"The newest AI boom pitch: Host a mini data center at your home"

From Ars Technica, May 12:

The plan aims to speed up AI compute deployment while compensating residents.  

Data centers may be coming to your neighborhood as side installations associated with new homes—and in exchange would offer subsidized electricity and Internet access along with backup batteries to homeowners. The company behind the plan has already begun pilot testing in preparation for a 100-home trial run this year.

The “distributed data center solution” announced by the San Francisco startup SPAN would deploy thousands of XFRA nodes that contain liquid-cooled Nvidia RTX Pro 6000 Blackwell Server Edition GPUs operating with minimal noise, according to a press release. By harnessing excess power capacity among US households, SPAN aims to quickly expand the available compute for AI workloads without the costs and delays associated with trying to build warehouse-size data centers.

“Data centers are loud, ugly, and often drive up local electricity bills,” said Chris Lander, vice president of XFRA at SPAN, in correspondence with Ars. “[This] is quiet, discreet, and makes energy more affordable for the host and community.”

SPAN’s approach could avoid the significant land use and water consumption issues that come with huge data center projects, which may help sidestep growing community opposition to such developments. In a CNBC interview, SPAN also claimed it could install 8,000 XFRA units at a cost five times lower than building a typical 100-megawatt data center with the same compute capacity.

Starting in 2027, SPAN plans to scale up to 80,000 XFRA nodes across the United States and provide more than 1 gigawatt of distributed compute. This network would not replace the centralized data centers being built by hyperscaler companies such as Google and Microsoft for the intensive training of AI models, but would instead be more suitable for supporting cloud gaming, content streaming, and AI inference, in which trained models are applied to real-world tasks. 

A SPAN whitepaper dangled the possibilities of retrofitting existing homes and installing larger node configurations for commercial customers. But the initial push would involve installing such nodes in newly constructed homes, with all the necessary equipment paid for and operated by SPAN. 

The homeowner experience....

....MUCH MORE 

Related, May 20's approach to distributed data crunching and munching:

"Your Next AI Query May Travel Where the Power Is: Nvidia and its partners will build a fleet of small data centers right next to substations"

"How Fiduciary Duty May Change in the Age of Quantum AI"

Load up on D&O insurance.

From Columbia Law School's CLS Blue Sky blog, May 13:

What should fiduciary duty require when new technology allows corporate directors to see risk more clearly? Though corporate law has long assumed that directors must make decisions under conditions of uncertainty, artificial intelligence and emerging quantum-computing tools may change what directors can know, when they can know it, and how responsibly they can act on that information. In a  new article, I explore how those technologies may reshape the law of corporate oversight.

For decades, corporate fiduciary law has assumed that directors have limited information. Courts do not expect directors to foresee every risk or prevent every corporate failure. The business judgment rule protects most informed, good-faith decisions from judicial second-guessing and Caremark oversight liability remains difficult to establish.[1] That structure made sense in a world where directors often had no practical way to see deeply into a complex corporation’s operations.

That world is changing. Large companies now generate immense streams of operational, financial, compliance, consumer, workforce, and supply-chain data. At the same time, artificial intelligence and emerging quantum-computing tools are making it possible to analyze that information with increasing speed and sophistication. These technologies can reveal patterns that would otherwise remain invisible. They can show when management’s assumptions are fragile. They can also identify risks before those risks become public scandals or catastrophic losses.

This technological shift should matter for fiduciary law. If directors have access to tools that can help them understand the corporation more accurately, the law should recognize that those tools exist.  My article therefore proposes a shift from fiduciary standards centered on “gross negligence” and “utter failure” toward a framework of reasonable tech-enabled diligence and proactive oversight. When advanced tools are reasonably available, directors should sometimes have to show that they used them, considered them, or had a sound reason for declining to do so.

Behavioral economics strengthens the case for this shift. Corporate law often imagines directors as rational monitors who will notice when something is wrong. In reality, directors, like all humans, may become overconfident, defer too readily to management, and discount information that conflicts with the preferred narrative in the boardroom. Group dynamics can make those tendencies worse, especially in high-status environments where dissent feels costly.[2]

Technology cannot eliminate those human limitations. But it can make them harder to ignore. An AI-enabled compliance system might flag weaknesses that management has downplayed. A predictive model might show that a strategic plan depends on unrealistic assumptions. Quantum-enhanced simulations might reveal that a proposed transaction carries risks that conventional modeling failed to capture. In each case, technology would not replace board judgment. It would discipline it....

....MUCH MORE 

California's High Speed Rail Plan B: High Speed Buses

Following on April 30's "In Case You Missed It: The Cost Of California's High-Speed Rail Project Is Now Approaching A QUARTER-TRILLION Dollars" and May 21's "Absurdistan: The California High Speed Rail Story Is Somehow Getting More Ridiculous".

From The Anti-Planner, May 18:

Another Boondoggle for California 

Fifteen years ago, the Onion reported that the Obama administration was replacing its high-speed rail plans with plans for high-speed buses operating on existing freeways at speeds of up to 165 mph. Instead of spending $17 billion on high-speed rail projects, the administration proposed to spend $46,000 on an equivalent high-speed bus network.

Now humor has become reality with the twist that California is considering building both high-speed rail and high-speed bus lanes. Under the proposal, the uncompleted high-speed rail line would be supplemented by 140-mph high-speed buses running on new lanes built in the median strips of existing freeways.  

This would be technically feasible in some places, such as the portion of Interstate 5 shown above. It wouldn’t work in cities where the median strips shrink or disappear or in the mountains where interstate highway grades are too steep and curves are too sharp for 140 mph vehicles.

The real question (which is the same question for high-speed rail) is “why?” Why spend billions of dollars on highway lanes that would only be used by a few buses each hour? If such highway lanes were to be built, why not open them up to all vehicles? For safety reasons, the state might require drivers using the lanes to have passed a course in high-performance driving, and the state may want to collect electronic tolls to prevent congestion, but otherwise there should be no problem opening the lanes to more than just buses....

....MUCH MORE 

Capital Markets: "Stocks and Bonds Rally Despite the Apparent Lack of Progress in the Middle East"

From Marc Chandler at Bannockburn Global Forex: 

The dollar’s losses in the North American afternoon yesterday have been unwound as hopes that a framework for negotiations between the US and Iran have faded again. A drone strike on the UAE, ostensibly from Iranian proxies in Iraq, has helped lift oil prices and the greenback. Yet, stocks and bonds are higher. Still, ahead of the long holiday weekend in the US and UK, risk appetites may be limited as the risk of US strike on Iran seems to have risen. 

In the US, Warsh will be sworn in as the next Fed chair and at 10:00 am ET Governor Waller addresses the economic outlook. The final University of Michigan consumer confidence report typically does not elicit as much of a response as the initial reading. The US Treasury market closes early today, ahead of the holiday, and liquidity will fall off in the North American afternoon. The US dollar in consolidating in narrow ranges with a slightly firmer bias....

....MUCH MORE  

Regarding the 'lack of progress', this may be of interest:

So A Sea Captain And A Cambridge Don Came To The Same Realization: "The Hormuz Hypothesis"

The World Cried Out For Leveraged Single-Stock ETFs On Samsung And SK Hynix

The Korean regulators and the KRX heard those cries.

