ADN touched on exactly the same points that Suzanne Downing, whom Sullivan portrays as an exemplar of integrity, used to attack Persily — that his column was motivated by politics alone. That no one promised a gas pipeline, etc.

What the Sullivan apologists can’t confess is that Persily’s column was exactly right — the White House claimed it has a $54 billion deal in hand with Korea, but that nation says the claim is not true.

As they stood behind Trump in the Oval Office at the Sept. 30 campaign stunt, however, Sullivan, Begich and Dunleavy led a gas line victory dance.

I still don’t know if they knew the $54 billion was a charade or if they were desperate to believe a Trump lie because it would help con Alaskans into thinking a miracle had happened.

There was nothing conditional about the Trump announcement at all or how the Alaska politicians received it, contrary to Millett’s meandering missive.

“Thank you Mr. President!” Sullivan said afterward. “Glad we could get this across the finish line for Alaska!”

Fresh from the White House gas line party, Sullivan went on a right-wing talk show in Anchorage to say the money was in hand to build the gas pipeline, attack his challenger Mary Peltola and praise Trump, who had said that the pipeline would be built because of Dan Sullivan.

“I think the president has no interest in switching horses when he just said the guy who’s getting it done for Alaska and us is me right now,” Sullivan told Mike Porcaro, adding that the president of Korea had agreed to pay for the massive project.

Commerce Secretary Howard Lutnick “really really drove a hard bargain with the Koreans,” Sullivan claimed. “But this is a really important day. It’s exciting.”

“It’s a big announcement. $54 billion. It’s a president to a president of an important ally,” said Sullivan. As Sullivan went after Peltola for being soft on the gas line, he said she was “saying anything to get elected.”

Dunleavy, who also appeared on Porcaro’s talk show Sept. 30, said, “Whenever you can get $50 billion plus coming your way for the largest gas project in the Arctic’s history and probably the largest project in the Pacific and certainly the largest project on the map in the world right now, that’s a good day Mike.”

Dunleavy said on social media it “was a fantastic day both for Alaska and for America as President Trump announced that the Republic of Korea is investing $54B into the Alaska LNG project, ensuring affordable, reliable gas for Alaskans.”

“Our South Korean allies are partners now, they are providing a lot of funding for this, upwards of $50 billion plus,” Dunleavy said.

Begich the Third also claimed the $54 billion deal was a historic accomplishment that Alaskans could take to the bank. He said the delegation was excited about what the pipeline would mean for the state.

And Sullivan and Begich should be reelected, Begich the Third said.

“When you’re putting up championships, you don’t trade Michael Jordan and Scottie Pippen. You come back and you win again,” Begich the Third told Porcaro.

The Third did not say whether he sees himself as Jordan or Pippen in that analogy.

by Dermot Cole, Anchorage Daily News |  Read more:
Image:AP Photo/Alex Brandon
[ed. Man, they're trying everything. See here and here. See also: In U.S. Gas Talks With Kremlin, Hidden Financing for Alaska Project Emerges (NYT):]

*****
An American energy company intends to buy Russian technology and use it to access a massive supply of natural gas in Alaska, liquefy it and export it to allies abroad.

The Kremlin and the White House were interested in the idea. President Vladimir V. Putin discussed the plan last month with President Trump’s peace envoys, Steve Witkoff and Jared Kushner, people familiar with the negotiations said, speaking on condition of anonymity to discuss sensitive diplomacy. It is one of a series of energy deals White House officials believe could help smooth relations with Moscow and eventually pave the way to end the war in Ukraine.

But it turns out that the company was not an All-American affair. The multibillion-dollar project has received secret funding from the same powerful Russian company that was to provide the technology, according to the energy executive who until last month led the U.S. firm and two others involved in company negotiations. [...]

“It’s not only unlawful, but it’s not in the U.S. interest to have Russian technology controlling the commercialization of Arctic gas in the North Slope,” Mr. Riddle said in a brief interview.

These previously unreported tensions were also detailed in legal memos that Mr. Riddle attached to his resignation letter, which was reviewed by The New York Times. The memos, prepared by Baker Botts, an international law firm, said the Treasury Department’s sanctions enforcement unit had raised concerns that Polar LNG had ties to Novatek that might present “potential Russia-related sanctions concerns.”

Polar LNG on Friday issued a statement announcing a new acting chief executive, Tim Talkington, and described Mr. Riddle as a “disgruntled former employee.”

But in a statement to The Times, Novatek said on Friday that it, in fact, was moving to acquire “minority shareholder” status in the Polar LNG project — a striking effort by the Russian energy giant to seek ownership of American gas production.

The project, if it happens, is a long way off. In addition to the sanctions issues that would have to be negotiated, the technology envisioned is highly complex and must overcome some of the most brutal weather conditions in the United States. It also is competing with another Alaska gas plan that already has the support of the Trump administration. But that the Polar LNG deal is being discussed at all shows how business deals of almost any stripe are on the table during the talks with the Kremlin.