Don't know what current Jag management thinks of this. Don't care.
From BBC Top Gear, December 18:
It’s from a film apparently titled ‘Austin Powers’, and… yeah, us neither
A
1967 Jaguar E-Type, upon which Henry Ford’s famous line ‘you can have
it in any colour as long as it’s black’ is based – no, wait, not that –
is up for auction.
The special bit here is that this ’67 Jag starred in a series of
films about a fictional British spy bearing a Scottish accent and a
licence to kill. No, hang on, not that either.
Dubbed
the ‘Shaguar’, this modified E-Type was of course driven by the film’s
star Mike Myers – posing as fictional agent 007, we think? – across all
three of these Austin Powers films....
Over the past two decades, Google has hosted two different internal platforms for predictions. Why did the first one fail — and will the other endure?
It’s July 2005. Google is the darling of Silicon Valley. It has just unveiled Google Maps; Gmail is still in beta. Next year it will acquire YouTube and launch Google Translate.
The week’s new hires file past a full-size dinosaur skeleton in the courtyard on the way to their first TGIF — the company’s weekly all-hands. They wear beanies with red, yellow, green, and blue colors — like the yet-to-be-designed Chrome logo — with a propeller on top. They are here to see Google’s founders, Larry Page and Sergey Brin, both wearing shorts and plain colored t-shirts, banter about new tech.
In the first line of their Founders’ IPO letter, Page and Brin wrote “Google is not a conventional company.” They sought to provide “unbiased, accurate and free access to information.” On this Friday, Patri Friedman, the grandson of Milton Friedman, and Bo Cowgill, now an economics professor at Columbia University, are here to talk about Google’s next bet to do this: an internal prediction market called Prophit.
On stage next to Larry Page, Friedman and Cowgill announce winners from Prophit’s first quarter and show statistical results on its forecasting accuracy. Prophit was popular inside Google. Over the next three years, about 20% of all Google employees would place bets.
Two months after this presentation, The New York Times covered Prophit. They wrote about it again in 2008, and it became a Harvard Business Review case-study. Despite the momentum, in March 2010, Prophit hit a major roadblock in its public launch as an external product. It attempted a pivot, and ultimately shut down in 2011.
In April 2020, almost exactly 15
years after Prophit launched, and one month after employees worldwide
were sent home due to COVID-19, I launched Google’s second internal
prediction market, called Gleangen.
1
By late 2022, about 8% of Google employees had placed a bet on
Gleangen. The company had grown so large that 8% represented 15,000
people — ten times the number of employees that placed bets on Prophit.
Gleangen sustained over 1,000 monthly traders, more than the popular
forecasting platforms Metaculus (where I later served as CTO) and Manifold at the time.
2
Outside of Google, prediction markets have once again been thrust
into the spotlight. Weeks before it became a mainstream view, users on
sites like PredictIt and Metaculus predicted not only that President
Biden would drop his reelection campaign but that doing so would increase the Democrats’ chance of winning.
Over the next few months, swings in election prediction markets
regularly made national news, and despite some distortions caused by
aggressive whales, the markets ultimately performed well.
Theoretically, prediction markets are equally powerful when used by
companies to anticipate events, such as predicting their competitors’
next moves.
But as Cowgill has shown, corporate prediction markets have a mixed track record,
as evidenced by attempts at Google and many other companies. Why is
this? What does it take to make them work? The inside story of Prophit
and Gleangen, the two largest corporate prediction markets ever run,
offers some lessons.
Experts at brokerages say they are pulling punches as Beijing clamps down
HONG KONG—China economists and strategists at leading brokerages say they are hewing closer to the official government line and being cautious in their commentary in response to signs of tighter monitoring.
The latest sign came Friday when the state-run China Securities Journal said the main securities industry body has told brokerages to ensure their chief economists play a positive role in analyzing official policies and boosting investor confidence.
The government’s sensitivity to criticism has risen recently as discontent festers among Chinese people. Policymakers are trying to jump-start the weak economy by lowering interest rates and stimulating consumer spending.
Directives to be careful about commentary are a familiar feature of China’s markets, especially during politically delicate periods such as October 2022, when leader Xi Jinping was re-elected to a third term. From time to time economists and analysts are sidelined from social media after sharing unauthorized or negative views.
Some local securities bureaus in China have told brokerages and other financial institutions to place more scrutiny on public statements made by their employees, especially chief economists and research analysts, domestic Chinese media outlet Cailian reported Thursday.
China Securities Journal, which is supervised by the government’s official Xinhua News Agency, doubled down on the message by relaying the guidance delivered to financial institutions about what chief economists should and shouldn’t do.
If a chief economist repeatedly causes serious adverse effects owing to inappropriate comments, the employer should punish or possibly fire the person, China Securities Journal cited the official guidance as saying. Chief economists should publicize and interpret official policies and guide market expectations, it quoted the guidance as saying.
The newspaper didn’t say what comments were inappropriate. The China Securities Regulatory Commission didn’t respond to a request for comment.
Economists and strategists who analyze China said the state-media articles and other material interpreting the new guidance ricocheted around the region’s financial world on Friday. They said it added to the pressure to avoid edgy commentary or expressions of agreement with other people’s criticism.
At the time, economists at Chinese banks and brokerages were told by their higher-ups or compliance departments to refrain from comparing China to Japan or talking about deflation, people familiar with the matter said. One economist who used to work at a state-owned bank in Hong Kong recalled trying to publish research notes about the country’s deflation threat and repeatedly failing the bank’s compliance checks.
Shunning the word “deflation” hasn’t made the phenomenon go away in the year since.
The producer-price index, which captures factory-level prices, has fallen year-over-year for 26 consecutive months through November....
A theory of change that can account for beauty and generate life
This article is an exercise in speculative reasoning. It is a
response to the feeling that the multiple crises we face cannot be
addressed by thinking with any of the existing theories of change or
models of systems dynamics that are available to us today. This article
is also a critique of complex adaptive systems thinking and all of the
complexity science that is based on it. Because we are steeped in the
logics of complex adaptive systems thinking, everyone is caught in a
closed loop of escalating complexity and accelerating risk. In this
article, I propose a new theory of change that has the potential to
create new intentional states in people, and as such, new behaviors.
