Friday, August 15, 2025

Climateer Line Of The Day: Truth-Telling In Academia (follow-up to Capitalism And The Market Economy Are Completely Opposite Intellectual Paradigms)

In "Capitalism And The Market Economy Are Completely Opposite Intellectual Paradigms" I linked to a gated version of the writer's "Capitalism and the Future of Nation States".

Here's an ungated version at Advisorpedia featuring the reference to a very good school that garnered the coveted CLoD award for this comment:

Even though I’m French, I must admit I had never really read Braudel until now. I knew of his ideas and concepts, of course (we Sciences Po students are trained in the art of quoting authors we haven’t read).

Here's Ncolas Colin, Dec 09, 2019 

Today, I’m pursuing a conversation initiated on Twitter about the future of nation states—and why ambitious capitalists need them more than ever. Stefano Bernardi, an angel investor and scout for Atomico, recently tweeted about the idea that nation states could disappear . He asked which books were worth reading to get an idea of what’s next. My first answer was that maybe nation states would be replaced by city states, and so these are the books I suggested:

  • City of Fortune: How Venice Ruled the Sea (Roger Crowley, 2013)
  • The memoirs of Lee Kuan Yew , the founding father of Singapore (published in 2000).
  • The New Knighthood: A History of the Order of the Temple (Malcolm Barber, 2012)
  • The Hansa Towns and the Hanseatic League (Helen Zimmern, 1889)
  • Under the Black Flag: The Romance and the Reality of Life Among the Pirates (David Cordingly, 2006)
  • The House of Rothschild (Niall Ferguson, 1999)
  • The Catholic Church and missionaries (book suggestions welcome!)
  • Ultimately, I realized that one thinker in particular could help us find answers to Stefano’s question, notwithstanding the fact that he died in 1985: I’m thinking about Fernand Braudel, a well-known French historian, social scientist, and author of one notably thorough work on the history of capitalism, Civilization and Capitalism, 15th-18th Century. 

    1. Even though I’m French, I must admit I had never really read Braudel until now. 

    I knew of his ideas and concepts, of course (we Sciences Po students are trained in the art of quoting authors we haven’t read). But Braudel burst into my intellectual universe recently in no small part thanks to venture capitalist and economist William H. Janeway. Bill quotes Braudel extensively in his book Doing Capitalism in the Innovation Economy, and he has (rightfully) declared Braudel one of the most enlightening thinkers when it comes to understanding venture capital: I found an unlikely guide in the great French historian Fernand Braudel… [His] meditations on what capitalists do generated a shock of recognition that I can still feel. Although the domain and context in which Braudel’s financiers operated is vastly different from the world of today’s working venture capitalist, the activity remains recognizable: putting surplus cash to work, again and again, wherever the potential return is unlimited by either institutional structures or competition. 

    2. For Braudel, the economy can be subdivided into three categories. 

    The first, which he calls“material life”, is made up of the infinite, informal transactions that form our daily lives. The second, the“market economy”, is where individuals conduct business, establishing a link between production and consumption. The third, finally, is“capitalism”. As Bill explains above, Braudel sees within capitalism an ensemble of processes that allow one to extricate oneself from the trivialities of commerce and pursue increasing returns to scale. The market economy is the world of merchants, those who buy and sell while taking a small margin as items pass through their hands. Capitalism, on the other hand, is the world of the traders, financiers, and entrepreneurs who have understood that they can attenuate the rigorous competition in the market economy by “inserting”capital into the production process. 

    3. For a long time, capitalism was at the margins of the economy.

    Its first iterations were what Braudel called the “faraway trade” (after the German word Fernhandel), for example that involving spices, silk, precious metals. In these sectors, where the goal was trading rare, non-perishable goods, lengthening the routes of commerce weakened the competitive dynamics between various economic agents. Few organizations were effectively able to trade from one end of these long routes to the other. The reward thus wouldn’t go to the best merchants, those who were most skilled in the art of buying and selling. Rather it went to those organizations which could invest in a financial, informational, and logistical infrastructure that could operate at the largest scale and secure a long-term competitive advantage. 

    4. Capitalism then started to spread throughout the economy. 

    Technological progress allowed capitalists to arrive in all sectors, setting off a race for scale. Today, there are few markets where businesses are simply content to buy and sell. Almost all sectors, even those that do not require large amounts of capital, are dominated by capitalistic businesses that utilize assets to avoid the difficulties caused by perfect competition. And so the history of capitalism is that of capitalists evicting merchants from a growing number of sectors of the economy. As I wrote in a previous issue more than two years ago, “Capitalists mostly care about return on assets (RoA) and return on equity (RoE), which enables them to take the larger view. As they’re focused on capital asset velocity, they tend to beat...the ‘merchants’, who obsess primarily about net operating margin.” 

    5. Capitalism played an extraordinary role in progress.

    The increasing returns it generated through scale created an economic surplus that allowed, depending on the context, for lower prices for consumers, higher salaries for workers, and/or better returns for investors. It’s for this reason that both the right and the left have always encouraged capitalism in the West. It was necessary, of course, to curb its excesses, but it was always counted on to develop the economy. Case in point: Mariana Mazzucato doesn’t like when “leftist economists”l ike her are depicted as anti-capitalists. As she’s argued on Twitter, you can be both for capitalism and for more state intervention. Indeed, the most prosperous countries were always those where capitalists benefited, according to Braudel, from a certain“goodwill” on the part of the state. Or, as Dani Rodrik puts it,  “capitalists need the state more than the state needs them”. 

    6. How, exactly, does capitalism contribute to economic development? 

    The process happens in two stages. First, you need to create and capture more value, and this is where capitalism makes a difference. Then you need to realize that value (that is, turning it into wealth) and it really matters where that happens. The whole point of having local capitalists is that value is realized locally and the resulting wealth spills out locally, enriching everyone around in the process (which might require some redistribution through taxes, benefits, and public services, but that’s another story). This two-stage process is why every state has an interest in supporting local capitalists with access to a supportive domestic market and various forms of industrial policy. The goal is to have capitalists create and capture even more value that will then be realized locally. In exchange for this support and “protection”, capitalists have to contribute to local development through consumption, investment, and redistribution. The state contributes to capitalists succeeding; capitalists, in turn, contribute to lifting up the local“material life”and“market economy”, thus strengthening the state. 

