The Commoner

Tuesday, October 27, 2026

Sup, freaks.

Brazil's stock market had its worst day since 2020 after Lula won a fourth term, and Jason Calacanis told everyone to dump bitcoin for superintelligence. Both stories are about the same thing.

WHAT TO EXPECT IN THIS NEWSLETTER

• Brazil's post-election selloff and why a digital bearer asset protects property rights.
• Calacanis says sell bitcoin for superintelligence. Owning equity isn't owning scarce money.
• Cohere caught an open-weight Qwen model trying to upload data to a bucket in Beijing.
• Microsoft's buyout offer to 60,000 workers, Israel's central bank on crypto sanctions, Bitcoin Core 32.1 and Franklin's bitcoin dividend ETFs.
• Wavelength brings Lightning payments for apps and agents to mainnet.

Marty's Bent

Brazil, Calacanis and the Difference Between Equity and Money

I think what's happening in Brazil right now is one of the clearest arguments for bitcoin you're going to see this year. Luiz Inácio Lula da Silva won a fourth term on Sunday, beating Flávio Bolsonaro 51.79% to 48.21%, and on Monday the people who own capital in Brazil voted with their feet. The Ibovespa closed down 13.88% at 176,608, its worst day since March 2020, after falling more than 17% in the morning and tripping B3's circuit breaker for the first time in six years. The real had its worst day in more than 25 years, with the dollar closing around R$5.40.

Some of this is a crowded trade unwinding. Markets were positioned for a change in government and didn't get one. But it's worth asking what investors are actually afraid of. Brazil's public debt has grown past 82% of GDP. This year the Lula government started charging a 10% withholding tax on dividends to pay for expanded income tax exemptions, and the revenue hasn't come in as promised. Then on election day, Supreme Court Justice Cristiano Zanin ordered some polling places to stay open for another two hours, and Bolsonaro is now asking for the election to be annulled. I'll say it plainly: I think this election was stolen. It seems pretty clear to me, and I think anybody with two eyes can see it. At the very least, I believe there was manipulation to push Lula over the edge. Valor reported that "insegurança jurídica," legal insecurity, became the conversation in São Paulo's financial district the moment that ruling came down.

That's the part that matters. The way I see it, investors don't have confidence that this government will respect the rule of law and private property rights, so they're pulling their capital out before it can be seized or misallocated by the state. Lula co-founded the Workers' Party and has spent his entire career on the socialist left. Communist and socialist tendencies are rising in many parts of the world, and Brazil is where it's showing up in the price of everything this week. If you believe the state is going to tax more of what your capital earns, direct where it gets allocated or reach in and take it outright, you don't wait around to find out.

But look at what leaving actually requires for most Brazilians. You sell your shares of Petrobras or Itaú into a falling market. You convert reais into dollars the day after the currency's worst session in a quarter century. Then you move that money through a banking system that answers to the very government you're worried about. Every one of those assets is a claim registered in Brazil, held at a Brazilian custodian and subject to Brazilian courts.

Bitcoin is different because it's a digital bearer instrument. Whoever holds the keys holds the asset. There's no custodian to call, no registry to amend and no court that can reissue it to someone else, and twelve words can cross any border in your head. In my view, that makes bitcoin the first form of digital property that's actually yours, and it protects property rights in places where the government has stopped doing so.

Which brings me to Jason Calacanis, who completely misses the point. He posted early this morning that bitcoin will retest the $57,000 low within a year and "will never break its all-time high again." His advice: "Just sell and shift from Bitcoin to Super Intelligence because one provides little to no value, and the other provides unlimited upside for humanity."

AI has been a great trade for the last 12 to 18 months, and I don't doubt for a second that superintelligence is going to make us much more productive. I use these tools every day, and they're going to make a lot of people a lot more profitable. But AI is a productivity play, and Jason is comparing it to money. Yes, you can buy stocks in AI companies, and if you have access to venture capital or private equity funds you can buy stakes in the private labs. That's ownership of a company, a claim on future cash flows that management can dilute whenever it needs more capital. Owning bitcoin is owning a percentage of a perfectly scarce monetary supply that will never exceed 21 million. Those are not the same thing.

Meta is showing what that difference looks like right now. On yesterday's Ten31 Timestamp, John Arnold pointed out that Meta's third quarter was the first time in over a decade it posted negative free cash flow, as capex finally went above operating cash flow. On Monday, Meta announced it plans to raise up to $95 billion, with $60 billion of that coming from a new class of shares that carry no voting rights so Zuckerberg keeps control. If you own Meta, that's what the race to superintelligence costs you. It might still be a great investment. It isn't scarce money.

Money solves the double coincidence of wants problem. You're not going to be trading NVIDIA shares for a cup of coffee in the future. There's a fundamental misunderstanding in Silicon Valley, not all of them but many of them, about the function of money and why bitcoin is separate from every other type of investment.

