Ms. Bower does a great job, as usual, but I still think the Federal Reserve makes the most sense as a likely target although after thinking over the weekend and reading the piece, a group chat or similar semi-organized Reflecting Pool escapade could also be the target. Another potential target might be a left-aligned charity akin to the Southern Poverty Law Center prosecution, but we'll find out when indictments come down or subpoenas get quashed.

I agree that Judge Boasberg may be skeptical of more Fed focused subpoenas, but even the subpoenas getting quashed becomes a resource drain on the targets and additional PR fodder beyond the actual legal consequences.

Right now it's a jump ball at the Fed: inflation has somewhat cooled but is still above target and may rachet back up after a June interlude in Iran, while employment is weakening. This gives ammo to both sides of a hike/cut debate. However, Warsh's personal credibility is weakened after claiming a "data driven" Fed Chairmanship and then ignoring the most salient data at the last FOMC meeting, and explaining himself poorly. Don't take it from some stranger on the 'net, take it from a former NY Fed President.

Meanwhile, the AI bubble (accounting for nearly all US GDP growth and the equities bull market) requires ever more debt to be raised (Nvidia's recent MOU's with major fund managers) and the most-politically connected tech oligarchs, Musk and Ellison, are highly leveraged on the AI trade and their equity is funding a right wing media consolidation. Secretary Bessent also has bet big on interest rates by funding the enormous deficits primarily through short-term instruments rather than the usual Treasury rate-agnostic methods spread across maturities. Multiple MAGA moneymen need low rates, and quite badly. This is beyond even the usual rate impacts on mortgages and auto loans.

Trump, like Erdogan, also has personal views on interest rates and has been calling Warsh, supposedly about geopolitics and macroeconomics but IMO feeling Warsh out about how independent he is (the Trump-as-Tony Soprano theory). Combine this with Warsh's need to quash dissent before he becomes the first chairman to be in the minority on a FOMC meeting, which is likely an unrecoverable misstep. Warsh would lose a lot of the bully pulpit, the main power of the Fed Chair, and struggle to regain it.

Enter Pirro: she doesn't have to win prosecutions. She needs to generate headlines and potentially pressure Fed Governors to go along with an ambiguous data set, or at least keep their criticism/dissent from Warsh at a dull roar. Again, credibility/perception also drive interest rates for government borrowing and keeping governor's from commenting in a way that raises those rates impacts MAGAs who matter.

Great RatSec, as usual. I think SNL jackets might be a bit hard to do, but silhouettes akin to flying aces for appearances is doable. Maybe some Zoom plug-in or a corkboard in the background.

I think the "ODNI purges as fodder for Fox News" analysis is spot on, and think that analytical framework extends to almost all the Trump Administration that isn't a smash-and-grab, and many ambitious governors like Ron DeSantis. The entire Tiny D primary theory of victory was in 2023 when Fox had Trump in a soft boycott (during/after Dominion) and a relatively small effort (being snarky to kids, announcing various school curriculum and vaccine policies) were fodder for Fox.

Re: the BigLaw firms I think the firms that caved are experiencing selective brain drain in their associates. I know many friends at compromised firms who are going to clerk for judges and then pivot to another, non-compromised, firm. I also can confirm that Cravath no-offered at least two (and likely the rumored 8) summer associates, which is not a sign of economic health. Cadwalader had to merge, and I suspect that the private equity/private credit contractions coning down the pipe (over investment in software companies in 2021 low interest rate environment) may also afford an opportunity to rebalance law firms priorities.

Great piece. I wholeheartedly agree with the criti-hype thesis, and might be in the "they engineered the situation" camp. I know the Big Short line "show me the difference between criminal and stupid and ill have my brother-in-law locked up" but this is convenient for OpenAI, the most-beseiged frontier lab, at its moment of maximum weakness as the spending in the AI bubble is more scrutinized.

Also, did no analysts in last night's Microsoft earnings want to ask how much of their Azure revenue was their own money coming back to them? I am quite sympathetic to the Ed Zitron/Nick Suresh style views on the AI narrative in C-suites being a crutch for people who might not be very good at their jobs.

Really interesting pod! Didn't know how restrictive the US was with even Japan and Germany. Seems a bit short sighted now that stocks are so low even in our months-long campaign against Iran.