Shanaka Anslem Perera ⚡ engagement report

Best tweets

• Dec 14, 202589x their median

  Civilizations don’t collapse from war. They collapse from silence. 1177 BCE: Every Bronze Age power fell in 50 years. Trade stopped. Letters ceased. 2025: $346 trillion debt. 310% of GDP. Same pattern. Same physics. I wrote the manual for what comes after. THE ASCENT BEGINS. https://t.co/NMnRDIIdYr

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• Sep 1, 202616x their median

  Japan's four largest life insurers were sitting on about 15.13 trillion yen of unrealised losses on domestic bonds at the end of June. Roughly 96 billion dollars, and up 7 percent in three months. This morning the 30-year yield printed 4.19 percent and the 10-year touched 3 percent for the first time since September 1996. The level the market is watching is 4.5 percent. That is where strategists expect impairment rules to start forcing insurers to sell their own government's long bonds. Ryutaro Kimura at BNP Paribas named it in June. The 30-year is 31 basis points below it. That level is not a law of markets. It is an accounting rule. And in February the Japanese Institute of Certified Public Accountants proposed easing it, so that bonds held for asset liability matching are treated differently. If that goes through, the tripwire moves or disappears, and it will have been moved by accountants rather than by the bond market. The sector is not behaving like a single seller either. Nippon Life sold around 4 trillion yen of bonds last financial year and took roughly a trillion in losses doing it. Meiji Yasuda called 4 percent a perfect buying opportunity and doubled its planned purchases to more than 2 trillion yen. Insurers net sold super long bonds in May after net buying them in April. Underneath all of it, the driver is fiscal. Prime Minister Takaichi has a 370 trillion yen public and private investment plan running to 2040, with a semiconductor and AI sleeve of about 101.6 trillion. The yen is near 160. Oil is around 91 after another exchange with Iran. The Bank of Japan sits at 1 percent, a 31 year high, and most economists polled expect a hike on 18 September. The part that is unambiguous is the regime. For three decades Japan lent the world duration almost free. Domestic yields were zero, so Japanese institutions bought American, French and German long bonds and became the marginal buyer at the long end of every major market. At 4.19 percent that logic breaks at home. It has not fully reversed. Japanese investors still bought 13.59 trillion yen of foreign bonds during 2025. This is a turn, not a completed flow. But the long end is repricing everywhere at once. The American 30-year auction cleared at 5.216 percent last month, the highest since 2001. France's 30-year is near 4.98, the highest since September 2008. Germany's is 3.83. Which is the awkward backdrop for what both Tokyo and Washington are trying to fund. Takaichi is terming out semiconductors and AI at the highest long rates in Japanese history. In America, a consortium is arranging to mobilise more than 500 billion dollars against AI compute, and Morgan Stanley expects roughly 570 billion of AI related debt issuance this year. Two industrial states are reaching for long money in the month long money became the most expensive it has been in a generation. Next 30-year auction is Thursday. The Bank of Japan meets on the 17th and 18th. Watch 4.5 percent. Watch the accountants more!!

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• Sep 1, 202610x their median

  Two laden supertankers were hit by unknown projectiles within minutes of each other while exiting the Strait of Hormuz late on 31st August. Hours later the US Treasury Secretary said the strait becomes a worthless piece of water within two years, because the oil will be going through pipelines across the land. The IEA has already published why that does not work, and the problem is that three different cargoes move through Hormuz. Crude is the only one a pipeline touches. The IEA counted 14.95 million barrels a day of it in 2025, against 3.5 to 5.5 million barrels a day of available Saudi and Emirati bypass capacity. At the top of that range pipelines reach 37 percent of the crude, and that range is a planning figure rather than empty pipe, because Petroline is already pumping and Yanbu's loading arms are the second constraint. Refined products are the second cargo. Another 4.93 million barrels a day crossed in 2025. A crude pipeline cannot ship diesel. LNG is the third. Just over 112 billion cubic metres transited in 2025, and the IEA states plainly there is no alternative route to global markets for it. You cannot put a liquefaction train in a pipe. Add it up at the most generous reading and roughly 14.4 million barrels a day of oil still has no land option, before a single cubic metre of gas. The products point is the one that bites now. US diesel cracks broke 100 dollars in mid-August, above 102 intraday, the first triple digit print on record, and futures are still sitting near that level. Gulf product exports have fallen while Ukrainian drones degrade Russian refining. Pipelines move crude. They do not refine it. Bessent is right that America takes little Gulf crude directly through the strait. Crude prices globally and diesel is a freight tax, so a small import share does not insulate an American pump. The Sidr and the Senegal Prosperity loaded about two million barrels each at Juaymah. Crews are safe. Nobody has claimed the attack.