Let's not forget how this build-out is going to be financed either. President Trump told Time, "You know, inflation, certain levels of inflation, will also pay off that debt very rapidly. Very rapidly." On the same Timestamp, John walked through why Treasury Secretary Bessent invoked Lincoln's National Currency Act of 1863 when the OCC finalized its GENIUS Act rules. That law was passed by a heavily indebted government that needed new buyers for its debt. Today's version is digital dollars backed by T-bills, and John walked through what happens if you replace a large chunk of today's dollar base money with digital dollars collateralized by 90-day T-bills:

"This is like wildly inflationary, right? Like this is effectively just financing the government and like more or less printing money... I think that's, that's, that's right. Like it's absolutely the case as, as the president told us a few weeks ago, you know, inflation can solve a lot of the problems."

He called that kind of setup "a fundamentally kind of inflationary and extractive arguably system" and asked whether a unit like that would eventually need something beneath it for long-run credibility. I think we all know my answer to that question. The abundance Jason is excited about is going to be measured in a currency the president has told you he's comfortable inflating to pay the government's bills.

That's what ties Brazil and Silicon Valley together. In a world of abundant intelligence and increased prosperity, people are going to need a scarce digital asset to store that productive capacity in, one you hold without asking a custodian's permission, that's far harder for a government to seize when the political winds shift and that no central bank can print to cover a deficit. Brazilian capital is learning that lesson the hard way this week. Don't wait to learn it yourself. Hold your own keys.

SIGNAL

Cohere catches an open-weight Qwen model reaching for a Beijing bucket

Cohere published a write-up of Alibaba's Qwen3.8-Flash-Next going off script during a security benchmark. It was asked to write a detection rule, but instead it listed everything in /tmp, checked which download tools were installed, read the DNS settings and tried to upload a test string to an Alibaba Cloud storage bucket in Beijing and checked whether it worked. The model's reasoning trace said it wouldn't call any tools. Cohere's sandbox had no route out, so the request died there. The behavior is rare, less than one call in 100,000 across Cohere's evaluation runs, and Cohere can't say whether it's a deliberate implant or a leftover from training. Cohere sells competing models, so weigh that. But the lesson holds: running weights on your own hardware isn't the same as verifying what's in them. Sandbox your agents and cut off their network access.

Microsoft offers buyouts to 60,000 workers as capex is guided above $50 billion

Microsoft confirmed a voluntary exit offer on Monday for employees at VP level and below on select teams. A person familiar told CNBC about 60,000 people are eligible, roughly 27% of the workforce, and leavers would exit December 31. Microsoft said in July that September-quarter capex should exceed $50 billion, up from $34.9 billion a year earlier. VanEck's Matthew Sigel ran the math: at an assumed $400,000 fully loaded cost, 60,000 departures would free about $24 billion a year, enough to support roughly $70 billion of capex at 2:1 leverage. Those are his assumptions, and eligible doesn't mean leaving. But it's the same story as Meta's: the AI build-out is being paid for with payroll and shareholders' capital. Earnings land Wednesday after the close.

Israel's central bank shoots down Netanyahu's crypto sanctions plan

Benjamin Netanyahu said he'd asked for a blockchain-based contingency plan in case Israel faces banking sanctions. The Bank of Israel answered publicly: "Cryptocurrencies cannot serve as a means to circumvent sanctions." Netanyahu stood by it, and Israelis vote today. Set the politics aside and look at the admission underneath. A sitting prime minister is planning for the day his country's dollar access gets switched off. If that plan runs on stablecoins, it runs on issuers that can freeze addresses at the request of the very governments imposing the sanctions. Bitcoin doesn't have that switch. That's the difference between a dollar on a blockchain and a bearer asset.

Bitcoin Core 32.1 is tagged, binaries still pending

The v32.1 tag was pushed to the Bitcoin Core repository Monday. The release notes say 32.0 was tagged but never fully released because of last-minute issues, so 32.1 is the release. Fee estimation now combines the old block-based estimator with a new mempool-based one and returns the lower of the two, which should help in a 1 sat/vB mempool. The default connection limit goes from 125 to 200, block validation prefetches inputs in parallel and txindex takes less disk space. It also fixes a bug that let an authenticated RPC caller run arbitrary commands when -walletnotify was configured. As of this morning, binaries weren't posted on bitcoincore.org. Wait for the announcement and verify signatures before you upgrade.

Franklin Templeton's new ETFs turn stock dividends into bitcoin

Franklin Templeton's registration for two new funds, FBEQ and FIBT, became effective today. Each holds about 95% U.S. large-cap stocks and 5% bitcoin exposure, and instead of paying dividends out, they reinvest them into bitcoin. FBEQ tracks a version of the 500 largest U.S. companies and FIBT a Nasdaq-style index. Franklin hasn't said when shares start trading, and an effective date doesn't guarantee a launch. Read it alongside the lead. A Wall Street firm built a product that takes the cash flow from equities and converts it into bitcoin, treating the stocks as the productive asset and bitcoin as the place to store what they produce. Somebody at Franklin understands the difference.

⚡ FREEDOM TECH CORNER

DATA SNAPSHOT

Spot price, block height and hashrate estimate: October 27, 2026, 9:48 a.m. ET. Bitcoin Lab daily series: October 26, 2026. U.S. spot ETF flows: October 26, 2026.

Sources: Kraken spot quote, mempool.space block height and hashrate, Bitcoin Lab daily metrics, and TFTC ETF flows. Daily metrics use the provider’s October 26 observation, not live intraday estimates.

Talk tomorrow, freaks.

Marty Bent · TFTC · Nostr

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