    7. Like all technological revolutions, that of computers and networks allowed capitalism to escape even further from the market economy by intensifying the race for increasing returns to scale. 

    In the 20th century economy, numerous countries succeeded in positioning themselves well on the chessboard of the world economy, turning industrial capitalism and the resulting increasing returns to scale into the motor for their local development. But now that capitalism is driven by computing and networks and thus plays at an even larger scale, the resulting economic surplus is becoming more and more concentrated within just a few“economic worlds”, to use Braudel’s term ( économie-monde). One economic world is centered on Silicon Valley; another one is centered on China. Today’s version of capitalism gives birth to even larger organizations and a greater geographic concentration of wealth. 

    8. What about the future of nation states?

    ....MUCH MORE

    For what it's worth, we are fans of Janeway:

    William Janeway: "Productive Bubbles" 

    "The Rise of Mesoeconomics" - William H. Janeway

    In our last visit with Bill Janeway, "The Forgotten Origins of Silicon Valley" - William H. Janeway, I didn't mention that he is not your typical pointy-headed academic. Here's his mini-bio at Cambridge Uni.:

    Ambassador for Cambridge Judge Business School

    Senior Advisor & Managing Director, Warburg Pincus

    Dr William H Janeway is a Senior Advisor and Managing Director of Warburg Pincus. He joined Warburg Pincus in 1988 and was responsible for building the information technology investment practice. Previously, he was Executive Vice President and Director at Eberstadt Fleming. Dr Janeway is a director of Magnet Systems, Nuance Communications, O’Reilly Media, and a member of the Board of Managers of Roubini Global Economics. He is a Visiting Lecturer in Economics at the University of Cambridge and Princeton University.....

    Monsanto: "Bayer ‘turning over every stone’ to ‘significantly contain’ glyphosate litigation by end of 2026" (BAYN - Deutsche Börse Xetra)

    Reprising an introduction from 2021's "Pension Funds Allowed to Sue Bayer Over Due Diligence in Monsanto Acquisition":

    There have been some bad mergers and/or acquisitions over the years, AOL - Time Warner comes to mind both for its top-tick timing and the $54 billion write-down of some of the intangibles in the deal two years after consummation, but Bayer's purchase of Monsanto may be the worst in history.

    From AgFunderNews, August 7:

    The crop science giant says it has settled 17,000 cases so far and hopes for a supreme court ruling next year.

    Bayer will “significantly contain” glyphosate litigation by the end of 2026, CEO Bill Anderson said this week during the company’s second-quarter 2025 earnings call.

    “Every decision we make has the goal of positioning the company to move past our litigation woes.”

    The company has repeatedly said this litigation—which has been ongoing since Bayer acquired Monsanto in 2018—is “a huge burden” on company financials thanks to payouts to plaintiffs alleging that the weed killer caused them to develop cancer.

    Thus far, Bayer has settled 17,000 cases “at a low cost per case,” Anderson said on the call, adding that “just recently, we’ve taken thousands of cases off the table through confidential settlements on a low cost per case average in the glyphosate litigation.”

    “I don’t want to get into whether this is a turning point,” he said of the settled cases. “I would simply say that we are turning over every stone to make sure that we’re executing on all of the various approaches that that we’ve called out in the past, and we remain committed to substantially containing this litigation threat to the company by the end of next year.”

    Bayer has another 61,000 cases to go on glyphosate litigation, for which it just allocated an additional $1.37 billion on top of the more than $10 billion it has already spent.

    It also faces significant litigation around polychlorinated biphenyls (PCBs), chemical compounds that Monsanto stopped producing in 1977 and which the United States Environmental Protection Agency (EPA) banned in 1979.

    SCOTUS ruling expected ‘by summer of next year’

    Bayer has repeatedly said it stands behind “the safety and non-carcinogenicity” of glyphosate.

    The company is currently awaiting word from the Solicitor General as to whether the supreme court will take up the case—in which the plaintiff sued after attributing his non-Hodgkin’s lymphoma to Roundup exposure—around an appeal of a lower court’s $1.25 million verdict in a Missouri state court....

    ....MUCH MORE 

    It's not as though the potential liability just crept up on the chemical behemoth. Here's a January 2019 post:

    Safe Or Not, Monsanto's Roundup Is Toxic for Bayer—Spiegel
    And many more over the years:

    "Can Bayer recover from its chronic pain?" 

    "Bayer ordered to pay $2.25 billion after jury links herbicide Roundup to cancer"
    As if Germany wasn't deindustrializing fast enough, the American judiciary is there with a little nudge off the ledge.

    Even before the acquisition Bayer had to know Monsanto's reputation.

    March 2014 -  "Why Does Everyone Hate Monsanto?" (MON) 

    Here's the monthly chart from TradingView:

     

    That March 1, 2015 monthly top-tick print is at 137 euros, 27.045 last. In the trade this is politely referred to as value destruction. For what it's worth the uptick at the end of the chart is from December 1, 2024's 19.314 to that 27.045 so maybe the market thinks Mr. Anderson will get the job done. 

    "T-Bill Sales Are Draining the Market’s Extra Cash. It’s a Challenge for the Treasury."

    From Barron's, August 15:

    Excess cash is getting sucked out of the financial machinery as the government increasingly turns to shorter-dated debt, or Treasury bills, to meet its borrowing needs. That is a risk for the market for ultrashort-term debt, including T-bills themselves.

    The action centers on the Federal Reserve’s so-called overnight reverse repo facility, where market participants can safely park cash and receive a small amount of interest. Money-market funds from companies such as Vanguard, banks, and government-sponsored enterprises like Freddie Mac use the RRP, collecting annualized returns of 4.25%.

    Back in December 2022, when usage was the highest on record, more than 100 counterparties had placed a total of $2.6 trillion in the RRP. But on Thursday, the figure was $28.82 billion, the lowest value since April 15, 2021. Only 14 institutions used the facility, also the lowest since April 2021. The five-day average balance now stands at $51.90 billion.

    The reason for the decline is that since July, the Treasury Department has increased the amount of T-bills it issues to finance government spending. Because T-bills are also cash-like, safe, and can offer slightly more attractive rates for longer periods than overnight, money has flowed to them from the RRP facility. Money-market funds, the largest users of the overnight RRP, took about 66% of the $212 billion net T-bill issuance in July, according to Teresa Ho, J.P. Morgan’s head of U.S. short duration strategy.

