What a Mess

I proudly declare that this little community of misfit nobodies understands what’s going on better than 99.99% of people in the world.

Almost everyone is confused and unable to make sense of what they see because they lack a deep understanding of modernity’s dependence on growth of scale, complexity, and non-renewable resource flows, nor the many limits to growth we are now hitting, nor CACTUS and its implications, and of course they also do not understand the human genetic tendency to deny unpleasant realities.

We here don’t know the specifics of how things will play out over the coming months and years, but we do have a pretty good understanding of the big picture trajectory.

Trump on September 25, 2024.

How does this end?

• Global energy + material shortages will soon be catastrophic for economy triggering many CACTUS feedback loops.
• Israel military is apparently nearing exhaustion.
• US almost out of air defenses and expensive stand-off weapons.
• Ground war not supported by US citizens and will take too long to build enough force to have a chance of winning.
• Iran is pissed and determined.

What are the options?

1. More of the same -> global economy crashes + Republicans lose the mid-terms.
2. US withdraws -> serious harm to empire + politically impossible?.
3. US nukes Iran’s missile mountains -> may not reopen Hormuz + many unpredictable consequences.
4. Israel nukes Iran cities without US permission -> Iran attempts to wipe our Israel + gulf infrastructure -> US wipes out Iran to save Israel -> Russia & China respond by ??? -> Hormuz unlikely to reopen quickly.
5. Make a deal with Iran to pretend that US special forces captured uranium, declare victory, and go home. -> Oops, might have worked before US killed Iran’s religious leader plus 160 schoolgirls while pretending to negotiate.

Pressure must be extreme behind closed doors.

What will they do?

Please reply with your prediction

https://sonar21.com/donald-trumps-imaginary-iranian-friends/

In response to Donald Trump’s various threats, a spokesperson for Iran’s Khatam al-Anbiya HQ recently said:

“The U.S. president has threatened that if Iran doesn’t reopen the Strait of Hormuz, U.S. forces will target Iranian power plants.

Tehran insists the Strait is only restricted to hostile traffic and remains under Iran’s control; safe passage continues under strict rules.

If the U.S. strikes Iranian power plants, Iran will:

– Fully close the Strait of Hormuz until damaged facilities are rebuilt.

– Target all Israeli energy, ICT, and infrastructure assets.

– Destroy regional companies with U.S. shareholders.

– Target power plants in countries hosting U.S. bases.

Iran says it is ready for a major campaign to eliminate all U.S. economic interests in West Asia.

While Tehran did not start this conflict, any attack on Iranian infrastructure will trigger relentless retaliation against U.S. and allied energy, oil, and industrial targets in the region.”

The US and Israel ignored Iran’s warning and attacked… and, as promised, Iran responded forcefully. On Sunday, according to a statement from Kuwait’s Ministry of Electricity, Water and Renewable Energy, an Indian worker was killed and significant damage was caused to a service building at a power and desalination plant, as a result of an Iranian attack against the State of Kuwait. Satellite data from NASA has reportedly detected an active fire at the Doha West Power and Water Desalination Station, the country’s largest combined power and water plant.

Imagery shows burn marks and smoke across the central section, with heat signals extending toward coastal storage tanks. The facility produces 2,400MW of power and around 110 million gallons of water per day, making up about 38.5% of Kuwait’s desalination output. With around 90% of Kuwait’s drinking water coming from desalination, this damage will quickly put pressure on the country’s water supply.

Nuclear weapons expert Professor Ted Postol explains Iran’s nuclear deterrent.

An Israel nuclear attack on Iran can be retaliated against.

US diplomatic efforts to strengthen its position in the middle east are highly effective.

Did President Trump tell Saudi Arabia leaders they can kiss his ass?

Yes, President Trump recently made headlines for using that specific phrase during a public event, though he was claiming the Saudi leadership was “kissing his ass” rather than telling them to do so.

On March 27, 2026, during the Future Investment Initiative (FII) summit in Miami, Florida, Trump described his relationship with Saudi Crown Prince Mohammed bin Salman (MBS) in highly informal and provocative terms.

More fuel for the CACTUS supernova.

https://no01.substack.com/p/the-gazillion-dollar-oops

The Gazillion-Dollar Oops

Three months ago I wrote about the AI spending binge and called it “The Trillion-Dollar Oops”. It felt cute at the time.

I owe you an apology.

I was being generous.

A whole year back, back all the way to December, the big five hyperscalers were spending $405 billion a year and I thought that number was already insane. I said it was accelerating. I said No1 knows what anything costs anymore. That these estimates kept getting revised upward so fast that by the time you finished reading the sentence, someone would have revised it again.

I thought I was joking. But increasingly this dimension has other ideas with reality. I was being prophetic.

The 2025 final tally came in at $443 billion for the top five, up 73% year-on-year. Fine. That’s the world we live in now. But the 2026 projections? CreditSights estimated about $600 billion in November. Then Q4 earnings calls hit and – in their own words – the guidance “blew away” their estimates. They raised it to $750 billion. Moody’s independently pegged it at $700 billion. This is the third consecutive year of growth exceeding 60%. And Moody’s projects $870 billion for 2027.

For scale, the Kobeissi Letter calculated that in 2025 alone, tech capex at 1.9% of GDP nearly matched the combined scale of every major American infrastructure project of the 20th century. And 2026 will exceed the lot.

