Most people I see who talk about robots quickly replacing humans out in the field (eg not white collar work, not assembly line work, but blue collar work out in the world) haven’t had any experience with what those jobs actually entail.

The price-related episodes of WBD get the lion’s share of views, but it’s episodes like this with that are the lion’s share of the value. Give it a listen.

Most likely Q1 2026. Currently being edited!

Yep, that’s this book.

And my spells.

A big conservative political podcast (seven figure YouTube subscribers) asked me to come on and talk about bitcoin (sat next to them on the plane out of the May conference in Vegas, which sparked their request). Last week when I went on the show, they decided to emphasize a talking point of why tariffs are great and will usher in a golden age, and some questions about bitcoin. When asked about tariffs, I generally disagreed that they would be bullish or usher in a new golden age, mentioned that the past three months of data doesn’t show a decline in import prices which means it has been a tax on Americans, and eventually we moved to discussing bitcoin. They ended up not airing the talk, and instead ran the clip with someone else who agreed on the tariff points. Waste of time, basically. It’s a reminder that a big percentage of what you see in heavily politicized media is about narrative framing and talking points rather than genuine attempts to discuss or explore. It reminded me why I normally decline to go on political shows; I had only agreed to this one because the catalyst was in person and so the agreeable side of me was like “sure, why not”. Well, that’s why not.

