First up, New York Post, April 18:
WASHINGTON — White House press secretary Karine Jean-Pierre acknowledged Thursday that President Biden’s maternal uncle, Ambrose Finnegan, actually died when his plane crashed into the Pacific Ocean during World War II — and that he wasn’t eaten by cannibals, as Biden implied on two separate occasions Wednesday....
....MUCH MORE
Also at the Post April 18:
Biden confuses Israeli city with Rafah in Gaza in shocking gaffe: ‘Don’t move on Haifa’
No worries.
From The Next Platform, April 10:
With MTIA v2 Chip, Meta Can Do AI Inference, But Not Training
If you control your code base and you have only a handful of applications that run at massive scale – what some have called hyperscale – then you, too, can win the Chip Jackpot like Meta Platforms and a few dozen companies and governments in the world have. If you win that jackpot, you are big enough and rich enough to co-design hardware to work precisely for and efficiently with your specific software, and vice versa.
Meta is one of the giants of the metaverse – hence its name change a few years back from Facebook – and it is also one of the biggest innovators in and users of AI in the world. Both require a tremendous amount of compute. And even though Meta Platforms will have spent somewhere around $15 billion for its fleet of 662,000 GPU accelerators – that is not the cost of systems, but just the cost of the GPUs – between 2017 and 2024 to buttress its AI ambitions, the company knows that AI training and inference costs have got to come radically down for the company to deploy AI at a larger scale than it currently wants to.
And so the company began designing its Meta Training and Inference Accelerator in 2020, and after three years of work, last May the company launched the MTIA v1 based on a significantly enhanced RISC-V architecture. We did a deep dive on MTIA v1, which was really aimed at AI inference workloads and particularly on the deep learning recommendation models (DLRMs) that drive the advertising and social networking applications in Facebook, Instagram, and other applications in the Meta stack.
With the MTIA v2 chip that was just revealed, Meta has built a much more capable device, setting it further down the road towards its independence from expensive and scarce GPU accelerators from Nvidia and AMD as well as other kinds of accelerators from myriad AI startups. Like MTIA v1, it an be used for inference, but not for AI training.
The blog post announcing the MTIA v2 device was written by Eran Tal, Nicolaas Viljoen, and Joel Coburn. Tal spent eight years at Nvidia in the 2000s and eventually became a senior systems design engineer for desktop GPUs. In 2010, Tal moved to Facebook to be a hardware engineer focusing on server design, did a stint helping Facebook co-design a mobile phone with Taiwanese consumer electronics maker HTC, was in charge of storage server designs for three years a decade ago, and then took over the Open Compute Project’s telecom hardware and software efforts (including OpenRAN). In April last year, Tal became director of hardware systems at Meta. Viljoen is the technical lead director of AI and network systems at Meta and was previously director of software engineering for DPU maker Netronome. Coburn has been a software engineer at Meta Platforms for over three years and was previously in the same position at Google for more than eight years. Suffice it to say, they know hardware and software and the nexus where they come together – or don’t....
....MUCH MORE
Again, here's Meta's blog post:
https://ai.meta.com/blog/next-generation-meta-training-inference-accelerator-AI-MTIA/
And at TweakTown, also April 10:
Meta's next-gen in-house AI chip is made on TSMC's 5nm process, with LPDDR5 RAM, not HBM
Meta's next-gen MTIA AI processor is made on TSMC 5nm, up to 1.35GHz frequency, PCIe Gen5 x8 interface, to fight NVIDIA in the cloud business.
We've been watching the decline of Hong Kong with a mixture of horror, fascination and sadness. Some links after the jump.
From The Loadstar via gCaptain, April 17:
Hong Kong fell out of the world’s top 10 container ports last year, for the first time in the history of container shipping, according to new data from Alphaliner on the world’s busiest 30 box ports.
HK saw traffic last year drop 14.1%, to 14.3m teu, establishing the long-term decline of what was always a leading container port – 20 years ago it regularly vied with Singapore and Shanghai for the title of the world’s busiest – deposed from 2023’s tenth ranking by Dubai.
“Dubai overtook two of its nearest competitors in 2023 to make the top 10, a position it previously occupied in 2018. As earlier predicted by Alphaliner, it moved ahead of Hong Kong, which posted its seventh year of consecutive volume declines and has now lost a third of its container traffic over the past decade,” Alphaliner wrote today.
The only other major port to have suffered a greater fall in volumes than Hong Kong was New York & New Jersey, which saw its throughput decline 17.7%, to 7.8m teu, for the year.
“It was not alone in the US: Los Angeles, Long Beach and east coast port Savannah, a surprise feature in the top 30 during the pandemic, saw throughput drop year on year by 13%, 12% and 16%, respectively.
“Nonetheless, the pandemic has so far been net positive for Long Beach and New York/New Jersey, with volumes still up on 2019 numbers,” Alphaliner said.
Last year saw two new entrants to the top 30 – China’s Qinzhou grew 13.1%, to reach 6.1m teu, in position 26, while Vietnam’s Cai Mep was ranked 30th with a throughput of 5.6m teu, flat in terms of growth, but allowing it to overtake Savannah and Manila, which both posted declining volumes....