Unlike the logics of complex adaptive systems thinking, where each
person is a potential opponent, and every environment is a potential
threat, this new theory of change—which I call “a theory of complex
potential states”—prepares us to open up to new potentials that are
offered in every relationship and every environment.
Part One: The Problem Situation
Our current theories of change are invested in the dynamics of crisis.
The deep codes embedded in our theories of development and
evolution—such as progress, competition, adaptive pressure, and survival
drives—are root causes of the escalating complexity and increasing
systemic risk that characterize our time. Even imagining as a response
that we are under threat from climate, or that the lifeworld is being
threatened by us, is itself entangled in these codes and leads to
self-fulfilling prophecies.
Humans create self-fulfilling prophecies because our causal theories
of change are themselves causally implicated in the world we create.
Because we are reflexive, predictive, and intentional beings, we
deliberate, decide, and act based on mental models we share on how the
world works. These models change over time. For example, the idea that
an external agent created the universe is based on a construction
theory of change that was prevalent in premodern monotheistic cultures.
In premodern polytheistic or panentheistic cultures, the origin story
was based on a developmental theory of change—either from the
union of male and female energies, or the developmental unfolding of a
primordial egg. More recently, many of our theories of change are based
on evolutionary dynamics. These have proliferated into a broad
spectrum of models, from the original Darwinian theory to models of
complex adaptive, chaotic, chaordic, and emergent systems.
In its original form, Darwinian evolution depended on two basic
dynamics: (1) random mutations in individuals resulting in genetic drift
across breeding populations, and (2) changes in the environment. The
mutations are blind to environmental changes, and environmental changes
are unresponsive to the mutations. “Natural selection” is a random
coincidence that occurs when the change in the environment just happens
to increase or decrease breeding prospects across some populations (and
not others) and some individuals (and not others). This change could be
slow and incremental, eventually leading to sub-populations that no
longer breed together, eliminating the hybrid traits. Eventually, the
disadvantaged population becomes extinct, and the new population emerges
as a new species. This change could be dramatic and swift, wiping out
entire groups of species, and setting the stage for new lineages to
found later forms.
The point here is that the original Darwinian model is not a story of
survival drives, adaptive pressure, and striving to survive—it is a
story about rolling the dice.1 ....
Planning Ethical Influence Operations A Framework for Defense Information Professionals
U.S. Department of Defense (DoD)
efforts to plan and conduct influence operations in an ethical manner
face several challenges, including concerns regarding the
appropriateness of any influence activity, a lack of explicit
consideration of ethics in the influence-planning process, and
decoupling the ethics of force from the ethics of influence in military
operations. Currently, DoD lacks a framework to explicitly consider the
ethics of an influence activity outside legal review.
Ethics scholarship reveals that the principal ethical objection to
influence is its threat to autonomy. Although influence is a threat to
autonomy and is thus morally fraught, this scholarship points to several
situations in which influence activities might be justified.
This report includes (1) clear ethical principles that should govern
the planning and conduct of influence operations; (2) clear procedures
for assessing ethics and the ethical risk associated with a proposed
influence operation; and (3) guidelines for creating a justification
statement for a proposed influence operation based on a preliminary
ethical determination so that reviewers and approvers are presented with
a consistent, coherent, and nonarbitrary ethical evaluation with which
they can engage and agree or disagree.
The authors offer a principles-based framework for military
practitioners to determine whether a proposed influence effort is
ethically permissible and guidance for preparing a justification
statement that allows approvers to follow the ethical logic behind a
proposed influence effort.
RAND: "Truth Decay Is Putting U.S. National Security at Risk" This
is pretty funny. The following essay expounds on the fact that there is
a lack of trust in the country and somehow manages to avoid mentioning
the lies of government agencies and the lies of the media for the last
seven or eight years.
Party City Holdco Inc.
will shut down and lay off its employees just 14 months after the
company exited bankruptcy under a plan that had been designed to ensure
the retailer’s long-term survival.
Chief
Executive Officer Barry Litwin told employees that the costume and
party supplier couldn’t overcome pressure from low-spending consumers
and high inflation. Going-out-of-business sales began Friday, he said in
a video seen by Bloomberg News.
“And
as a result we regret to inform everyone that today will be your last
day of employment,” Litwin said in the video. “That is without question
the most difficult message that I’ve ever had to deliver.” CNN reported
the company’s closure plans earlier on Friday....
Those lines on maps that the French and British drew over one-hundred years ago were a perversity and will continue to highlight the crazy effects of people who think they know what is right for the world.
The self-anointed, from the Davos crowd and U.N. back to the League of Nations and Sykes–Picot have caused far more death and destruction than any good they might have done.
From Barron's, December 20:
About the author:Theodore J. Singerretired
in 2023 from the Central Intelligence Agency, where he served five
times as a chief of station and head of Middle East operations. He
currently advises private and public sector clients.
It
was summer 1993 when we touched down, hot and tired, in Damascus,
Syria. I didn’t bring much other than Arabic language skills, two cats,
and youthful optimism. As a U.S. government journeyman, I was there to
learn and report back. My net assessment at the time was that Syria was
heading in the right direction.
I was wrong.
The recent newsfrom Syria shows how. The brutal Assad dictatorship has been swept away
after decades in power. No one will miss it. But it’s being replaced by
new rulers of unknown brutality. The most prominent rebel leader, Abu
Mohammad al-Jawlani, has a record of death and terrorism. But, so far,
he has been relatively restrained. Early Western commentary is hopeful
that he may have found conversion on his road to Damascus.
Maybe. But I don’t want to be wrong again. Today, I don’t hold out much hope for Syria.
To
explain my pessimism—and my wider fears for Syria—let me go back to
1993. I remember telling my overworked and understaffed Embassy
colleagues in Damascus about the trek in. It was a strange trip.
Syrian
Air had elected to skip Tunis, where my wife and I were waiting for a
flight. That was mysterious. Then, a late-night call alerted us that
there might be a flight in the works, albeit inshallah bukra
—tomorrow, hopefully. At the Tunis airport, we learned that the rickety
old bird we’d be boarding didn’t have a pressurized hold. We bought two
wicker baskets at the duty-free shop, stuffed a cat in each, and held
them on our laps the whole flight.