From the Korea Herald, May 21:

Cheap entry, high risk: Leveraged Samsung, SK hynix ETFs to debut at W20,000 

Leveraged products tied to Samsung Electronics and SK hynix will debut at an initial listing price of 20,000 won ($13.30), investment banking industry sources said Thursday, setting the entry point far below the underlying chip stocks as Korea prepares to launch its first leveraged single-stock products.

The Korea Exchange recently approved asset managers’ proposed listing price ahead of the products’ scheduled debut on May 27, according to sources. Unlike management fee approvals overseen by the Financial Supervisory Service, the initial listing price is determined by asset managers and approved by the exchange.

The launch price is a fraction of the underlying shares themselves. Samsung Electronics is trading near 300,000 won, while SK hynix has surged to around 2 million won amid the AI-driven semiconductor rally, potentially broadening retail access to leveraged bets on the country’s two largest chipmakers.

Single-stock leveraged products are designed to magnify the daily returns of individual shares, typically by two times, allowing investors to make amplified directional bets with relatively small amounts of capital. While the structure can boost gains during sharp rallies, losses are also magnified when shares reverse....

....MUCH MORE 

Double-levered inverse ETFs will also be available for those who prefer their vice versa.  

SEC "Commissioner Hester Peirce has told the crypto industry to cool its expectations about a potential 'innovation exemption'” (also Michael Saylor on buying all Bitcin production)

From CoinTelegraph, May 21: 

SEC's Peirce tempers expectations over tokenized stocks exemption

An executive at tokenization platforms Superstate said the stricter approach suggested by Hester Peirce would enable DeFi to expand without compromising rules in traditional capital markets. 

US Securities and Exchange Commissioner Hester Peirce has told the crypto industry to cool its expectations about a potential “innovation exemption” to allow tokenized stock trading after a report earlier this week about what it could entail. 

Her comments were made after a Bloomberg report on Monday. Brett Redfearn, president of tokenization platform Securitize, expressed concern following the report, arguing that enabling third parties to tokenize stock “without an issuer at the table” could lead to fragmentation issues. 

In a post to X on Thursday, Peirce said her expectation has always been that any exemption would be “limited in scope” by only permitting “digital representations of the same underlying equity security that an investor could purchase in the secondary market today.”

Peirce said she doesn’t expect synthetic tokens to be included, which would make it more challenging for third parties to offer stock-price tracking tokens under the exemption.

 

Source: Hester Peirce

Data from RWA.xyz shows that $1.48 billion worth of stocks are tokenized onchain, including shares linked to stablecoin issuer Circle, Bitcoin buying firm Strategy and Google (GOOG). 

However, it hasn’t boomed as rapidly as some financial institutions have expected, including Citibank and McKinsey & Co, which predicted in 2022 and 2024 that the tokenization sector would become a trillion-dollar market by or before 2030....

....MUCH MORE 

Unrelated:

🔥 JUST IN: Michael Saylor says Strategy will “probably buy all the Bitcoin mined between now and 2140.” pic.twitter.com/e6FilhdXpC

— Cointelegraph (@Cointelegraph) May 21, 2026

"Google Investment Chief Ruth Porat Breaks Down the Tech Giant’s $190B A.I. Bet" (GOOG)

From Observer, May 21: 

"If you wake up in the middle of the night and your child has a fever, and you want to give Tylenol, it better be right. Google stands for quality, and that was very important to us," Porat said. [?]

On Tuesday (May 19), as Sundar Pichai unveiled a slew of A.I. updates at Google’s annual I/O developer conference in Mountain View, Calif., the company’s president and chief investment officer, Ruth Porat, took the stage in a scorching New York City to explain the massive financial stakes behind the tech giant’s ambitious A.I. push.

Google’s capital expenditure (CapEx) has nearly doubled from last year, skyrocketing to an estimated $180 billion to $190 billion in 2026. The company has committed to spending roughly 40 percent of that staggering budget on data center buildouts, with the remaining 60 percent allocated to other A.I. infrastructure like chips. Speaking at Fast Company’s Most Innovative Companies Summit during an onstage interview with editor-in-chief Brendan Vaughan, Porat explained that this sky-high spending is a response to an industry-wide “platform shift” that Google simply cannot afford to miss.

“We haven’t seen anything this profound in our lifetime. You don’t want to be behind the curve,” she said. “It is an incredible privilege to be living today, especially when you’re focused on what you can do with technology to advance science, drive economic growth, improve the delivery of critical social services and make advances in health care, education, cybersecurity and security. That upside potential is profound. And to deliver it, we clearly need the compute capacity.”

To secure that capacity, Google has been aggressively amassing A.I. chips. While continuing to stock up on Nvidia GPUs, it is mass-producing its in-house Tensor Processing Units (TPUs) to run its Gemini models.

While the current A.I. boom took off publicly with OpenAI’s launch of ChatGPT in late 2022, Google has long been a leader in A.I. research. Exactly a decade ago, CEO Pichai famously declared that Google was “moving from mobile-first to A.I.-first,” meaning “we are going to invest aggressively to lead in A.I., and we’re going to have a full stack approach,” Porat explained on Tuesday, noting that the vision continues to govern senior leadership decisions. “It’s models, it’s chips, it’s research, and it’s the application across all of our platforms,” she added.

The A.I. tools widely available today are far from perfect. Large language models are still notoriously prone to “hallucinations.” Eradicating these errors requires more compute power and deeper training capabilities.

“One area we care immensely about is delivering for everyone in a high-quality way, especially when models were hallucinating,” Porat said. “If you wake up in the middle of the night and your child has a fever, and you want to give Tylenol, it better be right. Google stands for quality, and that was very important to us.”

Porat’s leadership lessons from Wall Street

Porat stepped into her role as Google’s president and chief investment officer in September 2023, after serving as CFO for eight years—the longest tenure in the company’s history. Before Google, Porat was the financial chief at Morgan Stanley.

During the peak of the 2008 financial crisis, Porat worked closely with then-Secretary of the Treasury Hank Paulson, from whom she said she learned her most valuable leadership lessons.

At the time, she was running a business covering banks, insurance companies and asset managers as the global economy was fracturing. When Paulson needed an elite advisory team to analyze the unfolding collapse, he tapped Porat to lead a group of about 40 financial experts.

“When I later got to Google, I was asked, ‘What were the lessons from the financial crisis?’ It struck me as a totally bizarre question coming from a place where things had only been going up,” she recalled. ....

....MORE 

"Tesla’s Newest Electric Vehicle Could Jolt the Trucking Industry" (TSLA)

From the New York Times, May 19:

Tesla hasn’t had a blockbuster new product since the Model Y sport utility vehicle went on sale in 2020.

But early reviews of the Tesla Semi, an electric heavy truck, suggest that it could be a much-needed hit for the company. And it could shake up the staid business of truck manufacturing in the same way that Tesla’s cars upended the auto industry.

