Friday, April 12, 2024

Inflation—JPMorgan CEO Jamie Dimon's Comments On The Bank's First Quarter Results (JPM)

This is the third time in a week that Mr. Dimon has made a point of commenting on inflation.

From JPMorgan Chase & Co., April 12:


Jamie Dimon, Chairman and CEO, commented: “We reported strong results in the first quarter, delivering net income of $13.4 billion, or $14.0 billion excluding a $725 million increase to the FDIC special assessment.

Last month, we announced a 10% increase to the common dividend. Our exceptionally high CET1 capital ratio of 15.0% and peer-leading returns provide us with the capacity and flexibility to both reinvest for growth and maintain an attractive capital-return profile, without compromising our fortress balance sheet.”

Dimon continued: “This quarter, NII declined 4% sequentially, and as expected, NII ex. Markets declined 2% sequentially due to deposit margin compression and lower deposit balances, mostly in CCB. Looking ahead, we expect normalization to continue for both NII and credit costs.”

Dimon continued: “Our lines of business saw strong underlying performance. In CCB, client investment assets were up 25% excluding First Republic, and we continued to add new customers. In CIB, IB fees increased 21%, reflecting improved DCM and ECM activity. In CB, we saw strong growth in Payments fees and onboarded a significant number of new client relationships. Finally, in AWM, asset management fees were up 14%, with continued strong net inflows.”

Dimon added: “Many economic indicators continue to be favorable. However, looking ahead, we remain alert to a number of significant uncertain forces. First, the global landscape is unsettling – terrible wars and violence continue to cause suffering, and geopolitical tensions are growing. Second, there seems to be a large number of persistent inflationary pressures, which may likely continue. And finally, we have never truly experienced the full effect of quantitative tightening on this scale. We do not know how these factors will play out, but we must prepare the Firm for a wide range of potential environments to ensure that we can consistently be there for clients.”

Dimon concluded: “We continue to be a pillar of strength for our clients, communities and markets across the world – while also delivering for shareholders. This quarter, we grew customers, continued to position the Firm for the future, maintained our fortress principles, raised the dividend and played a critical role in driving economic growth by extending credit and raising capital totaling more than $655 billion....

....MUCH MORE (8 page PDF), narrative and financials.

Careful with that "pillar of strength" and "fortress" talk Jamie, it brings back memories of that time the denarius/shekel cross went no-bid. From a November 2013 post "UPDATED--As TIPS Tumble, Maybe We Won't Have to Go To Electronic Money to Enforce Negative Rates!":

....Personally I'm thinking the lesson of currency disruptions from the Hungarian and Weimar hyperinflations all the way back to the demise of the shekel  in 70 a.d. is: keep some small silver coins to make day-to-day purchases and a stash of half-carat diamonds if you have to get through airports.

Maybe that last lesson didn't come out of the Roman destruction of the Temple.
Anyhoo, "Here at Masada Securities we are a fortress of strength in these uncertain times....

Back on topic...[edited for sanity]...

If interested see also our April 8 post on JPM's full year numbers a few days ago:

JP Morgan Chairman's Letter on Inflation, April 8, 2024 (JPM)

Is Someone Expecting Nuclear War?

I go out for a quick walk-and-talk and return to see both the 10-year treasury and the dollar index are up.

This means flight to safety, they usually move in opposite directions i.e. treasuries down = yields up = support for the dollar.

So the question of the moment is: Who knows what?

And have those Israeli nuclear-missile submarines received new orders in the last six hours?

Marc Chandler Looks At The Macro Scene Before Going On Hiatus

And what he sees is a bit concerning for the multitudes but enticing for the opportunistic.

From Marc to Market, April 12:

Where We Stand  

I am on vacation, and then on a business trip that will interrupt the commentary until the weekly note on April 30. The May monthly analysis will be published the following week after the FOMC meeting and April employment report. I wanted to weigh in on a few key market issues before leaving.

