War Arbitrageurs and the Quest for Superintelligence
Crisis alpha is creating profit opportunities for war arbitrageurs whilst the quest for (AI) Superintelligence continues to accelerate the (technology based) efficient frontier.
A. The US Secretary of War Pete Hegseth attempted to use the broker Morgan Stanley to buy BlackRock’s Defense Industrials Active ETF (IDEF) before the Iran War. Hegseth has denied that the portfolio acquisition ever took place. (The Atlantic Monthly’s Tom Nichols would describe this as “vice signaling.”) ETFs are designed for sector / thematic / diversification plays (and smart beta) rather than the single stocks (equities options) or pairs trades that benefit from event catalysts and volatility. The practitioner literature on ETFs grew after the Great Recession or Global Financial Crisis in 2008. ETFs helped to drive the widespread adoption of algorithmic trading. The leading academic / practitioner work is Professor A. Seddik Meziani’s Exchange-Traded Funds: Investment Practices and Tactical Approaches (London: Palgrave Macmillan, 2016). Here is the BBC’s Adam Curtis on BlackRock’s founder Larry Fink and his ALADDIN portfolio management system.
B. Oil traders are arbitraging the second Trump administration on Iran War related geopolitical risk. This is no surprise whatsoever for readers of Leah McGrath Goodman’s classic The Asylum: Inside the Rise and Ruin of the Global Oil Market (New York: HarperCollins, 2011).
C. Muskism is the new reactionary modernist ideology that Quinn Slobodian and Ben Tarnoff have detailed in their new book Muskism: A Guide for the Perplexed (New York: Penguin, 2026).
D. The game theorist, political economist, author, and politician Yanis Varoufakis on who will likely win the Iran War.
E. What tail risk inflation hedging is.
F. Today’s MIT OCW free course is Energy Economics by Professor Paul Joskow.
G. Sebastian Mallaby (Council on Foreign Relations) has a new book out today called The Infinity Machine: Demis Hassabis, DeepMind and the Quest for Superintelligence (New York: Penguin, 2026) available now on Amazon Kindle and Audible. All of Mallaby’s books are highly influential in finance, investment, and public policy circles - and are very highly recommended as long-form creative non-fiction and journalism.