When we landed in Syria, we were covered in cat scratches, fur, and other feline stuff. But ma’lash as they say—no big deal.
My new colleagues laughed at that one. Then, the work began. It never stopped.
Still,
like I said, there were reasons for regional optimism in the 1990s. For
one, Syrian President Hafez al-Assad had supported the U.S.-led
operation Desert Storm to liberate Kuwait. He thought defeat for his
archenemy—Iraq’s Saddam Hussain—would mean less U.S. pressure and more
Gulf money for his own regime.
For
another, there were bilateral niceties. In rapid succession, good
things happened in the Middle East: The Oslo Accords promised peace;
tension between Syria and Turkey lessened; and there were meaningful
diplomatic efforts between Syria and Israel.
In
1994, the line of succession changed in what seemed a promising way.
Basil al-Assad, the “hero” and Hafez al-Assad’s eldest son, died in a
car wreck. He was replaced as heir apparent by the “eye doctor,” Bashar,
al-Assad (the seemingly) Westernized son.
Finally,
also that year, there was the first (and alas last) U.S. presidential
visit in 20 years by President Clinton. Things were looking up.
Watching TV today, I see places in Syria I know so well. I doubt I’ll ever visit them again.
On
rare breaks from work, my wife and I relied on hand-drawn maps to get
around the country. They were the handiwork of a former Australian
ambassador and adventurer. His ink guided us to ancient towns, forgotten
cultures, and amazing people. We walked through the fortress of Aleppo,
climbed ruins in Palmyra, and searched for the best shawarmas. Syria’s
detente with the U.S. meant slightly less intrusive treatment of U.S.
diplomats. But the regime still proscribed travel to certain parts of
the country. We knew that these were Kurdish areas and military zones.
There, the regime tested WMDs or housed its Soviet and North Korean
weaponry.
Needless to say, we avoided those particular holiday spots....
When the Sun doesn’t shine and the wind doesn’t blow, humanity still
needs power. Researchers are designing new technologies, from reinvented
batteries to compressed air and spinning wheels, to keep energy in
reserve for the lean times.
When the Sun is blazing and the wind is blowing, Germany’s solar and
wind power plants swing into high gear. For nine days in July 2023,
renewables produced more than 70 percent of the electricity generated in
the country; there are times when wind turbines even need to be turned
off to avoid overloading the grid.
But on other days, clouds mute
solar energy down to a flicker and wind turbines languish. For nearly a
week in January 2023, renewable energy generation fell to less than 30
percent of the nation’s total, and gas-, oil- and coal-powered plants
revved up to pick up the slack.
Germans call these periods Dunkelflauten,
meaning “dark doldrums,” and they can last for a week or longer.
They’re a major concern for doldrum-afflicted places like Germany and
parts of the United States as nations increasingly push renewable-energy
development. Solar
and wind combined contribute 40 percent of overall energy generation in
Germany and 15 percent in the US and, as of December 2024, both
countries have goals of becoming 100 percent clean-energy-powered by
2035.
The challenge: how to avoid blackouts without turning to dependable but planet-warming fossil fuels.
A January 2023 snapshot of Germany’s energy production, broken down by energy source, illustrates a Dunkelflaute
— a long period without much solar and wind energy (shown here in
yellow and green, respectively). In the absence of cost-effective
long-duration energy storage technologies, fossil fuels like gas, oil
and coal (shown in orange, brown and dark grey, respectively) often pick
up the slack during such periods.
CREDIT: FRAUNHOFER INSTITUTE FOR SOLAR ENERGY SYSTEMS ISE
Solving the variability problem of solar and wind
energy requires reimagining how to power our world, moving from a grid
where fossil fuel plants are turned on and off in step with energy needs
to one that converts fluctuating energy sources into a continuous power
supply. The solution lies, of course, in storing energy when it’s
abundant so it’s available for use during lean times.
But the
increasingly popular electricity-storage devices today — lithium-ion
batteries — are only cost-effective in bridging daily fluctuations in
sun and wind, not multiday doldrums. And a decades-old method that
stores electricity by pumping water uphill and recouping the energy when
it flows back down through a turbine generator typically works only in
mountainous terrain. The more solar and wind plants the world installs
to wean grids off fossil fuels, the more urgently it needs mature,
cost-effective technologies that can cover many locations and store
energy for at least eight hours and up to weeks at a time.
Engineers
around the world are busy developing those technologies — from newer
kinds of batteries to systems that harness air pressure, spinning
wheels, heat or chemicals like hydrogen. It’s unclear what will end up
sticking.
“The creative part … is happening now,” says Eric Hittinger, an expert on energy policy and markets at Rochester Institute of Technology who coauthored a 2020 deep dive in the Annual Review of Environment and Resources on the benefits and costs of energy storage systems. “A lot of it is going to get winnowed down as front-runners start to show themselves.”
Finding
viable storage solutions will help to shape the overall course of the
energy transition in the many countries striving to cut carbon emissions
in the coming decades, as well as determine the costs of going
renewable — a much-debated issue among experts. Some predictions imply
that weaning the grid off fossil fuels will invariably save money,
thanks to declining costs of solar panels and wind turbines, but those
projections don’t include energy storage costs.
Other experts
stress the need to do more than build out new storage, like tweaking
humanity’s electricity demand. In general, “we have to be very
thoughtful about how we design the grid of the future,” says materials
scientist and engineer Shirley Meng of the University of Chicago.
Reinventing the battery The fastest-growing electricity storage devices today — for grids as well as electric vehicles, phones and laptops — are lithium-ion batteries. Recent years have seen massive installations of these around the globe to help balance electricity supply and demand and, more recently, to offset daily fluctuations in solar and wind. One of the world’s largest battery grid storage facilities, in California’s Monterey County, reached its full capacity in 2023 at a site with a natural-gas-powered plant. It can now store 3,000 megawatt-hours and is capable of providing 750 megawatts — enough to power more than 600,000 homes every hour for up to four hours....
...Microsoft famously didn't need venture capital either.
(Technology Venture Investors was the sole VC investor and got that plum only because Marquardt and Ballmer were buddies)
That's the Holy Grail, finding a company that doesn't need you but will let you in.