I’ve found it. My least favorite book I’ve ever read. And here’s a review. Digital Fortress by Dan Brown. It’s a techno-thriller about encryption, published in 1998. Now, it’s certainly not the worst book out there, by a long shot. There are AI-generated slop books, there are indie books that are scribblings by madmen, etc. But this is the worst book out of ones that I’ve actually read cover-to-cover. It’s from a major publisher, and a best-selling author. Amazon rating 4.3, Goodreads rating 3.7. So, it’s a serious book and people do like it. When it came out as Brown’s debut novel, it was a flop, but Brown’s later giga-best-sellers (eg the Da Vinci Code) retroactively made this book a best-seller too by association. So, I’m punching up here; not punching down. I’ll start with the good. The opening premise is interesting, and it’s a page-turner, as Dan Brown books all are. There’s a story here. Not a great story, but a mostly coherent one. Some of the antagonists are presented with sympathetic, complex motives, although in some cases that evaporates when convenient. In every other aspect, I was basically hate-reading it, as though watching a car wreck that I can’t turn away from. So, I’m going to give the book 2 stars out of 5. Non-spoiler Premise: During the 1990s, the NSA tried to stop strong encryption from existing. However, this was a ploy to feign weakness. In reality (according to this novel), they purposely “lost” the crypto wars because they secretly built a supercomputer that could break strong encryption. So, the whole world went on thinking it now had strong encryption, and the NSA could secretly break it all and surveil all encrypted stuff. However, one day (around 1998 when the book was published), some ex-NSA genius Japanese cypherpunk named Ensei Tankado (with strong Satoshi Nakamoto vibes, written a decade pre-Bitcoin, basically the only cool character in the story) seemingly creates a form of truly strong encryption that even this supercomputer can’t break. Everyone freaks out about it. Twists and turns ensue. Non-spoiler Review: In my view, this book is weak on multiple levels, from characters to plot to theme to the literal writing. Most of the protagonists in this book work for the NSA. They’re trying to make sure strong encryption doesn’t exist in the wild. As the reader, it’s written such that we’re supposed to mostly be rooting for the NSA here, or at least certain good elements within the NSA, but seeing their beliefs get *mildly* challenged. In this narrative, all sorts of terrorist attacks have almost happened over the years, and were prevented only because the NSA could surveil all their communications that the terrorists thought were encrypted. The book is often given credit for bringing up the ethical conflict regarding surveillance by letting the cypherpunk characters in the book (of which there are basically two, the Japanese guy who is cool and another guy who is an asshole) make their case and test the NSA. So, it supposedly “makes you think”. But it’s the super-basic 101 version; the cypherpunks point out the obvious “who watches the watchmen?” argument and protagonists are like, “hmm”. Which is more fair from a normie point of view in 1998 than now, but it's still not groundbreaking. Meanwhile, most of the plot and the stakes are around the NSA protecting itself and its powers. The NSA protagonists, to the extent that they reflect on the ethics of what they’re doing at all, do so for like a page and move on. The primary protagonists are cartoonish. They're the type of descriptions that get satirized today. One is Susan Fletcher. She’s utterly gorgeous (everyone around her is in love with her and mentally undresses her when she walks by), and she’s the head of NSA cryptography in her 30s. She’s got a 170 IQ (the author makes sure to tell us, because people around her all know her IQ), and she’s very kind. She is presented as having no flaws. (As a reader though, I think she’s kind of a moron, which seems unintentional by the author.) Her co-protagonist boyfriend, David Becker, is a super hot genius linguist that speaks a dozen languages, the youngest professor at Georgetown, super athletic and nice (obliterates everyone on the squash court and then treats them to a meal afterward). Romantic, friendly, thoughtful, but also humble enough to not fully realize that everyone views him as super hot. Becker has no flaws. Actually, Susan thinks Becker has precisely one flaw- he always insists on paying when they go on a date even though she makes more money than him. He’s “slightly too chivalrous” basically. He has a minor i around his compensation because his linguistics field happens to pay less than Susan’s code-breaking and yet he’s the man in the relationship so has a provider instinct. That’s his flaw. He doesn’t overdo it, or make particularly bad decisions because of it, and isn't sexist. That’s like when someone in an interview asks you what your flaw is, and you say sometimes you work too hard. The plot is all about this new unbreakable code, an action-adventure to find the private key, insider threats (not all NSA characters are kind), twists and turns, etc. I won’t spoiler it, but I found it rather boring despite occasional glimmers of interest. As soon as something would start to build some momentum, it would soon be fumbled. The opening premise itself was interesting (NSA tricked people into thinking they had strong encryption so they could just casually read it all- and the potential ramifications), but beyond that, nah. For the most part (a few nuances aside I can't mention for spoiler reasons), the stakes are that if the protagonists lose, it just means people would be able to communicate with each other without the NSA surveilling them. The horror. Some spoiler things do add a bit more stakes to dial that up, but then the themes around that are not fleshed out enough. And there are a bunch of plot conveniences, too many blatant miscommunications, etc. With all of that, I at least expected it to be smoothly written. But it’s not. -There are huge info dumps of exposition. Just page after page of context inserted in there. No attempt to drip it in smoothly with dialogue or have a character think it for a specific reason. It’s just like, we meet David, then we get three pages of David’s backstory. We meet the NSA Director, then we get three pages of his backstory. We meet Takado, then we get three pages of his backstory. We learn about the NSA’s codebreaking supercomputer, so we get three pages of backstory about how it came to be, etc. My editor would murder me if I wrote like this. It's so blatant, I almost respect it. Just chad info dumps everywhere. -The point-of-view is inconsistent. Books are usually written either in first person, or in third person limited (ie you can see the thoughts of one character at a time like first person but it’s written in third person), or in third person omniscient (ie you can see the thoughts of all characters). This book moves between third person limited and third person omniscient haphazardly. Sometimes in a scene, you’re in one character’s head, then in another character’s head, and then back again, without a line break that is normally used to designate a shift in point-of-view. Some portions become vaguely omniscient, but then it goes back to third person limited. And then sometimes there *are* line breaks to change points-of-view, even though the point-of-view regularly changes without line breaks anyway. Some authors might try some artsy head-hopping methods and experimentation, but this isn’t that. It’s just sloppy; I detect no particular pattern about the “rules” of the narrator- it’s not true third person limited, nor is it consistently omniscient, but rather it is just kind of whatever the author wants it to be at a given time. -Word choice and sentence structure are weak. Action scenes are mostly boring. Attached is an example of the writing from near the start of the book, to show what I mean. Susan’s going to her NSA job, and we have a point-of-view line break to a guard just to tell us, the reader, how hot and smart Susan is. Then we go back to Susan, who thinks about David, and without a point-of-view line break we’re in David’s head now to get pages and pages of his origin story for how he met Susan. Anyone else read this? I lost five IQ points for doing so.