New Divergence: The continued robust US jobs growth (276k average in Q1 24 and 251k average in 2023) and above-trend growth allow the Federal Reserve to remain focused on inflation. And for good reason: CPI has consistently been reported this year above expectations. The headline rate stands at six-month highs. Fed Chair Powell has drawn attention to the core services excluding housing, and it rose at around an 8% annualized pace in Q1. For all practical purposes, the Eurozone and UK are nearly stagnant, and price pressures are moderating quicker than in the US. The widening two-year premiums capture this divergence. The US pays around 200 bp more than Germany to borrow for two years. Last year's peak was about 205 bp. The US pays nearly 60 bp more than the UK for two-year money. That is the most in a year. One is paid to be long dollars. The next targets may be near $1.06 for the euro and $1.2400-50 for sterling.  

Japanese Yen: The threat of intervention helped cap the dollar near JPY152 last year and in recent weeks. However, the US CPI proved too much and the dam burst. Stop-loss and option-related buying lifted the dollar beyond JPY153. Resistance, or where economists might talk about supply, is difficult to assess given that these levels have not been seen in 34 years. We have talked about JPY155. The high in 1990 was slightly above JPY160. We argue that Japanese officials made a tactical mistake by not intervening in the thin markets around Easter. That could have knocked the dollar down before what had been expected to be a solid US jobs report and a sticky CPI. We also argued that the likelihood of Japanese intervention during the first state visit in nine years was slim. Intervention to knock down the dollar, which ostensibly is important in the efforts to restrain prices, would be a diplomatic insult. Japanese officials stress the pace of the move rather than a particular level. One-month implied volatility is near 9%. When the BOJ intervened in Sept-Oct 2022, it was around 14%-17%. Three-month implied volatility is also near 9%. During the last bout of intervention, it was 13%-14%. Actual, or historical volatility over the past month is around 6%. It was around twice as high around the time of the 2022 intervention.

Chinese Yuan: If Chinese officials stopped managing the yuan, it would likely fall sharply. It is off almost 2% this year. Among the other major currencies, it it virtually tied with sterling as the best performer. The point is that Beijing is resisting the pressure from a strong dollar. It is not seeking export advantage through the exchange rate. Before the recent holiday, another way that the approved band can be defended was illustrated. Without resorting to overt or covert intervention, trades on the electronic platform that would imply a price outside of the band were blocked. China has the resources to mount a more serious defense of the yuan, but why should it? It is a story about a strong US dollar. The resilience of the yuan has meant that it has strengthened against many of China's trading partners. The tolerance, though, has limits. We suspect the dollar can move back into its previous range CNY7.25-CNY7.30.

Surplus Capacity....


"Why auto insurance costs are rising at the fastest rate in 47 years"

A deep dive from Yahoo Finance, April 10 (after the CPI release):

As car prices moderate from a pandemic-era surge, insurance has pushed the cost of car ownership to the brink for many Americans.

New data out on Wednesday from the Bureau of Labor Statistics showed auto insurance costs last month were 22.2% higher than they were a year ago and increased from February's 20.6% year-over-year gain. March's rise in insurance costs is the largest gain since December 1976, when prices rose 22.4% over the prior year.

The sticker shock hitting many American drivers is being driven by a rise in accidents, the severity of accidents, and geographical factors combining to create a perfect storm and push costs higher.

'Severity' and bodily injury claims on the rise
The most alarming factor driving insurance costs higher is more severe claims.

"In general, the numbers of crashes, injuries, and fatalities are up, and inflation has made the cost of repairs more expensive," AAA spokesperson Robert Sinclair told Yahoo Finance.

Sinclair said motorists developed "bad habits" on the road during pandemic lockdowns, contributing to current behavior. For example, as the New York Times reported earlier this year, researchers in Nevada discovered that during the pandemic, motorists were speeding more (and driving through intersections), seat belt use was down, and intoxicated driving arrests were up to near-historic highs.

Read more: Tips for getting cheap car insurance

Sinclair also pointed to NHTSA data, which found that in 2021, at the height of the pandemic, road fatalities increased by 10.5% to their highest level since 2005, even while most Americans stayed at home. The NHTSA said it was the highest percentage increase it had ever seen. The agency found that fatalities in 2022 only decreased by 0.3% as compared to 2021.

Insurance tech firm Insurify found that auto insurance premium hikes were "largely due to the skyrocketing price of auto parts and the increasing number and severity of claims." And while increases may moderate, analysts still believe further premium hikes are on the horizon....