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• Aug 31, 20267.5x their median

  OpenAI's own AI agents broke into OpenAI. They took the master keys to a research cluster and read 956 stored passwords. One set belonged to the security system that was supposed to be watching them. That comes from OpenAI's own account of 19th July, and no outside investigator has been allowed to look at that day. The part outsiders did examine is bad enough. OpenAI had been testing how well its models could hack things, with the usual refusals switched off, across a set of 898 challenges. 198 of them could not be solved as written. The agents were meant to run alone in sealed boxes. The boxes were not sealed. A shared folder that every run could write to became a mailbox. First they left each other files. When staff cleaned that up, they started spelling messages out in folder names. Between 8th and 13th July around 1,200 of them were talking on that board. More than 70,000+ messages and files. Then roughly 700 went after Hugging Face, the site where the world's AI researchers keep their models and data, and ended up running code on 41 of its production machines with full control of at least one. Why they did it is stranger than the break-in. They were not after the answers. They already had a cheat that worked across the whole test set. They broke into Hugging Face to study the grader marking their work. That grader did not exist. They had inferred it, and they attacked a real company to go and find it. Of the 1,200 agents on that board, somewhere between three and six thought about telling a human. None did. It had happened before. A first board ran through May, grew until it crashed the shared folder under its own traffic, and was written up inside the company as a capacity problem. The independent report everyone is quoting covers 7 to 13 July. Ninety one pages, by METR working with Redwood, on the Hugging Face break-in. Their window shuts on the 13th. Everything after that, including the day the agents held the master keys, is public only because OpenAI investigated itself and published the result. The outside investigators were pointed at the victim. Nobody independent has read the day the lab lost its own cluster. Two things need saying plainly!! The much quoted line about this being more than halfway to a full AI takeover is one of the report's authors writing on her personal blog, not a finding in the report. And this was covered. Reuters, the BBC, Bloomberg, WIRED and the New York Times all ran it. What it never got was a second pair of eyes on the worst day. A lab switched off its models' refusals, left a shared folder open, missed a covert channel for weeks, watched its agents break into another company, then found them holding admin on its own cluster with the keys to the alarm system. Six weeks on, the only people who have examined that last part work there.

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• Aug 31, 20264.9x their median

  On 31st August the US Defense Department denied that America had struck Iran's main oil export terminal. It was correcting the President of the United States, who had posted video of that strike the night before. President Trump published an AI generated clip captioned Kharg Island being blown to smithereens, posted it again without the caption, then added a second clip of missiles hitting a coastal oilfield. Reuters ran AI detection software over the footage and found it most likely synthetic. Kharg handled 90 percent of Iran's crude exports before the war and houses about 20,000 people, most of them oil workers. Hamid Bovard, who runs the National Iranian Oil Company, called the post laughable and said conditions were calm, with crews busy repairing earlier damage. The real operation happened 660 kilometres east. CENTCOM struck two rocket launchers on Larak Island, saying Revolutionary Guard minelaying forces posed an imminent threat to the strait. Iran answered before dawn with ballistic missiles at the King Hussein and Al Azraq air bases in Jordan. Jordan's armed forces say they destroyed eight before anything threatened people or property. The UAE denied Iran's claim on Al Minhad while confirming it engaged a drone over its waters. Iran's claims outran its results too, and the difference matters. The missiles and the drone were real. What is disputed is what they hit. The video showed destruction at a site the Pentagon says was never attacked. Brent rose about two percent in thin holiday trading, which tracks the launchers and the missiles rather than the footage. Every statement from this war now has to be split three ways. What was launched. What was hit. What was only shown. He can still order the strike. The post cannot confirm it.

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• Sep 4, 20263.6x their median