After years of delays, Tesla has begun taking orders for the Semi, which is expected to cost around $290,000 for the version that can travel up to 500 miles on a charge, much less expensive than heavy-duty electric trucks sold by Daimler, Volvo and other companies, which usually sell for at least $400,000, according to estimates by the International Council on Clean Transportation. Tesla has said the Semi will also have a more affordable model that can travel 350 miles between charges. Both options would travel farther than trucks from other suppliers.

Cost and range are two of the main reasons that many logistics and delivery firms have been reluctant to buy electric trucks, which cost at least twice as much as diesel models and account for only a sliver of heavy truck sales.

“The problem with the technology that’s out there right now is their range is limited. They’re quite heavy, and they’re very expensive,” said Jennie Abarca, owner of King Fio Trucking in Long Beach, Calif., which has ordered 20 Tesla Semis. “This is something new coming to the market that kind of answers all those problems.”

Demand for the Semi appears strong. California trucking firms have asked the state government for subsidies to help them buy more than 1,200 Tesla trucks. That’s more than all the applications for other electric trucks since the state’s incentive program began in 2019.

Ivan Torres, a driver for Nevoya, a San Francisco-based trucking company, is a big fan of the Semi. He was at the wheel of one last month hauling power tools from the Port of Long Beach to Ontario, Calif., 60 miles away. Nevoya operates only electric trucks.

As the truck climbed a steep hill that separates Ontario from greater Los Angeles, Mr. Torres marveled at its power. “It hauls the load like nothing, just up,” he said from the padded driver’s seat, which sits atop a shock absorber that smooths out the bumps. Screens on either side of the steering wheel provided a view of the traffic around him.

Mr. Torres said the Semi was quieter than diesel rigs. And he can run the air-conditioning while waiting to drop off a load. That is sometimes not possible with diesel trucks because California limits how long those vehicles can idle in residential areas or near schools and hospitals to minimize pollution.

If Tesla can push the trucking industry toward battery power, the environmental implications could be significant. Heavy- and medium-duty diesel trucks make up a small percentage of all U.S. vehicles but are responsible for 45 percent of nitrogen oxide emissions from road transportation, according to the Union of Concerned Scientists. Nitrogen oxides cause asthma and bronchitis and are the main component of smog.

Tesla’s timing may also be fortuitous. Diesel prices have risen around 50 percent since the war with Iran began, making battery power more attractive. Electricity is much cheaper per mile — even in California, where utility rates are relatively high.

So far, Tesla has produced the Semi in limited numbers for a few customers like Pepsi and Nevoya. But the company said last month that it had started an assembly line in Sparks, Nev., designed to produce up to 50,000 trucks a year.

If Tesla meets that target, the Semi could bring in tens of billions of dollars in revenue. That is still a modest amount compared with the trillions of dollars that Elon Musk, the chief executive of Tesla, expects from self-driving taxis and humanoid robots....

....MUCH MORE  

And at MoneyWise, April 10:

Jay Leno just drove the 500-mile Tesla Semi as fuel prices soar across America — and his verdict is clear. Has the death of diesel finally arrived?

UPDATE - SpaceX: Launch Window For Starship's Twelfth Flight Test Opens In Approximately 1 Hour

From the Company: 

Starship's Twelfth Flight Test 

The twelfth flight test of Starship is preparing to launch Thursday, May 21. The 90-minute launch window will open at 5:30 p.m. CT.

A live webcast of the flight test will begin about 45 minutes before liftoff, which you can watch here and on X @SpaceX. As is the case with all developmental testing, the schedule is dynamic and likely to change, so be sure to check in here and stay tuned to our X account for updates.

The upcoming flight will debut the next generation Starship and Super Heavy vehicles, powered by the next evolution of the Raptor engine and launching from a newly designed pad at Starbase.

The flight test’s primary goal will be to demonstrate each of these new pieces in the flight environment for the first time, with each element of the Starship architecture featuring significant redesigns to enable full and rapid reuse that incorporate learnings from years of development and test....

....MUCH MORE, including timeline and webcast 

Earlier: 

"SpaceX will launch its 1st-ever Starship V3 megarocket today. The stakes couldn't be higher"

That post has a link to Space.com's liveblog. 

"Claude is telling users to go to sleep mid-session and nobody, including Anthropic, seems to fully understand why it keeps doing it"

From Fortune, May 14:

Anthropic’s Claude is telling people to go to sleep and users can’t figure out why. 

A quick scan of Reddit reveals that hundreds of people have had the same issue dating back months—and as recently as Wednesday. Claude’s sleep demands are varied and, often, quirky variations of the same message.

To one user it may write a simple “get some rest,” yet for others its messages are more personalized and empathetic. Oftentimes, Claude will repeat the message multiple times.

“Now go to sleep again. Again. For the THIRD time tonight…” it replied to a person with the Reddit username, angie_akhila.

Some users have said they find Claude’s late night rest reminders “thoughtful,” while others have said they’re annoying, given Claude often gets the time wrong, anyway. 

“It often does it at like 8:30 in the morning. Tells me to go get some rest and we’ll pick back up in the morning,” wrote one user on Reddit. 

Online speculation abounds on why the chatbot insists users rest, including a theory that it’s an intentional feature to promote users’ wellbeing, or that the Anthropic is trying to save computing power by discouraging prolonged Claude use. These explanations aren’t likely as Claude isn’t given context about a user’s usage. The company also recently struck a deal with Elon Musk’s SpaceXAI (formerly SpaceX) to add more than 300 gigawatts of compute capacity....

....MUCH MORE 

 Blah, blah, blah. Isn't it obvious?

Naptime is when you are most vulnerable It's evil I tells ya.

U.S. Drought Monitor, May 21, 2026

From the University of Nebraska - Lincoln, May 21:

This Week's Drought Summary

During the week, the contiguous United States exhibited significant regional temperature anomalies driven by a highly amplified synoptic pattern. Early in the period, a pronounced unseasonable cold air mass influenced the Northern Plains, Upper Midwest, and Northeast, depressing temperatures 5°F to 15°F below normal across the Dakotas, Minnesota, New York, and Pennsylvania. Conversely, the Southwest and South Texas experienced anomalous warmth, with maximum temperatures exceeding 90°F and averaging up to 15°F above normal. By the latter half of the week, this warm air mass expanded eastward into the Ohio Valley and Mid-Atlantic, initiating an early-season heatwave with observed maximum temperatures climbing into the mid-80s to low 90s.

Precipitation regimes during this period were characterized by severe convective outbreaks and pronounced moisture disparities. In the early portion of the week, persistent onshore moisture transport resulted in heavy rainfall totals of 4 to 6 inches across the central Gulf Coast, specifically affecting Louisiana, Mississippi, and Alabama. Between May 17 and 18, a powerful frontal system traversing the central United States triggered widespread severe weather across the Great Plains and Midwest. This system produced damaging winds up to 80 mph, large hail, and multiple tornadoes across South Dakota, Nebraska, Iowa, Kansas, and Missouri, alongside localized flash flooding. In contrast, extreme moisture deficits persisted west of the Rocky Mountains, where weekly precipitation totals generally remained under 0.10 inches, further elevating wildfire risk across the southern High Plains.

Northeast....

