studying market history @backtestpodcast | building teal systems | ex-(@divvyhomes, @figment_io, @blackstone)
Texas, USA
Joined July 2012
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Daniel Gamboa retweeted
1. US business sector productivity growth was 2.1% over the year ending 2026 Q3. That's solid.
2. If you think of trend productivity growth as ~1-1.5%, we running +0.5-1pp higher at the moment. Again, that's good news.
3. For perspective, at the height of the dot com boom (1999-2000), productivity growth was running about +2pp higher annually. This premium had completely faded by ~2005. So we're at 1/4 - 1/2 of peak dot com boom effect.
4. I would put next to no weight on quarter-to-quarter productivity growth. It's very noisy.
5. Productivity growth was stronger in 2023, when AI capabilities were far lower but AI capex was accelerating precipitously. That should tell us something.
6. There are probably other factors besides AI affecting short-run measured US productivity as well, including knock-ons from US policy choices made during the pandemic, the high-churn labor market of 2022, and large shifts in immigration flows.
7. Measures of TFP growth from Fernald and BLS are weak, suggesting to the extent AI is a factor, it's not primarily through task- or worker-level productivity effects (but TFP has to be estimated so take it with many grains of salt).
More from @Stripe Economics here:
stripeeconomics.com/p/ai-and…
Evidence is growing that we’re turning the corner on productivity.
US productivity grew at a 3.6% annual rate this past quarter.
That’s more than double the 1.5% average from 2007-2019.
The new numbers put me further ahead for my bet with Bob Gordon about productivity growth in the 2020s. 💪
Here’s how far the US is now ahead of the CBO estimate at the start of the decade (before they knew about the pandemic or LLMs) courtesy of @jasonfurman’s
Econvitals.
Daniel Gamboa retweeted
Dems won by focusing on affordability.
As it happens, the Senate’s first vote when it returns Tuesday will be on a bill to lower energy costs by modernizing the permitting process. It will be first test of whether affordability is a governing priority or just a campaign slogan.
Daniel Gamboa retweeted
The tale of the Cornish Giant was one my favorite parts of @backtestpodcast's Revolution series.
Richard Trevithick invented the steam locomotive, but the rails cracked underneath it. His steam locomotive couldn't break into the market until iron caught up. It was a classic Total Product problem from the book Crossing the Chasm.
As a life update, like Gretchen Weiners trying to make fetch work, I am still trying my best to make Trevithick work. It means someone who is huge, smart, and a little crazy. Use it at the polls today!
It’s 1850. The Gold Rush is on. Cornelius Vanderbilt thinks he’s found a faster, cheaper route to California through Nicaragua, but his engineers tell him it's impossible: too shallow, too many rapids.
So he goes himself. He shoves the pilot aside, runs the boiler at full steam. Then he winches the boat over the rocks!
He opens his route and undercuts his competition so badly, they pay him to stop.
Daniel Gamboa retweeted
@backtestpodcast being honored in Bend Quarterly (an oldschool IRL newspaper) is a fun and unexpected way to put a bow on our Rail Revolution series.
“So, every name still carved above library doorways and made immortal in the form of the firm originally made a fortune on the rail or its finance. Not a single one of them built a locomotive engine.”
The benefits of abundant intelligence will accrue far outside of San Fransisco.
Spent the last year writing about capital, sovereignty, and the coming reordering of economic power.
THE COMMANDING HEIGHTS
Commanding-Heights.com
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In NYC with @mgharris34 meeting friends of the show and planning for Season 3 of @backtestpodcast
Love this development
I always intended Stratechery to have a sponsorship component; it just took me 12 years to get back to it. That I could do so with the company that made the subscription business possible makes me so happy. There is nothing better than endorsing a product you whole-heartedly believe in.
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Daniel Gamboa retweeted
🧵1/10 Given the recent reactions of mathematicians over rapid advances in AI, I think it is important to remember that technological change has historically been a very personal event for people.
Over the history of technological progress, looms have fallen silent, switchboards have gone dark, and factory lines have shrunk bringing with them a human crisis of identity and what it means to be a master of one's craft.
Reassuring to see VC and not debt markets driving this part of the boom, although important to note the demand from this chart is oartially underpinning the compute buildout, with a very different financing mix
This chart shows the key risk to the AI trade, and it's missing from the latest revenue announcements.
The AI boom is fundamentally driven by a top 1% of companies that drive 80% of spend. Within that top 1%, 80% are venture-backed.
That's all fine if the AI trade works out, and if, as some prominent investors say, everyone wins.
But if it doesn't work out, then we have a cascading effect of large customers simultaneously pulling back their AI spend.
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First guest post on the @backtestpodcast newsletter is out this morning and it's a great piece by @WillCarpTexas
Enjoy!
nitter.gq/backtestpodcast/status…
The Competition for Capital, a guest post by @WillCarpTexas, exploring the fierce competition for capital demand across AI, entitlements, defense, and infrastructure with a historical lense
backtestpodcast.com/p/the-co…
She competes for China for the cultural connection which I respect (even admire) and this answer is unequivocally American which I love
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Excellent piece full of nuance and “make you think” writing by @DKThomp
“…it is succeeding brilliantly along the craft axis of science, but it is interrupting the thousand-year conversation”
That’s been true for a while now. This just feels like the next (bigger) chapter
New newsletter: I KNOW WHY THE MATHEMATICIANS WEEP
I wrote about "technological grief"—the uncanny and ego-eviscerating feeling of watching a machine do an intellectual job on which you based your sense of self and worth. Also:
- what makes humans special
- what makes math special
- why science is both a craft (discovery) and a conversation (the relationships you build with fellow discoverers)
- how AI disrupting the former (intelligence) might increase the significance of the latter (relationships)
- why other fields should be prepared for emotional and occupational disorientation that mathematicians are going through
With many thanks to deeply wise words of @stevenstrogatz
derekthompson.org/p/i-know-w…
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This reminds me of the Army’s smart ranger vs strong ranger. Look it up
Hustle is not cool. You know what’s cool? Sustained speed, learning things once
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I heard this on @netflix's Rafa doc and can't stop thinking about it: "Talent develops in tranquility, character in the full current of human life" -Johann Wolfgang von Goethe
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