Two earthquakes, one fortnight, and the archive files them in the order history will. First: the SVB weekend resolved Sunday night with the systemic-risk exception, all depositors made whole (equity and bonds zeroed; the moral-hazard debate correctly rages), Signature Bank seized the same weekend, a new Fed facility (BTFP) lending against underwater bonds at par (the footnote-hole, papered by policy), and, the aftershock, Credit Suisse, a 166-year-old globally systemic institution, wobbled within the week and was force-married to UBS by Swiss decree on a Sunday (the AT1 bondholders zeroed ahead of equity, a subordination inversion that will feed litigation for years). The velocity thesis is now doctrine at the Fed: post-incident interviews confirm regulators cited Twitter-and-Slack-speed runs as unprecedented. The banking system’s circuit breakers got their 2023 firmware update in one weekend, live.
Second, and the one the decade will remember: GPT-4 shipped (March 14th, with Anthropic’s Claude launching the same day; the frontier is now plural). The capability delta is not subtle: bar exam at the 90th percentile (3.5 scored the 10th), competent multimodal reasoning over images, and, the measure this file trusts most, our own internal tools, re-pointed at the new model with zero prompt changes, went from “useful with supervision” to “routinely startling” overnight. The emergent-capability curve between model generations is the entire strategic story of the moment: nobody, including, by their own published admissions, the labs, can predict which capabilities arrive at which scale (the “sparks” paper discourse arriving as the file posts). The governance shelf and the FLOPS-as-materiel file are now the same file: capability jumps this discontinuous, under competitive race pressure, with evaluation science this young, is the highest-variance configuration this archive has cataloged in eleven years. Filed without panic and without comfort: the loom has a new generation, and the industry is learning its properties in production, together, again.
The grace ledger, because the charter demands it: Champions League draw has delivered a quarter-final with a surprise package (Napoli’s Scudetto-marching squad!) and, the group chat’s actual headline, Benfica beating Club Brugge with one of the lowest payrolls in the knockouts. Variance worship, annual sacrament, gratefully received in a fortnight that needed normal chaos.
TIL: AT1/CoCo bond mechanics and why “equity is the first loss” turned out to have a Swiss asterisk. Every capital stack is a runbook until a sovereign edits it at 7pm Sunday. Read the indenture and the jurisdiction (the boring-documents doctrine, cross-border edition).