Item #1: Bitcoin continue to lag tech stocks; huge profit with shorting method; Scott Bessent rules out any treasury purchases.
I covered this yesterday, but this week has been among the strongest in a long time as BTC continues to lag tech stocks. The divergence has is quite pronounced over the past month, for example comparing QQQ to Bitcoin:
Others on Twitter have noticed this too, such as @WhalePanda, whose account has 303k followers:
Bitcoin keeps rolling over and dying.
Stocks still up though.I really hate how tradfi "tamed" (read: castrated) Bitcoin.
— WhalePanda (@WhalePanda) August 5, 2025
One would assume that if more people notice this pattern that it would eventually stop working, but apparently this has not been the case. It shows the power of IQ to find methods before anyone else does.
Item #2: Speaking of IQ, a couple months ago I finished the math challenge in an attempt to come up with what was an effectively an uncapped IQ test. Before finishing I tired to come up with additional results/examples to no avail, and afterward continued efforts led nowhere.
A couple weeks ago I was rereading something to take another stab at the problem, and according to a leading number theorist, finding examples is “very difficult” and requires “great ingenuity”. The author of the other paper from 28 years ago also said it was very difficult to find any that were not of some trivial form. Little surprise I failed to find any more. To have found any was a miracle. This is why there was a 28-year gap between my result and the penultimate one. Without recreating the procedure I had used there was no way anyone would have found it. It was sorta like the math-equivalent of how John Carmack created Doom and Quake, by improvising to work within the limitations. So I think this means mission accomplished.
Item #3: I saw this going viral: US national debt reaches a record $37 trillion, the Treasury Department reports.
The national debt is so large, it’s hard to wrap one’s mind around it. But the national debt at all-time highs does not mean Americans become poorer. The fallacy of composition is to assume that the national debt is like a household debt. All the predictions of runaway inflation, dollar collapse, or economic collapse since 2008 have failed to come true, except 2022 when inflation did spike, largely attributed to the post-Covid economic surge and stimulus hangover. We’re talking a single year out of 15+, so it’s not something that should factor into one’s investment decisions.
A common concern is that deficit spending erodes purchasing power or will make Americans poorer. This would only be true if you kept your money under a mattress. Stocks and home ownership are time-tested, effective hedges against loss of purchasing power. The national debt does not affect the ability of Americans to accumulate significant real-levels of wealth with investments and income. Anyone who invested in the Nasdaq 100 or S&P 500 over the past decade has realized significant real returns, except for 2022.
Item #4: Everyone is asking, “Is AI a bubble?” Unlike past bubbles (e.g. tech stocks in the ’90s) there are only a handful of publicly traded AI companies, which have notably preformed poorly despite considerable AI hype. This “bubble” is instead limited to private companies.
Also, the AI market is capable of accommodating many entrants and each getting a super-high valuation and filling some sort of niche, instead of the old ‘Google vs Yahoo’ or ‘Apple App Store vs Google App Store’ duopolies or winner-take-all markets like with seen with ‘MySpace vs Facebook’ or ‘Windows vs Mac’. There is Cursor, Windsurf, Cline, Claude, Chat GPT, Gemini, etc.
Each company fills some sort of role and has strengths and weaknesses. During past bubbles, the market was more concentrated among a handful of names, or companies were more interchangeable. If you used Google for search, there was no need to use Yahoo or Bing, for example, as those are clearly inferior. But with LLMs, agents, and assistants, it’s not like one is overwhelmingly better than the others. So this means looking at AI from the lens of past bubbles may not work.
Item #5: This also went super-viral: Nobody’s buying homes, nobody’s switching jobs.
This can be explained by two main factors: It’s simply too hard to find a job due to excessive screening and too many applicants, and homes are too expensive. I don’t think any deeper analysis is needed. As someone writes, “There are no jobs. I’ve done this for two years now. Bunch of bullshit job ads or referrals to jobs that turn out never got approved internally. Tech hiring is gone, especially in non-direct-engineering roles such as Product, Design, Project/Program Mgmt etc.”
Item #6: xAI Was About to Land a Major Government Contract. Then Grok Praised Hitler.
In August, the US government also announced partnerships with OpenAI rivals Anthropic and Google Gemini. It also struck a deal with Box, a content management platform powered by AI. The push is part of the Trump administration’s plan to modernize the federal government with an increased reliance on AI tools. It comes on the heels of the president’s AI Action Plan unveiled last month, which calls for less regulation and an increase in AI adoption across the government.
This also agrees with what I wrote yesterday. Despite positioning itself as anti-woke, or being perceived by his supporters as anti-woke, the Trump administration has fully embraced Silicon Valley and AI through these large investments. But thinks crypto is a joke and for his own enrichment by taking advantage of the suckers who bought his $Trump coin. The ultra-wealthy and successful are less likely to view things through a partisan lens, but see themselves as belonging to an exclusive network.