What's Up With Prediction Markets? & OpenAI On Red Alert

Hi readers, happy Thursday! Today we’ll be covering the rise of prediction markets, the U.S. economy, India’s new security app, Europe’s plan to fund Ukraine, Trump’s cabinet meeting, an investigation into Pete Hegseth, and OpenAI on red alert.

“We're each of us alone, to be sure. What can you do but hold your hand out in the dark?” ― Ursula K. Le Guin

CNN Bets On Kalshi

Yesterday, CNN announced that it would be partnering with Kalshi, a so-called prediction market platform. If you’ve never heard of a prediction market before, it’s basically a platform that allows users to bet on yes-or-no questions about events that will occur in the future – think things like “It will rain in Austin, Texas tomorrow” or “Gavin Newsom will be the 2028 Democratic presidential nominee.” Users buy and trade “yes” and “no” contracts for each question – if 80% of people believe it will rain in Austin tomorrow, “yes” contracts should sell for close to $0.80, while “no” contracts should sell for $0.20. Once the event in question takes place, the winning contracts pay out $1 (users usually buy multiple contracts for an event).

Prediction markets like Kalshi and Polymarket have grown massively since last year’s presidential election, and they’ve been increasingly given legitimacy by mainstream institutions. In the case of CNN, Kalshi odds will be displayed via real-time data tickers on the company’s broadcasts and platforms in relation to topics including weather, politics, and other news.

CNN claims that bringing Kalshi odds to its broadcast will give journalists a “data-based angle from which to explore and better understand the world around us.” Why does this matter? The thing is that Kalshi betting odds aren’t actually a real-world prediction of something happening – instead, they’re more reflective of what Kalshi’s (largely white male) userbase believes. They can also be manipulated by “whales” – people placing massive bets – in order to change public opinion of political candidates, and those whales will now have an even bigger stage thanks to CNN. Plus, the deal will now encourage people to gamble on politics, exposing elections to more bad actors and spreading gambling addiction even more than the nation’s sportsbetting epidemic already has.

No Green This Holiday Season

We’ll put it simply – the economy is not doing very well right now. Yesterday, payroll processor ADP released its jobs numbers for November, revealing that private employers cut 32,000 jobs last month, meaning the economy has lost private-sector jobs in three of the past four months. Most of those losses were concentrated in small businesses, which cut more than 120,000 jobs, while larger companies added employees. “It is those mom-and-pop, Main Street companies, firms, small businesses and establishments that are really weathering what is an uncertain macro environment and a cautious consumer,” said ADP’s chief economist. “I see them as a canary in the coal mine.” A federal government jobs report was slated for release this Friday, but the government shutdown means the Bureau of Labor Statistics will publish a partially-complete November jobs report on December 16 instead.

Meanwhile, Black Friday spending data indicates that consumers are struggling as well. Americans spent $44 billion between Thanksgiving and Cyber Monday this year – an 8% increase compared to last year – but data shows that consumers were focused on finding discounts and leveraging buy-now-pay-later services (BNPL) to get their holiday shopping done. According to Adobe Analytics, BNPL purchases accounted for $1 billion in spending on Cyber Monday alone, and BNPL firm Klarna reported a 45% increase in sales growth between November 2024 and this year. “Everything’s more expensive,” said one consumer. “I’m buying less this year, but I am looking for more sales. I plan to buy less for family and friends.” 

The Federal Reserve is widely expected to make one more interest rate cut in December – the rate cut should encourage employers to hire more people, but the decision could also raise inflation as Americans struggle to make ends meet.

Hydration Isn’t About Sugary Sports Drinks

New Delhi Gets Nosy 

• On Tuesday, India’s government gave big technology companies 90 days to install a government cybersecurity app on every smartphone in the country. The app, named Sanchar Saathi (or Communication Partner), allows users to track lost or stolen smartphones and also check how many phones are registered under their name. The government says the app will clamp down on India’s massive fraud problems, and will also help regulate the country’s secondhand phone markets.

• The announcement was met with mass outrage from India’s opposition parties as well as civil rights groups, who claim that the app will be abused for government surveillance purposes. Some tech companies, including Apple, have already announced plans to fight back against the order. Later on Tuesday, India’s communications minister announced that the app can “be deleted from the mobile phone just like any other app,” but that hasn’t seemed to ease anyone’s fears about government snooping.

Frozen Funds Are On The Menu

• European Commission president Ursula von der Leyen has announced that the European Commission is moving ahead with its plans to offer Ukraine a massive loan based on Russian assets frozen in European accounts. The controversial €90 billion ($105 billion) plan, according to von der Leyen, will cover two-thirds of Ukraine’s funding needs over the next two years, with “international partners” covering the rest. 

• The plan will hand Kyiv loans secured against €290 billion of Russian assets held in European institutions, and will ensure that Ukraine is able to drag out its war against Russia for a few more years. Despite von der Leyen’s desires, though, the loan deal is lacking unanimous approval from every European country. Belgium, where much of the frozen funds are being held, is the plan’s biggest opponent – Prime Minister Bart De Wever has stated that the country could be fined billions of euros if Russian individuals and companies sued over the loans.