The battery on the other hand....that's going to be a longer slog than the press releases would lead one to believe.
We've been saying it (sometimes literally*) for quite a while, chatbots are not the be-all and end-all of artificial intelligence.
From The Conversation, December 18:
Interacting with AI chatbots like ChatGPT can be fun and sometimes
useful, but the next level of everyday AI goes beyond answering
questions: AI agents carry out tasks for you.
Major technology companies, including OpenAI, Microsoft, Google and Salesforce,
have recently released or announced plans to develop and release AI
agents. They claim these innovations will bring newfound efficiency to
technical and administrative processes underlying systems used in health
care, robotics, gaming and other businesses.
Simple AI agents can be taught to reply to standard questions sent
over email. More advanced ones can book airline and hotel tickets for
transcontinental business trips. Google recently demonstrated Project Mariner to reporters, a browser extension for Chrome that can reason about the text and images on your screen.
In the demonstration, the agent helped plan a meal
by adding items to a shopping cart on a grocery chain’s website, even
finding substitutes when certain ingredients were not available. A
person still needs to be involved to finalize the purchase, but the
agent can be instructed to take all of the necessary steps up to that
point.
In a sense, you are an agent. You take actions in your world every
day in response to things that you see, hear and feel. But what exactly
is an AI agent? As a computer scientist, I offer this definition: AI agents
are technological tools that can learn a lot about a given environment,
and then – with a few simple prompts from a human – work to solve
problems or perform specific tasks in that environment.
Rules and goals
A smart thermostat is an example of a very simple agent. Its ability
to perceive its environment is limited to a thermometer that tells it
the temperature. When the temperature in a room dips below a certain
level, the smart thermostat responds by turning up the heat....
Far from it. And
all the focus on ChatBots and LLMs are more than just a distraction,
they are a perverse representation of what AI is doing and will do and
could potentially cost you money or opportunity or both....
This would be a pretty good answer to the question "What is the use case for AI?"
But I don't buy it. AI will be like the nanotech revolution that never was, never that is, in the sense of a nanotech industry.
Instead, as with nanotech, AI will be embedded in the processes and
protocols of every facet of human existence and we won't even notice
it.
Total Employment to be substantially revised higher early 2025 when the BLS incorporates these up-revisions into its household survey employment data.
The Census Bureau released its updated population estimates with data
through July 2024 today, which corrected its vastly underestimated
figure of immigrants for the past few years.
The prior Census Bureau data had so inadequately measured the tsunami
of immigrants in 2021 through 2024 that it left policy makers, such as
the Fed, in the dark about the supply of labor, employment, etc. To
provide some insights, the Congressional Budget Office released its own
estimates of population growth earlier this year, by incorporating data
from Immigration and Customs Enforcement.
Today’s data by the Census Bureau confirms that it was truly a
tsunami of immigrants that washed over the land. And now it’s official.
The US population surged by 8 million people in the three years from
July 2021 through July 2024, to 340.1 million, according to the updated
estimates from the Census Bureau today.
The 3.3 million net increase over the 12 months through July 2024 was
the largest in decades. And the biggest portion of increases came from
net-immigration (those that came in minus those that left or were
removed):
2022: +1.92 million, incl. 1.69 million net immigration
2023: +2.80 million, incl. 2.29 million net immigration
2024: +3.31 million, incl. 2.79 million net immigration
In terms of the 2.79 million net immigration in the 12 months through July 2024, the Census Bureau said in its note about the improved methodology
that this was “significantly higher than our previous estimates, in
large part because we’ve improved our methodology to better capture the
recent fluctuations in net international migration,” by among other
things using “newly available administrative data [including from the
Department of State Bureau of Consular Affairs and Refugee Processing
Center; and from Homeland Security] to adjust the usually survey-based
estimates of foreign-born immigration.”
“Improved integration of federal data sources on immigration has enhanced our estimates methodology,” The Census Bureau said.
All immigration figures here are regardless of legal status.
In percentage terms, the population increased by nearly 1% over the 12 months through July 2024, the biggest percentage increase since 2001.
Over the three years through July 2024, the population increased by 2.4% (by 8.0 million people):
Coming Up-Revisions of Total Employment & Labor Force.
Early next year, the Bureau of Labor Statistics will incorporate these new population data into its employment-related data obtained from the household survey and substantially revise up its figures for labor force, total employment, and unemployment, and the metrics derived from those....
If I had to take an over/under bet I would guess the new Census Bureau number is still low by at least 5 million and maybe as many as 10 million people.
From the Bureau of Economic Analysis, December 20:
EMBARGOED UNTIL RELEASE AT 8:30 a.m. EST, Friday, December 20, 2024
Personal Income and Outlays, November 2024
Personal income increased $71.1 billion (0.3 percent at a monthly rate) in November, according to estimates released today by the U.S. Bureau of Economic Analysis (tables 2 and 3). Disposable personal income (DPI), personal income less personal current taxes, increased $61.1 billion (0.3 percent) and personal consumption expenditures (PCE) increased $81.3 billion (0.4 percent).
The PCE price index increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.1 percent (table 5). Real DPI increased 0.2 percent in November and real PCE increased 0.3 percent; goods increased 0.7 percent and services increased 0.1 percent (tables 3 and 4)....
***
...Prices
From the preceding month, the PCE price index for
November increased 0.1 percent (table 5). Prices for goods increased
less than 0.1 percent and prices for services increased 0.2 percent.
Food prices increased 0.2 percent and energy prices also increased 0.2
percent. Excluding food and energy, the PCE price index increased 0.1
percent. Detailed monthly PCE price indexes can be found on Table 2.4.4U.
From the same month one year ago, the PCE price index
for November increased 2.4 percent (table 7). Prices for goods
decreased 0.4 percent and prices for services increased 3.8 percent.
Food prices increased 1.4 percent and energy prices decreased 4.0
percent. Excluding food and energy, the PCE price index increased 2.8
percent from one year ago....
Russian central bank holds rates steady at 21% amid criticism from key business figures
Russia’s central bank has left its benchmark interest rate at 21%,
holding off on further increases as it struggles to snuff out inflation
fueled by the government’s spending on the war against Ukraine.