Hyperscalers raised $108 billion in debt during 2025. Morgan Stanley estimates borrowing will hit $400 billion in 2026. This could push total high-grade US corporate bond issuance to a record $2.25 trillion.

And then Alphabet did something extraordinary. Google – the company sitting on $126 billion in cash – raised $32 billion in debt in less than 24 hours. Including a 100-year bond. Anyone who’ll buy this, will be dead before it matures. Denominated in sterling. At least someone in that boardroom has a sense of humour.

The last tech company to issue a century bond was Motorola. In 1997. Remember Motorola? Exactly. I’m sure it’ll be fine.

Investors demanded record protection against these bonds via Credit Default Swaps. So get this: the market is simultaneously lending these companies hundreds of billions of dollars and buying insurance in case they can’t pay it back.

The MIT study I cited in December – 95% failure rate for enterprise AI projects – still holds. Nobody’s contradicted it. Nobody’s even tried to contradict it with better data. Gartner found that only one in five AI initiatives achieves measurable ROI. One in fifty delivers what they call “disruptive value”. Seventy-four percent of organizations are breaking even or losing money on AI. IBM’s numbers are even more depressing: pilot-stage ROI of 31% collapses to 7% at scale. Seven percent. Below cost of capital. You’d get better returns from a savings account.

42% of companies abandoned most of their AI projects in 2025. Not “scaled back”. Not “restructured”. Abandoned.

Any good GPU needs power. So last time I talked about the grid. Guess what? It’s getting worse. The 2026-2027 PJM capacity auction added another 22% on top of last year’s 833% jump, hitting the FERC-approved cap – and would have gone 18% higher without that cap. They project now a full six gigawatt shortfall against reliability requirements in 2027. 1.21 gigawatts used to sound like a lot.

Virginia, America’s data centre capital, is building a 944-megawatt gas plant just to keep the lights on. Data centres are expected to consume 41% to 59% of all Virginia’s electricity by 2030. Up from 25% today.

AEP Ohio then introduced a novel concept: making data centres pay for power they reserve even if they don’t use it. Paying for things you order. Revolutionary stuff. The moment that rule went into effect, half the pipeline – 17 gigawatts – vanished. Half the grid crisis evaporated the moment consequences were introduced. I would make a joke but I think the universe already did.

There are some cracks now though. Tiny ones…

Amazon’s stock fell 8% after they announced their $200 billion capex plan. Microsoft dropped 11% after quarterly results. Oracle has halved from its September high, wiping out a cool half trillion in market value. Funny thing about markets – they eventually ask where the returns are.

Three months ago I wrote that someone was going to pay for this. That either it would be shareholders or the rest of us. I laid out the circular financing, the Enron comparisons, the 19-year leases for 1-year-obsolete hardware, the 95% failure rate, the grid that can’t cope, the CEOs who admit it’s a bubble while pouring money into it.

Every single number got worse since then.

I called my last article “The trillion-dollar oops”.

I don’t think “trillion” cuts it anymore. We’ve left a trillion behind. We’re in territory where the numbers are so large they’ve stopped being numbers and started being theology.

You don’t analyse them anymore. You believe in them, or you don’t.

Simplicius the Thinker today explains the building pressure.

https://simplicius76.substack.com/p/essential-us-awacs-plane-destroyed

Saudi Arabian Prince Sultan Airbase was hit with many US KC-135s damaged and destroyed. But shocking new images have also now revealed that an E-3 AWACS plane worth nearly $300 million (1993 dollars, inflation adjusted to $600-700m today) was also completely destroyed.

Simplicius agrees with my guess that US will attempt to destroy Iran.

Disregarding the completely unrealistic—and to be frank, childish—ideas about ground troop invasion of Iranian land, we can therefore conclude that Trump’s one final remaining emergency lever will be to massively bomb Iran’s energy infrastructure, a kind of desperate last-ditch hail mary out of spite, the fit of a sadistic sore loser.

But even this is obviously fraught with great risk because:

– It will not accomplish anything, due to Iran’s grid decentralization

– It will cause an even bigger headache for the US when Iran responds in kind and lights up the entire region’s critical infrastructure to an even greater degree

But the pressure is actually increasing on the US-Israeli Axis powers because the Houthis have now cashed in their promise of opening up a new front with the launch of ballistic missiles onto Israel earlier today.

Likewise, Hezbollah has been ramping up the humiliation of Israeli forces in lower Lebanon with the advent of FPV drones, including those on fiber-optics, which have reportedly taken out many Merkava tanks in the past few days alone, with footage attesting to various hits. The IDF is scrambling to recover after announcing intent to annex southern Lebanon.

As of this writing another major refinery in Bahrain has gone up in flames:

– The IRGC has finally finished off or burned down the largest oil refinery in the Middle East, located in Bahrain

– There’s no place left to even assess the damage. The Bahrain Petroleum Company (BAPCO) has acknowledged that the plant has been completely burned out.

– BAPCO is essentially the foundation of the national economy and one of the oldest refineries in the Persian Gulf region. The Bahrain Petroleum Company (BAPCO) is Bahrain’s state-owned oil and gas company. The Bapco Refinery has a capacity of 400,000 barrels per day.