Additional World News

• ‘Those who eat Chilean salmon cannot imagine how much human blood it carries with it’ (Guardian)

• Child deaths worldwide projected to rise, reversing decades of progress amid global health funding cuts (CNN)

• What Israel's plan to reopen the Rafah border crossing means for Palestinians in Gaza (AP)

• Half of Europeans see Trump as enemy of Europe, survey finds (Guardian)

• South Korea Has a Coffee Shop Problem (NYT, $)

• Insight: How an oil pipeline battle shows the US gaining sway in Iraq (Reuters)

A Cabinet Comedy Of Errors

• Tuesday marked the last White House Cabinet meeting of the year, and it seems like our 79 year-old president (and the rest of his government) could use the upcoming holiday break. During the televised meeting, President Trump appeared to nod off as his Cabinet members spoke, with his eyes completely shutting multiple times. Besides the president drifting in and out of consciousness, the meeting offered a few other comedic scenes: White House budget director Russell Vought doodled a cute landscape drawing as his coworkers were discussing their departments, and Defense Secretary Pete Hegseth was seated behind a nameplate designating him the “ssecretary of war.”

• As for the actual political takeaways from the meeting, it appears that the White House lacks a unified opinion on affordability. While Treasury Secretary Scott Bessent called affordability a “crisis,” Trump said that Democrats discussing rising costs was a “con job.” Hegseth used the Q&A section of the meeting to defend his decision to order a “double tap” strike on survivors of a boat strike in the Caribbean earlier this fall, blaming the “fog of war” for the incident. Trump later told reporters that he doesn’t want immigrants from Somalia (specifically) to enter the U.S., saying that they should stay in their home country and try to fix it instead.

The Secretary Of War, Under Fire

• In March, a journalist for The Atlantic published a story revealing that Defense Secretary Pete Hegseth had used Signal, a messaging app, to discuss U.S. airstrikes on Yemen’s Houthi rebels with his wife and brother. The Atlantic writer knew about the story because Hegseth had accidentally added him to the group chat before revealing the critical military plans.

• Since then, Pentagon Inspector General Steven Stebbins has been investigating the “Signalgate” incident, and his report on the debacle is expected to be released next week. According to a government source, the report will state that Hegseth risked the safety of U.S. servicemembers by using the unofficial app, adding yet another controversy to the Defense Secretary’s mile-long wall of shame. 

• Hegseth hasn’t been too cooperative with the months-long investigation, claiming that it’s a political-motivated attack seeking to undermine his authority. It’s highly unlikely that Hegseth will face any consequences from the report, as the Trump administration stated that “President Trump stands by Secretary Hegseth” even as news about the report broke on Wednesday.

Additional USA News

• Photos of Jeffrey Epstein’s Private Island Released by Democrats (NYT, $)

• Republicans brace for tough midterms after Tennessee special election (AP)

• As Trump’s immigration raids hit New Orleans, a Chicago group shares resistance tips (NPR)

• How Minnesota became a hub for Somali immigrants in the U.S. (NPR)

• Shredded cheese sold in dozens of states recalled due to potential for metal fragment contamination (AP)

• Trump says he will repeal Biden-era fuel efficiency standards for cars and trucks (Guardian) 

Sam On-Red-Alert-Man

• Something just shifted in the AI landscape. Two weeks ago, Google released its Gemini 3 LLM, which quickly gathered praise as a major upgrade compared to other LLMs on the market. According to The Wall Street Journal and The Information, OpenAI – which makes (current) industry leader ChatGPT – declared “code red” on Monday as it began to feel the impacts of Google’s new model.

• OpenAI is a massive company valued at over $500 billion, which means it’s working on many projects at once. Those include integrating ads into ChatGPT, developing shopping and health agents, and rolling out a personal assistant feature named Pulse. In Monday’s “code red” memo, CEO Sam Altman stated that in the wake of Gemini 3’s release, all of those initiatives will be put on the back burner. Instead, the company will spend more resources to make ChatGPT smarter, faster, and more personalized in order to maintain control over the LLM market. Unfortunately for OpenAI, the Gemini 3 release comes at a critical time – the company has made massive financial commitments over the past year, but is $200 billion short of turning a profit.

Additional Reads

• Having a dog can boost teenagers’ mental health, say scientists (Guardian)

• Your Data Might Determine How Much You Pay for Eggs (Wired, $)

• One day, AI might be better than you at surfing the web. That day isn’t today. (Verge) 

• NFL: How abnormal drugs test saved Denver Broncos linebacker Alex Singleton from cancer (BBC)

• Drunk raccoon found passed out in Virginia liquor store (Guardian) 

• Why Taylor Swift’s Accent Has Changed (Atlantic, $) 

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Peanut For Your Thoughts

The Epstein Island pictures are all (relatively) normal, but the room with a dentist’s chair (and a few extra surprises inside) really threw me for a loop.

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