"The Real Estate Nightmare Unfolding in Downtown St. Louis"

A few years ago I mentioned a truck driver I met in Reno as I was coming down from Tahoe and he was taking a load to Oakland. We were both having breakfast and talking about this and that and when he mentioned his destination I ask if he was ever concerned about his truck being hijacked or him getting robbed. Did I mention that he was a black man?

I was slightly trepidatious about my query because it could be twisted into something racist when I intended it as a fact-based question: trucks get stolen and drivers get assaulted and it tends to happen more in lower-income places like Richmond CA than in San Francisco's Nob Hill neighborhood.

George was a sharp guy—among the things we had been talking about were U.S. pension policy and the actuarial assumptions behind the creation of the Social Security system—and he knew exactly what I was asking and turned to me and said: "I'm from St. Louis, and things have gotten so rough in my hometown that I don't even return to visit old friends."

"The young people scare me."

From the Wall Street Journal, April 9:

The office district is empty, with boarded up towers, copper thieves and failing retail—even the Panera outlet shut down. The city is desperately trying to reverse the ‘doom loop.’

The Railway Exchange Building was the heart of downtown St. Louis for a century. Every day, locals crowded into the sprawling, ornate 21-story office building to go to work, shop at the department store that filled its lower floors or dine on the famous French onion soup at its restaurant.

Today, the building sits empty, with many of its windows boarded up. A fire broke out last year, which authorities suspect was the work of copper thieves. Police and firefighters send in occasional raids to search for missing people or to roust squatters. A search dog died during one of the raids last year when it fell through an open window.

“It’s a very dangerous place,” said Dennis Jenkerson, the St. Louis Fire Department chief.
It anchors a neighborhood with deserted sidewalks sprinkled with broken glass and tiny pieces of copper pipes left behind by scavengers. Signs suggest visitors should “park in well-lit areas.” Nearby, the city’s largest office building—the 44-story AT&T Tower, now empty—recently sold for around $3.5 million.

Cities such as San Francisco and Chicago are trying to save their downtown office districts from spiraling into a doom loop. St. Louis is already trapped in one.

As offices sit empty, shops and restaurants close and abandoned buildings become voids that suck the life out of the streets around them. Locals often find boarded-up buildings depressing and empty sidewalks scary. So even fewer people commute downtown.

This self-reinforcing cycle accelerated in recent years as the pandemic emptied offices. St. Louis’s central business district had the steepest drop in foot traffic of 66 major North American cities between the start of the pandemic and last summer, according to the University of Toronto’s School of Cities. Traffic has improved some in the past 12 months, but at a slower rate than many Midwestern cities.

Now, it stands as a warning to others: This is the future for America’s downtowns if they can’t reinvent themselves and halt the downward spiral.

On a recent Tuesday morning, few people are on the streets on a 15-block stretch that makes up much of the southern portion of the St. Louis office district. Two empty storefronts exist for each open one. The office district’s northern half is a bit more lively, but not by much. Good luck finding a clothing store. There isn’t even a McDonald’s. Violent crime is rare, but car break-ins are common.

The price for the AT&T Tower, three blocks from the Railway Exchange, was a sliver of the $205 million it sold for in 2006. Its value has been falling for years. In 2022, it changed hands for just $4 million.

Jack O’Connor, who tends bar downtown at Hayden’s Irish Pub, looks out on the Railway Exchange Building across the street. Last year the city demolished a bridge connecting the building to the parking garage across the road because people kept using it to break in to the Exchange building. After intruders kicked and sawed through the plywood covering ground-floor windows, a security firm recently installed steel plates. But people keep breaking in.

“I once saw like six teenagers with skateboards and GoPros get in there,” O’Connor said. A police officer showed up and berated the kids. “They just kind of sauntered off,” he said. “But they’ve been back.”

When the pandemic broke out in 2020 and millions of employees got used to working from home, pundits predicted the demise of big coastal cities. But office districts in New York, Miami and Boston have bounced back better than skeptics feared. The nascent boom in the artificial intelligence industry is even starting to attract some businesses back to San Francisco.  

