Studio Ghibli AI, Classified Leaks, and the Context Shift

The Signal chat, even more tariffs, and the value of meaning-making

the signal chat, Studio Ghibli AI, even more tariffs, and how context trumps content

Context vs Content

Again, another week of a lot. So a quick news roundup:

• 25% tariffs on autos: These could raise car prices as high as $12,000¹ (even on cars ‘Made in America’ because the inputs like engines and powertrain components usually come from somewhere else). Trump threatened to tariff Canada and EU even more if they decided to work together. The main goal does seem to be to push manufacturers back to the US but that’s complicated - the Big Three said “they needed more time to adapt”. Some steelworkers were already laid off due to weak auto production. We will find out more on April 2.

• Sentiment: The oil and gas industry are extremely upset with Trump - if you have time, you really should read through the comments from the Dallas Fed Energy Survey. Natural gas is up 100% vs last year. Remember, we can’t do anything (especially AI) without energy - and this is how arguably some of the most important people in our supply chains are feeling. The uncertainty is palpable as people can’t plan for new development (much less reshore manufacturing) and it really feels like we are are all waiting in never-ending spiral of whims and wishes. Chaos is expensive!

• There is a continued repositioning of allies. China, Japan, and South Korea are setting up a trilateral summit. China is trying to work with India. According to Steven Kelly, European officials are starting to war-game what could happen if they can’t rely on the Fed to provide dollar funding for swaps in times of stress. International relations are pivoting on the US is framing negotiations, not even just the substance of the deals.

It’s really a lot! And today I want to talk about how it’s a lot - that context is increasingly more decisive than content in shaping economic outcomes, policy reactions, and cultural narratives.

The Signal Chat Leak

Senior Trump administration officials were discussing plans for bombing Yemen in a Signal group chat. Mike Waltz, Trump’s national security adviser, added Atlantic’s Editor-in-Chief to the chat, seemingly on accident. It’s not good for many reasons, including (1) they were using a commercial app on their personal phones to discuss sensitive plans² (2) they accidentally added a journalist (3) many members of the administration then lied when asked to explain what happened. The FT said that it could have violated the US Espionage Act - it’s careless, incompetent behavior that could have put the lives of soldiers at risk if the wrong person was added.

Right now, it doesn’t seem like anyone is getting fired from the leak. Mike Waltz did take responsibility but also denied knowing Jeffrey Goldberg. It’s very much the crystallization of how the administration interacts with the world - there of deception and to be quite honest, they seem to think that voters are stupid sometimes, (I am really not being political here, it’s just how they treat the populace) and then you turn around and you get a 25% tariff on cars from the guy you voted for to improve the economy.

But this is also a perfect crystallization of how, in our hyper-digital age, it's increasingly the context and framing of information (not the content itself) that drives debates and shapes economic futures. Here, the content of the war plans was practically overshadowed by how they leaked (understandably!) - the wrong platform, the journalist, and the subsequent denial. In other words, the context of the leak drove the story more than the actual secrets themselves.

Abundance as an Example

So let me flesh this out more - you can look at the Abundance Discourse (the conversation around Ezra Klein and Derek Thompson’s new book) for another example of this. A lot of people… just don’t like it. I think the book is good, with good ideas on how to build and invest and essentially provides something other than the regressive ideas that are sometimes proposed (rent caps, for example). The authors have faced a lot of criticism mostly because their agenda doesn’t serve microinterests (I do think Joe Weisenthal has the most substantial critical write up on it³).

Most critics seemingly don’t pay attention to the core idea of ‘Time to Actually Build’ - they just argue with the context that Klein and Thompson have presented. Critics ignore the substance and push a blanket ‘capitalism bad’ narrative or argue for some other tangential thing or don’t like Ezra Klein etc etc. It’s this meme -

And this is where we are - context matters more than content. In Klein and Thompson’s case, the actual policy proposals get lost under layers of personal bias, political branding, and Twitter hot takes. Again, context - the who, where, and how of discourse - ends up more influential than the content of the book itself.

Studio Ghibli AI

And for another example - around the same time the leak happened Grant Slatton tweeted “tremendous alpha right now in sending your wife photos of yall converted to studio ghibli anime” and it got like 35,000 likes and suddenly all of Twitter was either (1) the US government experiencing a massive breach of security and (2) thousands of pictures of dogs and wives and memes in the same style as My Neighbor Totoro.

