They have that budget, though

They have that budget overall. Not $500k just to sink one ship.

none of the russian naval assets destroyed have been taken out by drones

Yes, because the Russians have been smart enough to keep their ships in Russian-controlled ports.

On a somewhat related note, people may know that Pittsburgh is one of the top places in the US for medical research and treatment. It’s the home of Carnegie Mellon University, the University of Pittsburgh, and many others. It has “the second-most hospitals and second-most doctors per capita of any in the nation”.

But why would the “Steel City” have such good medical care? It turns out that for a while, steel worker unions were really powerful, and one of the main benefits the unions fought for was good health care for their members. Now the steel industry is long gone, but what remains is a great medical system that was essentially founded by those unions.

Moral of the story? If you’re a worker in a dirty, dangerous industry, you can either vote for someone like Trump who will gut your healthcare and strip you of government protections, or you can form a union and get the protection you deserve.

they’re little more than teleoperated missiles.

I think that’s true of drones that would attack a ship on the open sea. I don’t think that’s true of a drone you’d use to attack a ship in a harbour, in a narrow strait, in a canal like the Suez or Panama, etc. Especially with FPV drones that can be flown into a weak spot, you could get the standard quad-copter drones with a grenade-type charge to disable a ship.

$500 FPV drones, while fairly effective in trench warfare, are utterly negated by things like a closed door or “a big net”

They’re slowed down by doors and nets, but not negated. The bigger the net, more likely there will be a hole in it somewhere. A closed door works in a bunker where the door can be tens of metres from the target. But, a ship doesn’t have that much room to work with. In addition, a ship is a massively high value target. A bunker is only really as valuable as the people who happen to be inside it. But, the cheapest US navy ship comes in at about $100m.

To put the cost of a $500 drone in perspective, a single WWII era shell cost somewhere around $500 in WWII money. With inflation, that would be about $10,000 today. So, you could buy 20 $500 drones for the cost of a single unguided battleship shell. In the battle of the Denmark Strait, the battleship Bismarck fired something like 18 salvos, with each salvo using about 3-4 guns, for about 50ish rounds used. So, that’s about half a million dollars in shells. I strongly believe that if you gave $500 grand to a Ukrainian drone unit, they could find a way to sink a ship with it.

In fact, I wouldn’t be surprised if the shells used by the 5 inch guns on a modern ship cost more than the drones Ukraine is using to harass the Russian soldiers. So, if the Ukrainians had the ammunition budget of a ship they were attacking, and even if every single shell scored a hit, the Ukrainians might have more $500 drones than the ship had $500 shells.

Maybe they’d use small drones to exhaust the countermeasures of the ships and just bleed them out of ammo. Maybe they’d use enormous heavy-lift drones to drop flares, chaff and fireworks to blind the ships. Who knows what their tactics would be. The main thing is that ships and their crews are designed, armed and trained to fight the last war, and drones are a big part of the current/next war.

You’re right that drones have limitations. Jammers can cut off radio controlled drones. Optical fiber drones have a shorter range, the fibers can get tangled etc. GPS guided drones can be jammed or misled. But, US ships haven’t been trained or equipped for all-out drone warfare. They’re still focusing on planes and missiles as being the main threats. And because of the costs associated with planes and missiles, they don’t have to plan to survive a swarm of hundreds or thousands.

I just think that ships are such high value targets, and drones are so versatile, that there will be a solution that works, at least when the ship is in a vulnerable place near land and with limited maneuvering options.

We may have to wait for another three years.

Which is also a clue that he isn’t short selling.

There are two ways of making money when a stock goes down. One is to sell the stock short. The other is to buy a put option.

A short sale is extremely risky. Say the shares are at $50 and you think they’re going to go down, so you sell 1000 shares you don’t own (short selling) and agree to buy them back by some date in the future. If you’re right and the stock tanks to $20, you can buy the shares and pocket $30,000. But, if the stock doesn’t sink, you might have to buy the shares for $60 each, so you lose $10 per stock, or $10,000. If there are tons of people shorting the stock, you can get a short squeeze, where everybody needs to buy shares to close out their short position, and because everybody needs to buy, the stock price rockets up, so you get people having to buy a stock that used to be $50 for $200, leading to $150,000 in losses for a 1000 share short where the maximum possible gain was only $50,000.