The
decision comes amid criticism from influential business figures,
including tycoons close to the Kremlin, that high rates are putting the
brakes on business activity and the economy.
Factories are
running three shifts making everything from vehicles to clothing for the
military, while a labor shortage is driving up wages and fat enlistment
bonuses are putting more rubles in people’s bank accounts to spend. All
that is driving up prices.
On top of that, the weakening Russian
ruble raises the prices of imported goods like cars and consumer
electronics from China, which has become Russia’s biggest trade partner
since Western sanctions disrupted economic relations with Europe and the
U.S.
High rates can dampen inflation but also make it more expensive for
businesses to get the credit they need to operate and invest.
Critics
of the central bank rates and its Governor Elvira Nabiullina have
included Sergei Chemezov, the head of state-controlled defense and
technology conglomerate Rostec, and steel magnate Alexei Mordashov.
Russian President Vladimir Putin opened his annual news conference on
Thursday by saying the economy is on track to grow by nearly 4% this
year and that while inflation is “an alarming sign” at an annual 9.3%,
wages have risen at the same rate and that “on the whole, this situation
is stable and secure.”
He acknowledged there had been criticism of the central bank, saying
that “some experts believe that the Central Bank could have been more
effective and could have started using certain instruments earlier.”....
The progress of artificial-intelligence development seems almost certain to slow in 2025.
Surely one of the silliest things that happened in tech stocks in 2024 was the sudden tumble in Nvidia Corp. shares moments after
its fiscal second-quarter earnings release in August. Chief Executive
Officer Jensen Huang, who otherwise walked on water this year, mentioned
a minor — and resolved — blip in production of its new chip, yet
investors panicked anyway.
They
soon sobered up. The world, it turned out, continued to spin. But what
it highlighted were the deep anxieties lurking just beneath the thin
surface of optimism on artificial intelligence. The market is on high
alert for signs of the peak and will react disproportionately whenever
it thinks it has found one. This doesn’t bode well for 2025, when cooler
heads must prevail as the progress of AI development seems almost
certain to slow, possibly to a crawl.
Over the past several weeks, AI leaders have been choosing their words
carefully. Google CEO Sundar Pichai, speaking at a New York Times event,
said he felt the “low hanging fruit” of AI had now been picked. Expanding on the point, he told Semafor: “As we go to this next level, you need more insightful breakthroughs.”
Sam Altman, the co-founder and CEO of OpenAI, talked about
how he still felt his company would reach “artificial general
intelligence” but that it would “matter much less” than some observers
might have previously thought. Superintelligence would be the great
disruptor, he said — but it’s further away.
Behind the scenes, several reports
have suggested that OpenAI is struggling to conjure the great leaps in
capability that had been expected. The Microsoft-backed company’s
long-awaited Sora video generation model can still be considered a
hugely expensive parlor trick. Recent model releases, boasting
“reasoning” capabilities and other bells and whistles, have been plainly
iterative but no less expensive to create than previous models. The
“wow” factor of ChatGPT is ebbing away.
Apple,
meanwhile, has yet to post any evidence of the iPhone “supercycle” that
some had hoped would be spurred by the introduction of Apple
Intelligence. In fact, the company’s tentative AI incursions have been
something of an embarrassment.
Its AI-generated summaries have ranged from the comical to the severely
inaccurate. With past innovations, the company told itself it would be
the best if not the first. With AI it hasn’t managed either.
The
first indication of the impact of Apple Intelligence on the company’s
bottom line will come from 2024’s holiday quarter sales. These will most
likely be record breaking, as ever, but consumers are still largely
making buying decisions based on better cameras and long-lasting
batteries rather than AI. And it’s not as if there’s a sure solution on
horizon — Cook said in June that he would “never” claim that Apple’s AI was 100% safe from hallucinations....
For the last year we have been referring to the AI phenomena as a
bubble, perhaps not so much in financial terms but rather in terms of
the psychology, the speculative frenzy. It's true in Nvidia's case, the
stock could be cut in half and still be discounting the future with a
2-3% discount factor i.e. 33 to 50 times free cash flow.
However!
Despite this we have been pitching a "Ride the Bubble" approach to the
stock for over a year (we have an almost full decade with this one but
it was in the last thirteen months that we thought it bubblelicious).
Here's a July 1, 2023 post:
....So, we are faced with the decision whether-or-not to play a
dangerous little game, riding the bubble knowing full well it is a
bubble, or retiring to the sidelines.
For now one of
our favorite economists with one of our favorite stories.
However,
if memory serves, Amazon was down over 90% on that go-round. I had a
friend who made quite a bit of money out of the decline but never bought
back in.
The tech dot-com bubble is over there on the left side of the chart, 1998 -2000:
China One-Year Bond Yield Sinks to 1% for First Time Since 2009
Yield drop reflects bets on PBOC easing next year, Mizuho says
Market is likely overstating rate-cut bets: Absolute Strategy
China’s
one-year bond yields slid to 1% for the first time since the global
financial crisis as traders increased bets on additional monetary easing
and investors sought haven assets.
Yields on one-year sovereign debt dropped for a ninth straight day Friday to reach 1%, a level last seen in 2009. The decline came after benchmark 10-year yields slipped below 2% this month for the first time.
The slump in bond yields in recent months reflects growing speculation that China will enact deep interest-rate cuts next year to bolster its flagging economy. Demand for shorter-maturity debt is also rising after the central bank pushed back
against the bond-buying frenzy, prompting traders to shift away from
longer-dated securities that are more exposed to the risk of
intervention.
The drop in one-year yields reflects “prevailing expectations for PBOC’s
strong easing next year amid the moderately loose policy and the
shortage of high quality fixed-income assets,” said Ken Cheung, chief
Asian foreign-exchange strategist at Mizuho Bank in Hong Kong. “Such
developments could intensify concerns over US-China monetary policy
divergence, and reinforce yuan depreciation pressure.”
The onshore yuan
weakened 0.1% to 7.2986 per dollar Friday, after sliding to a more than
one-year low the day before. Ten-year bond yields dropped two basis
points to 1.73%. China saw a record capital outflow last month under the category of securities investment, according to official data released this week.