It’s cute and it’s fun. But. The creator of the style, Hayao Miyazaki, thoughts on AI are neither cute nor fun. He said "I would never wish to incorporate this technology into my work at all… it’s an insult to life itself." Which is complicated - the artist clearly doesn’t like the medium, but does the artist get a say in any of that? The content of the work is his, but the context in which people are sharing it isn’t!

What people are doing with Miyazaki’s work is very similar to a Snapchat filter - it’s really nothing new, but how people are talking about it is important.

For example, someone said “art just became accessible” in regards to being able to Ghibli-fy friends - which has layers of discussion in (1) how people think about art (2) how people think about artists (3) the intent that people have to bring art into being and (4) is AI-generated art in the style of someone else’s art actually… art?

• Art is a process and a practice and is something you spend time with, thinking about. Usually it comes from the depths of your soul, a small doodle or a poem or a song or a mural on a wall. Aesthetic and art are different - one is a path that has already been carved, the other is something new and bright and entirely personal.

• Art is one of the very best things that makes us human. There are worries about the ‘Dead Internet Theory’ - that we stop making art and music and beautiful things (I don’t think this will happen) and the AIs just end up training on old data and eventually each other and perhaps come up with new and beautiful things, but of course, can the AI⁴ feel how a human feels? And can a human feel how another human felt if it’s the AI making it?

Miyazaki’s discomfort with AI-generated art underscores a larger trend: AI doesn’t just replicate tasks - it reshapes how meaning (and thus value) is made.

And this is important because when we talk about AI's economic impact, we often fall back on familiar automation narratives: "Will robots take our jobs?" And there is evidence to the contrary - like the rise of more ATM machines actually led to more bank teller jobs as branches became cheaper to operate.

But what is happening now isn't just automation replacing routine tasks. We really do have a restructuring of how value is created and distributed. Unlike previous technological revolutions that primarily transformed physical production, AI transforms meaning-making itself, changing how we create and distribute value. The Ghibli AI trend is a perfect microcosm:

1. The raw content (images) is easily reproducible and has minimal intrinsic value

2. The context (who shares it, how it's framed, which platforms amplify it) creates the actual economic and social value

3. The creators of the original style (Studio Ghibli) receive some value through "increased interest" while platforms capture the economic benefits.

   1. Studio Ghibli itself saw a surge in interest but captured almost none of the economic value from the trend

   2. Platform companies (Twitter) monetized the increased engagement

   3. AI developers gained valuable training data from millions of uploaded images

   4. Individual users "spent" their social capital by participating in the trend

This pattern of value distribution - where content creators receive attention but platforms capture revenue - is clearly the dominant economic model of our digital age.

But notice how the context (the viral tweets, the platform hype, the novelty of AI filter) drove the phenomenon more than the intrinsic value of the images themselves. Once again, context overshadowed content.

But as AI accelerates our ability to (1) generate, (2) manipulate, and (3) distribute information, this weird tension becomes even more pronounced. We're entering an era where the battle between content and context will reshape how all policy is created, communicated, and understood. Digital platforms and AI tools have created an environment where:

1. Information volume overwhelms individual capacity to process details, making simplifying frames more influential

2. Algorithmic curation creates personalized information environments that can reinforce certain ideas while hiding others

3. AI-generated content can rapidly produce and distribute compelling narrative frames at unprecedented scale

4. The collapse of traditional media gatekeepers means fewer institutional checks on misleading frames

The result is a landscape where the context provided for policies (like that’s my buddy Joe Rogan talking about this, let’s listen to him) shapes their reception more powerfully than their actual content. Thorstein Veblen's concept of conspicuous consumption matters here - the purchasing of goods not for their utility but for the status they display. In our digital economy, we're witnessing a shift to what might be called "conspicuous contextualization" - where value derives not from the content itself but from who frames it, where it appears, and how it's positioned.

All sorts of questions pop up here - do we develop economic systems that distribute the benefits of context creation broadly? Or will we see further concentration of power in the hands of those who control the dominant contextual frameworks?