....MUCH MORE
If interested see:
The Fall of Hong Kong: How China-US Rivalry Ended a Geopolitical Neutral Zone
"Once High-Flying Bankers in Hong Kong Become a Lost Generation"
Hong Kong: "How China strangled its golden goose – and paid a terrible price"
It's deliberate. Beijing has planned on bringing Hong Kong to heel since 2012 and possibly since 1997....
From China Law Blog:
Hong Kong’s Demise
This blog has not minced words when it comes to describing the grim situation in Hong Kong, which, as one of my former colleagues at the State Department puts it, “will get worse before it doesn’t get better.”....
This primer on what's what in Funding Land is as good as you are likely to find.
From Bloomberg via ZeroHedge, April 18:
It's Time To Pay Attention To Funding Risks Again
Authored by Simon White, Bloomberg macro strategist,
The risk of a squeeze in US funding markets is increasing as the yield curve bear steepens, i.e. longer-term yields rise more than short-term ones. More attractive bill yields and climbing interest-payment costs on government debt are depleting reserves and reducing their velocity, increasing the chance of a disorderly upswing in funding rates, as well as posing a risk to the stock market.
The bond market intimidates everybody, in the oft-cited words of Bill Clinton’s chief strategist James Carville. That description is apt today as rising yields reverberate across the financial system. Funding risks are intensifying again, increasing the chance of a rate-volatility driven correction in stocks.
Concerns about funding issues have been in abeyance for most of this year, but it is time to sit up and take notice again as the backdrop becomes more pernicious. The bear steepening of the yield curve is a double whammy, accelerating the rate of reserve depletion through a declining reverse repo facility (RRP) and rising government interest payments.
The curve has been bear steepening in the 3-12 month versus 10-year sectors as inflation fears drive term premium higher, with the measure now close to levels last seen in 2008 (using tradeable forward OIS rates rather than “academic” term premium).
A bear steepening is particularly problematic in the current set-up.
First note that the RRP has been hugely important in keeping risk assets supported despite the fastest rate-hiking cycle for decades and ongoing QT.
The Treasury’s decision to pivot issuance toward short-term bills allowed money market funds (MMFs) to tap the more than $2.5 trillion liquidity idling in the RRP to fund the government. That prevented enormous public issuance crowding out other assets, and allowed the rally in stocks and bonds to continue.
But the RRP falling and eventually going to zero is a harbinger total reserves overall are potentially nearing their so-called lowest comfortable level — with estimates for the LCLoR ranging from about $2.5 to $3 trillion — where abrupt and acute funding problems become more likely. This week the domestic RRP fell as low as $327 billion, and is now at $440 billion, the lowest levels it has reached since June 2021, taking the sum of reserves and the RRP to just over $4 trillion.
The RRP has been declining as six-month and 12-month bill yields have been rising in response to the market reducing the number of rate cuts expected from the Fed, making bills more attractive to MMFs relative to the RRP facility.
Some of the RRP’s recent fall has also likely been driven by seasonal tax payments. But that should not mask the clear downwards trend in the facility and its rising volatility. It would not be the first time that a telegraphed non-risk becomes a real risk precisely because peoples’ guards are down.
That’s potentially the case today. As I noted in a column earlier this year, a portent of previous funding episodes was a sharp drop in funding volumes immediately preceding a rapid rise in them, similar to a tsunami wave. As the chart below shows, when the total amount of reserves + RRP declines, volumes in fed funds (i.e. reserves) tend to also decline.
Further falls in fed funds volumes would be a sign that funding problems are potentially fomenting.
Rising longer-term yields are the other side of the coin in the bear steepening. The US government’s interest-rate bill is climbing rapidly, and is now over $1 trillion on an annual basis. This is set to grow much higher.
The 10-year yield gives us a near real-time barometer for the US’s annual interest expense. The recent rise in yields projects the expense will soon double to almost 5% of total debt outstanding, or over $1.7 trillion - i.e. about the GDP of Australia each year in interest.
....MORE, as with Shakespeare's wasp, the sting is in the tail.Here lies the rub: to pay that interest, the government needs to tax and borrow. But that is an ever-greater drain on reserves and their velocity, accentuating the effects of the Fed’s ongoing QT program.
You might ask why that is the case given the interest is paid to bond holders and is therefore re-injected into the economy?
But that’s unlikely to be so for two reasons.
The first is that the corporate and household sectors, the two most likely to spend interest back in the domestic economy, together only account for about 10% of UST holdings. The much larger financial and foreign sectors are more likely to save the proceeds, or spend them abroad.
Second, reserves that end up as savings are of lower velocity, especially if they were originally higher-velocity bank deposits used to pay taxes. The more that interest payments percolate through the system, the more they end up with holders who have an increasingly lower propensity to spend them.
Thus a bear steepening squeezes the RRP and outstanding reserves — as well as their velocity — in a pincer movement, increasing the risk of a funding episode.
The last such major squeeze was in September 2019. It’s notable that in the days running up to that, the yield curve was bear steepening (in fact, it was in the top 1% of eight-day rises for the 2s10s curve going back 2000).
The bear steepening therefore means we should once again be vigilant to funding risks, and keep a close eye on the Funding Stress Trigger shown below....
These two points:
The first is that the corporate and household sectors, the two most likely to spend interest back in the domestic economy, together only account for about 10% of UST holdings. The much larger financial and foreign sectors are more likely to save the proceeds, or spend them abroad.