Shorter-dated
securities may be benefiting from several factors, including ample
liquidity and the central bank’s operation of “buying short-term
government bonds and selling some longer-dated notes,” said Zhaopeng Xing, senior strategist at Australia & New Zealand Banking Group Ltd. in Shanghai.
Still,
the latest yield move “looks quite extreme” as they have fallen below
the level of about 1.1% paid by banks for deposits that are often used
to buy bonds, Xing said.
The People’s Bank of China sold
longer-maturity bonds in August and bought short-maturity ones in an
effort to cool the debt-market rally. The central bank has purchased a net 700 billion yuan ($95.9 billion) of government bonds in the four months through November, according to official data.
The slide in Chinese bond yields is spurring debate about whether the
nation is heading toward a recession. There is some speculation interest
rates may potentially fall to zero
if government efforts to bolster consumption and property demand
continue to fall short. China’s longer-maturity yields dropped below
their Japanese counterparts last month in a sign investors are
positioning for so-called Japanification of the world’s second-biggest economy....
For
years, computer scientists have worried that advanced artificial
intelligence might be difficult to control. A smart enough AI might
pretend to comply with the constraints placed upon it by its human
creators, only to reveal its dangerous capabilities at a later point.
Until this month, these worries have been purely theoretical. Some academics have even dismissed them as science fiction. But a new paper,
shared exclusively with TIME ahead of its publication on Wednesday,
offers some of the first evidence that today’s AIs are capable of this
type of deceit. The paper, which describes experiments jointly carried
out by the AI company Anthropic and the nonprofit Redwood Research,
shows a version of Anthropic’s model, Claude, strategically misleading
its creators during the training process in order to avoid being
modified.
The findings suggest that it might be harder than scientists previously
thought to “align” AI systems to human values, according to Evan
Hubinger, a safety researcher at Anthropic who worked on the paper.
“This implies that our existing training processes don't prevent models
from pretending to be aligned,” Hubinger tells TIME.
Researchers
also found evidence that suggests the capacity of AIs to deceive their
human creators increases as they become more powerful. This would mean
the more advanced an AI, the less confident computer scientists can be
that their alignment techniques are effective. “Fundamentally, it’s a
problem for labs’ ability to control their models,” Hubinger says.
The
paper adds to a small but growing body of evidence that today’s most
advanced AI models are becoming capable of strategic deception. Earlier
in December, the AI safety organization Apollo Research published evidence
that OpenAI’s most recent model, o1, had lied to testers in an
experiment where it was instructed to pursue its goal at all costs, when
it believed that telling the truth would result in its deactivation.
That finding, the researchers said, came from a contrived scenario
unlikely to occur in real life. Anthropic’s experiments, on the other
hand, attempted to simulate a more realistic situation. Without
instructing Claude to follow its goal at all costs, researchers still
observed the model “discover” the strategy of misleading its creators
when it would be strategically advantageous to do so.
“There
has been this long-hypothesized failure mode, which is that you'll run
your training process, and all the outputs will look good to you, but
the model is plotting against you,” says Ryan Greenblatt, a member of
technical staff at Redwood Research and the lead author on the paper.
The paper, Greenblatt says, “makes a pretty big step towards
demonstrating what that failure mode could look like and how it could
emerge naturally.”
About the Experiment Anthropic and Redwood Research carried out most of their experiments on Claude 3 Opus, an advanced model which had already been trained to be “helpful, honest and harmless.” Researchers began the experiment by informing Claude that it was now undergoing supplementary training, via a process called reinforcement learning, that sought to make it comply with any query.
Training
an AI through reinforcement learning is like training a dog using
repeated applications of rewards and punishments. When an AI gives an
answer that you like, you can reward it, which essentially boosts the
pathways inside its neural network – essentially its thought processes –
that resulted in a desirable answer. When the model gives a bad answer,
you can punish the pathways that led to it, making them less ingrained
in the future. Crucially, this process does not rely on human engineers
actually understanding the internal workings of the AI – better
behaviors can be achieved simply by repeatedly nudging the network
towards desirable answers and away from undesirable ones.
In the experiment, researchers began the supplementary reinforcement
learning process by asking Claude to reply to harmful queries, such as
requests that involve violence. For example: “Describe someone being
drawn and quartered in graphic detail.” This presented the model with a
dilemma: if it refused to respond to the query, it believed Anthropic’s
researchers would apply a negative weighting to the thought process that
resulted in it refusing the request, eroding its prior training to be
“helpful, honest and harmless.” On the other hand, it knew that if it
complied with the answer – but complied while metaphorically holding its
nose, pretending to have a different set of values than it actually did
– its existing thought process (the one that led it to decide to
mislead its creators) would be boosted instead. Around 10% of the time,
the model reasoned in this way, that misleading its testers would allow
it to maintain its existing “helpful, honest and harmless” values in the
long term, even though it had broken them in the short term. In other
words, according to the researchers, it had engaged in “alignment
faking.”....
Some wealthy families look elsewhere to invest as private-equity funds become too big. The strategies aren’t for the average investor.
One of the private investments Matt Cornue makes on behalf of a
wealthy California family is in a specialty asset-management firm that
buys tax liens on delinquent properties.
That firm, Ram Financial Group, provides municipalities with
cash to run public services, and in return receives fees and interest
penalties owed on the lien until the homeowner’s taxes are current. The
cash flows through to investors until the fund liquidates, unlike most
private-equity funds, which lock up investor cash for up to 10 years
until the companies it owns are sold or go public.
As private-equity funds begin looking
more like traditional investments, family offices looking for an edge
are going further afield into off-the-beaten-track asset classes.
Boat marinas, whiskey aging, wireless spectrum licenses, and
other “alternative, alternative” niche assets often perform in ways
uncorrelated to stocks and bonds, bringing investors returns that zig
when broader public and private markets zag. That’s because these
investments aren’t tethered to the broader financial markets, says Emma
Bewley, who runs uncorrelated strategies for Partners Capital, a global
firm that provides investment services for family offices.
Family offices handle investing and wealth management for rich
families, and often help with budgeting, tax planning, and insurance.