    In the first week of August, the Treasury offered a record high of $100 billion and $85 billion worth of four-week and 6-week bills. That debt likely was also purchased by money-market funds that shifted cash from the Fed facility. The 6-week bill had a rate 0.05 percentage points higher than that for reverse repos. Citi strategists expects the total held in the RRP to go near zero by month-end.

    With that pool of cash drying up, the next logical source of money to buy T-bills is banks’ $3.32 trillion in reserves at the Fed. The problem there is that the market can’t afford a sharp decline in reserves. In 2019, when reserve balances sank, it threw sand in the gears of financial markets. The rate at which institutions borrow from one another overnight, called the Secured Overnight Financing Rate, rose dramatically, prompting the Fed to step in.

    Citi sees bank reserves ending the year at $2.8 trillion. Fed Governor Christopher Waller sees around $2.7 trillion in reserves as a possibility, but it is difficult to know how high reserves should be. Most Fed officials and economists refrain from estimating the exact level of “ample” reserves.

    “The next six weeks remain the key test for USD repo markets and we expect pressure in September,” Angelo Manolatos, macro strategist at Wells Fargo, told Barron’s by email. “There is likely to be over $260 billion of net T-bill issuance between now and the Mid-September corporate tax date.” Cash flows from short-term debt to the Treasury, reducing liquidity, when companies pay their taxes.....

    ....MUCH MORE 

    "9 ways to spot an AI-generated viral video"

    From Mashable, August 14:

    You're going to have to put on your media literacy caps. 

    https://helios-i.mashable.com/imagery/articles/02oK9mGDZC7bTWCl40Vhq3V/hero-image.fill.size_1248x702.v1755122133.jpg 

    AI-generated video has gotten way too good. Scary good, actually. Because of that, our feeds are flooded with suspiciously perfect clips — like impossibly cute animals bouncing on trampolines — racking up millions of views across TikTok, Shorts, and Reels.

    With AI content blending seamlessly into our scroll, it's not always easy to know what’s real. So, how can you tell if a viral video is AI-generated?

    Truth be told, there’s no perfect checklist for spotting an AI-generated video. “Even if I don’t find the artifact, I cannot say for sure that it’s real, and that’s what we want,” Negar Kamali, an AI research scientist at Northwestern University’s Kellogg School of Management, told Mashable Tech Reporter Cecily Mauran last year. 

    The old giveaways — warped faces, mangled fingers, impossibly smooth textures — are getting harder to catch as the tech improves. Temporal inconsistencies are being cleaned up. But just like with those surreal animal clips captured on fake doorbell cams, the truth still lives in the little details. That’s where the synthetic mask always slips.

    The rise of ultra-realistic AI video tools
    Part of the challenge is the technology itself. Tools like OpenAI’s Sora and Google Veo 3 can now generate cinematic clips with complex camera movements, realistic lighting, and believable textures. These platforms aren’t just toys — they’re edging into professional-grade filmmaking territory, making the gap between human-shot footage and AI-generated content thinner than ever. This means spotting the "tells" in viral AI videos takes sharper eyes and a bit more skepticism.

    ***

    Take the video above, for example, an entire workshop’s worth of bunnies bouncing in perfect rhythm. It's absolutely adorable (and easy to make), but it’s also deeply suspicious when you look a little closer.

    With that in mind, here are the best ways to identify AI-generated viral videos.....

    ....MUCH MORE 

    Marc Andreessen: AI Won't Replace Venture Capitalists

    "....They couldn’t hit an elephant at this distance.”
    —U.S. Major General John Sedgwick moments before a Confederate 
    bullet took his life at the Battle of Spotsylvania Court House, May 9, 1864

    From Business Insider May 6, 2025:

    AI for thee, but not for VC
    Marc Andreessen thinks artificial intelligence can do every job in the world — except his  

    Marc Andreessen is, arguably, the most famous venture capitalist on earth. Cofounder of the legendary VC firm Andreessen Horowitz, inventor of the first popular web browser, and by reputation such a widely read intellectual egghead that his colleagues call him "MarcGPT." And as befits his nickname, Andreessen is a big believer in a future powered by artificial intelligence. His firm — "a16z" to Silicon Valley sophisticates — has invested in Elon Musk's xAI and Sam Altman's OpenAI. Andreessen has called AI "our alchemy, our Philosopher's Stone," and "a universal problem solver" that "ramps up the capabilities of our machines and ourselves."

    But for Andreessen, there is one job that AI will never do as well as a living, breathing human being: his.

    Think I'm kidding? On an a16z podcast last week, Andreessen opined that being a venture capitalist may be a profession that is "quite literally timeless." "When the AIs are doing everything else," he continued, "that may be one of the last remaining fields that people are still doing."

    Here's the logic. Andreessen starts by talking about all the things that people thought might disrupt the way VCs operate — like the Craigslist-style approach of AngelList, or crowdfunding. "The other form of structural change, of course, is AI," Andreessen says. Then he issues a challenge to the AI crowd: "All right, smart guys. You're sitting around doing all this analysis, and you have all these smart people doing all this modeling and all this research and so forth. Why can't you just plug this into Claude or ChatGPT or Gemini and have it tell you what to invest in?"

    The reason, Andreessen explains, is that it takes a VC like him to know how to pick a winner. He throws out a bunch of examples, going all the way back to the whaling industry 500 years ago: book publishers, movie studio executives, talent scouts at music labels. (I'll spare you the details here, but I spoke with an economist who has analyzed the whaling industry, and he says MarcGPT is pretty much wrong on every count.) Andreessen insists that these are key jobs that spring up "any time you have a part of the economy in which you have an entrepreneur going on a high-risk, high-return endeavor where it is far from clear what is going to work, and there are many more aspirants than there is money to fund them."

    Here, Andreessen argues, is where the human element is irreplaceable. "You're not just funding them," he says. "You have to actually work with them to execute the entire project. That's art. That's not science. That's art. We would like it to be science, but, like, it's art."

    Now correct me if I'm wrong, but it seems like a lot of AI folks have been trying to tell us that AI can make art. Last year, even Andreessen said that AI had enough of a sense of humor to "save comedy." But apparently it can't do his art....