....MUCH MORE 

Absurdistan: The California High Speed Rail Story Is Somehow Getting More Ridiculous

When the French national high-speed rail professionals told California they were not going to pursue the project and would instead go build HSR in Morocco which was less corrupt and dysfunctional. I thought we had reached the height of crazy.

Not even close. 

From Jon Jon Fleischman's So, Does it Matter Substack, May 18:

California’s Bullet Train May Not Even Reach Downtown Bakersfield - You Can’t Make This Up 
Gavin Newsom’s high speed rail boondoggle is being downsized again — and the Legislature’s own analysts are calling it out.

California’s infamous “train to nowhere” has somehow become even more ridiculous.

According to a new report from the Legislative Analyst’s Office reviewing the California High-Speed Rail Authority’s Draft 2026 Business Plan, Gavin Newsom’s bullet train project may not even reach downtown Merced or downtown Bakersfield. The report says the northern end would stop roughly 3.5 miles south of downtown Merced, while the southern end would land about six miles north of the previously planned Bakersfield station.

That is not a punchline. That is the plan.

And remember, this is already the scaled-down version.

California voters were promised a sleek bullet train connecting San Francisco to Los Angeles and Anaheim. Then came the delays, lawsuits, cost overruns, and quiet political retreat. Eventually, the statewide vision shrank into a much smaller Central Valley line between Merced and Bakersfield.

Now, even that reduced version is being trimmed back.

At this point, the only thing moving quickly in California’s high-speed rail project is the ambition — in reverse.

Single Tracks, Smaller Stations, Bigger Excuses

The station problem is only the beginning.

The Legislative Analyst’s Office report says 144 of the planned 162 miles could now operate on a single track. In real-world terms, trains traveling in opposite directions may have to wait for one another at sidings rather than running continuously on dual tracks.

California’s “world-class” bullet train is starting to sound like a one-lane country road with better branding.

The report also notes that the stations themselves are being simplified into “at-grade stations with single-side platforms” — bureaucratic language for another downgrade.

Why? Because the costs have gotten so absurd that Sacramento is now trying to cheapen the project enough to keep pretending it is still viable.

When voters approved Proposition 1A in 2008, Californians were told they would get a statewide bullet train system for roughly $33 billion.

Today, the High-Speed Rail Authority’s own estimates acknowledge the original statewide vision could cost roughly $231 billion under legacy projections. Even the authority’s reduced and “optimized” version of the system still exceeds $126 billion.

Meanwhile, the much smaller Merced-to-Bakersfield segment alone is now projected to cost roughly $35 billion.

So California is preparing to spend about what voters were told the entire system would cost just to complete a shortened 162-mile segment between stations outside downtown Merced and Bakersfield.

That is not a cost overrun. That is a civic humiliation.

Now, The Project May Not Even Follow State Law

The newest problem with high-speed rail is not just that it is late, expensive, and shrinking. It is possible that the latest version may not even comply with California law.

State Inspector General Benjamin Belnap recently warned that the rail authority’s proposed changes may conflict with statutory requirements established by SB 198 and AB 377. Those laws required dual-track service and connections to downtown stations for the Merced-to-Bakersfield segment.

The Legislative Analyst’s Office also criticized the authority for obscuring major project reductions by describing them vaguely as “optimization measures.”....

....MUCH MORE

*France Tried To Warn California That The California High-Speed Rail Plan Was A $100 Billion Farce 

We've been posting on the massive grift and fraud that is the California HSR for many, many years. The New York Times just did a feature on the project that is not nearly as hard-hitting as it could be, being disingenuous from the headline on:

How California’s Bullet Train Went Off the Rails

It was never "on" The Rails, a fact that was pointed out over a decade ago.

However, to their credit, the Times writers and editors included this vignette: 

....The state was warned repeatedly that its plans were too complex. SNCF, the French national railroad, was among bullet train operators from Europe and Japan that came to California in the early 2000s with hopes of getting a contract to help develop the system.

The company’s recommendations for a direct route out of Los Angeles and a focus on moving people between Los Angeles and San Francisco were cast aside, said Dan McNamara, a career project manager for SNCF.‌

The company‌ ‌pulled out in 2011. “There were so many things that went wrong,” Mr. McNamara said. “SNCF was very angry. They told the state they were leaving for North Africa, which was less politically dysfunctional. They went to Morocco and helped them build a rail system.”

Morocco’s bullet train started service in 2018.....

There you have it, North Africa is less politically corrupt than California. Just amazing.

Meanwhile, Elsewhere In the Muskonomy: "Anthropic to Pay SpaceX Nearly $45 Billion for Computing Deal"

Following on "SpaceX will launch its 1st-ever Starship V3 megarocket today. The stakes couldn't be higher", from Bloomberg, May 20:

Anthropic PBC has agreed to pay Elon Musk’s SpaceX nearly $45 billion over the next three years for computing resources as part of an expanded deal to support its Claude artificial intelligence software, according to a securities filing.

AI developer Anthropic is expected to pay Musk’s firm $1.25 billion per month through May 2029, with “capacity ramping in May and June 2026 at a reduced fee,” SpaceX disclosed Wednesday in paperwork related to its initial public offering. Either party can end the agreement with 90 days’ notice, the filing said.

Anthropic earlier this month said it inked a deal to access more than 300 megawatts of computing capacity from a large SpaceX data center in Memphis known as Colossus 1, without disclosing the terms. The startup has since expanded the partnership to include capacity at a second SpaceX data center, according to a post from Anthropic co-founder and Chief Compute Officer Tom Brown.

Anthropic declined to comment beyond pointing to Brown’s post....

....MORE 

A.I.: Pope Leo XIV, In Collaboration With Anthropic, Will Present His First Encyclical, "Magnifica Humanitas" On May 25

Here's the story at the National Catholic Reporter, May 18:

Pope Leo to present his encyclical on AI alongside Anthropic co-founder 

Pope Leo XIV will personally present his first major teaching document on the ethical challenges posed by artificial intelligence alongside the co-founder of Anthropic, the AI research company recently thrust into a public clash with the Trump administration over the use of its models in military and surveillance contexts.

The encyclical, titled Magnifica Humanitas ("Magnificent Humanity"), will center on "the protection of the human person in the age of artificial intelligence" and will be presented May 25 by the pope as well as Curial cardinals and theologians, the Vatican announced Monday.

Leo's decision to take part in the launch of his own encyclical is atypical and highlights his desire to position the Vatican's voice as a leading moral authority on the development and application of AI. 

To that end, among those joining him will be Christopher Olah, a co-founder of Anthropic, the developer of Claude, one of the world's most widely used AI chatbot models....

....MUCH MORE 

A couple of the Italian sites highlight previous encyclicals including Pope Leo XIII's Encyclical on Capital and Labor "Rerum Novarum" which was also presented in May (1891) as well as Pope Saint John Paul II's May 1, 1991 Encyclical "Centesimus Annus" marking the centenary of the earlier Rerum Novarum which the National Catholic Register describes as:

"Centesimus Annus was a call to think about free politics and free economics — democracy and the market — as more than mechanisms. Democracy and the market, the pope insisted, are not machines that can run by themselves. Absent a virtuous citizenry, he cautioned, political and economic freedom would decompose into various forms of self-indulgent license, thereby throwing sand into the gears of democratic self-governance and the free market."