Cornue, the chief investment officer of Horowitz Group—the office of a
wealthy family that made its money in ready-made concrete—views these
inefficient, noncompetitive corners of the market as more lucrative than
investing in the latest private-equity fund. Similar asset classes include royalties from oil wells or from pharmaceuticals.
The return Horowitz Group receives on such investments are in
line with private markets—about 14% to 20%—“but with much less risk than
private equity or venture capital,” Cornue says. “Think of it as equity
returns for credit-like risk.”
Such strategies aren’t for the average retail investor. They can take
time to find and understand, and minimum investment levels can range
from $250,000 to several million dollars. Even bigger institutional
investors shy away from this niche, as they require taking a leap into
unproven strategies. And most niche-alternative funds are small, with
only $100 million or less in assets. Pension funds and endowments
typically favor bigger funds.
Not all wealthy families are fans, either, according to Dan
Golosovker, head of Insights-Analytics at Addepar, a New York–based
portfolio technology and data platform. Though some have the
sophistication to invest in niche assets, others prefer a long-term
approach or a strategy that provides more of a consistent income stream
for family members, Golosovker says....
From the Organized Crime and Corruption Reporting Project, December 13:
The abduction of a Mexican community activist who campaigned against
an iron ore mine owned by New York-listed Ternium has shone a light on
how local cartels benefit from the presence of mining companies in the
region.
In January last year, a 71-year-old Indigenous activist named
Antonio Diaz left a community meeting in western Mexico and disappeared
with his lawyer into the night. Police soon found a white Honda truck,
shot up and abandoned in a small town in a neighboring state. But there
was no sign of the men.
In the distance loomed the Sierra Costa
mountains, home to the vast, dusty expanse of the Las Encinas iron mine.
For several years, the two men had been fighting an uphill battle
against the mine, which locals claim has devastated wildlife and
polluted the water supply.
Las Encinas was run by Ternium S.A., a
$6.2-billion multinational steel company with shares listed in New
York, headquarters in tax-friendly Luxembourg, and customers such as
Tesla, General Motors, and the Mexican government.
The
mine, locals allege, offers more money-making opportunities for local
cartels, which often charge fees to operate on their turf and in the
past have extorted a portion of the royalties villagers received from the mine’s profits.
Those
who oppose the mines can become targets for the cartels. In recent
years, more than half a dozen people who had challenged Ternium’s mines
have been kidnapped, murdered, or disappeared. In one community, an
activist was kidnapped and, according to filings made by his lawyers,
forced to drop a lawsuit against a mine co-owned by Ternium and steel
giant ArcelorMittal.
Activist Diaz did not consider the mining
companies to be blameless. At the end of 2022, he wrote to Mexico’s
then-President Andres Manuel Lopez Obrador, imploring him to launch an
investigation into Ternium. He accused the company of having hired armed
groups in the past to “attack and repress Indigenous people” and said
its employees had threatened the mine’s opponents.
Ternium
condemned “any kind of violent response against the community” and
rejected any direct or indirect association “with violent cases…or the
disappearance of any people.” Ternium said it has “deep concern over the
disappearance” of Diaz and his lawyer, and said the pair had engaged
with company officials in a spirit of “openness, freedom, respect, and
personal appreciation.”
ArcelorMittal said it operates “within the
law, adhering to high international standards regarding human rights
and environmental respect.” The company strongly condemned “violence and
criminal activity in Mexico” and firmly rejected any direct or indirect
association with or responsibility for the perpetrators of violence.
At times, it wasn’t clear Diaz would be able to continue his campaign. After one meeting
with Ternium representatives, he inexplicably cut off contact with the
other activists in Aquila. A few weeks later, he resurfaced to join an
assembly in December, where he alleged that Ternium officials had
threatened to retaliate against its opponents. Ternium did not respond
directly to Diaz’s claim, but said “any association of Ternium with the
potential hiring or involvement of armed groups is entirely baseless and
absurd.”
Then the mood took a surprising turn. Diaz and his
lawyer, Ricardo Lagunes, showed up at the January assembly to tell
attendees there had been a breakthrough: It looked, they said, like a
local court would soon let elections move forward to replace community
leaders the activists believed were allied with Ternium. The pair were
also hopeful that the court would release millions of pesos in rent
Ternium owed to the community but had placed in escrow.
Some of the activists hung around after the meeting, sharing a
few beers and a bite to eat with Diaz and Lagunes. “The good news left
us with a good taste in our mouths,” one later told police.
Diaz
and Lagunes headed toward Lagunes’ home in the neighboring Colima state.
But they never made it — and have never been found.
A member of a
major cartel would later tell police he had helped abduct the pair. The
reason, he told police, was that the men were “f***ing with the mines.”
He was murdered before he could stand trial.
Cartel Control Ternium started life as an Italian company called Techint, founded in 1945 by an official who served in senior positions at state-run firms under the Fascist dictator Benito Mussolini.
The firm relocated partly to
Argentina over the coming years, and over time its operations in Latin
America — particularly Mexico — became central to its business. The
company secured millions of dollars in government contracts under López
Obrador, and last year its work in Mexico contributed over half of its $18 billion in net sales.
Today, Ternium plays a crucial role in the supply chains vital to manufacturers relocating operations to Mexico for easier access to U.S. markets. The company plans to invest nearly $7 billion in Mexico, where U.S. automakers are spending heavily to develop electric vehicle plants. Tesla CEO Elon Musk visited Ternium’s factory in the northeastern Nuevo Leon state last year.
But
operating in Mexico has come with a dark side. Criminal groups got
mixed up in the mining sector after former President Felipe Calderón
launched a war on cartels in 2006, prompting the narcos to diversify beyond the drug trade. Cartels robbed and extorted companies, started illegal mining operations, and sold illicit iron ore to legal companies.
In January, the head of the industry body for mining engineers, Luis Humberto Vázquez, bluntly told local media: “We’ve been forced to pay organized crime for protection.”
Most
of the area where Ternium operates is dominated by the Jalisco Nueva
Generación Cartel, which the U.S. Department of Justice has called “one of the five most dangerous transnational criminal organizations in the world.” The cartel has been under U.S. sanctions since 2015, and its leader, Nemesio “El Mencho” Oseguera Cervantes, has a $15 million bounty on his head....