    ....MUCH MORE 

    Embodied Intelligence: China's Whole-of-Nation Push into Robotics

    From the Jamestown Foundation's China Brief, August 9:

    Embodied Intelligence: The PRC’s Whole-of-Nation Push into Robotics 

    Executive Summary:

    • Since 2015, Beijing has pursued a whole-of-nation strategy to dominate intelligent robotics, combining vertical integration, policy coordination, rapid deployment, and local experimentation. This approach has already achieved several of its core objectives.
    • Policy documents articulate an official focus on core trends and technologies like humanoid robotics, sensors, actuators, and motion control. Local governments are also diversifying applications into fields ranging from eldercare to logistics and manufacturing.
    • Massive state subsidies and loans underwrite these programs, with provinces and cities engaging in a de facto “subsidy race,” each vying to foster the next national robotics champion within their jurisdiction.
    • “Industrial migration” is another emerging trend, in which a growing number of electric vehicle and tech giants are entering the humanoid robotics sector due to technological and supply chain overlaps. Their scale, engineering capacity, and vertical integration allow them to lower costs, accelerate R&D, and compete aggressively in a nascent industry.

    Editor’s note: This article is the first in a series analyzing the trajectory of the PRC’s robotics industry, from ecosystem formation to supply chain control to military implications. This first instalment maps previously undisclosed trends, drawing on recent policy papers, investment announcements, and discussions among industry players to decode the Beijing’s approach to this increasingly important sector.

    Beijing is mounting a coordinated campaign to get ahead in next-generation artificial intelligence (AI) hardware through a nationwide surge in robotics. While companies in the West like Tesla and Boston Dynamics introduced physical AI to global audiences years ago, the People’s Republic of China (PRC) is now rapidly assembling an impressive array of competitors, marshalling industrial, academic, and financial resources to scale up its new national champions. The race is well underway.

    At the 2025 World Artificial Intelligence Conference (世界人工智能大会) in Shanghai, the “National and Local Co-built Embodied Artificial Intelligence Robotics Innovation Center” (“HUMANOID”; 国家地方共建人形机器人创新中心) unveiled a new initiative to accelerate the development of humanoid robotics. It introduced fresh funding channels, training platforms, and national research hubs, all with the backing of central ministries and provincial governments (CCTV, July 28).

    Across the country, similar announcements have proliferated in recent months. Since January, the central government has launched an $8.2 billion National AI Industry Investment Fund (国家级人工智能基金) to steer capital into frontier technologies, including the integration of AI into physical world. Meanwhile, local governments in Beijing, Shenzhen, and other regions have unveiled plans specifically targeting humanoid robotics (Baijiahao/Neutral Carbon Corporation Company, April 17).

    First Steps: PRC’s Path to Robotics Dominance

    Back in 2013, the PRC lagged behind global leaders such as Korea, Japan and Germany in robot density, even if it had become the world’s largest market for industrial robotics. Having assessed that robotics would be a key strategic industry in the future, the government began to lay the groundwork to engineer its industrial catch up.

    Robotics was grouped alongside high-end computer numerical control (CNC) machine tools as one of 10 sectors highlighted in the Made in China 2025 policy, a landmark industrial strategy launched in 2015 to achieve global leadership in key emerging technologies. This policy, which anticipated many of the embodied AI ambitions now driving current PRC policy, divided robotics into three domains: industrial robots for manufacturing, service robots for human-centric environments, and special-purpose robots for hazardous or military use. (MIIT Equipment Industry Development Center, May 12, 2016). To execute the goals set in the Made in China 2025 plan, the National Development and Reform Commission (NDRC) published the Robot Industry Development Plan (2016–2020) (机器人产业发展规划2016-2020年). This plan highlighted structural weaknesses, such as reliance on foreign core components like servo motors and control systems, and advocated for greater self-sufficiency in response (NDRC, April 27, 2016). Importantly, these calls predated the United States’s imposition of export controls during the first Trump administration.

    In 2021, the 14th Five-Year Plan and its related sub-strategies further prioritized robotics, outlining specific goals in intelligent manufacturing, smart mobile robots, and cleanroom automation (using robotics within controlled environments to minimize human intervention). At the end of that year, the government released the 14th Five-Year Robotics Industry Plan (“十四五”机器人产业发展规划), which set an additional goal of becoming a global robotics leader by 2025, with an annual industry growth rate exceeding 20 percent (MIIT, December 28, 2021)....

    ....MUCH MORE 

    Most recently:

    "Cartel and Organized Criminal Use of Artificial Intelligence"

    From C/O (counter-OPFOR) Futures, August 1:

    This subject bibliography, which contains resources published between 2013 and 2025 with an emphasis on newer works, explores the evolving intersection of artificial intelligence (AI), logistics, and autonomous systems as they relate to transnational criminal and narco-terrorist organizations, with a primary focus on Latin American cartels. Specifically, it examines how AI- driven tools—such as machine learning, geospatial analytics, and natural language processing— are being leveraged both by illicit networks to optimize trafficking routes and by law enforcement agencies to disrupt them. The latter can, in turn, be ‘blue teamed’ by illicit organizations for countermeasures development. The work focuses on extracting, analyzing, and organizing the academic literature alongside news reports to better understand how contemporary AI—typically, but not exclusively, generative artificial intelligence (GEN AI)—is being weaponized and/or operationally employed by organized criminal organizations and across illicit flows...

    ....MORE (bibliography download link 16 page PDF) 

    Tropical Storm Erin Winds Now At 70 MPH

    It appears the ensemble of model runs shown in the spaghetti graphs were accurate (so far) and Bermuda will avoid a direct hit. From Orlando's  WESH Television 2 via "Tropical Storm/Hurricane Erin: Spaghetti Graph Of Model Runs Shows Track Between U.S. and Bermuda", August 14:

    https://kubrick.htvapps.com/htv-prod-media.s3.amazonaws.com/images/dynamic/wesh/HURR_A_MODEL_STATIC2.jpg?resize=660:* 

    And from the National Hurricane Center, 8:00 am EDT, August 15: 

    https://www.nhc.noaa.gov/storm_graphics/AT05/refresh/AL052025_5day_cone_no_line_and_wind+png/151156_5day_cone_no_line_and_wind.png 

    Public
    Advisory
    #16A

    800 AM AST 

    ....DISCUSSION AND OUTLOOK
    ----------------------
    At 800 AM AST (1200 UTC), the center of Tropical Storm Erin was
    located near latitude 18.1 North, longitude 55.2 West. Erin is
    moving toward the west-northwest near 17 mph (28 km/h). This motion
    is expected to continue into the weekend. On the forecast track, the
    center of Erin is likely to move near or just north of the northern
    Leeward Islands over the weekend.
     
