Just the usual reminder that accountability, like all forms of regulation, is inversely correlated to confidence.

Something something K-Shaped Economy...

A Sunday morning thought. Few activities boost confidence like volunteering. Service for others and with others reminds us that we have certainty and control not just in our own lives but even more as a community, when we come together with a purpose greater than ourselves.

A thread: With the markets at all-time highs and billionaire confidence now off the charts, no one should be surprised to see enormous AI and space companies on offer. They're a perfect fit with mood.

The meaning of "AI Revolution" depends on whether it is spoken by someone at the top of the K or someone at the bottom.

On its own this is awful. Paired with the markets at all-time highs and a small number of individuals richer than ever and feeling invulnerable, this has the makings of a revolution. Image h/t @mikezaccardi.bsky.social

"Can anything stop South Korea's bull run?"

It's not just in wages and wealth that the top and bottom look nothing alike. The arm and leg of the K now have two completely different life experiences. My thoughts on how we went from a K-Shaped Recovery to a full-blown K-Shaped American Experience www.linkedin.com/pulse/k-shap...

There comes a point in the investment cycle when IPO filings might better be called a fantasy fiction book launch.

While the market may not be the economy, the economy is now the market...

Sacrificing and investing are fundamentally the same decision. Both involve an immediate and tangible cost in an exchange for an unknown future benefit. Moreover, our willingness to consider either is entirely a function of our level of confidence.

It's not just in wages and wealth that the top and bottom look nothing alike. The arm and leg of the K now have two completely different life experiences. My thoughts on how we went from a K-Shaped Recovery to a full-blown K-Shaped American Experience www.linkedin.com/pulse/k-shap...

Follow is our easiest stress response. The Passenger seat is better than the Stress Center. If you are looking for where authoritarian regimes come from, they begin with a large, desperate crowd.

Looks like AI may finally be where the K-Shaped Economy actually matters to investors.

FWIW - We've reached the point in the AI hype cycle where for those at the top of K to justify growth/profit forecasts, the obliteration of jobs held by those at the bottom of the K is now required. Put simply, AI has become a zero-sum game between the hand and foot of the K.

Why the backlash to AI and not the internet in one slide:

FWIW - I'm not sure I would have chosen "lower-value human capital" given the backdrop of an extreme K-Shaped Economy.

And folks wonder why tech titan commencement addresses weren't warmly applauded this spring...

The biggest problem for AI is that we've reached the point in the hype cycle where to justify valuations/forecasts, those at the top must predict massive layoffs of those at the bottom. Put simply, AI has now become a zero-sum game between the hand and foot of our K-Shaped Economy.

Our garage band name of the day, - "Lower-Value Human Capital" - comes from the UK. For those at the top, it sounds like Beatlemania. Meanwhile, those at the bottom don't like what it sounds like at all.

‘Negative AI sentiment could become a financial liability for AI labs if it continues to curb access to their most valuable resource: compute power.‘ www.axios.com/2026/05/17/a...

The relative mobility of those at the top is one of the most important, yet least appreciated, aspects of our K-Shaped American Experience. Moreover, it begs the question, what does it mean to be a citizen?

K-Shaped Consumer Sentiment as measured by asset inflation for those at the top and by price inflation for those bottom...

Something something certainty and control...

Shocked. I am shocked, I tell you.

With less than 6 months to Election Day it would appear the strategy is this: So long as both parties make the other so objectionable as to be un-votable, neither party need bother to address affordability (or any other pressing issue for that matter.)

The K-Shaped Experience: Human interaction at the top. Online Chatbot for everyone else...

LOL - Between the cuts to beef tariffs and the Federal gas tax, you'd think Memorial Day was coming up.

I do a ton of reading already but there’s no way I’m not adding this to my morning routine. Way more than most, Luke has his finger on the pulse of the markets. Check it out:

Give powerless and uncertain people a relevant and resonant reason to feel even more vulnerable and its amazing how united they can become. Those atop the K would be wise to take note.

FWIW - What people think the K-Shaped Economy is is just the tip of what the K-Shaped Economy is all about. Wealth, incomes, and spending just scratch the surface.

A Public Service Announcement Given how low consumer sentiment now is and the 5th F response that naturally comes with that, businesses should be especially mindful of the high potential for acts of sabotage, both from within and without.

Not saying it will happen, but current social mood suggests conditions are ripe for a significant spontaneous social movement to come out of nowhere.

ATWATER: ".. Faced with higher taxes," the wealthy flee. ".. The net result is an increasing awareness, especially among those at the bottom, that those at the top are at best temporary residents and not true citizens of the local community."

As our K-Shaped Economy morphs further and further into a K-Shaped Experience in America, here are some thoughts on an aspect that doesn't the attention it deserves: relative geographic mobility.

With consumer sentiment all over the map, I'd like to recommend a guidebook to help you better understand why K-Shaped confidence really matters. www.amazon.com/Confidence-M...

WSJ: “.. the current Congress has enacted just 90 laws, an anemic pace. The previous Congress passed 274, the fewest since the Civil War.” www.wsj.com/politics/why...

Meanwhile at the bottom of the K...

It's amazing what mounting uncertainty and powerlessness can do to bring people together with a common purpose... FWIW - Those atop the K would wise to consider this.

With the financial markets at all-time highs, it is easy for those with investment assets to think the rest of America feels like they do. They don't. Moreover, there are far more who don't feel like they do than they realize. Here's a rough breakdown of how Americans now feel:

FWIW - The further gas prices rise, the more our K-Shaped Economy becomes a Top-of-the-K-Dependent Economy.

“Pardon my French, but nothing fucking matters at this point. Stock prices just go up. Get over yourself. If I had to summarize the markets narratives I’ve read this week that’s it. Nothing Fucking Matters. Move over BTFD. It’s NFM time.” - @peteratwater.bsky.social

There's a market metaphor in here somewhere...

“What started as an event a year ago became a pattern, became a trend, and is now a certain trend that can be extrapolated. Confidence in the TACO trade is now so strong that ChatGPT can and will tell you how you can maximize your financial return from it.” www.bloomberg.com/opinion/news...

Two copy editors high-fiving so hard right now

I suppose this is really where the rubber meets the road...

FWIW - It's not the answer that matters as much as it is that the question is being asked in the first place...

cc @sethgodin.bsky.social

A great example this morning from Seth Godin of the subtle ways our feeling of certainty impacts our view of the world around. When we say things can only get "even better" or "even worse", we're unknowingly expressing how certain we are in the state of what is now.

LOL - The media's coverage of corporate hedges - not to mention CEOs' delight in those hedges - would appear to perfectly mirror their perceived value...