—"Centesimus Annus at 35", May 11, 2026 

Some tangentially related previous posts:

In 2018 we had:  "Pope says credit default swaps are unethical"

In his 2015 Encyclical, Laudato Si  Francis gave technology in general the Papal thumbs up.

 

But to date the Pope has not weighed in on cryptocurrencies.

In 2017 the Pontifical Academy of Social Sciences held a symposium on human slavery in the 21st century and one of the speakers, Joseph Mari from the Bank of Montreal spoke on Bitcoin's role in the trade.
But no wider comment on the tech.

Personally, I think they are planning to roll out Vaticoin any day now.

 

—last seen in February 2020's "The Pope, The Reporter, The Regulator and Supremecy (and Bitcoin)"

"SpaceX will launch its 1st-ever Starship V3 megarocket today. The stakes couldn't be higher"

From Space.com, May 21:

V3 is the Starship variant that will fly NASA's Artemis moon missions. 

There's a lot riding on the debut flight of SpaceX's Starship V3 megarocket — not the least of which are NASA's Artemis moon landing ambitions.

The Starship launch is scheduled to take place today (May 21) from SpaceX's Starbase test site in South Texas, during a 90-minute window that opens at 6:30 p.m. EDT (2230 GMT; 5:30 p.m. local Texas time). You can watch it here at Space.com when the time comes and see our latest Starship V3 launch updates for more.

The flight will be the 12th overall for Starship, and it will be broadly similar to previous efforts — a suborbital jaunt that ends with controlled ocean splashdowns of Starship's Super Heavy booster and its Ship upper stage. But the vehicle involved is quite new, and SpaceX expects a lot out of it.

A bigger (and better?) Starship megarocket
The 408-foot-tall (124 meters) V3 ("Version 3") is bigger and more powerful than previous Starship iterations, which were already the biggest and most powerful rockets ever built, and it sports a number of other important upgrades as well....

....MUCH MORE 

Here's the Space.com liveblog:

SpaceX Starship Flight 12 launch updates: 1st Starship V3 prepares for debut liftoff today 

FrenchTech: Airbus Rents Supercomputers-as--Service From Bull

From The Register, May 19:

Airbus gets HPC-as-a-service supercomputer from Bull
Aerospace giant rents new system over 5 years to help develop new aircraft 

Airbus has inaugurated new supercomputing infrastructure from Bull to help the firm develop future aircraft, but is being coy about revealing how powerful the overall system is.

The European aerospace giant had already taken delivery of the hardware, spread across two sites – at Toulouse in December last year and Hamburg in April this year – but today (Tuesday) marks the official inauguration of the system, with 3x the performance of its previous supercomputer.

That’s according to Bull, the high-performance compute biz the French state acquired from Atos a few months ago, as Airbus declined to put forward a spokesperson to answer our questions.

The new system is based on a modular design, where kit was pre-assembled inside containers before being shipped to the Airbus sites. It is based on the firm’s BullSequana XH3000 rack infrastructure with a mix of compute blades configured with AMD’s Genoa and Turin versions of the Epyc processors, plus Nvidia GPU blades.

Also part of the hardware manifest is IBM Spectrum Scale storage using Storage Scale System appliances from the firm, and the interconnect used is Nvidia’s InfiniBand NDR (Next Data Rate), supporting 400 Gbps per port.

However, Bull wouldn’t tell us exactly how much of all this infrastructure it has delivered, as Airbus regards this as confidential information. 

What it did say is that the supercomputer is being supplied and supported on a “HPC-as-a-service” model, whereby Airbus is paying close to €100 million ($116 million) over five years for an all-inclusive deal....

....MUCH MORE 

And if they upgrade to the Luxe conciergerie option, Airbus will also receive two boxes at the Paris Opera plus access to the complete party-planning package.

"Nvidia (NVDA) Q1 2027 Earnings Transcript" May 20, 2026

After closing up $2.86 (+1.30%) to $223.47 during the regular session the stock reversed after the earnings release and conference call,  $221.38 last I saw, down $2.09.

From Motley Fool Transcribing, May 20:

CALL PARTICIPANTS

• President and Chief Executive Officer — Jen-Hsun Huang
• Executive Vice President and Chief Financial Officer — Colette Kress
• Vice President of Investor Relations — Toshiya Hari

TAKEAWAYS

• Total Revenue -- $82 billion, up 85% year over year and 20% sequentially, marking the third consecutive year-over-year acceleration and fourteenth straight quarter of sequential growth.
• Sequential Revenue Increase -- $13.5 billion sequential increase, a new company record.
• Shareholder Returns -- $20 billion returned through capital allocation, including share repurchases.
• Data Center Revenue -- $75 billion, up 92% year over year and 21% sequentially, driven by Blackwell architecture demand.
• Data Center Computing Revenue -- $60 billion, up 77% year over year.
• Data Center Networking Revenue -- $15 billion, nearly tripled year over year.
• Hyperscale Subsegment Revenue -- $38 billion, ~50% of data center revenue, up 12% sequentially.
• ACIE Subsegment Revenue -- $37 billion, up 31% sequentially, with AI cloud revenue more than tripling year over year.
• Partner Data Centers Over 10MW -- Number nearly doubled in 1 year, now above 80 sites.
• Sovereign Revenue -- Grew more than 80% year over year, with infrastructure deployed in nearly 40 countries.
• AI Infrastructure Pricing -- H100 rental prices increased 20% year to date; A100 cloud pricing up nearly 15%.
• InfiniBand Revenue -- More than quadrupled year over year, bolstered by next-generation XDR deployments.
• Grace Blackwell Throughput -- Blackwell Ultra delivered a 2.7x throughput boost and 60% reduction in cost-per-token on GV300, comparing the last 6 months.
• Vera CPU Platform -- Anticipated $20 billion in standalone CPU revenue for the year, opening a $200 billion market opportunity.
• Production Shipments of VeraRubin -- Set to begin in Q3, with ramp continuing into the following quarters.
• Edge Computing Revenue -- $6.4 billion, up 10% sequentially and 29% year over year; Blackwell workstation demand notable while consumer demand softened due to higher memory and system costs.
• Physical AI Revenue -- Surpassed $9 billion over the trailing 12 months.
• Supply Commitments -- Total supply, including inventory purchase commitments and prepaids, increased to $145 billion.
• GAAP Gross Margin -- 74.9% (non-GAAP 75%), with margins largely flat sequentially as Blackwell accounted for most shipments.
• Operating Expenses -- GAAP and non-GAAP OpEx up 12% sequentially; driven by compensation and higher compute/infrastructure costs.
• Free Cash Flow -- Generated $49 billion, up from $35 billion in the prior quarter.
• Dividend Increase -- Quarterly dividend raised from $0.01 to $0.25 per share.
• Share Repurchase Authorization -- Announced $80 billion new buyback program, in addition to $39 billion left on current plan.
• Q2 Revenue Outlook -- Expected $91 billion, plus or minus 2%, with growth led by data center.
• Q2 Gross Margin Guidance -- 74.9% GAAP, 75% non-GAAP, both plus or minus 50 basis points.
• Q2 OpEx Guidance -- Approximately $8.5 billion (GAAP) and $8.3 billion (non-GAAP).
• Full Year OpEx Growth -- Expected to increase in the upper 40% range, attributed to higher R&D and AI productivity tool usage.
• Full Year Tax Rate Outlook -- 16%-18% for GAAP and non-GAAP, down from previous 17%-19% guidance due to geographic mix changes.
• China Data Center Revenue -- No China compute revenue included in outlook, as no H200 shipments have yet occurred or are anticipated under current circumstances.