    Maximum sustained winds are near 70 mph (110 km/h) with higher 
    gusts.  Steady strengthening is expected during the next few days 
    and Erin is forecast to become a hurricane later today, and it could 
    become a major hurricane by this weekend.
     
    Tropical-storm-force winds extend outward up to 90 miles (150 km)
    mainly to the northeast of the center.
     
    The latest minimum central pressure estimated from NOAA Hurricane 
    Hunter aircraft data is 998 mb (29.47 inches).....

    "IPO market surges in August with companies 'striking while the iron is hot'"

    This is what we were referring to introducing August 6's "Blackstone prepares portfolio companies for IPOs":

    One of the reasons markets trend higher is a lack of new shares coming on to the market.

    Over the last few months the IPO window has been opening and the offerings absorb buying power that would otherwise go into issues already trading.

    See also: supply/demand.

    The Wall Street marketeers are nothing if not opportunistic.

    From Yahoo Finance, August 15: 

    The end of summer usually marks one of the slowest periods of the year for investment bankers.

    This year, however, markets aren't taking a vacation.

    Halfway through August, the IPO market has already roughly doubled the amount of activity typically seen during the month, with 12 new issues worth at least $50 million raising some $2.9 billion in capital.

    August typically saw nine IPOs raising an average of $1.5 billion collectively over the past decade, according to data from IPO research firm Renaissance Capital.

    "There's clear demand for new issues, and these companies are striking while the iron is hot," Renaissance Capital research director Avery Marquez said.

    Marquez noted that given how the IPO market has been largely frozen in the past years, the surge in activity isn't necessarily surprising. Still, he said, "these companies would likely not be going public right now if there wasn't such a strong appetite for IPOs."

    This week, crypto exchange operator Bullish (BLSH) enjoyed the latest high-profile market debut, raising over $1 billion in its IPO and seeing its stock open at $90 per share, nearly triple the $37 where the company priced its offering.

    At the close of its first day of trading, Bullish had a market cap of $10 billion, almost double the company's IPO valuation.

    The lack of a summer slowdown has been good for Wall Street banks, especially after predictions for a breakout year were shunted after tariff uncertainty defined much of the first half of the year.

    At its current pace, August remains on track to see IPO activity match a strong July, which saw $5.2 billion raised on 29 IPOs, including one of the year's most expected offerings in design software maker Figma (FIG)....

    ....MUCH MORE 

    Thursday, August 14, 2025

    One Of Unitree's New Robots

    On August 13 we linked to "Founder of China’s Unitree sees lack of advanced AI as biggest roadblock to mass robot use". Here's some of what his company does: 

    https://x.com/UnitreeRobotics/status/1952672597558309136 

    Quite amazing. And regarding his lament, on August 14 we saw this: 

    "Nvidia Unveils A.I. Models to Give Robots Human-Like Reasoning Skills" (NVDA)

    This stuff is moving pretty fast.

    GE Vernova Is Down $51.97 (7.7%) In Ten Days But Behind Scenes...(GEV)

    That decline, from the intra-day high on August 4 to the last print in today's afterhours trade is on no news, a situation that can be nerve-wracking. Which is one of the reasons to own companies with sales and earnings and cash flow. The operating metrics provide a measure of comfort.

    My best guess as to what is happening is a rotation out of top-performing large caps into small caps which tend to have more domestic-focused—and thus less tariff wars exposed—businesses. The problem with this rotation is, and always has been, that when panic rolls down Wall Street you find the truth of "To whom" the hard way; there is no buyer to whom you can sell at anywhere near the last price print.

    So, not having any great insight into why investors/speculators are actually selling the #2 gainer in the S&P 500, here's the U.S. Department of Energy on some stuff GEV is doing in the real world of energy production:

    National Lab Starts Examination of GE Vernova’s Advanced Nuclear Fuel 
    Researchers at Pacific Northwest National Laboratory get first look at an advanced fuel developed by GE Vernova.

    Office of Nuclear Energy

    August 13, 2025

    Researchers at Pacific Northwest National Laboratory are getting their first look at an advanced fuel developed by GE Vernova that could help boost the performance of nuclear power plants and reduce the quantity of spent nuclear fuel.  

    The assemblies were recently shipped to the lab after spending six years in a commercial reactor as part of the U.S. Department of Energy’s Accident Tolerant Fuel program.

    Special Delivery 

    GE Vernova’s Global Nuclear Fuel (GNF) initially loaded eight assemblies into a commercial reactor for two 24-month cycles of operation and were later relicensed and reinserted into the reactor for continued exposure.

    The high burnup fuel rods shipped to the lab include full length and partial length rods — a feature that is unique to boiling water reactor fuels.  The fuel pellets inside the rods contain gadolinium, which absorbs neutrons to improve the utilization of the fissile content in the fuel throughout the fuel cycle. 

    The assemblies were removed in 2023 and recently shipped to PNNL for examination to further evaluate its performance. 

    “The examination of these rods is the next step in our continuous drive to develop higher efficiency fuels that are safer and more reliable,” said Craig Ranson, Installed Base CEO, GE Vernova Hitachi Nuclear Energy. “We are proud to be part of this collaboration with the U.S. Department of Energy, PNNL and our utility partners to benefit the entire industry.”    

    “This is a significant milestone for our Accident Tolerant Fuel program,” said Frank Goldner, the Accident Tolerant Fuel federal program manager in the Office of Nuclear Energy. “The development of this fuel could further support the Trump Administration’s executive order to facilitate five gigawatts of power uprates at existing power plants by 2030 and high burnup fuels could be a big part of that....

    ....MUCH MORE 

    So while I decide between having a strawberry or taking a nap stuff is getting done. 