And then the question becomes - well if economic systems get overly complex and confusing, it becomes that much easier to bend them to your will right? If democracy becomes tainted by lack of respect for truth and a force of context shaping, you can simply buy voters, like Elon Musk is - and that’s not great. It’s confusing.

The Theoretical Backbone

We do have answers in the halls of history. I promise I won’t be too flowery here - our digital reality is increasingly restructuring economic and social value before our eyes. Everyone has talked about this before. We're living in what Jean Baudrillard would call a "hyperreality," where the distinction between the real and the simulation has collapsed, leaving us to navigate an economy of signs and symbols rather than tangible goods and services. Marshall McLuhan said many years ago that "the medium is the message." The container matters more than what's inside it.

Erving Goffman's concept of frame analysis is relevant here too. Goffman described how humans organize experiences through primary frameworks - the backdrop of assumptions that help us interpret events. And it gets confusing really fast, because digital technologies are are actually dismantling these frameworks because they force disparate contexts to coexist in the same spaces with little differentiation.

When military planning and cat pictures flow through identical interfaces, our brains struggle to process the appropriate context for each⁵ Here, too, the real story is how the context - the platform and the feed - rearranges our sense of priority, overshadowing the substance.

Like when President Trump recently announced a 25% "secondary tariff" on countries purchasing Venezuelan oil, markets reacted not just to the economic mechanics of the policy but to what the move signaled about America's geopolitical posturing, right? Whether tariffs genuinely protect domestic jobs is less relevant than the signal these abrupt policies send: unpredictability, potential for trade retaliation, and the sense of a fractured US approach to global commerce.

Why Context Will Dominate

So what does all this mean for you and me - the everyday participants in this strange new context economy? How do we navigate a world where the frame has become more valuable than what's inside it?

All these examples (the Signal chat leak, the Abundance discourse, the Ghibli AI craze, global trade) reveal a truth - we’re really not just dealing with raw content, but with the frames that shape how that content is delivered and interpreted. In each case, the platform, format, or social narrative dominated the conversation more than the actual substance. Understandably!

As AI tools make it increasingly easy to generate persuasive economic narratives, regulatory frameworks need to evolve. Current approaches focus primarily on content moderation (is the information true or false?) rather than context moderation (how is the information being framed and targeted?). We need context literacy!

We already have models for this in financial regulation, where there are strict rules about how investment opportunities can be presented to consumers. Similar principles need be applied to information more broadly.

Also, when context increasingly trumps content in determining value, we need new frameworks for understanding, measuring, and distributing that value. Power gravitates to those who control context. Ultimately, the real battle isn’t about the raw content - it’s about who defines, manipulates, and monetizes the frame. That’s why Trump’s tariffs, Klein and Thompson’s ideas, and Miyazaki’s art style all end up overshadowed by questions of when and where they appear, who is sharing them, and how they’re spun.

This isn’t really anything novel. But in our hyper-digital age, how information is framed often matters more than the substance of that information itself.

Disclaimer: This is not financial advice or recommendation for any investment. The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.

1. This is tangential - but we are now seeing student loan delinquencies begin to impact credit scores (a 90-day delinquency is a ~170pt score drop, which is truly brutal). The markets are starting to massively reprice risk, and this could have major consequences for the consumer (including their ability to finance things like cars).

2. It is a part of the 2025 Plan to use third party software to discuss top secret plans so, that might be something too

3. His argument is that the system itself needs to change - he writes “our existing economic model has too much riding on a perpetual rise in the value of financial assets and this would be threatened if profits keep having to get reinvested for public good” - and that’s a complicated question to answer, and is somewhat outside the core part of Klein and Thompson’s book, but is kind of the meat of all of it. Klein and Thompson are assuming the S&P 500 would be malleable to profits actually leaving the system.

4. The AI part of this is interesting because Microsoft is abandoning some data center projects after Alibaba’s Chairman warned that there might be a bubble in data center construction. CoreWeave, a company that buys Nvidia GPUs and resells them, is undergoing some complicated technical defaults (and 62% of their business is Microsoft, so the dominoes are tipping a bit).

5. Ground News is actually an interesting real time experiment in this, where they compare headlines from different publications talking about the same topic - and it gives you a strong sense of framing effects. If you’re interested in it, I have a code (they aren’t sponsoring this newsletter, but I will make some videos with them) at groundnews.com/kyla