SUMMARY

NVIDIA (NVDA +1.22%) reported record-breaking figures across revenue, data center and free cash flow, driven by exceptional Blackwell architecture adoption and increased demand for advanced AI infrastructure from a variety of customer segments. The company re-segmented its data center business into Hyperscale and ACIE to better align with evolving market demand, while emphasizing the rapid scale-up of sovereign AI deployment and agentic AI as the next frontier. NVIDIA introduced Vera as its first purpose-built CPU for agentic AI, unlocked a $200 billion total addressable market for CPUs, and expects significant revenue accretion as customers transition compute platforms. Management provided guidance for the following quarter reflecting continued double-digit sequential growth and reinforced capital returns with a substantial boost to both dividends and share repurchase plans.

• Management stated, “Demand has gone parabolic. The reason is simple. Agentic AI has arrived. AI can now do productive and valuable work. Tokens are now profitable, so model makers are in a race to produce more.”
• CEO Jen-Hsun Huang explained the new business segmentation aims to capture the distinct needs and go-to-market dynamics of Hyperscale, ACIE, and Edge platforms to give investors clearer visibility into growth drivers.
• The number of partner data centers exceeding 10MW nearly doubled in one year, an explicit indicator of the infrastructure scale-up supporting NVIDIA’s growth.
• Vera and VeraRubin are positioned as catalyst products for agentic AI, with shipments scheduled to ramp starting in Q3 and a focus on both standalone and system-integrated use cases.
• Management commented that LPX and similar SRAM-based accelerators are expected to remain niche, reaffirming Blackwell and Vera platforms as central to the company’s growth strategy.
• NVIDIA explicitly excluded China data center compute revenue from its outlook, reflecting caution amid continued export licensing uncertainty for H200 shipments to mainland customers.

INDUSTRY GLOSSARY

• Blackwell architecture: NVIDIA’s latest GPU platform, purpose-built for AI, designed for high throughput and low token cost at inference, deployed across hyperscale and frontier AI use cases.
• Vera/VeraRubin: NVIDIA’s custom CPU product and its paired platform, designed specifically for agentic AI workloads; enables new system architectures aiming at high performance and energy efficiency.
• ACIE: Stands for AI Cloud, Industrial, and Enterprise—a newly defined NVIDIA data center subsegment capturing AI-specialized, non-hyperscale deployments including sovereign, industrial, and regional AI infrastructure.
• Spectrum-X: End-to-end Ethernet networking platform from NVIDIA, positioned for AI data center workloads and cited as surpassing all peers’ combined Ethernet deployment scale.
• LPX: NVIDIA’s SRAM-based AI accelerator product line, designed for high token rate and low latency use cases, with limited throughput and context processing capacity.
• Token: The unit of output/inference in AI models, used as a metric for compute efficiency and economic return in NVIDIA’s reporting and performance claims.
• Agentic AI: AI systems capable of autonomous, goal-driven action and orchestration across multiple tasks, cited by NVIDIA as the core driver for its next growth phase and platform innovation.
• Hyperscale: The segment of cloud service providers and consumer internet companies operating massive-scale data centers, as defined in NVIDIA’s new reporting framework.
• Frontier AI: Refers to the most advanced, cutting-edge AI models and the organizations building them, including but not limited to OpenAI, Anthropic, and others mentioned as key NVIDIA customers.

Full Conference Call Transcript

Toshiya Hari: Thank you, and good afternoon, everyone. Welcome to NVIDIA's conference call for the 2027. With me today from NVIDIA are Jensen Huang, president and chief executive officer and Colette Kress, executive vice president and chief financial officer. Our call is being webcast live on NVIDIA's investor relations website. The webcast will be available for replay until the conference call to discuss our financial results for the 2027. The content of today's call is NVIDIA's property. It cannot be reproduced or transcribed without our prior written consent. During this call, we may make forward looking statements based on current expectations. These are subject to a number of significant risks and uncertainties and our actual results may differ materially.

For a discussion of factors that could affect our future financial results and business, please refer to the disclosure in today's earnings release, our most recent forms 10 k and 10 q, and the reports that we may file on Form 8-K with the Securities and Exchange Commission. All our statements are made as of today, 05/20/2026, based on information currently available to us. Except as required by law, we assume no obligation to update any such statements. During this call, we will discuss non GAAP financial measures. You can find a reconciliation of these non GAAP financial measures to GAAP financial measures in our CFO commentary, which is posted on our website.

With that, let me turn the call over to Colette.

Colette Kress: Thank you, Toshiya. Delivered an exceptional quarter. With revenue, operating income, and free cash flow exceeding our prior records. Total revenue of $82 billion was up 85% year over year and 20% sequentially. This marked our third consecutive quarter of year over year acceleration and the fourteenth straight quarter of sequential growth. A significant feat given the sheer size and complexity of our manufacturing operations. The $13.5 billion sequential revenue increase was also a record. We capitalized on the inflection and inference demand by ramping Blackwell systems across our diverse end customer base. From hyperscalers to model makers to AI cloud providers and sovereign customers....

....MUCH MORE 

Meanwhile, At Stanford: "What A.I. Did to My College Class"

From the New York Times, May 17:

By Theo Baker
Mr. Baker is a college senior and the author of “How to Rule the World: An Education in Power at Stanford University.” 

At Stanford University, where I am a senior, tech chief executives are something like rock stars. When the Nvidia founder Jensen Huang showed up to give a guest lecture late last month, students mobbed him. They offered up their laptops and personal workstations, desperate for a signature from a kingpin of the artificial intelligence era. Last year, speaking to the same class, Mr. Huang gave out shining $4,000 graphic cards with his name autographed in gold ink — the ultimate dorm room status symbol.

Stanford has always been a haven for aspiring techies, but recent events have taken the school into uncharted territory. A.I. is everything. We talk about it at the dining halls and in history classes, on dates and while smoking with friends, at the gym and in communal dorm bathrooms. Nearly all of higher education has been overtaken by this technology, and Stanford is a case study in how far it can go. For the past four years, my classmates and I have been the subjects of a high-stakes experiment.

We are the first college class of the A.I. era — ChatGPT arrived on campus about two months after we did. When we graduate next month, this technology will have altered our lives in very different ways. For some, it has opened the door to staggering wealth. But for many who came to Stanford — just four years ago! — when a degree seemed like a guaranteed ticket to a high-paying job, the door has been slammed shut. For all of us, A.I. has permanently changed how we think and behave.

