Quote of the Day
"It’s not just that something costs more than it did five years ago, it’s that every transaction has become a test of the maximum amount of bullshit and money you’re willing to absorb before giving up."
(Hanna Horvath)
Chart of the Day
Moderna ($MRNA) and Merck ($MRK) saw positive Phase 3 results for a mRNA melanoma vaccine. (chart via YCharts)
Markets
- A look at the state of the bull market. (spilledcoffee.co)
- A look at return dispersion in the components of the S&P 500. (axios.com)
AI
- Recent hacks show AI companies don't have a great handle on things. (ft.com)
- Where small language models (SLMs) can substitute for LLMs. (klementoninvesting.substack.com)
- Patrick O'Shaughnessy talks with Ben Thompson about the binding constraints on the AI buildout. (podcasts.apple.com)
- Hyperscalers are betting big on natural gas. (techcrunch.com)
Apple
- How Apple ($AAPL) 'AirPods Vision' could work. (spyglass.org)
- The Apple ($AAPL) Vision Pro as surgery assistant. (asymco.com)
Pharma
- A Moderna ($MRNA) and Merck ($MRK) mRNA melanoma vaccine proved efficacious. (wsj.com)
- Eli Lilly ($LLY) is taking cues from Silicon Valley. (economist.com)
- Why pharmaceutical price inflation is negative. (axios.com)
Stay in touch
- Don't miss a thing! Sign up for our daily e-mail newsletter. (abnormalreturns.com)
- Work in wealth management? Sign up for our exclusive Talking Wealth newsletter. (talkingwealthpod.com)
Ukraine
- How Ukraine is using satellite imagery in the war. (nytimes.com)
- On the challenges on keeping US-made Bradley infantry fighting vehicles running. (businessinsider.com)
- How the owner of a furniture company became the CEO of Ukraine's leading missile maker. (wsj.com)
- Russian tanks are still struggling against Ukrainian drones. (arstechnica.com)
Economy
- Just how hot is the U.S. economy running? (ft.com)
- More signs of strength in the American economy. (thetranscript.substack.com)
- Why diesel prices aren't going down any time soon. (nytimes.com)
- Federal interest expenditures are projected to increase. (schwab.com)
Earlier on Abnormal Returns
- Personal finance links: following your own rules. (abnormalreturns.com)
- What you missed in our Tuesday linkfest. (abnormalreturns.com)
- Research links: offsetting declines. (abnormalreturns.com)
Facts Only
* Moderna and Merck reported positive Phase 3 results for an mRNA melanoma vaccine.
* Hyperscalers are investing in natural gas.
* Apple is developing "AirPods Vision" and utilizing the Vision Pro as a surgery assistant.
* Eli Lilly is adopting Silicon Valley operational methods.
* Pharmaceutical price inflation is currently negative.
* Ukraine is employing satellite imagery and drones in its conflict with Russia.
* US-made Bradley infantry fighting vehicles in Ukraine face maintenance challenges.
* A furniture company owner is the CEO of a leading Ukrainian missile maker.
* US federal interest expenditures are projected to increase.
* Diesel prices are not expected to decrease in the near future.
* Recent security breaches have occurred at AI companies.
* Small language models (SLMs) are being positioned as substitutes for large language models (LLMs).
Executive Summary
Current market and technological trends show a heavy intersection between biotechnology, artificial intelligence, and energy infrastructure. In pharma, Moderna and Merck have achieved efficacy in mRNA melanoma vaccines, while Eli Lilly is integrating tech-sector management styles. This progress contrasts with a broader trend of negative pharmaceutical price inflation. Simultaneously, AI development is shifting toward a duality of massive hyperscaler investments in natural gas to power infrastructure and a strategic move toward small language models for specific efficiencies, despite ongoing security vulnerabilities within AI firms.
On the geopolitical and macroeconomic front, the US economy shows signs of strength and "heat," though this is tempered by rising federal interest expenditures and stubborn diesel costs. In Ukraine, the war effort is characterized by a reliance on satellite imagery and drones to counter Russian armor, alongside the challenges of maintaining Western hardware like Bradley vehicles and the unconventional leadership of its defense industry.
Full Take
The strongest version of this narrative is that we are witnessing a "Great Convergence" where the boundaries between software, biology, and energy are dissolving. The success of mRNA vaccines and the "Silicon Valley-fication" of Eli Lilly suggest that the iterative, data-driven approach of tech is becoming the dominant paradigm for physical sciences.
This is SKEPTICAL MODE. The pattern here is a curated aggregation of high-signal fragments designed to create a sense of comprehensive awareness. By juxtaposing the "heat" of the US economy with rising federal interest costs, the narrative creates a tension between growth and sustainability without explicitly resolving it. The inclusion of a cynical quote about the "cost of bullshit" serves as a framing device, priming the reader to view these corporate and geopolitical developments through a lens of systemic inefficiency and consumer fatigue.
The underlying paradigm is one of "technological solutionism"—the belief that whether it is cancer, war, or compute power, the answer is a more efficient model or a more powerful engine. This assumes that scaling (of models, of energy, of missiles) is the primary lever for success. The second-order consequence is a deepening dependency on a few "hyperscalers" who control the energy and the intelligence, potentially eroding the agency of smaller actors.
Patterns detected: none
If this were a coordinated influence campaign, the playbook would involve "signal flooding"—overwhelming the reader with disparate "wins" (vaccines, economic strength, drone success) to create an aura of inevitable progress and stability, masking systemic vulnerabilities like AI hacks and debt projections. The content here is a neutral curation and does not match that attack pattern.
Bridge Questions:
1. If SLMs replace LLMs, does the power shift away from the hyperscalers back to local operators?
2. Does the "Silicon Valley-fication" of pharma accelerate cures, or does it prioritize venture-capital-friendly milestones over long-term patient outcomes?
3. At what point does the "heat" of the economy become a liability that outweighs the benefits of growth?