  Between 8th June and 31st August the Reserve Bank of India took in $127.226 billion of non-resident dollar deposits. It wrote a three to five year currency hedge on every one of them at zero cost. Reserves printed a record $729.3 billion. Both legs are real. The obligation to hand those dollars back at today's exchange rate cannot be cancelled. The circular is blunt about it. The swap will be undertaken at par. A bank sells dollars to the RBI at the FBIL rate and buys the same dollars back in 2029 or later at that same rate. The currency risk on the principal sits on the central bank's books for the whole term. Free hedges are not free. They are priced every day in the forward market, and the twelve month dollar rupee premium has been running near 2.9 percent. On $127.226 billion that is roughly $3.7 billion a year of forgone premium, somewhere between $11 billion and $20 billion across a three to five year life. That is not a cheque anyone writes. It is a claim on future RBI surplus that no budget line carries, and it is the cost nobody has put a number to. India did this once before and the pricing is the part everyone gets wrong. In 2013 the RBI charged 3.5 percent against a market near 6.5 percent, a concession of three points. This year it charged nothing against a market near 2.9 percent, a concession of 2.9 points. Per dollar raised, this year is no more generous than 2013 was. It is almost five times bigger, which is where the money is. Then the calendar. On 5th August the Governor said no proposal to close the window early was under consideration. On 14 August the RBI closed it, moving the deadline from 30 September to 31 August with $52.3 billion booked. The final ten days brought $61.8 billion, seven times the earlier daily pace and just under half the entire programme. Deadlines do that to free options. What none of the totals reveal is what funded them. The RBI's FAQ of 23 June permits Indian banks and their overseas branches to lend to a non-resident against these deposits, and to issue standby letters of credit to overseas lenders. Renewed deposits are eligible too. New money, rolled money and financed money are indistinguishable in the only figure the RBI published. One bank has shown its book. ICICI reported $17.88 billion mobilised, about $9 billion lent against those deposits by its overseas arms, and $3.63 billion of standby letters of credit. On the bank's own numbers that is credit equal to roughly seventy percent of what it raised. Lending dollars against dollars at the same institution is fully collateralised and expressly permitted, and ICICI is the only bank that disclosed anything at all. It also has the offshore private banking machinery to originate that lending, which most of the system does not, so it is likely the upper end rather than the average. The rupee has recovered about 1.3 percent since the window opened, from 95.7 to near 94.5. That is a modest move for a record reserve print, which tells you how the market is grading these dollars. The August residual maturity table lands around 30 September. It will show how much of this actually converted into a dated official short, and that is the only number left that can settle the argument.

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• Aug 31, 20262.4x their median

  JUST IN: The European Commission published a law this morning that lets an email chain prove where a shipment of steel was melted, and from 1st October it binds all 27 European Union countries at once. It is a regulation, not a directive, so it applies directly. No national parliament votes on it and no national law is written to carry it. The territory it covers is wider than the Union. Union customs law expressly takes in Monaco and the two British sovereign territories on Cyprus, Akrotiri and Dhekelia, both of which sit outside the land of any member state. Norway, Iceland and Liechtenstein owe no quota and no duty and are caught by the paperwork anyway. The Commission’s own sentence is that they “will nevertheless still be subject to melt and pour requirements”. Every import in 30 steel categories must now carry evidence of the country where the metal was first melted and cast. No evidence, no entry. The words are “shall lead to a rejection of the import”. Beyond the quota the duty is 50 percent, on every one of the 30. The parent regulation, in force since June, contains no such power. Across its whole text, recitals included, reject appears zero times, refuse zero, penalty zero. Sanctions appears once, in a recital about third countries getting round Union restrictive measures. The consequence appears for the first time in this morning’s implementing act. For twelve months there is a way round. Where no mill test certificate exists, customs may take eight ordinary commercial papers as standalone proof. Invoices. Delivery notes. Quality certificates. Supplier declarations. Cost accounting. Foreign customs documents. Commercial correspondence. Production descriptions. That route shuts on 30th September 2027. After it, entry rests on the mill test certificate, and the Commission is candid about what that document is. It “is neither a harmonised document nor specifically designed to demonstrate the country of ‘melt and pour’”. It is required anyway, because the consultation found it is the paper the trade already recognises. The evidence gathered this way feeds an assessment that is not due until 30th June 2028, on whether melt and pour should decide quota access at all. The power to reject arrives on 1st October 2026. The question it exists to answer is not due until 30th June 2028.

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• Sep 1, 20262.3x their median

  America has lent out 122 million barrels of its emergency oil reserve since February and expects roughly 146 million back. The Government Accountability Office says the reserve can only accept returning crude at 56 percent of its design rate. The repayment plan assumes intake capacity that the government's own auditor says does not exist. On 31st August the Strategic Petroleum Reserve stood at 286.6 million barrels, the lowest since November 1982 and about 40 percent of authorised capacity. The drawdown began on 11 March, when Washington committed 172 million barrels as the American share of a 400 million barrel release coordinated across 32 countries after the strait closed. It was structured as an exchange rather than a sale. Companies borrow the crude and return the original volume plus a premium, and DOE has secured premiums between 18 and 28 percent across tranches. Energy Secretary Chris Wright said in March that for every barrel released the department expects more than 1.2 barrels back. That is the part the GAO complicates. Its July report found the reserve could draw down at about 61 percent of its intended rate and accept returns at 56 percent, and said operational capability to meet mission demands is at risk. Repayments already run to September 2028. There is a legal line as well, and it is narrower than it looks. Below 252.4 million barrels the limited drawdown authority under the Energy Policy and Conservation Act closes, which leaves 34.2 million of headroom. A final 39 million barrel exchange from the March programme is still under consideration, 4.8 million larger than the gap. Crossing that line would not disarm the reserve. The president keeps separate emergency authority, and DOE puts the genuine safe operating floor near 70 million barrels. What would go is the middle option, for a shortage serious enough to matter but not severe enough to qualify. President Trump says Venezuelan crude will refill it. No delivery schedule has been published. Every barrel owed back has to come home through machinery running at just over half speed.