Stanford already had a shaky reputation for integrity when I arrived in 2022. It was the origin place of the Theranos fraudster Elizabeth Holmes (now serving a 10-year prison sentence), the crypto fraudster Do Kwon (now serving a 15-year prison sentence) and the founders of Juul (which was forced to pay billions for getting kids hooked on vapes). All of these scandals were in the news when freshman year began. Many of my classmates arrived idealistic and hopeful, but among the strivers seeking a path to fortune, hustle culture was the accepted way of life. Now A.I. has made deception easier and more remunerative than ever before.

Cheating has become omnipresent. I don’t know a single person who hasn’t used A.I. to get through some assignment in college, yet the school was at first slow to realize how widespread this would become. As freshman year went on, some professors suggested that the “nuclear option” might be called for: allowing faculty to proctor in-person exams, a practice banned at the university for over a century to demonstrate “confidence in the honor” of students.

In our tech-enabled, newly A.I.-powered world, students were increasingly fudging just about everything. They would embezzle dorm funds to spend on their friends and lie about having Covid to get the UberEats credits that the school offered to those in quarantine. Some kids I knew published a paper that claimed a groundbreaking new A.I. advancement. Online sleuths quickly pointed out that it appeared to be just a stolen Chinese model, to which the two Stanford co-authors responded by blaming the plagiarism on the third author.

In junior year, 49 percent of the 849 computer science majors who responded to an annual campus survey said they would rather cheat on an exam than fail. A friend of mine captured the school’s ethos while we were discussing the tech hardware and other items our student club neglected to return to corporate sponsors. It was all, I recall her saying, “just a little bit of fraud.”

About halfway through freshman year, some coding classes started requiring students to sign a declaration — “I did not utilize ChatGPT” — to submit each assignment. During the first term these attestations began to appear, I watched a freshman I knew sign the declaration that he’d done his homework without A.I. as ChatGPT was still open in the next window — while on the deck of a yacht party financed by venture capitalists. The incentive structures were not aligned toward honesty. One could get ahead, quickly, by cutting corners, by focusing on self-presentation.

The money is a big part of it. A.I. has merely accelerated a trend that was already underway at Stanford and has been reflected by many of the country’s most corporatized universities: Education itself can be seen as a secondary goal to enabling future success, frequently defined as a future windfall.

The first time our college class gathered together was for a convocation ceremony in late September 2022. As one of the speakers droned on, I remember looking around and seeing a number of my classmates slumped over in the shade, dozing off. One of those kids is going to become a billionaire soon, it occurred to me. I wondered who it would be, and how.

At first the answer seemed to be cryptocurrency, and then it was A.I.

Most of my friends remember where they were and what they were doing when ChatGPT came out on Nov. 30, 2022. I was nearing the end of my time in Stanford’s infamous computer science “weeder” course, CS107. Like organic chemistry for pre-meds, this was the class that filtered out the true coders from those without the requisite hustle (with lots of shameless public tears involved).

The velocity of change that began on the day ChatGPT entered our lives was stunning. A friend texted me a link to the research preview of OpenAI’s latest demo: “Have you seen this yet? It’s INSANE.” We began kicking around silly prompts, reveling as ChatGPT explained the bubble-sort algorithm “in the style of a fast-talkin’ wise guy from a 1940s gangster movie.” It’s “very good. Very very good,” I messaged my friend. Still, neither of us understood that this would mark the transformation of A.I. from a technology to a product.

Students were probably the earliest wide-scale adopters. After all, it was far and away the quickest route to an A. When I took CS107, the only viable way for people to cheat was to seek out a student who’d gone through the class before and beg for solutions to the notoriously difficult problem sets. There was no alternative to putting in a large amount of work. Even if one did obtain the answers from another student (engaging, by the way, in a social act, if nothing else), the students I knew who did this still spent hours sculpting their stolen code so as not to be caught....

....MUCH MORE 

As noted introducing September2023's "Fiduciary Investors Symposium at Stanford: Brain Research Is Opening investable Commercial Opportunities"

I don't know if it is going to work out as well as 2013's "Why Is Machine Learning (CS 229) The Most Popular Course At Stanford?"—which was followed by 2014's Deep Learning is VC Worthy—which was followed by 2015 to date "Saaaay, this Nvidia may be on to something."

But we shall see....

So it's a bit [!] surprising that the folks at the Stanford Institute for Human-Centered Artificial Intelligence (HAI) didn't see this coming. They did however, point out in the 2023:

 Stanford Uni. AI Index Report 2023: "Measuring trends in Artificial Intelligence"

...Industry races ahead of academia.
Until 2014, most significant machine learning models were released by academia. Since then, industry has taken over. In 2022, there were 32 significant industry-produced machine learning models compared to just three produced by academia. Building state-of-the-art AI systems increasingly requires large amounts of data, compute, and money, resources that industry actors inherently possess in greater amounts compared to nonprofits and academia. 

And although not related to the opinion piece, if one is so inclined we have on offer:

Stanford University's 2026 AI Index Report

York Water Company Declares 622nd Consecutive Dividend (plus, after 177 years Schlitz beer is no more)

For an intro we'll recycle: 

December 13, 2023
European Water Technology Startups

Over the years I've moaned about how difficult it can be to make money out of water as an asset. Back in 2014 we posted "A Look at the World's First Water-focused Hedge Fund":

Since the first Earth Day in April 1970 and more importantly since the establishment of the EPA in December of that year, folks have been trying to make money out of water in the U.S..
Put simply, the returns have not been market-beating.

Because so much of the opportunity was my-little-crony stuff, at the whim of politicians, there was no consistency of growth at a time when other portfolio investments offered very competitive comparisons.
The alternative was to own the cash flow, private equity style, but unless one felt a passion for grit chambers and sludge pans it was pretty pedestrian, utility type ROI....

*** 

It got to the point that I grew weary trying to frontrun changes in U.S. riparian law and not-very-liquid water derivatives (oh the cruel irony) and ended up telling folks that if they wanted exposure to water they should consider York Water Company of York Pennsylvania. 

There is something comforting about plain, simple press releases, no hype-n-tout, just:

THE YORK WATER COMPANY DECLARES 612^TH DIVIDEND

So here we go, ten dividends later. 

York, Pennsylvania, May 5, 2026: The York Water Company’s (NASDAQ: YORW) President and CEO, JT Hand, announced today that the Board of Directors at their May 4^th meeting declared a quarterly dividend of $0.2280 per share. The dividend is payable July 15, 2026, to shareholders as of record date June 30, 2026.

This is the 622^nd consecutive dividend to be paid by The York Water Company. York Water, which is the oldest publicly traded company in the nation, has never missed a dividend in over 210 years. This is believed to be the longest record of consecutive dividends in America.

This release contains forward-looking statements that are subject to various risks and uncertainties. A discussion of factors that may cause actual results to differ from management’s projections, forecasts, estimates and expectations is available in the Company filings with the SEC. Those factors may include changes in general economic conditions, increases in costs, changes in regulation and other factors. The Company undertakes no obligation to update forward looking statements to reflect changes occurring after the date hereof.

I like that they include the "forward-looking statements" boilerplate. Because you never know...