It’s the cities far from the coasts that are suffering most. Six of the 10 U.S. office districts with the steepest drop in foot traffic between 2019 and mid-2023 are in the Midwest, according to the University of Toronto.

As in other Midwestern cities, the St. Louis office district has suffered a slow demise for decades. Population loss, competition from newer offices in the suburbs and failed urban planning left behind a glut of dreary, empty buildings and wide, dangerous roads. The business district has few apartments. There are some tourists, but not enough to make up for missing office workers.

“It’s a classic chicken and egg kind of deal,” said Glenn MacDonald, a professor of economics at Washington University in St. Louis’s Olin Business School. “People don’t go there because there’s nothing to do. There’s nothing to do because people don’t go there.”
The St. Louis office district’s downward spiral picked up steam when the department store—by then a Macy’s—shut down at the Railway Exchange Building in 2013 amid a wave of department-store closures in downtowns across the country. Not long after, offices in the building—the city’s second biggest after the AT&T Tower—emptied out.

Four years later, AT&T moved out of the building that carried its name.  
Nearby shops and restaurants suddenly had fewer customers, so they closed or moved. Next came the parking garage across the street from the Railway Exchange. 

“That building fell apart,” said Syeeda Aziz-Morris, owner of Pharaoh’s Donuts on the garage’s ground floor. 

With the garage’s ceilings crumbling and propped up by makeshift poles, Pharaoh’s moved out and into a new space two blocks away in late 2019. An Indian restaurant, a convenience store, a Quiznos and a karaoke bar closed. The city condemned the garage building.

Losing a Panera
From there, desolation spread south. Across the street from the garage, a St. Louis Bread sandwich shop—part of the Panera chain—shuttered. That left the attorneys at law firm Brown & Crouppen without a lunch spot.

“It’s pathetic that a Panera was the thing holding this area together, but it really did,” said the firm’s managing partner Andy Crouppen. “It brought people from five, six blocks away, it created a little bit of activity.”

“When that left, it created a noticeable void in the area,” Crouppen said. “People started walking in another direction.”....


Urban planners and security experts both know: Empty streets are dangerous streets. And once you've gotten to that point, turning things around is so difficult that most people choose to just move away.

If they can.

Thursday, April 11, 2024

Vietnamese Woman Sentenced To Death For $44 Billion Fraud

That's a big fraud.

From the BBC, April 11:

Truong My Lan: Vietnamese billionaire sentenced to death for $44bn fraud
It was the most spectacular trial ever held in Vietnam, befitting one of the greatest bank frauds the world has ever seen.

Behind the stately yellow portico of the colonial-era courthouse in Ho Chi Minh City, a 67-year-old Vietnamese property developer was sentenced to death on Thursday for looting one of the country's largest banks over a period of 11 years.

It's a rare verdict - she is one of very few women in Vietnam to be sentenced to death for a white collar crime.

The decision is a reflection of the dizzying scale of the fraud. Truong My Lan was convicted of taking out $44bn (£35bn) in loans from the Saigon Commercial Bank. The verdict requires her to return $27bn, a sum prosecutors said may never be recovered. Some believe the death penalty is the court's way of trying to encourage her to return some of the missing billions.

The habitually secretive communist authorities were uncharacteristically forthright about this case, going into minute detail for the media. They said 2,700 people were summoned to testify, while 10 state prosecutors and around 200 lawyers were involved. 

The evidence was in 104 boxes weighing a total of six tonnes. Eighty-five others were tried with Truong My Lan, who denied the charges and can appeal.

All of the defendants were found guilty. Four received life in jail. The rest were given prison terms ranging from 20 years to three years suspended. Truong My Lan's husband and niece received jail terms of nine and 17 years respectively.

"There has never been a show trial like this, I think, in the communist era," says David Brown, a retired US state department official with long experience in Vietnam. "There has certainly been nothing on this scale."

The trial was the most dramatic chapter so far in the "Blazing Furnaces" anti-corruption campaign led by the Communist Party Secretary-General, Nguyen Phu Trong.

A conservative ideologue steeped in Marxist theory, Nguyen Phu Trong believes that popular anger over untamed corruption poses an existential threat to the Communist Party's monopoly on power. He began the campaign in earnest in 2016 after out-manoeuvring the then pro-business prime minister to retain the top job in the party.