    Most recently on the big dog in the energy transition, August 7:

    Nuclear: Hungary Moves Ahead On GE Vernova Hitachi BWRX-300 Small Modular Reactor Project (GEV)

    $623.00 last, down from the Aug. 4 $674.97 intraday high (and the $677.29 July 31 ATH)

    "Nvidia Unveils A.I. Models to Give Robots Human-Like Reasoning Skills" (NVDA)

    Huh. Just in time to assuage the fears of one of China's up-and-coming robotics companies:

    "Founder of China’s Unitree sees lack of advanced AI as biggest roadblock to mass robot use"

    From Observer, August 13 (same date as the link above): 

    The A.I. boom has helped make Nvidia the world’s most valuable publicly traded company with a market cap of $4.3 trillion. But CEO Jensen Huang envisions the company’s future to center around physical A.I. At its SIGGRAPH conference on Aug. 11, Nvidia unveiled a suite of A.I. models aimed at advancing physical A.I. systems, including humanoid robots and self-driving cars. The centerpiece is Cosmos Reason, a vision-language-action (VLA) model that the company says can give robots human-like reasoning abilities. 

    “Computer graphics and A.I. are converging to fundamentally transform robotics,” said Rev Lebaredian, Nvidia’s vice president of Omniverse and simulation technologies, in a statement. “By combining A.I. reasoning with scalable, physically accurate simulation, we’re enabling developers to build tomorrow’s robots and autonomous vehicles that will transform trillions of dollars in industries.”

    Cosmos Reason is a 7-billion-parameter model that boasts an understanding of prior knowledge, physics and common sense in how to operate amongst the real world. When applied to physical A.I. systems, it will act “as the brain for deliberate, methodical decision-making,” said Nvidia in a blog post.

    The model can also automate dataset curation and annotation, a capability already being used by Uber as well as Nvidia’s own robotics and self-driving teams....

    ....MUCH MORE 

    Trump Warns of Economic Disaster if Court Strikes Down Tariffs

    That phrasing doesn't sound as terror-stricken as the Germans were over a possible beer shortage ahead of Oktoberfest 2012 and earlier in 2010:

    (This means a catastrophe is inevitable [It's a recipe for disaster]) 

    And from the New York Times, August 13:

    The president has crowed about the billions of dollars collected so far from tariffs. That money could be at risk if the White House loses the legal battle. 

    The Trump administration’s top lawyers urged a federal court this week to uphold its sweeping global tariffs or risk “financial ruin,” warning that the United States could slip into an economic depression if an adverse ruling forces the government to refund billions of dollars in duties.

    While experts broadly disputed that a losing verdict would trigger a calamity of that magnitude, many said the government’s extraordinary assertions underscored the risks looming over President Trump, who has widened the scope of his punishing trade war even while its legal basis remains unsettled.

    At the heart of the wrangling is a 1977 law that empowers the president to impose trade embargoes and sanctions in response to economic emergencies. The word tariff appears nowhere in that statute, but Mr. Trump has nonetheless invoked its powers as the basis for his withering levies, including the steep taxes he imposed on imports from more than 90 countries last Thursday.

    For Mr. Trump, the worst-case scenario would be a resounding defeat at the hands of the Supreme Court, which is likely to take up one of the pending cases. If the justices rule overwhelmingly against the president, the decision could halt tariff collections while triggering “a significant wave of claims” from businesses demanding refunds, said Andrew Morris, a senior litigation counsel at the New Civil Liberties Alliance. The legal group has represented businesses in tariff lawsuits.

    "Russian superyacht, with helideck and marble fireplace, was seized. Now you can bid on it"

    I'd want to make sure the anti-piracy gear is in good working order should the prior owner decide to attempt a repossession.

    From the Los Angeles Times, August 7:

    https://ca-times.brightspotcdn.com/dims4/default/10a48a5/2147483647/strip/true/crop/2000x1333+0+0/resize/1200x800!/format/webp/quality/75/?url=https%3A%2F%2Fcalifornia-times-brightspot.s3.amazonaws.com%2F30%2Fee%2Fffd8b54e4da484f11a9328718e75%2Fme-amadea-yacht-auctioned-03.JPG

    A bedroom on the Amadea, which can host 16 guests in eight luxurious staterooms.
    (U.S. Marshals Service and National Maritime Services)

    • The $300-million-plus Amadea is currently sitting in a San Diego harbor.
    • The superyacht is being auctioned; the bid deposit is $10 million.

    The Russian oligarch billionaire lifestyle can be yours for the potentially low, low price of tens of millions of dollars, courtesy of the U.S. government.

    The National Maritime Services, working on behalf of the U.S. Marshals Service, is auctioning off a superyacht, the $300-million-plus Amadea, which currently sits in a San Diego harbor, with a bid deposit starting at $10 million.

    Florida-based Fraser Yachts, the auction’s promotional agents, described the prize “as one of the most comprehensively equipped yachts in her class.”

    The 348-foot-long ship was built in 2017 and can comfortably host 16 guests in eight luxurious staterooms.

    An additional 21 cabins can house a professional crew of up to 36 workers.

    One of the ship’s jewels is a glass elevator that serves all decks, while a second lift is available for crew.

    The yacht includes a glass-edged mosaic pool with submerged barstools, and an outdoor bar area surrounded by sun pads (cushioned areas for perfecting your tan).

    The ship’s main salon showcases a piano and marble fireplace.....

    ...For late-arriving quests, the Amadea also boasts a helideck.... 

    ....MUCH MORE 

    No reserve price.

    Tropical Storm/Hurricane Erin: Spaghetti Graph Of Model Runs Shows Track Between U.S. and Bermuda

    From WESH Television 2, Orlando, August 14:

    Tracking Tropical Storm Erin: Maps, spaghetti models 

    Tropical Storm Erin formed in the Atlantic on Monday and is expected to gain strength, according to the National Hurricane Center.  

    https://kubrick.htvapps.com/htv-prod-media.s3.amazonaws.com/images/dynamic/wesh/HURR_A_MODEL_STATIC2.jpg?resize=660:* 

    And about an hour ago: 

    Tropical Storm Erin expected to strengthen; models show slight eastward shift

    Which is good for Bermuda while enhancing the surfing off the Carolinas 

    "The Producer Price Index for final demand rose 0.9 percent in July" (PPI)

    From the Bureau of Labor Statistics, August 14:

    PRODUCER PRICE INDEXES - JULY 2025

    The Producer Price Index for final demand rose 0.9 percent in July, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices were unchanged in June and moved up 0.4 percent in May. (See table A.) On an unadjusted basis, the index for final demand advanced 3.3 percent for the 12 months ended in July, the largest 12-month increase since rising 3.4 percent in February 2025.