The latest manufacturing purchasing manager's index report shows higher prices and lower activity/employment in the US manufacturing sector. https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/july/ A sampling of business survey results shows ongoing issues with tariffs: “Fairly flat quarter over quarter, but with us being in the safety and security sector (and with U.S. Customs and Border Protection as a customer), the recent bill that passed should result in an increase in business in the coming months.” [Computer & Electronic Products] “Sales continue at unprecedented growth, driven by data-center construction. Customers and the sales team continue to demand lower pricing, which drives down gross margins in face of input price increases, primarily from aluminum imports.” [Chemical Products] “These tariff wars are beginning to wear us out. It’s been very difficult to forecast what we will pay in duties and calculate any cost savings we’ve had this year. Also, tariffs have disrupted our customs import bond. There is zero clarity about the future, and it’s been a difficult few months trying to figure out where everything is going to land and the impact on our business. So far, tremendous and unexpected costs have been incurred.” [Apparel, Leather & Allied Products] “Currently, higher interest rates still depress the construction industry for new construction projects. Tariff policies are uncertain, which slows down (1) our investment in new projects, (2) component sourcing for new products, (3) blanket orders and (4) replenishment of large inventory quantities. Instead, we’re working to shift suppliers to lower political risk countries or develop domestic sources. We are impacted by the higher tariffs on costs of raw materials and components both sourced domestically and from overseas, and we expect expenses will be higher in the third and fourth quarters as we consume the inventory received with new and higher tariffs or update costs from domestic sources in the second quarter.” [Machinery] “Sales softening more than usual during the summer. Negotiations with non-U.S. manufacturers are strained as we are reluctant to issue POs for deliveries three or more months into the future with prices that include current tariffs.” [Fabricated Metal Products] “In the health-care world we continue with ‘business as normal,’ but we are increasingly searching and assessing geopolitical risk mitigation options.” [Miscellaneous Manufacturing] “Tariffs are causing complete uncertainty around sourcing strategies. A sit-and-wait game for now.” [Electrical Equipment, Appliances & Components] “Sales are about on par with 2024, but nowhere near budget forecast. Tariff concerns seem to be growing as the year progresses.” [Nonmetallic Mineral Products] “Business is steady, with solid bookings and backlog. Still uncertainty about tariffs and associated inflation.” [Furniture & Related Products] “Energy capacity, specifically in the grid operated by PJM Interconnection, continues to be one of the major concerns for business continuity and growth in this region. The procurement of power and rising natural gas prices in this region due to past green energy policies, coupled with future projected allocations for artificial intelligence data centers, adds additional stress to the PJM system.” [Primary Metals] “Cautiously stable. Tariff impacts are still being monitored. Some increases have been implemented while monitoring other products.” [Transportation Equipment]