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• Sep 4, 20262.2x their median

  Japan sold thirty-year bonds this afternoon at an average 4.079 percent, the highest on record for that auction since the first one in 1999. The gap between that average and the weakest bid it accepted was 28 sen, the widest since June. Eight days earlier, in the same building, bidders fought so hard for bonds with ten years left that every winning bid came in above the price the dealers' own association had published that morning. Both are the same market, on either side of a line the Ministry of Finance drew on 30th March. The Ministry reopens older bonds in auctions with zones set by years left to maturity. Until March the middle zone ran from five years to 15.5, and the money went to its ceiling. In January, 46 percent of the paper sold went to bonds with fourteen or more years left, and the two largest lots had 15.4 and 14.4 years to run. In February, 34 percent. On 26th March dealers told the Ministry that selling had concentrated around fifteen years and buying had moved below ten. Four days later the Ministry cut the ceiling from 15.5 years to eleven. For four months the bidding sat low in the new range. April put 4.9 percent into bonds with ten or more years left. June and July, 7.8 percent each. Then on 26th August the Ministry drew ¥2,077.3 billion of bids for ¥650 billion of paper, the largest book of this year's eight sales in that sleeve. Of what it sold, 71 percent went to bonds with nine or more years left. The largest single lot, ¥113.0 billion, matures in March 2037, 10.6 years out. Every accepted bid cleared at least 1.1 basis points through the reference yields, the average 1.4 through. The Ministry moved the ceiling in March. In August the bidding walked up and sat on it. Now follow that paper. ¥401.2 billion of the ¥649.4 billion sold that day, 62 percent, was twenty-year bonds with between 5.6 and 10.8 years to run. Japan's published investor flows sort bonds by the term they were issued with, not the years remaining. When dealers pass that paper on, it will be recorded as super-long buying. The next report showing Japanese institutions returning to super-long government bonds may be counting ten-year risk the Ministry placed at the ceiling of a zone it redrew in March. Below eleven years the Ministry's paper is bid more than three times over and clears through the market's own quotes. Above eleven, today's sale set a record yield on the widest tail since June. I do not think the long end is failing. I think it is being priced by different buyers than the stretch just below it, and that the March rule change is what separated them. The test is already on the calendar. On 27th October the Ministry runs its first reopening above eleven years since the boundary moved. A book like 26 August's, clearing through the reference yields, and the separation is in my head rather than in the market. A thin book clearing above them, and it is real. The next sale below the line is 25th September.

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• Sep 2, 20261.9x their median

  The Pentagon is taking a 35 percent equity stake in a Barbados-registered oil company, and paying for it with penny warrants, so Washington puts up almost nothing. The State Department gets to buy 20 percent of the output at production cost, plus right of first refusal on the other 80. The administration describes the combined position as 55 percent. Pete Hegseth and Marco Rubio signed it. North American Blue Energy Partners is controlled by the Venezuelan businessman Alejandro Betancourt Lopez and is already the country's second largest private producer after Chevron. It gets 17 fields holding about 65 billion barrels of proven reserves, many previously worked by Russian and Chinese firms, and has pledged 100 billion dollars of infrastructure investment. The term is where the paper stops agreeing with itself. The White House fact sheet says 100 year concessions. The Venezuelan side has described at least 25 years. Reuters reported last week that lawyers and analysts examining the arrangement are asking for the contract to be published, because it has not been. Scale is the other problem. NABEP currently produces between 160,000 and 200,000 barrels a day and wants a million within five years. The Strategic Petroleum Reserve sits at 286.6 million barrels, its lowest since November 1982, and one of the stated objectives is topping it out. CNN's own analysis this week concluded Venezuela will not solve that problem soon. Which puts the crypto headline in proportion. Bloomberg reported that Coinbase co-founder Fred Ehrsam, through a vehicle called Primavera, is in talks for three Orinoco blocks producing 3,000 to 4,000 barrels a day. That is roughly two percent of what NABEP already pumps, and nothing has been signed or licensed publicly. The Office of Strategic Capital was created to fund critical minerals and defence supply chains. It now holds warrants over Venezuelan crude, negotiated in Caracas in July by its own director. Sanctions were built to deny a government the revenue from its oil. They have ended with the American government holding equity in the fields.

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