What a difference a day makes. Tuesday’s eleventh-hour, two-week ceasefire deal led to investors breathing a big sigh of relief. On Wednesday, the S&P 500 closed up 2.5% while the Dow rose 2.8% bringing the indices a little closer to breaking positive for the year. As of this writing, the S&P 500 is flat for the year, while the Dow is up 0.70% and the Nasdaq continues to lag at -1.64%. Both the US and Iran have claimed victory, although the hard work is ahead. Iran’s 10-point plan and the White House’s 15-point plan aren’t even in the same ballpark. While de-escalation and resolution to the war is critical, the economy appears to be taking it in stride for now. Assuming things are resolved soon, the impact on the economy may be negligible.
To be clear, a lot of things must go right with the negotiations. Israel’s continued bombing of Lebanon is one sticking point. Another hinges on Iran’s “agreeing to the complete, immediate, and safe opening of the Strait of Hormuz,” according to President Trump. It is unclear whether each side is negotiating in good faith or simply buying time to re-arm and move assets into place for the next phase of the war. It is our hope that it is the former and not the latter.
In news you may not have heard, the NY Times reported it now believes the identity of mysterious Bitcoin creator Satoshi Nakamoto is nonother than British cryptographer and entrepreneur Adam Back. Hours later, Back told the BBC that it had the wrong guy. The linked article is well written, and if you are at all curious it is a good read. Worth noting, the journalist who investigated this piece is the same person who broke the Theranos scandal involving Elizabeth Holmes. I, however, am still not convinced that Bitcoin was the work of one person. My hunch remains that Hal Finney, Nick Szabo, Craig Wright, and others were involved in its creation and possibly were working with the National Security Agency (NSA). I hope someday we learn the truth of this fascinating mystery. By the way, the original “wallet” continues to hold approximately $80 billion in Bitcoin and has remained untouched for 17 years.
In other news, while you may be tired of hearing about artificial intelligence (AI), it isn’t going away. In fact, it is progressing at an alarming rate with few guardrails in place. This week Anthropic, the creator of “Claude”, revealed its latest AI could potentially be a national security threat. It is so concerned that it has not released this large language model (LLM) publicly; only 12 companies have been given access presumably to ensure that bad actors cannot hack its systems. The model, named “Mythos,” found thousands of zero-day vulnerabilities in just a few weeks in operating systems and commercial software; some of them 27 years old. This includes OpenBSD, the operating system literally designed to be the most secure in the world. Initially I believed this report to be hype, however I read this morning that this threat is so serious, the Federal Reserve and the US Treasury summoned Wall Street bank CEOs to an emergency meeting in Washington DC this week. While we may not want AI in our lives, it seems it is coming regardless.
In closing, I turn to a story that gives me hope. The next time you’re out for dinner, someone might not only ask for your jacket, but they may also want you to hand over your phone, too. There is a new trend taking hold called “digital detox” dining. The number of bars and restaurants establishing a phone-free environment is growing, led by younger patrons. A recent survey, from Talker Research, shows that 63% of Gen Z says they intentionally disconnect; 57% of millennials say the same. Restaurant owners cite a desire for customers to be fully present, improve social interaction, and reduce the distraction of screens. It seems some customers agree as the trend is starting to gain ground. I am old enough to remember the days before smartphones and social media. Maybe it wouldn’t be so bad to turn off the phone every now and then. Now you know.
Bruce J. Mason, MBA