Second, reserves that end up as savings are of lower velocity, especially if they were originally higher-velocity bank deposits used to pay taxes. The more that interest payments percolate through the system, the more they end up with holders who have an increasingly lower propensity to spend them.
would put the lie to the earlier article, "What If Fed Rate Hikes Are Actually Sparking US Economic Boom?", also at Bloomberg.
And September 2019? Extremely important for a number of reasons including a couple that we haven't yet mentioned. Previously:
"Anatomy of the Repo Rate Spikes in September 2019"
A topic of ongoing interest in light of recent events. HT up front to one of the authors, the Fed's R. Jay Kahn.
From The Office Of Financial Research, April 25, 2023....
Also from Kahn et al via the OFR: "Why Is So Much Repo Not Centrally Cleared?" and via the Social Science Research Network: "Hedge Funds and the Treasury Cash-Futures Disconnect"
And on the 2019 repo spike:
"Economist Michael Hudson Says the Fed 'Broke the Law' with its Repo Loans to Wall Street Trading Houses"
At
the time I remember thinking "Oh look, the Fed has a new lending
facility" and moving on to something shiny, not realizing it was a very
big deal. As the old-timers used to say: "Pay attention or pay the
offer."....
"ANALYSIS-U.S. banks face trillion-dollar reverse repo headache"
A Nomura Document May Shed Light on the Repo Blowup and Fed Bailout of the Gang of Six in 2019
"A Closer Look at the U.S. Bacon Situation"
"The Federal Reserve's Explanation Of What Happened In The Money Markets In September 2019
What seems to have happened was that somebody's derivative book got upside down to the tune of a few trillion dollars (notional, always say notional) and in addition the contagion through the counterparty daisy chain was also in the trillions and well, here's the Fed with their version.
From the Board of Governors of the Federal Reserve System....
....And more to come. We've been picking at this scab for quite a while and the picture puzzle is only now coming together so dribs and drabs.
And how does this ancient history tie into what's going on in 2022?
I have a feeling that lands somewhere in "the nebulous region between mere suspicion and probable cause"(LaFave & Israel on U.S. v. Ramsey, 431 U.S. 606 [1977])that there is some sort of misdirection going on that I'm not understanding.If so, any attempt at analysis of Fed policy and market moves by traditional means, global macro, central bank policy and practice, market internals such as options gamma etc., etc. is just so much blather.And I keep coming back to the 3rd and 4th quarters of 2019 as the period when things were getting very weird.More to come (maybe)
Trouble In Repo Land—The QE Endgame: A Big Problem Is Emerging For The Fed
"The Fed Is About to Ramp Up Balance-Sheet Shrinkage. It May Get Dicey".
"Red Pill or Blue Pill? Variants, Inflation, and the Controlled Demolition of Society"
Money, Money, Money: "A Self-Fulfilling Prophecy: Systemic Collapse and Pandemic Simulation"
June 2019: In its Annual Economic Report,
the Swiss-based Bank of International Settlements (BIS), the ‘Central
Bank of all central banks’, sets the international alarm bells ringing.
The document highlights “overheating […] in the leveraged loan market”,
where “credit standards have been deteriorating” and “collateralized
loan obligations (CLOs) have surged – reminiscent of the steep rise in
collateralized debt obligations [CDOs] that amplified the subprime
crisis [in 2008].” Simply stated, the belly of the financial industry is
once again full of junk.
9 August 2019: The BIS issues a working paper
calling for “unconventional monetary policy measures” to “insulate the
real economy from further deterioration in financial conditions”. The
paper indicates that, by offering “direct credit to the economy” during a
crisis, central bank lending “can replace commercial banks in providing
loans to firms.”
15 August 2019: Blackrock Inc., the world’s most powerful investment fund (managing around $7 trillion in stock and bond funds), issues a white paper
titled Dealing with the next downturn. Essentially, the paper instructs
the US Federal Reserve to inject liquidity directly into the financial
system to prevent “a dramatic downturn.” Again, the message is
unequivocal: “An unprecedented response is needed when monetary policy
is exhausted and fiscal policy alone is not enough. That response will
likely involve ‘going direct’”: “finding ways to get central bank
money directly in the hands of public and private sector spenders” while
avoiding “hyperinflation. Examples include the Weimar Republic in the
1920s as well as Argentina and Zimbabwe more recently.”
22-24 August 2019:
G7 central bankers meet in Jackson Hole, Wyoming, to discuss
BlackRock’s paper along with urgent measures to prevent the looming
meltdown. In the prescient words of James Bullard, President of the St Louis Federal Reserve: “We just have to stop thinking that next year things are going to be normal.”
15-16 September 2019:
The downturn is officially inaugurated by a sudden spike in the repo
rates (from 2% to 10.5%). ‘Repo’ is shorthand for ‘repurchase
agreement’, a contract where investment funds lend money against
collateral assets (normally Treasury securities). At the time of the
exchange, financial operators (banks) undertake to buy back the assets
at a higher price, typically overnight. In brief, repos are short-term
collateralized loans. They are the main source of funding for traders in
most markets, especially the derivatives galaxy. A lack of liquidity in
the repo market can have a devastating domino effect on all major
financial sectors.