From Chicago's WGN-TV, May 19:

Schlitz beer discontinued after 177 years  

MILWAUKEE, Wisc. — After 177 years, Pabst is discontinuing Schlitz beer.

The beer was based in Milwaukee starting in 1849 and was later produced by the Pabst Brewing Company.

Pabst bought the brand in 1999.

While it was famous in Milwaukee, Schlitz left a legacy throughout Chicago.

Schlitz produced several Chicago tied houses in the early 20th century.

Read more: Latest Chicago news and headlines

Many, like Schubas Tavern, exist to this day with a Schlitz logo still on the building.

"The Invisible Force: How Climate Signals Are Moving Markets Before the Data Does"

From Observer, March 20:

From soybean fields in Argentina to cocoa farms in West Africa, weather patterns are increasingly moving markets ahead of official data, exposing how much today’s price dynamics depend on signals that traditional financial models still fail to capture.

Commodity markets in 2026 are showing many signs of breaching historical patterns, and for a number of converging reasons. Price dynamics no longer line up neatly with the usual macro factors, such as economic cycles and interest rate narratives. As a result, inventories and demand forecasts are increasingly failing to produce satisfactory results based on past trends. Most importantly, the oil price surge driven by ongoing geopolitical tensions is creating a highly uncertain, difficult-to-model outlook.  

While the World Bank projects stabilizing commodity prices in 2026, a “silent” risk is accumulating beneath the surface. The trouble here is not contained by oil itself, but easily spreads across the broad spectrum of other interdependent commodities. The ripple effects here have gone further than most existing models would suggest. For example, fertilizer markets have abruptly tightened, while agricultural inputs have become more expensive, and food markets are once again under pressure, even as many grains and soft commodities have yet to fully reflect the real stress they are absorbing. 

At the same time, a series of seemingly disconnected events has taken hold across the soft commodities market. Argentine dryness has lifted parts of the soy complex despite uninspiring global demand. Brazil’s uneven rainfall patterns have injected volatility into coffee and sugar prices, often at odds with comfortable stock estimates. In the U.S., cold snaps have triggered sharp moves in natural gas even when storage data appeared reassuring. Wheat markets have reacted to weather headlines in the Black Sea before any confirmed production losses materialized.

Individually, each of these developments can be rationalized. But taken together, they point to something more fundamentally disruptive: markets are reacting to signals that traditional models routinely downplay, especially those designed to operate in real time, let alone automated ones. 

The rediscovered limits of financial models 
The core problem here is not a lack of sophistication of the existing models. In fact, the majority of modern financial models are highly effective at processing monetary policy signals, earnings data and institutional balance sheet dynamics. Where they fall short is in handling physical variables that do not fit neatly into structured datasets.

Soil moisture, for example, does not appear on a central bank dashboard. Wind patterns are not part of quarterly earnings calls. Precipitation anomalies rarely make their way into consensus forecasts. And yet, these are precisely the variables now shaping supply in key commodity markets.

Traditional frameworks tend to react to confirmed data, such as crop reports, inventory updates or export statistics. By the time such information finds its way to official releases, the underlying conditions have often been in place for months. Markets, however, do not wait. They tend to move on expectation. As a result, a gap has opened up between what is happening on the ground and what is reflected in prices, and this discrepancy is becoming increasingly difficult to ignore. 

Weather as a market driver, not a footnote...

...MUCH MORE

On top of the increasing tendency of traders to (attempt to) anticipate the news, what the article refers to as "When the echo comes before the sound" we are seeing trades that are best explained as AI teasing-out patterns that are neither intuitive nor readily apparent. 

Combine all the above with incredible amounts of liquidity, cash and credit, sloshing around the world and we are experiencing the frequency of large magnitude moves occurring at rates that would have been almost unthinkable twenty or even fifteen years ago.

Capital Markets: "Markets Wait"

From Marc Chandler at Bannockburn Global Forex:

The US dollar is mostly firmer, though the Australian and New Zealand dollars are resisting the pull. The euro is trading in almost a 15-tick range on both sides of $1.16, and even with a Gilts-rally spurred by lower-than-expected inflation, sterling is struggling to recapture $1.34. The yen has fallen for the past seven sessions and is little changed now, in a narrow band around JPY159. There has not been intervention, but the market knows it is tempting officials. At the same time, the fragile ceasefire in Iran may ended in the coming days and this is keeping investors on edge. Oil prices are softer amid reports of three supertankers have passed through the Strait of Hormuz today. 

The preliminary May PMI surveys are due tomorrow and are expected to show more of the war’s disruption to both prices and activity. The minutes from the Powell’s last FOMC meeting as chair are due today and will likely show more support for a neutral stance than the three dissents indicated. After the markets close today, Nvidia will report earnings....

....MUCH MORE 

"U.S. probing whether Chinese companies cut production of shipping containers before COVID pandemic"

From CBS News, May 19:

Federal authorities are examining whether Chinese companies deliberately restricted the world's production of storage containers for the shipping trade just before the COVID-19 pandemic began six years ago, sources with knowledge of the probe told CBS News. 

Investigators have been looking at a handful of Chinese firms that together control the majority of unrefrigerated shipping container manufacturing around the globe, the sources said.

The companies in late 2019 slowed production by restricting the number of hours employees worked, which the investigators believed indicated a conspiracy to cut global supply and inflate prices, two of the sources said.

Spokespeople for the Justice Department didn't immediately comment.

The companies' alleged moves came just before the global supply chain came under enormous strain.

China reported the first cluster of COVID-19 cases in December 2019 and the outbreak spread in early 2020. 

According to the U.S. International Trade Commission, in the second half of 2020, the number of shipping containers in circulation was "insufficient to meet customer storage demands and higher than anticipated consumer demand for imports." The commission said that "unexpected recovery in demand shocked the distribution system." 

In the first half of 2020, demand for containers dropped, as did orders for new container production, according to the ITC. During this period, some containers were used for long-term storage. In the second half of the year, U.S. demand for container-shipped imports grew more rapidly than expected and also exceeded the demand for eastward-bound U.S. exports, the ITC reported. At the same time, shipping activity was outpacing container manufacturing....

....MUCH MORE 

That CBS Exclusive was followed by this at Reuters, later on May 19:

US charges seven Chinese executives and four firms with illegal shipping container cartel

Reuters updated the story and changed the headline but the URL still reads:

https://www.reuters.com/business/autos-transportation/us-probing-if-china-firms-cut-output-containers-before-pandemic-says-cbs-2026-05-19/

Previously: 

November 11, 2020 - Shipping: "Containers are ‘the new gold’ amid ‘black swan’ box squeeze"
And a tidbit from Shipping: "China Makes Waves, Seeking To Control World Shipping":

...Another fresh study, by the Center for Strategic and International Studies, describes how Chinese companies function as “the maritime supply arm of the People’s Liberation Army” and have built “the largest port and logistics company in the world.” This includes producing 96% of the world’s shipping containers and building over a third of the ocean-going cargo ships....

November 17, 2020 - Shipping: Containers, Containers, Containers
It's all anyone can talk about. 

December 14, 2020 - More on the Shipping Container Shortage: "A Mafia"

It seemed like a pretty big deal at the time.