Strategy had their earnings call today and I was one of the analysts able to participate in the Q&A with the executive team. Although most people are focused on bull market stuff, I decided to aim my question more toward bear market scenarios and stress testing. Here's the transcript for that portion if you're interested: ________ Lyn Alden, Research Analyst: So, thank you for the opportunity. So, Strategy navigated the 2022 bear market successfully. And so my question is going to relate to stress testing as it relates to these mid-term BTC ratings. Given that Strategy’s credit products are backed more by assets and capital access than operating cash flows, are there certain bitcoin bear market assumptions or thresholds, either such as in terms of drawdown magnitudes or lengths of time where capital markets might become inconducive for new capital issuance, that you’re planning for as you design these forward leverage ratios, and for your overall capital structure? Thank you. Michael Saylor, Executive Chairman, Strategy: You know, I think that if we if we equitize the convertible bonds and we go to all preferreds, you can imagine, for example, you have a $100 billion of Bitcoin. You have $50 billion of preferred in an extreme like, the extreme case of 50% leverage case. And if that $50 billion was a debt liability coming due in three years, that would be a lot of risk. And if it was a debt liability coming due in twenty five years, it’d be less risk, but it’ll still be something. But if it’s an if it’s actually equity, if if it’s $50 billion preferred equity, it never comes due. And so now you have a different kind of risk. In that particular case, Bitcoin can draw down 80%, and you’re fine. It can draw down 90%. So I actually think if you look at our our structure, as we migrate to preferreds, we end up with this clock, you know, very, very robust antifragile capital structure where the principal never comes due. And then you have to ask the question, well, where is the liability? And the liability is in the dividend. You notice when Andrew showed the the liabilities, he showed you three tranches. He showed you the interest liability, the cumulative liabilities, and the noncumulative liabilities. That’s because the interest has gotta be paid or you’re in default. The cumulative doesn’t have to be paid, but if you don’t if you suspended, it accumulates, so it’s still a liability. And then the noncumulative, you could suspend it, and it isn’t a liability. So when you add all that up, you know, you you imagine that you’ve got $50,000,000,000 and you have even if you had a 10% dividend, that means you’re down to $5 billion. So on a $100 billion of assets, you’ve got $5,000,000,000 of dividend liabilities, but some of them are more collapsible than others of them. But so you say to yourself, well, what happens if Bitcoin falls 95%? You’d still make you’d still meet those liabilities most likely. You you might in you know, you might in a 95% drawdown, you might suspend something. But you can see, you know, for the most part, no one really contemplates, you know, more than the 80% extreme craze case of the crypto well, I guess the crypto winter is, like, 75% or something. You would know. $66,000 to 16,000, I guess, was, like, the peak to trough. Call it 80%. I think that our structure is is smooth, and we wouldn’t miss a single dividend payment on an 80% drawdown. On a 90% to 95% drawdown, in theory, you might suspend something for a little bit of time, but you would eventually get back current on it. So, you know, so I think in terms of robustness, it’s it’s pretty robust. And if you compare it to the fragility of a credit conventional bank, you know, we’re think about the leverage we’ve got in order to generate our earnings. We’ve got maybe 1.2 leverage. Typical banks got ten, twenty x leverage to get their earnings. So this model is is orders of magnitude less less risky than a conventional banking model. Phong, Andrew, do you guys have anything to add on that? Phong Le, President & Chief Executive Officer, Strategy: I can add, Lyn. We we we we’ve had the benefit of being a Bitcoin treasury company for five years. We went through a crypto winter in 2022 with a much more fragile debt structure and capital structure. We had a Silvergate margin loan, that was Bitcoin backed. We had a secured note that had onerous, you know, clauses, and and and so, we learned a lot from that. You know? And and at that point in time, our most pristine debt were our convertible notes. And now I think we’re much more prepared for a Bitcoin drawdown because over time, we won’t have we already don’t have, secured notes. We don’t have a margin loan. Over time, we may not have convertible notes. And to Mike’s point, we we will be relying on perpetual preferred notes that don’t ever, come due. So, I think we learned a lot, during this period of time, and and we hope to to share that with everybody out there. Lyn Alden, Research Analyst: Thank you. Michael Saylor, Executive Chairman, Strategy: And, of course, the point is we did survive the 80% drawdown with a much weaker capital structure. So, so this capital structure is is bulletproof compared to that one. So, so I think we’re good to 90%. And if it goes below 90%, then we’ll shuffle a few things around. It’ll be colorful.

One of the complexities in politics is that there are multiple decisions that seem useful in the short-term but erode long-term value. Being able to appreciate that long-term value and its various bulwarks is important for dealing with short-term things. The basic exercise is to imagine your least favorite politician. Any power you give to your favorite politician today has a decent chance of landing in the hands of your least favorite one eventually. Still want to hand that power over? Another classic example is the first amendment. Some hateful idiot is saying all sorts of bad things. The best answer is, “look, what he’s saying is awful, but we need to let him say those things and for people to counter-argument them rather than suppress them. If he is wrong, the long arc of debate will show that to be true. Because otherwise that power can one day be used against good things, too.”

I expect demand for the preferreds, especially STRC, to drive down yields.

They would pause the preferred dividends before selling the bitcoin.