17 September 2019: The Fed begins the
emergency monetary programme, pumping hundreds of billions of dollars
per week into Wall Street, effectively executing BlackRock’s “going
direct” plan. (Unsurprisingly, in March 2020 the Fed will hire BlackRock to manage the bailout package in response to the ‘COVID-19 crisis’).
19 September 2019: Donald Trump signs Executive Order 13887,
establishing a National Influenza Vaccine Task Force whose aim is to
develop a “5-year national plan (Plan) to promote the use of more agile
and scalable vaccine manufacturing technologies and to accelerate
development of vaccines that protect against many or all influenza
viruses.” This is to counteract “an influenza pandemic”, which, “unlike
seasonal influenza […] has the potential to spread rapidly around the
globe, infect higher numbers of people, and cause high rates of illness
and death in populations that lack prior immunity”. As someone guessed, the pandemic was imminent, while in Europe too preparations were underway (see here and here).
TradingView, DJIA daily, December 2019 - June 2020
Some highlights from the Fed Chair's calendar:
February 19, Wednesday
3:00 PM – 4:00 PM Meeting with Jamie Dimon, CEO and Jenn Peipszack, CFO, JPMorgan Chase
Location: AnteroomMarch 19, Thursday
4:30 PM – 5:00 PM Phone call with Larry Fink, CEO BlackRock
April 3, Friday
3:30 PM – 3:45 PM Phone call with Larry Fink, CEO, BlackRockApril 9, Thursday
5:15 PM – 5:30 PM Phone call with Larry Fink, CEO, BlackRock
May 13, Wednesday
1:30 PM – 2:00 PM Phone call with Larry Fink, CEO, BlackRock
Of course there is much much more but discerning reader gets the point: Powell forgot to call me!
It appears I may have become a bit obsessed with the events of September 2019 - March 2020.
The stock is trading down another $3.45 (-2.22%) at $152.00 in pre-market trade.
First up, from Yahoo Finance, April 17:
Tesla's biggest challenges ahead of reporting Q1 earnings
Shares of Tesla (TSLA) are under pressure ahead of the company's first-quarter earnings results expected out next week, as it contends with a slew of mounting challenges.
Tesla is seeking shareholder approval for a $56 billion pay package for CEO Elon Musk, which was initially struck down by a Delaware Chancery Court judge in January. The EV company is now looking to move its incorporation from Delaware to Texas for this controversial compensation plan.
Compounding these issues, analysts at Barclays have taken a bearish stance on Tesla's stock, warning that the company's upcoming earnings results could drive the share price even lower. The investment bank has dropped its price target on Tesla shares to $180, down from the previous $225.
Additionally, Tesla is reportedly planning to lay off around 10% of its global workforce.
For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.
This post was written by Angel Smith
Video Transcript
- Tesla's once again asked shareholders to vote on a $56 billion compensation plan and package for CEO Elon Musk. This is the same package that was voided earlier this year by a Delaware court. They are also calling for a vote to move the company's incorporation from Delaware to Texas. This comes as Barclays this morning warned that next week's Tesla earnings could drive the stock price even lower.If you're taking a look at shares right now, they're up premarket by about 7/10 of a percent, but let's show a year-to-date chart, if we may, because it's been a slippity-slide here for TSLA shares, and its shareholders certainly wondering, OK, when will things start to turn around. Is it management decision?....
....MUCH MORE
And the reminder, from March 26:
Goldman Hints That Tesla May Have Some Negative FCF Quarters Ahead (TSLA)
Additionally, January 26, 2024:
Tesla Roundup: Dead Money For, At Minimum, A Couple Quarters (TSLA)
In Taiwan the stock was up around 1%, pre-market U.S., down 1.5%.
From Reuters via Yahoo Finance, April 18:
TSMC expects Q2 sales to jump on 'insatiable' AI demand
- Sees Q2 revenue at $19.6-$20.4 bln vs $15.68 bln year earlier
- Forecasts 2024 revenue to rise in low- to mid-20% range in USD
- TSMC Q1 net profit rises 9%, beats forecasts
- Stock price has surged on chip demand for AI applications
(Recasts with comments from earnings conference)
By Yimou Lee and Faith Hung
TAIPEI, April 18 (Reuters) -
TSMC, the world's largest chipmaker and a major Apple and Nvidia supplier, forecast second-quarter sales may rise as much as 30% as it rides a wave of demand for semiconductors used in artificial intelligence (AI) applications.
The surging need for processors for AI left executives at Taiwan Semiconductor Manufacturing Co (TSMC), which investors watch closely as a bellwether for the chip industry, plainly stating just how strong the demand was.
"Almost all the AI innovators are working with TSMC to address the insatiable AI-related demand for energy efficient computing power," CEO C.C. Wei said during the company's first-quarter earnings call.
"AI-related data centre demand is very, very strong," he said, adding that the shift from traditional servers to AI servers is "favourable" to TSMC.
TSMC has benefited from the AI wave that has helped it weather the tapering off of COVID-19 pandemic-led electronics demand and pushed the company's stock to a record.
AI servers are expected to account for a low-teens percentage of its 2024 revenue, more than double from last year, with that figure rising to more than 20% of revenue by 2028, it said.
Demand for auto chips would fall this year, compared with a previous estimate of growth, it added.
Looking ahead, TSMC said it expects business in the second quarter to be supported by strong demand for its industry-leading 3 nanometre (nm) and 5nm technologies, although that strength would be partially offset by sluggish demand for smartphones....