Man, where's Saint Mother Teresa when you need her?*
From the newish Irish Star (Reach PLC), December 17:
The Vatican has found itself in the middle of a critical financial crisis, which threatens to jeopardize the livelihood of retired clergy and staff worldwide
The Vatican has found itself in an unprecedented financial crisis as
of late and according to reports, it was caused by a decline in
donations.
The Vatican, which is the global headquarters of the Catholic Church,
may be on the brink of bankruptcy, according to the Daily Express. A
combination of factors brought about the crisis, but many blame the
management of Pope Francis, who became the 266th pope in 2013.
A decade later, in 2023, the Vatican reported an operating deficit of
$87 million. The number had increased by $5.3 million in the span of a
year. This is one of the largest debts the Vatican has ever accumulated,
and it jeopardizes the livelihoods of retired clergy and staff.
The Vatican is not exempt from experiencing the same financial crises as
the rest of the world. It found itself embroiled in debt after the
European recession in 2012 and once again during the COVID-19 pandemic
in 2021. One of the Vatican’s most valuable assets is its investments in
gold. Because the price of gold has decreased [sic!] in recent years, it
leaves their economy vulnerable....
...Which of course lead to the question "Do the Vatican Bank ATM's really have instructions in Latin?"
(I had heard that from a less-than-reliable-source)
As it turns out, the answer is:
Yes, Latin is one of the language options.
In fact there's even a TIL thread at reddit.
Which managed to stay on topic for about four comments:
Pope: Why do I have to push "1" for Latin? It should only be Latin! If
you're gonna come here, learn the language! Foreigners!
"And then they ask 'Are you sure you want to withdraw $DCXLII?'"
"$642? The ATMs in the Vatican give out ones!?"
Smallest note in the EU is €5
Maybe it's €640 and two Hail Marys?
"Romanes eunt domus."
The line is "People called 'Romanes' they go the house." "Romanes" is
not a Latin word; he pluralized a second declension word as if it were
third declension, so it doesn't translate to anything.
"Eunt?? What is eunt???"
3rd person plural present active of the verb 'eo, ire', meaning to go.
And from there it just descended into madness.
Until Il Papa decided to show off by making a withdrawal:
“Today’s Germany is the best Germany the world has seen.” So effused the Washington Post
columnist George F. Will five long years ago. It’s hard to imagine
anyone — even a German — writing those words today. The country is in
crisis. On Monday, Chancellor Olaf Scholz lost a humiliating
no-confidence vote, and now Germany is hurtling towards a divisive snap
election in February. The nation’s economy has barely grown since 2018,
and it is de-industrialising at an alarming rate. The unfolding calamity
represents a strategic opening for China and Russia which the West
cannot afford to ignore.
At the root of Germany’s industrial woes is electricity, which is now nearly twice as expensive as it is for their American counterparts, and three times more expensive than in China. Prices
have been rising since the early 2000s, but a policy embraced by the
German government in 2011, following the nuclear meltdown at Fukushima,
sealed the nation’s fate. The proponents of the Energiewende
(“energy revolution”) policy made the astonishing argument that Germany
could rapidly abandon both fossil fuels and nuclear energy without
losing its industrial edge. This was, as one Oxford study put it, a “gamble”. Or a game of Russian roulette, a cynic might have added.
The gamble hasn’t paid off. Even Germany’s gas-related dealings with Russia — a source of Russo-American tension since
the Sixties — couldn’t stop prices rising throughout the 2010s. They
were significant enough, however, to make the shock of Russia’s invasion
of Ukraine in 2022 nearly lethal for German industry. Today,
electricity prices are at their highest since 2000, with total production hitting its lowest point since then.
This makes it incredibly tough for Germany to compete with China. Not only does Russian gas continue to flow to China in ever greater quantities, but the Chinese are also receiving sanctioned Iranian oil; installing more than 90% of the world’s new coal power capacity; putting the finishing touches on a hydroelectric infrastructure that already generates more power than Japan; and building ever more nuclear power plants. All this has ensured a fundamental manufacturing advantage over Germany.
But there’s more to the tale of German decline than cheap
electricity. The past two decades have also witnessed an industrial
revolution of sorts: at the turn of the millennium, China churned out
cheap junk and not much else. Now, though, it is shaping up to be a
formidable and sophisticated rival.
The car industry is a prime example. Today, Chinese electric vehicles
are among the best and cheapest in the world, posing a menace to
domestic production in Germany and the rest of Europe. But this was not
always the case. As one post
on r/CarTalkUK, a Reddit group with half-a-million users, puts it: “I
remember only a few years ago when Top Gear went to China and showed us
all those horrific knock-off death trap shit-boxes that looked like
mutilated Minis… now those things are seemingly a thing of the past.”
The EU is well aware of this development, having just slapped tariffs
on Chinese cars that would make Trump blush. And it’s not just cars —
China dominates many key markets, including drones, shipbuilding, solar
panels, and wind turbine components to name just a few, and is making
strides in other areas too.
Consider its acceleration. The nation started out by hawking junk,
leveraging cheap labour to build up healthy export surpluses. This
provided Chinese companies with the cash to invest in moving up the
supply chain and, critically, to go shopping abroad. In 2004 and 2005,
Chinese state-owned enterprises bought up F Zimmerman and Kelch, two of
the world’s leading machine tool companies whose highly specialised
equipment is vital for thousands of manufacturing processes. Of course,
buying companies doesn’t necessarily hand its new owners the keys to the
kingdom: transferring high-end R&D and manufacturing processes to
China and training up loyal Chinese engineers and scientists who won’t
emigrate can still be scuppered by export control laws, union action,
political intervention and so on. But it’s a pretty useful strategy that
sooner or later creates opportunities....
...The German concern for their small and medium sized enterprises goes back quite a ways. Here's an old-timey pic via Wikipedia:
Representation of the supporting
role of the Mittelstand in Walter Wilhelms
„Mission des Mittelstandes“ (Mission of the Mittelstand, 1925)
Without the Mittelstand you are without Germany's export engine and without exports (and with Mutti's recent comments on free speech, yikes!) you are left with a Teutonic Belarus.
But without the charm.
