If you’d like to read this issue on my website, click here! If you’d like to sign-up and receive this in your inbox each week, click here! Read past issues here.
Good Friday Morning! Except to those of you cheating on word games like Wordle. A new survey shows that the Northeast states cheat the most when trying to win the word game and get high scores. At the top of the cheating list were “Maine, followed by New Hampshire, Massachusetts, Vermont, and Connecticut.”
On the flip side, the South hosted the most players willing to be humble and take their score. The most honest states were “Mississippi, Louisiana, and Texas.” And what does it mean to be honest? Don’t Google possible answers to the words.
It’s just a game. Don’t cheat.
And don’t ask AI for help either. That’s the topic this week, as I dig into why markets are in chaos and why crypto is puking everywhere—links to follow.
Quick Hits:
- Epstein conspiracies take off. If you thought there were a lot of Epstein conspiracy theories before, it’s practically a cottage industry now. The number of files being released by the DOJ is creating new ones almost every hour. The biggest one that took off this week is that he’s still alive. CBS News dropped a report that suggested new information surrounding the video of his death. People have hacked his email account and more to check out what’s in there. It’s wild, and the number of conspiracy theories is only going to grow over time.
- The American Almanac is growing! Hundreds of thousands of people now read us daily. I want to express my sincere gratitude to those of you who subscribe, share, and help us grow. You can subscribe here for free. Additionally, please check out Capital Digest (finance/economics), Conservative Legal News, and Real Talk Digest. There are more projects in the pipeline. If you don’t see anything in your inbox a day after signing up, check your spam folder.
Where you can find me this week
Please subscribe, rate, and review The Horse Race on YouTube — the reviews help listeners, and readers like you find me. Make sure to sign up for the Conservative Institute’s daily newsletter and The American Almanac.
Bernie Sanders Lands Private Jet On American Prosperity – Conservative Institute
CNN Accidentally Admits Trump Is Right On ICE And Minnesota – Conservative Institute
An Ice Storm Exposes Democrat Governance – Conservative Institute
The Crypto Crash and the Software Panic Are the Same Story: AI Is Here
Thursday felt like the moment the market stopped debating theories and started pricing consequences. Bitcoin knifed through $70,000, and software stocks traded like somebody discovered termites in the foundation.
I keep harping on this point, but it’s the truth: this isn’t an “AI is coming someday” story. AI is now. This is AI showing up in cash flows, headcount decisions, and collateral chains—right now, in the real economy, on your screen.
Start with crypto. Reuters reported that bitcoin fell 12.6% in a day to around $63,525, wiping roughly $2 trillion from the global crypto market value since its October peak—about $800 billion of that in the last month alone.
Bitcoin is roughly half its October 2025 high (around $126,000) as the “crypto winter” narrative returns with a vengeance. Crypto has fallen before, but there was a narrative it could at least fall back on. That has vanished, as the rank speculators have moved on to prediction markets.
And the macro backdrop matters because it always matters. Reuters noted markets have pointed to risk-off positioning and jitters around President Trump’s Fed chair pick, Kevin Warsh, widely viewed as hawkish, as the dollar strengthened and volatility spiked.
Now zoom over to software—the supposed “safe” corner of tech built on recurring revenue and sticky workflows. Think: Salesforce, Adobe, Microsoft, etc. News outlets called the selloff “software-mageddon”: about seven straight sessions of declines and roughly $1 trillion in market value erased in a week as investors panic about AI disruption.
The spark wasn’t mystical. Reuters reported the latest leg down was linked to fears that rapidly evolving AI tools can do more of what “application software” used to do—especially as AI moves into enterprise workflows where SaaS historically charged tolls.
The worst performers are down 50% from recent highs, and the selloff is broad enough that it’s starting to look like pure panic.
What was the change? Over Christmas, a lot of Wall Street was home for the holidays and downloaded a new tool that had just come out: Claude Code. This new coding tool allowed people with no experience to build apps, software, and more. OpenAI has scrambled to keep up and has unleashed its version, called Codex.