....MUCH MORE
And at the Wall Street Journal, April 18:
Chip Giant TSMC Offers Reassurance—and a Warning
Semiconductor investments required for rapid growth of artificial intelligence are on track
The chip industry is recovering more slowly than expected from the inventory glut of 2023.
That was the bad news from Taiwan Semiconductor Manufacturing Co, the world’s largest contract chip maker, which reported first-quarter results Thursday. On a call with analysts, the company cut its forecast for overall market growth this year, excluding memory chips, to 10%, down from “more than 10%” three months ago. Its U.S.-listed shares fell roughly 2% in premarket trading.
The standout reason for the downgrade was automotive chips: TSMC previously expected demand from the sector to increase this year, but now it expects a contraction instead. The company didn’t give an explanation, but the most likely one is slowing growth in chip-intensive electric vehicles.
The good news for TSMC investors is that the company, despite often being seen as a chip-industry bellwether, isn’t the same thing as the market. Importantly, the company maintained its forecast that its own revenue will grow by more than 20% this year in dollar terms.
Partly this is because it is a pure foundry operation—TSMC only makes chips designed by others—and the foundry business has more room to recover, having suffered more in the recent slump. At the same time, the company’s lead in manufacturing the most advanced chips also makes it a disproportionate beneficiary of the industry’s biggest growth driver: artificial intelligence....
....MUCH MORE
Here's the SEC filing on Form 20-F
TSMC earnings were expected to be flat to up 5% so possibly a small beat.
From Reuters via Yahoo Finance, April 17/18:
(Adds detail on capex and ASML earnings, paragraphs 6, 7)
- Analysts expect first-quarter profit of $6.7 bln
- Q1 revenue jumps, beats market expectations
- Stock price has surged on chip demand for AI applications
- TSMC announces third fab in Arizona, gets US subsidies
- Earnings call at 0600 GMT on Thursday
TAIPEI, April 18 (Reuters) - Taiwan Semiconductor Manufacturing Co , the dominant producer of advanced chips used in artificial intelligence applications, is expected to report a 5% rise in first-quarter profit on Thursday thanks to strong demand.
The world's largest contract chipmaker, whose customers include Apple and Nvidia, has benefited from a surge towards AI that has helped it weather the tapering off of pandemic-led electronics demand and pushed TSMC's stock to a record high.
TSMC is set to report a net profit of T$218.1 billion ($6.74 billion) for the quarter ended March 31, according to an LSEG SmartEstimate drawn from 22 analysts. SmartEstimates give greater weighting to forecasts from analysts who are more consistently accurate.
That compares to the first-quarter net profit of T$206.9 billion last year....
....MUCH MORE
From The New York Post, April 15:
Iran’s propaganda is going One Direction.
Iranian state TV shared footage it claimed showed “Israelis panicking” while under attack from missiles and drones – but was really just a throng of excited Louis Tomlinson fans.
The Islamic Republic of Iran News Network (IRINN) shared the footage “claiming that it showed panicking Israelis amid the … Iranian attack,” according to a fact-checker for BBC Monitoring.
This footage of “Israelis panicking” turned out to be fans of Louis Tomlinson, formerly of One Direction....
....MUCH MORE
Sadly, with the advent of AI we will see less and less of Iran's world-class precision marching photoshop team. Who can forget the 2009 missile test pictures:
2008's "Oil: Iran has Photoshop, not afraid to use it"
Or 2012's "Iran news alters missile test image to include ‘Star Wars’ character":
And a few years later:
Due to threatened budget cutbacks we are considering consolidating our politics, sports, national security and fashion coverage.Simpler, happier times.
Since we're newbs at the politics thing we have looked to media worldwide for guidance on how to proceed....
All I could think of while typing that headline was Jake Sullivan, President Biden's National Security Advisor declaring "The Middle East region is quieter today than it has been in two decades."
That was at The Atlantic magazine's Atlantic Festival. September 28 - 29, 2023, eight days before the Hamas rape, murder, torture and hostage taking began.
Back to Moldova. From Emerging Europe, April 17:
Europe’s first e-park is at the heart of Moldova’s emergence as an IT powerhouseWith few natural resources and perhaps best known internationally for its outstanding wine, Moldova’s future development will depend on the further growth of its knowledge economy, a major new study from Emerging Europe has found....
....MUCH MORE
One possible shadow on the otherwise sunny scene:
Norway boosts aid to Moldova
Obviously looking to boost herring sales. And perhaps establish a beachhead in the lucrative Transnistrian market
Hoo boy could you spin some conspiracy theories out of this conjecture.
From Bloomberg, April 17:
- A radical theory is spreading as economy defies expectations
- ‘The reality is people have more money,’ one convert says
As the US economy hums along month after month, minting hundreds of thousands of new jobs and confounding experts who had warned of an imminent downturn, some on Wall Street are starting to entertain a fringe economic theory.
What if, they ask, all those interest-rate hikes the past two years are actually boosting the economy? In other words, maybe the economy isn’t booming despite higher rates but rather because of them.
It’s an idea so radical that in mainstream academic and financial circles, it borders on heresy — the sort of thing that in the past only Turkey’s populist president, Recep Tayyip Erdogan, or the most zealous disciples of Modern Monetary Theory would dare utter publicly.