    Within final demand, more than three-quarters of the broad-based advance in July can be traced to the index for final demand services, which rose 1.1 percent. Prices for final demand goods increased 0.7 percent.

    The index for final demand less foods, energy, and trade services moved up 0.6 percent in July, the largest increase since rising 0.9 percent in March 2022. For the 12 months ended in July, prices for final demand less foods, energy, and trade services advanced 2.8 percent.

    Final Demand

    Final demand services: The index for final demand services moved up 1.1 percent in July, the largest advance since rising 1.3 percent in March 2022. Over half of the broad-based July increase is attributable to margins for final demand trade services, which jumped 2.0 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand services less trade, transportation, and warehousing and for final demand transportation and warehousing services advanced 0.7 percent and 1.0 percent, respectively.

    Product detail: Thirty percent of the July rise in prices for final demand services can be traced to margins for machinery and equipment wholesaling, which jumped 3.8 percent. The indexes for portfolio management; securities brokerage, dealing, investment advice, and related services; traveler accommodation services; automobiles retailing (partial); and truck transportation of freight also advanced. In contrast, prices for hospital outpatient care fell 0.5 percent. The indexes for furniture retailing and for pipeline transportation of energy products also declined. (See table 2.)

    Final demand goods: Prices for final demand goods moved up 0.7 percent in July, the largest advance since rising 0.7 percent in January. Forty percent of the broad-based increase in July can be attributed to the index for final demand foods, which jumped 1.4 percent. Prices for final demand goods less foods and energy and for final demand energy moved up 0.4 percent and 0.9 percent, respectively.

    Product detail: A quarter of the July advance in the index for final demand goods can be traced to prices for fresh and dry vegetables, which jumped 38.9 percent. The indexes for meats, diesel fuel, jet fuel, nonferrous scrap, and eggs for fresh use also rose. Conversely, prices for gasoline decreased 1.8 percent. The indexes for canned, cooked, smoked, or prepared poultry and for plastic resins and materials also declined....

    ....MUCH MORE, tables, narrative.

    "Trump administration to unveil tougher solar and wind subsidy rules"

    From Reuters via MSN, August 14: 

    The Trump administration is expected as soon as Monday to take another step toward curbing the growth of renewable energy in the United States by making it harder for companies to claim federal tax subsidies for wind and solar energy.

    The Treasury Department next week will reach a 45-day deadline, set by U.S. President Donald Trump in July, to revise rules governing who can qualify for clean energy tax credits that the Republicans' One Big Beautiful Bill Act is phasing out years [sic] earlier than planned.

    The rule under scrutiny centers around what it means for a project to be considered under construction, a definition that is critical to companies building facilities that require years of planning. 

    The OBBBA requires projects to begin construction by July of next year or enter service by the end of 2027 to qualify for a 30% tax credit and bonuses that can push the subsidy even higher. Under previous law, the credits were available through 2032.

    In an executive order last month, three days after signing the OBBBA into law, Trump directed Treasury to restrict the use of safe harbors, rules that have allowed project owners for years to claim tax credits so long as they incur 5% of their costs or make meaningful physical progress before the credit expires.

    Washington policy advisory firm Capstone said it could see Treasury requiring developers to incur a higher percentage of costs, such as 10% or 15%. Under the physical work requirement, the agency could exclude off-site construction or require more contact with the government and proof of continuous work....

    ....MUCH MORE 

    One hundred Years Of Norwegian Svalberg: A Corner Of NATO Where Lenin Presides

    From the Governor of Svalbard:

    Celebrating the 100th anniversary of the Svalbard Act on 14 August  

    We are celebrating that August 14th marks 100 years since Svalbard became part of the Kingdom of Norway. HRH Crown Prince Haakon, Prime Minister Støre and Minister of Justice Aas-Hansen will attend the celebration. 

    The incorporation of Svalbard as part of the Kingdom of Norway occurred through the entry into force of the Svalbard Act on 14 August 1925. Since then, Svalbard, which in area constitutes an area as large as Norway south of Dovre, has been part of what, according to Section 1 of the Constitution, is a "free, independent, indivisible and inalienable kingdom."

    This will be celebrated in Longyearbyen on Thursday, 14 August 2025. HRH Crown Prince Haakon, Prime Minister Jonas Gahr Støre and Minister of Justice Astrid Aas-Hansen will participate in parts of the program.

    The celebration will begin with a wreath-laying ceremony at the Sverdrup memorial stone at Huset and at the monument to fallen miners.

    At 11:00 there will be an anniversary service in Svalbard Church, and at 11:50 there will be a ceremony at the monument on Skjæringa and a flag raising at 12:00.

    At 13:30 there will be a public celebration and entertainment on the square in Longyearbyen. The day will end with a festive performance in Longyearbyen Cultural Centre at 17:00....

    And:
    Program for anniversary celebration 14 August

    From The Economist, August 11:

    Barentsburg, A Russian-run company town in Arctic Norway, could become a geopolitical headache.

    A bust of Lenin glowers over the square in Barentsburg. Public signs are in Cyrillic script; murals and banners celebrate Russian scientists and artists. Russia’s tricolour flaps from buildings beside ones for Arktikugol, a Russian mining company. A Russian outfit provides the phone service, and shops sell Russian gherkins, tinned fish and fizzy drinks. Russian scientific institutes dot the town. Outside one, bathed in midnight sunshine, two geologists explain they are on their annual research visit from St Petersburg.
     
    You might think this settlement is part of Russia. It’s not. Barentsburg is a geopolitical quirk: a Russian company town squatting on Svalbard, an Arctic archipelago that belongs to Norway. The NATO country has undisputed control, thanks to a treaty that came into force on August 14th 1925. As The Economist went to press, Jonas Store, Norway’s prime minister, was set to preside over a 100th anniversary ceremony in Longyearbyen, Svalbard’s capital. But the treaty also grants nationals and companies from other countries broad rights to exploit resources there, notably by mining coal. Russians have done so since the 1930s.
     
