Seems like more of a semantic distinction IMO. Yes, I can't technically "blame" the AI because it's not accountable. But what word would you suggest for "I had [X technology] handle [Y task] and it failed to perform that task?" I can't "blame" my router if I lose internet and it prevents me from jumping on a Zoom call, but it's also true that the router failed to do the thing it was supposed to do.

Like, why would the same agency regulating wheat futures also be responsible for regulating event contracts? I know the simple answer is that Congress said they should be, but conceptually it's a bit odd.

So JPMorgan/Goldman prepare all the info on the book and start calling institutional investors after the market closes. The funds and banks prepare bids, there's some negotiation, and the block is finalized before trading opens the next day.

Speed does matter, but you're only calling investors you know "can" close the deal (i.e. they'll have enough capital to buy it all that day/night). So it's more of a price question than a speed one at that point?

And really, nobody wants the downward spiral of a fire sale in the tech sector. Someone will make money on that chaos, but it's a lot of risk when you can lock in a discount with the block trade.

1. SA wants to buy stock with leverage. You do that through a major bank via total return swaps. Essentially, SA pays X% of the value on $100 of stock (for 4x leverage you'd pay $25) plus an ongoing financing fee (call it 5% a year), then you get the return/loss on that $100 of stock. SA was in these agreements with JPMorgan and Goldman Sachs.

2. The bank, because they don't want to actually hold that risk, goes out and buys $100 of stock.

3. Citadel and others see JPMorgan buying lots and lots of this stock. That's confusing, because normally JPMorgan wouldn't be making a huge directional bet on a stock. They deduce that a large fund is buying the stock.

4. Citadel starts widening their spread (the difference between what they'll buy a stock for and what they'll sell it for). They hedge some of this as best they can, or temporarily live with the risk.

5. SA, the highly leveraged fund buying volatile stocks, inevitably blows up because volatile stocks swing around in price. A dip causes margin calls.

6. JPMorgan or Goldman need to sell the stock fast, because SA is close to dipping below their required margin (i.e. SA paid $25 for $100 in stock exposure, the stock drops to $90, JPMorgan asks for more money because the stock went down by too much).

7. Citadel offers to buy all of the stock from JPMorgan. Because they're doing it in one big block, JPMorgan doesn't lose money selling on the open market (once you start selling, each successive sale is for less money because there are more people selling than buying). Citadel is compensated for this by getting a discount to the asset value (the stock is worth $90, Citadel gets to buy it for $81).

So Citadel didn't do anything to "set up" SA. But because they're hyper-aware of market dynamics, they would have known that someone is going to need to sell stock if the market takes a turn on these names.

What guys like Leopold either don't understand or understand but ignore is that being right directionally and being right on market timing are two different skillsets. When you've juiced a stock by 800%, the existence of alpha pales in comparison to your vulnerability to the stock market.

If I were a betting man, I'd bet that Citadel was also selling to Situation Awareness while they were on the way up. At some point, SA had juiced their stock prices so much that no "rational" investors (those that have a view of the stock based on some amount of fundamentals) would be on the other side of the trade. It's retail investors, bandwagon investors, and Citadel-caliber funds. This situation (over-leveraged company blows up due to some volatility) happens all the time in commodities trading, which is where Citadel started.

Blockbuster was good until it wasn't. Sears was good until it wasn't. Barnes and Noble was good, then it fell apart, and now it's good again. The lesson to learn is that by the time your financials say things are taking a turn, you're a year to multiple years late to start fixing the problem.

How can you tell if a company is good? Because trillions of dollars are spent by banks, private equity, hedge funds, and others truing to figure out if a company is "good."

> By that measure, you might as well save yourself the executive compensation and potential for disaster by just not having a CEO at all

Sure, but somebody is still making the decisions the CEO would have otherwise made. Maybe it's a good thing that the power isn't concentrated in one person; I'd be open to that. But you now have to trust that each department head is making good decisions. That's fine if they were already making good decisions, hit it's disastrous if they weren't.

Memory is the acute issue causing their struggles; their most recent quarter saw a gross margin of 4.5% (that's revenue minus the direct cost of producing the cameras, divided by the revenue). That's a hefty fall from their previous margin of ~31%. This contributed to their operating loss of $57M in the last 3 months.

Thag being said, they haven't had a positive quarterly operating income since the last quarter of 2022, even when the margin was higher than 4.5%. So it's not like they were succeeding before the memory crunch, just losing money slower.

Counterpoint: if you think you need to pay for my attention, that's a negative signal for what you're asking me. If I'm giving 10 vendors a shot at my business, I'm not going to pay money for the right to give you that opportunity?

On the other side, the only person paying $5 to ask me something is probably someone getting a lot of no's elsewhere. That, or what I offer is so valuable that people are willing to pay for it. But that's not most people.

A Captcha isn't 5 grand, but I think the same principle applies. If I'm putting a request for proposal to 10 vendors, I'll probably disqualify the one that makes me verify that I'm a human. It's not like I'm short of qualified companies.

Sitting around a campfire once a month will likely increase your cancer risk. But it increases your cancer risk way, way less than smoking a pack of cigarettes every day.

Similarly, the World Health Organization is confident that smoked meats increase cancer risk. But that makes no statement about how much more likely you are to get cancer. I'm confident that eating undercooked chicken raises my risk for salmonella; I'm equally confident that eating a raw and expired piece of chicken also raises my risk of salmonella. But I would not say that each of those raises my salmonella risk by the same amount.

See the difference?

If you lower your chances of dying of every common thing, your relative chance of dying of a rare or incurable disease goes up. If I cured every disease but cancer, my odds of eventually dying of cancer would be very high.

Counterpoint: If I don't teach a kid to read and then ask them to do a test that has reading as a requirement, I can say two contradictory things:

1. This kid isn't intelligent. 2. I don't know what this kid's intelligence is; I gave them a test on something they weren't taught.

What you're describing is in line with 1. That's completely fair and definitely part of what I'd consider intelligence.

This paper is making a statement more in line with 2. I've seen similar conclusions elsewhere; the theories are things like "education is less and less aligned with what IQ tests measure."

In the context of fitness, I feel like 2 is more in line with what we'd be thinking about?

> Notably, these gains do not uniformly translate to a rise in underlying GMA, suggesting the presence of domain-specific improvements and test characteristic changes over time. Conversely, the observed decline is primarily due to decreases in word comprehension and numerical reasoning tests, also reflecting specific abilities not attributable to changes in the latent GMA factor. Our findings further challenge the validity of claims that changes in the general factor drive the Flynn effect and its reversal. Furthermore, they caution against using these scores for longitudinal studies without accounting for changes in test characteristics.

I took a look at the proxy statement as they have it outlined in this [0] document (Proposal 4). As currently formulated, Musk has 12 operational goals (like ship 1 million robots or hit 50 billion EBITDA) and 12 market cap goals. These need to be paired together for the shares to vest; so, if he reaches the first market cap number, he also needs to fulfill an operating goal for the first set of shares to be earned. These earned shares vest in ~5 years.

This comes with a huge caveat. If Tesla changes control, those operational goals go out the window and his stock award is based solely on market cap (along with the shares immediately vesting). The share price for this is the greater of:

1. The last traded Tesla price prior to the acquisition, or 2. The per share price outlined in the acquisition.

The "easiest" way to take advantage is to IPO SpaceX (which he did), pump up the market cap, acquire Tesla for a sizable premium, and vest as much of the stock award as you can. It means you get to avoid the operational goals entirely and vest a bunch of Tesla (but soon to be SpaceX) stock.

[0]: https://www.sec.gov/Archives/edgar/data/1318605/000110465925...