But the new converts — along with a handful who confess to being at least curious about the idea — say the economic evidence is becoming impossible to ignore. By some key gauges — GDP, unemployment, corporate profits — the expansion now is as strong or even stronger than it was when the Federal Reserve first began lifting rates.
This is, the contrarians argue, because the jump in benchmark rates from 0% to over 5% is providing Americans with a significant stream of income from their bond investments and savings accounts for the first time in two decades. “The reality is people have more money,” says Kevin Muir, a former derivatives trader at RBC Capital Markets who now writes an investing newsletter called The MacroTourist.*****These people — and companies — are in turn spending a big enough chunk of that new-found cash, the theory goes, to drive up demand and goose growth.In a typical rate-hiking cycle, the additional spending from this group isn’t nearly enough to match the drop in demand from those who stop borrowing money. That’s what causes the classic Fed-induced downturn (and corresponding decline in inflation). Everyone was expecting the economy to follow that pattern and “slow precipitously,” Muir says. “I’m like no, it’s probably more balanced and might even be slightly stimulative.”
Muir and the rest of the contrarians — Greenlight Capital’s David Einhorn is the most high profile of them — say it’s different this time for a few reasons. Principal among them is the impact of exploding US budget deficits. The government’s debt has ballooned to $35 trillion, double what it was just a decade ago. That means those higher interest rates it’s now paying on the debt translate into an additional $50 billion or so flowing into the pockets of American (and foreign) bond investors each month....
....MUCH MORE
Will Tesla hook up with Stellantis to become the next hybrid challenger?
Will I finally be able to quit the necessity of reminding myself that Stellantis' symbol, STLA is not a palindrome of Tesla's symbol, TSLA?
From Asia Times, April 16:
EVs may not be as transformative as previously predicted as US consumer concerns rise about reliability and convenience
The automotive industry is in a most difficult period of its history. How can it predict the future?
Technological marvels enabled by digital electronics have periodically emerged as new consumer products and services. And what is most remarkable is how quickly they have become accepted as necessities.
Consider in the past few decades color television, personal computers, flat panel displays, wireless communications, digital photography and image storage, LED light sources, email and internet-based services.
In each case, it took a few years for these innovations to go from start-up to widespread adoption where history is quickly forgotten. Who remembers 35mm film cameras, light bulbs or TV receivers with cathode ray tubes? Or 78rpm records?
A world where such profound innovations become quickly accepted as normal also leads to the anticipation of new markets created by innovations and further anticipation that such markets will be rapidly accepted to the point of creating major new industries.
Betting on such future markets calls for massive amounts of capital and consequent opportunities for great profit—or loss if the market size developments do not meet expectations. The automobile industry now faces this investment challenge....
....MUCH MORE
From Reuters via gCaptain, April 16:
The Panama Canal Authority (ACP) has announced an increase in booking slots for its Panamax locks starting mid-May, in response to current and predicted water levels in Gatun Lake.
Following a severe drought last year, the Panama Canal Authority has had to limit the waterway’s capacity by reducing both the number of daily ship transits and their maximum draft.
With the dry season coming to an end, the ACP has been gradually easing restrictions and increasing the number of daily transits from 24 to 27, as of March 25.
Under the new schedule, a total of 24 ships are now scheduled to cross daily from May 7 to May 15 due to scheduled maintenance. From May 16, this number will further increase to 31 per day in both the Panamax (original) locks and Neopanamax (new) locks. Additionally, an extra slot will open in the Neopanamax locks from June 1, with crossings expected to remain at 32 per day until further notice.
The ACP also plans to increase the maximum authorized draft for vessels transiting the Neopanamax locks to 45 feet from June 15, an improvement from the current 44 feet.
The decision comes amid optimism that rainfall will begin by late April and continue for several months due to the weakening El Nino and the shift to La Nina this summer....
....MUCH MORE
From Business Insider, April 16:
If you want to gamble in America these days, you have more ways to put your money on the line than ever. You've got the real-life casino, the casino on your phone, sports betting, crypto, meme stocks — even complex financial products like zero-day options can give you a quick hit of risk. For young men in particular, it's an enticing, if a bit troubling, prospect. But for a variety of companies, from sportsbooks to investing apps, an increased willingness to make some kind of gamble means business is booming. The boys-who-like-to-bet bank is open, and companies are making as many withdrawals as they can.
The level at which gambling has become normalized in the United States in recent years is stunning. Americans legally bet a record $119.84 billion on sports in 2023, up from $93 billion in 2022. Since the Supreme Court in 2018 struck down a federal law prohibiting sports gambling, more than three dozen states have embraced it in some form. Seven states have also legalized iGaming, meaning online blackjack, roulette, and slot machines.
And while not explicitly gambling, free trading apps such as Robinhood have gotten an increasing number of ordinary people into investing — for fun, to alleviate boredom, to try to make some extra cash. While many people have used the apps to build a stable portfolio, a good chunk of people are doing high-risk day trading or piling into meme stocks like GameStop, AMC, or, as Donald Trump's people are hoping, his newly public social-media company. Crypto is back again, and this time around, almost nobody is pretending the endeavor is about anything other than "number go up." Many video games have a gambling-like aspect, too, that gets kids and adolescents into the risk-minded pipeline.