An option is much safer. There you’re buying the option to sell the shares at a certain price at some time in the future. Say you think a stock is going to crash. It’s currently trading at $50/share. You can buy 1000 put options at a strike price of $40 with a date 1 month in the future. It will cost you something to buy those options, say $1 per share, so $1000. If the stock goes up or stays at $50, your bet didn’t work out. You don’t have to sell the shares, you just tear up the options contract. You’re out whatever you paid for the option, say $1000 here. But, say the stock tanks and it’s now at $20/share. Now your bet did pay off. You can buy 1000 shares at $20 each for $20,000, then immediately exercise your option and sell them for $40,000, netting you $20,000. With put options the upside is significantly smaller, but the potential downside is tiny. It’s just the cost of the options.

Someone predicting a crash within 3 years isn’t going to short sell the shares. Between now and then the shares could continue to rise for a while, and they’d be on the hook for a huge payout in that case. If they buy options the down side is much smaller. They may have to re-buy new options a bunch of times. But in the worst case they just have to let the options expire unused and eat whatever cost they paid for them.

For the coming AI crash, I don’t think it will be very soon. I think there will be a crash. But, I think the government will try to keep the bubble from bursting. Too much of the US economy is now invested in AI. So, even under Biden, or Harris, or Obama they’d try to prevent a catastrophic crash by using taxpayer money to prevent the most damaging bubble burst. With Trump, there’s going to be even more government interference in the market. His backers are crypto bros. They’re the ones making him billions on his meme coins. They bankrolled JD Vance’s political career. If they demand that he rescues their failing companies, he’ll do it. And, since the GOP does whatever Trump wants, they’ll just fork over literal trillions in taxpayer dollars to keep things from crashing. But, eventually there will have to be a crash, because there’s just not a sustainable business model in any of this, at least not at anything like the current scale.

Also, the way short positions work is that the people who are most successful at shorting a stock are the ones who have a megaphone to announce they’ve shorted the stock. They go on as many podcasts, news shows, interviews, etc. as possible to say things are going to crash. Because, the more people who hear about it, the more hesitation there will be to invest, which means the more chances of their prediction coming through.

So, he’s not just some guy who is betting on the bubble bursting, he’s a guy who is now heavily incentivized to cause the bubble to burst so he can make his investors a lot of money.

things were encrusted with flak of which most could fire 40mm proximity airburst shells

Almost all of which missed. And they were firing at relatively large, relatively predictably moving planes, not tiny drones that can change direction on a dime.

As for swarms of drones attacking US Navy ships, we really don’t know how well they’d handle it. Even before the war in Ukraine, it wasn’t an unknown threat, but they’d never actually had to deal with it. Sure, occasionally there’s one civilian drone that goes where it’s not supposed to, and it gets taken down by a net, or a military drone, or a rifle. But, they’ve never faced trained and motivated drone warfare specialists. And, in Ukraine drone warfare has gone through multiple generations of move and counter-move. If there were a US Navy ship in a harbour, or one that had to pass through a narrow strait and it was the Ukrainians who were trying to attack it with drones, I’d definitely bet on the Ukrainians. They have a ton of up-to-the-minute experience with the latest tactics and counters. The US Navy may have done some training, but they’ve never had to do it for real the way the Ukrainians have.

I’m sure the US military would learn quickly if it got into a real drone war. The US military has issues, but not the massive corruption, nepotism, theft, and rigid command structure that the Russians have. And, even the Russians have adapted somewhat. But, my guess is that it will take a significant loss for the US military before the right people are put in charge and given a free hand. That’s not a US military issue, it’s just a general issue with what happens before a crisis and after a crisis.

From the sky? Ever seen a phalanx gun in action?

Against a single multi-million dollar missile? Yep. Against a cloud of 500 cheap drones, each one moving in an unpredictable way? No. I suspect it would kill a lot of them, but some of them would get through.

Apparently a Phalanx fires 4500 rounds per minute, but that “rounds per minute” figure is deceiving because it can’t fire for a minute. It has a magazine that holds about 1500 rounds, enough for about 20 seconds. The original “Block 0” phalanx took 2 men 10-30 minutes to change a magazine. Block 1 improved that to less than 5 minutes. This makes sense with their original threat model: one, maybe 2 very expensive missiles coming at the ship.

It seems to me that if you can spend 100 drones to draw fire for the Phalanx for 20 seconds, you now have a 5 minute window where there’s no CIWS to protect the ship.

But no one’s sinking a US Navy warship without serious weapons.

The USS Cole was nearly sunk by a small fiberglass boat. And, you don’t even need weapons. The USS John McCain almost sunk itself by running into another ship, just a month or so after something similar happened to the USS Fitzgerald.