I won’t lie, I’ve done the same. I got a random idea I’d bounced around with AI for the last 18 months. After telling ChatGPT I was going to run it through Codex, it produced a playbook and told me to do exactly that. A few evenings of tinkering later, I had a piece of software running that was from my brain. It’s an unreal feeling.
That’s the connective tissue most people miss: AI isn’t just “a feature” inside software. It threatens the whole economic logic of software as we’ve known it—paying a subscription for a tool to help humans do work—when the agent can start doing the work itself.
And once you accept that premise, “jobs” stops being a talking point and starts being a spreadsheet line item. Workday, for example, announced about 400 layoffs (roughly 2% of its workforce), primarily in non-revenue roles, even as it says it will keep hiring in strategic areas.
For example, CNBC’s top tech reporter, Deirdre Bosa, sat down one morning and tried to make her own “Monday” or “Workday” app. One hour later, not only did she have her own custom app, but it was already plugged into her calendar and helping out.
That’s where we are now: people are realizing they can just make anything. That expensive software you like? There’s a chance you can just make it now.
Then you step back and realize the labor market is already catching the vibration. Challenger, Gray & Christmas reported 108,435 announced job cuts in January—the highest January total since 2009— and Reuters noted AI was cited for about 7% of those cuts.
I’ll be honest, that AI number is low. Anecdotally, I’ve never seen so many recruiters out of work in my career. People who helped me get a job once have been out of work for months. Companies are cutting back, or not backfilling.
So how does software carnage connect to Bitcoin? In practice, through leverage, liquidity, and correlations—through the plumbing. When a market regime flips to risk-off, the first things sold are the things people borrowed to own.
Crypto still trades like tech most days, despite the “digital gold” marketing. That’s not an insult; it’s an observation about who owns it, how they own it, and what they do when their margin gets tight.
This is where Michael Burry’s warning lands. The legendary “Big Short” investor warned about a potential “death spiral” in bitcoin driven by forced selling and cascading effects across the crypto ecosystem.
The basic mechanism is simple enough for normal people: price falls trigger liquidations; liquidations force more selling; stressed players sell whatever they can; and the shock waves move outward into anything correlated or used as collateral.
The evidence for that this week is in precious metals: gold and silver. Gold plunged about 10% in its steepest fall since 1983, and silver posted one of its most significant one-day drops on record amid margin and liquidity stress after the Warsh nomination shock rippled through markets.
MarketWatch reported silver fell as much as 13% in another volatile leg, with analysts pointing to liquidation selling—precisely the kind of “sell what you can” behavior that shows up when leverage breaks.
Business Insider noted the overlap directly: metals, software, and bitcoin all swinging in the same risk-off storm, with investors rotating away from tech and into other commodities, and margin dynamics showing up across markets.
What does this say in a nutshell? People are selling everything to cover their butts. And they’re moving into safer parts of the market, or into money market accounts and getting out entirely – for the time being. It’s a series of events coalescing into the chaos shaking markets and draining crypto.
This may be just interest rates, not robots. Software was expensive, crypto was euphoric, and Trump’s new Fed chair could signal a shift in monetary policy that spooks markets temporarily.
Bank of America’s critique, summarized in Fortune, is basically that investors are pricing contradictions: assuming AI capex returns are weak (data center construction) while also assuming AI is robust enough to obliterate legacy software workflows. Markets can overshoot, and sometimes that logic eventually corrects.
But even if the market is overshooting, it’s overshooting in a direction that matters. Investors are explicitly repricing the software sector around AI disruption fears—meaning boards and CFOs will make real-world decisions based on that repricing. A lot of big software company names exited 2025, thinking they were fine. They are starting 2026 in a panic.
Those same companies are already doing the thing markets fear: cutting costs, thinning layers, and pushing human roles away from routine operations and toward “strategic” work—while AI takes a growing share of routine operations. Workday’s layoff rationale reads like that playbook.