While plenty of people across demographics are participating in these trends, data suggests the crowds skew younger and male. A 2023 survey from the NCAA found that sports gambling was prevalent among young adults, specifically on college campuses and among Black and Latino respondents. Pew Research found in 2022 that men and people under 50 were likelier to bet on sports than women and the over-50 crowd. Younger men tend to be more into crypto and meme-stock trading as well.
This isn't surprising. Men tend to take more financial risks than women. As investors, they're more prone to overconfidence, which often leads them to trade more — and, as a result, get lower returns. Men generally gamble more than women, and they've been found to have lower levels of impulsive coping in gambling settings....
....MUCH MORE
Related, April 13:
For some reason, when pulling up the McKinsey post linked immediately below, this popped up:
April 13, 2020First they came for the alcohol-based disinfectant. and I did not speak out because I had alcohol.
Then they came for the toilet paper and...well, lets just say that after the colonoscopy prep I'm set for quite a while.
But, as a lot of people are finding out, after a month those roots grow out a half inch or so....
I should maybe go back to the archive and see just how deep into the communal madness we got.
One example that comes immediately to mind was February 29. 2020's "Social Responses to Epidemics Depicted by Cinema":
A great resource for portfolio risk managers.
As just one example, what is the trade if the world is confronted by a real-life version of "Blindness (2008, Fernando Meirelles), which deals with a fictional disease that causes epidemic blindness, leading to collective hysteria?"
I mean beyond the simplistic "short Luxottica." Duh.
From Emerging Infectious Diseases Journal, Volume 26, Number 2—February 2020....
Damn near contemporaneous.
OpEd from Barron's, April 12:
About the author: Alix Guerrier is the chief executive of DonorsChoose.
It’s been four years since the height of the Covid pandemic left schools closed across the country. School doors have long since reopened, but the consequences of a disrupted education are still lingering for the cohort of Covid students. This learning loss is on course to cause even greater disruption to our students’ futures and to our economy as a whole.
The U.S. education system drives our economy. Our skilled workforce enables us to lead the world in innovation and to be at the forefront of a wide range of industries. But pandemic learning loss threatens our ability to meet workforce demands and remain competitive on the global stage. Preventing this long-term economic problem requires collective urgency beyond the education sector.
As a former teacher, I know firsthand how much kids depend on consistency in their educational environment, and how challenging it can be for them when that is interrupted. We owe it to our students and our nation to invest in learning recovery so that they are back on track to reach their full academic potential.
Recent data confirms that Covid-19 set student progress in math and reading back by decades
. Most students from that cohort are still behind their 2019 counterparts and likely will be for years to come. Students who already faced challenges are falling even further behind. Existing gaps in test scores based on student race, ethnicity, and economic background are widening in Covid’s wake.
It’s getting harder to catch up. Students in the Covid-era cohort are losing talented teachers, many of whom are burning out and leaving the field. Mental health issues are growing, with more than 40% of students reporting persistent feelings of sadness or hopelessness in the CDC’s latest Youth Risk Behavior Survey. Chronic absenteeism worsened during the pandemic, which can lead to falling grades and test scores and make students more likely to drop out.
The repercussions are alarming for our students and economy. What happens to our industries if Covid-cohort students cannot catch up? Economists predict this generation will experience long-term economic losses. One estimate is that Covid-era students will see 6% lower lifetime earnings, with Black students likely to suffer a drop two percentage points worse. Another analysis suggests that a near $200 billion drop in GDP for every year that the Covid-cohort is in the workforce is possible. The economic drag from this lower-skilled workforce is projected over time to cost the economy six times more than the entire economic losses of the 2007-2009 recession....
....MUCH MORE
The estimated hit to GDP faced by these cohorts as quoted in the Education Next piece, "Generation Lost: The Pandemic’s Lifetime Tax" is $28 trillion though is based on this paper (page 3 of 24), published at Hoover February 29:
....Based on the available research on lifetime earnings associated with more skills, the average student in school during the pandemic will lose 5 to 6 percent of lifetime earnings. Because a lower-skilled workforce leads to lower economic growth, the nation will lose some $31 trillion (in present value terms) during the twenty-first century. This aggregate economic loss is higher than the US GDP for one year and dwarfs the total economic losses from either the slowdown of the economy during the pandemic or from the 2008 recession.
It is also possible to assess how the economic costs of the pandemic were spread across the United States. Students from different states can expect to lose widely different proportions of their future earnings. Whereas the students from Utah, who on average suffered the lowest learning losses in the nation, can expect 2 percent lower lifetime earnings, this economic loss climbs to 9 percent for the students in Delaware and Oklahoma....
Here's the lead author https://hanushek.stanford.edu/. Other researchers seem to cite him a lot. A lot.
The per year figure is from McKinsey (2001) totaling $7.5 trillion in lower lifetime earnings, which seems exceptionally low compared to other research, perhaps because it came out relatively soon after the lockdowns. We happened to catch it when it came out.
I hope the people who spent over two years on their covid jihad, destroying lives and livelihoods, retarding the education of an entire generation of children, twisting facts to fit a corrupt agenda, I hope they understand there were millions of people keeping receipts, and that the receipt-keepers won't be trying to shame their persecutors, for they know they feel no shame. They will be seeking justice, and possibly vengeance, against the entire class that oppressed them.I think I will retreat to the castle keep for a couple years and just observe how things play out.