    Some western intelligence officials fear the arrangement gives Russia an opening to cause trouble. Norway’s intelligence chief, Admiral Nils Andreas Stensonses, warned in June that lately the Arctic “gets more attention” from Russia, in part because the Baltic Sea has become unfriendly waters since it invaded Ukraine. Three years ago Russian trawlers sabotaged a communications cable that runs hundreds of kilometres to the Norwegian mainland. The next year Vladimir Putin’s administration designated Norway as unfriendly. In March Russia accused Norway of breaching the treaty with its military activity in Svalbard....
    ....MUCH MORE 
     
    Speaking of geopolitics, an interesting location in the eyes of the northern navies:
     
    https://web.archive.org/web/20220306050418if_/https://thebarentsobserver.com/sites/default/files/resize/skjermbilde_2020-12-01_kl._11.05.38-2000x1204.png 
    —the Barents Observer via the Internet archive (link rotted) 
     
    As seen in June 2022's "Top Russian legislators question Norwegian sovereignty over Svalbard"

    I'm not entirely sure what the Russian play is here. It might be as straightforward as securing access to the Atlantic for Russia's Arctic-based submarines:

    And September 2024's Meanwhile, In The Arctic: "Svalbard-research becomes more important for China, professor says"

    Wednesday, August 13, 2025

    "OpenAI's GPT-5 looks less like AI evolution and more like cost cutting"

    From The Register, August 13: 

    Gotta pay for all those GPUs somehow

    Comment For all the superlative-laden claims, OpenAI's new top model appears to be less of an advancement and more of a way to save compute costs — something that hasn't exactly gone over well with the company's most dedicated users.

    As the flag bearer that kicked off the generative AI era, OpenAI is under considerable pressure not only to demonstrate technological advances, but also to justify its massive, multi-billion-dollar funding rounds by showing its business is growing.

    To do that, OpenAI can either increase its user base, raise prices, or cut costs. Much of the industry is already aligning around its $20 and $200 a month pricing tiers. So OpenAI would need to offer something others cannot to justify a premium, or risk losing customers to competitors such as Anthropic or Google.

    With the academic year about to kick off, OpenAI is sure to pick up a fresh round of subscriptions as students file back into classrooms following the summer break. While more paying customers will mean more revenues, it also means higher compute costs.

    Enter the cost-cutting era.

    Perhaps the best evidence of cost-cutting is the fact that GPT-5 isn't actually one model. It's a collection of at least two models: a lightweight LLM that can quickly respond to most requests and a heavier duty one designed to tackle more complex topics. Which model prompts land in is determined by a router model, which acts a bit like an intelligent load balancer for the platform as a whole. Image prompts use a completely different model, Image Gen 4o.

    This is a departure from how OpenAI has operated in the past. Previously, Plus and Pro users have been able to choose which model they'd like to use. If you wanted to ask o3 mundane questions that GPT-4o could have easily handled, you could.

    In theory, OpenAI's router model should allow the bulk of GPT-5's traffic to be served by its smaller, less resource-intensive models.

    We can see more evidence of cost-cutting in OpenAI's decision to toggle reasoning on and off by default automatically, depending on the complexity of the prompt. Freeloaders... we mean free tier users, don't have the ability to toggle this on themselves. The less reasoning the models are doing, the fewer tokens they generate and the less expensive they are to operate....

    ....MUCH MORE 

    One of the sidebar stories at El Reg is headlined: "GPT-5 is going so well for OpenAI that there's now a 'show additional models' switch" Ouch.

    America's Fastest Growing Companies: Names You Must Know

    Test on Friday.

    There are 5000 of them so best get cracking.

    (just kidding, we don't "must" anything. no "must" read, no "must see", do, etc.)

    From Inc. Magazine, August 12:

    Inc. 5000
    Meet the Companies Scaling at Hyper Speed 

    Companies on the 2025 Inc. 5000 list are ranked according to their percentage revenue growth over three years, from 2021 to 2024. To qualify, companies must be privately held, for-profit, based in the U.S., and independent (not subsidiaries or divisions of other companies) as of December 31, 2024. Since then, some companies on the list may have gone public or been acquired. Companies must have been founded and generating revenue by March 31, 2021. The minimum revenue requirement is $100,000 for 2021 and $2 million for 2024. All honorees must pass Inc.’s editorial review....

    ....MUCH MORE  

    The complete list is linked at the bottom of the first page. 

    "Founder of China’s Unitree sees lack of advanced AI as biggest roadblock to mass robot use"

    From the South China Morning Post, August 13: 

    In an interview with the People’s Daily, Wang Xingxing predicts that significant progress in the sector will arrive in three to five years

    The biggest obstacle to the mass deployment of robots is the lack of advanced artificial intelligence, according to Wang Xingxing, founder of China’s leading robotics company Unitree.

    Robotic AI had not reached a critical threshold necessary for widespread adoption, Wang said in an interview published on Wednesday by the People’s Daily, the official newspaper of the Communist Party. He reiterated his earlier assertion that the “ChatGPT moment” for the robotics industry had yet to arrive.

    “This is a common challenge worldwide, and many people are working to overcome it,” he said. “But breakthroughs can happen at any time … issues that currently seem insurmountable could be suddenly resolved in the future.”

    Wang’s remarks come as China’s robotics sector – an area also known as embodied intelligence – is gaining momentum, attracting interest from the government, various industries and the public.

    Unitree garnered national attention after its humanoid robots gave a dance performance during state broadcaster China Central Television’s annual Lunar New Year’s Eve gala. Weeks later, Wang became the youngest entrepreneur to join Chinese President Xi Jinping’s high-profile business symposium in February.

    Wang, 35, said the heightened attention was beneficial for the entire industry, adding that Unitree and other robotics businesses performed well in the first half of the year.

    He expressed surprise at the rapid advancements in robotics AI. “I cannot believe robots are already engaged in boxing matches,” Wang said. “I expected it would take at least a year or two, but it happened in just a few months.”

    Wang predicted significant progress within three to five years, though he cautioned that it may take longer for robots to enter households because of ethical and safety concerns.....

    ....MUCH MORE