I don’t see any way off this train. The U.S. government needs AI in its clash with China and the broader world. That means the primary companies building and spreading AI tech will continue pursuing bigger and better tech.
It’s impossible to avoid the conclusion that the entire U.S. economy – specifically employment – is about to go through one of its most disruptive periods in possibly a century. Watching these AIs shift from telling you things to doing has radically altered how I view the world.
Where I thought AI was at the start of the year and where I believe it is now are entirely different. I had bought into the notion that AI growth was slowing a bit and that model growth would take longer. That was severely wrong. The pivot to AI agents doing things for you is going to explode and change everything.
To put this in perspective: I’m a lawyer. I started in the legal tech industry. I was doing a mental list this week and can name several companies that will be a shell of themselves soon, if not outright out of business. I don’t know how they compete in this world, because their entire model was built around putting lawyers in seats when needed.
I was reading a piece about how law school admissions are up. Whenever law school admissions tick up, it’s a sure-fire sign that economic activity is slowing. More people jump into law school to hide from the job market while things settle. I don’t know what all these new lawyers will do when they graduate. The doors that were open to me are closing fast.
And I’m seeing this in the legal sector, where tech adoption is slow. If it’s true for me, it’s doubly true in other industries.
That doesn’t mean we should ban AI or treat it like a moral contagion. It means we should tell the truth about the speed of the change and stop acting shocked when the market starts pricing it in. There’s no stopping this train.
Wall Street has been seriously repricing everything over the last month. This could be a one-off. It could be more. I don’t know. But AI is rapidly expanding, evolving, and taking over more tasks every day. It is a difficult thing to explain unless you see it in the act.
I was talking with a friend this weekend, and he said he suddenly just got it. It all made sense. He’d sat down, tested AI, and saw the full scope. And every single criticism, argument, pro, con, and everything made sense all at once.
The AI age isn’t “coming.” It’s here. The question now is what new economic order exists on the backside of this revolution? Unlike the industrial and computer revolutions, the AI moment is fast. We are speeding towards this brave world at the speed of light.
Long term, that’s where my real concerns sit. The country’s political system is not prepared for the possible upheaval. The tech CEOs like Elon Musk are privately freaking out about this. It hasn’t hit the mainstream consciousness yet. But it will.
The standard American has the viewpoint, “I don’t like AI.“ I get that. It’s fair. It’s also not where we’re headed. There is no populism that’s slowing this moment down.
If you have any doubts, look at the wild swings on Wall Street. Everyone is being forced to rethink everything they believed.
Links of the week
The Electoral College Is Poised to Get Tougher for Democrats: Census projections add new urgency to the party’s quest to build a competitive coalition. – Liberal Patriot
Nothing Costs Like Crime: Wrongdoing isn’t cheap—and until it’s brought under control, affordability is just a word. – City Journal
Reality is finally crashing New York’s utopian green-energy party – NYPost
The Transgender Industrial Complex Is Collapsing – AMAC
How Trump Botched Immigration and Gave Democrats a Win: Which Democrats may immediately fumble away. – Liberal Patriot
American women have a terrifying new flirtation – NYPost
Starfleet Academy is Embarrassingly BAD – The Acolyte of Star Trek – Nerdrotic
Why did the Transatlantic accent suddenly vanish? – NYPost
X/Twitter Thread(s) of the week
Kling 3.0 is some of the best AI video I’ve ever seen – and this is a mockumentary.
Satire of the week
Trump Appoints Lara Trump To Be Next Dilbert – Onion
‘UNO: Even More Brutal Edition’ Comes With Card That SWATs Your Family Members And Has Them Arrested On False Charges – Babylon Bee
Missionary On Hour Twelve Of Trying To Get ChatGPT Saved – Babylon Bee
New Study Links Staying Up Late With Feeling Free and at Peace for Once – Reductress
Millennial Recounts Extinct Social Tradition Known as the ‘House Party’ – The Hard Times
Report: Wealthy, Influential Figures Not Named In Epstein Files Being Bullied By Rich Pervert Peers – Waterford Whispers News