If you'll excuse me, there's a drawbridge to be raised, can't take too many precautions against the risk of misidentification. I'd prefer the last sound I hear not be the mob baying "Ă€ la lanterne!"
We've visited the author of this piece, Michael Senger a few times, usually identifying him as a San Francisco Attorney. I'm wondering now if he somewhat fancies himself in the role of the chief American prosecutor at Nuremberg, Justice Jackson....
From SciTechDaily, April 16:
Nitrogen is a nutrient essential for all life on Earth. Despite the abundance of nitrogen gas (N2) in the atmosphere, it remains largely inaccessible to many life forms until it undergoes nitrogen fixation. This vital process transforms dinitrogen into ammonium, an important source of inorganic nitrogen
While there are bacteria that are able to reduce dinitrogen to ammonium, researchers at the University of Rhode Island, Institut de Ciències del Mar in Barcelona, University of California at Santa Cruz, and the Massachusetts Institute of Technology have discovered nitrogen-fixing symbiotic organisms exhibiting behaviors similar to organelles. In fact, researchers posit these symbiotic organisms – UCYN-A, a species of cyanobacteria – may be evolving organelle-like characteristics. Their study was recently published in the journal Cell.
Symbiotic Relationship and Its Implications
UCYN-A live in a symbiotic relationship with a closely related group of marine algae, B. bigelowii, in areas of the open ocean that are often low in nutrients. Most nitrogen-fixing bacteria have mechanisms to regulate dinitrogen use when fixed sources of nitrogen are available, alleviating the high energetic cost of this process. However, UCYN-A have lost the genes allowing this and are able to fix nitrogen gas into ammonium even in nutrient-rich environments. The host, in-turn, provides it with carbon fixed photosynthetically by its chloroplasts....
....MUCH MORE
If one is so inclined, we have on offer a few hundred posts on nitrogen.
Magic 8-ball says "No" (also
In November, Google’s AI outfit DeepMind published a press release titled “Millions of new materials discovered with deep learning." But now, researchers who have analyzed a subset of what DeepMind discovered say "we have yet to find any strikingly novel compounds" in that subset.
“AI tool GNoME finds 2.2 million new crystals, including 380,000 stable materials that could power future technologies,” Google wrote of the finding, adding that this was “equivalent to nearly 800 years’ worth of knowledge,” that many of the discoveries “escaped previous human chemical intuition,” and that it was “an order-of-magnitude expansion in stable materials known to humanity.” The paper was published in Nature and was picked up very widely in the press as an example of the incredible promise of AI in science.
Another paper, published at the same time and done by researchers at Lawrence Berkeley National Laboratory “in partnership with Google DeepMind … shows how our AI predictions can be leveraged for autonomous material synthesis,” Google wrote. In this experiment, researchers created an “autonomous laboratory” (A-Lab) that used “computations, historical data from the literature, machine learning, and active learning to plan and interpret the outcomes of experiments performed using robotics.” Essentially, the researchers used AI and robots to remove humans from the laboratory, and came out the other end after 17 days having discovered and synthesized new materials, which the researchers wrote “demonstrates the effectiveness of artificial intelligence-driven platforms for autonomous materials discovery.”
But in the last month, two external groups of researchers that analyzed the DeepMind and Berkeley papers and published their own analyses that at the very least suggest this specific research is being oversold. Everyone in the materials science world that I spoke to stressed that AI holds great promise for discovering new types of materials. But they say Google and its deep learning techniques have not suddenly made an incredible breakthrough in the materials science world.
In a perspective paper published in Chemical Materials this week, Anthony Cheetham and Ram Seshadri of the University of California, Santa Barbara selected a random sample of the 380,000 proposed structures released by DeepMind and say that none of them meet a three-part test of whether the proposed material is “credible,” “useful,” and “novel.” They believe that what DeepMind found are “crystalline inorganic compounds and should be described as such, rather than using the more generic label ‘material,’” which they say is a term that should be reserved for things that “demonstrate some utility.”
In the analysis, they write “we have yet to find any strikingly novel compounds in the GNoME and Stable Structure listings, although we anticipate that there must be some among the 384,870 compositions. We also note that, while many of the new compositions are trivial adaptations of known materials, the computational approach delivers credible overall compositions, which gives us confidence that the underlying approach is sound.”
....MUCH MORE
There seems to be a deep dishonesty coming out of Google and Google AI.
And that would be entirely on the people at Google:
Following up on March 31's "The Purpose Of A System Is What It Does...":
“....There is after all,” Beer observed, “no point in claiming that the purpose of a system is to do what it constantly fails to do.”In late February when Google's Gemini generative AI generated some hubbub with the portraits of a black George Washington or a black Nazi, commenters missed the point of what the people at Google were doing. As Marc Andreessen—a guy who knows something about tech having developed the first commercial browser, among other things—put it regarding these so-called 'mistakes':
I know it’s hard to believe, but Big Tech AI generates the output it does because it is precisely executing the specific ideological, radical, biased agenda of its creators. The apparently bizarre output is 100% intended. It is working as designed.
— Marc Andreessen 🇺🇸 (@pmarca) February 26, 2024
Possibly related at 404 Media, April 12:
OpenAI Training Bot Crawls 'World's Lamest Content Farm' 3 Million Times in One Day