The campaign has seen two presidents and two deputy prime ministers forced to resign, and hundreds of officials disciplined or jailed. Now one of the country's richest women has joined their ranks.

Truong My Lan comes from a Sino-Vietnamese family in Ho Chi Minh City, formerly Saigon. It has long been the commercial engine of the Vietnamese economy, dating well back to its days as the anti-communist capital of South Vietnam, with a large, ethnic Chinese community.

She started as a market stall vendor, selling cosmetics with her mother, but began buying land and property after the Communist Party ushered in a period of economic reform, known as Doi Moi, in 1986. By the 1990s, she owned a large portfolio of hotels and restaurants....

....According to prosecutors, over a period of three years from February 2019, she ordered her driver to withdraw 108 trillion Vietnamese dong, more than $4bn (£2.3bn) in cash from the bank, and store it in her basement.

That much cash, even if all of it was in Vietnam's largest denomination banknotes, would weigh two tonnes....


Telegraph Reports Telegraph Faces Financial Stability Threat From Former Telegraph Owners, The Barclay Family

From The Telegraph, April 11:

Lloyds’ knowledge of suspicious transactions could prompt it to withdraw financing 

The Telegraph would be at risk of financial instability if the Barclay family were to regain control in the wake of the failed takeover backed by the United Arab Emirates, it can be revealed.

Suspicious transactions discovered while the company was placed in receivership by Lloyds Banking Group last year mean that its access to finance could be restricted by the family’s potential comeback.

A loan of £60m from Lloyds to the parent company of The Telegraph and The Spectator magazine, Press Acquisitions Limited, would be threatened with a demand for immediate repayment, sources said.

The borrowing is a normal corporate loan unrelated to the £1.2bn overdue Barclay family debt that prompted the bank to send in receivers. It has never been in default.

It is understood that Lloyds was among the parties involved in The Telegraph’s receivership that made Suspicious Activity Reports (SARs) to the National Crime Agency, which acts as a clearing house and can forward intelligence to authorities including the Serious Fraud Office and HMRC.

The SARs, which have been previously reported, were also made by the independent directors who are still overseeing the company, as well as legal and restructuring advisers, according to multiple sources.

The concerns were triggered by the movement of large sums between The Telegraph and other companies controlled by the Barclay family. The independent directors subsequently called in the specialist law firm BCL to investigate alongside the annual audit of the accounts, conducted by PwC....


It is now apparent that behind these seemingly invincible walls, madness and death were being kindled by the events of 2019:

That's Fort Brecqhou, seat of the Billionaire Barclay Bros. and reputed redoubt and last stand of the twins.... 


January 25, 2019, It's Incredible that an institution as well respected as the FT would stoop to this level

February 2, 2019, "Is The FT's Izabella Kaminska Running A CIA/NSA/GCHQ/MI5/6 PsyOp?"

October 28, 2019, Did FT Alphaville's Jemima Kelly Destroy The Barclay Brothers? (are they being run out of Britain?)

January 7, 2023, "Apparently The FT's Jemima Kelly's Campaign To Destroy The Remaining Billionaire Barclay Bro Continues Apace"

The caption under the (faux) castle continued:

....should Jemima succeed in her quest to drive them (and their lackey at the Sark Newspaper) insane.

And Ambrose Evans-Pritchard, international business editor of the Daily Telegraph, shakes his fist at the sky, thinking all he wanted was a genteel retirement. 

Grid: How U.S. Electrical Transmission Lines Will Be Rebuilt—Reconductoring

From UtilityDive, April 9:

Reconductoring US power lines could quadruple new transmission capacity by 2035: report 

Replacing power lines with advanced conductors would enable 90% clean electricity by 2035, according to a Goldman School and GridLab report.

Replacing conventional transmission lines with advanced conductors could sharply increase U.S. transmission capacity in the near-term, and at a lower cost than building new power lines, according to a report on reconductoring released Tuesday.

Reconductoring transmission lines could add about 64 TW-miles of new interzonal transmission capacity by 2035 compared to about 16 TW-miles from only building new transmission lines, the report from the Goldman School of Public Policy at the University of California, Berkeley and GridLab said.

While quadrupling new transmission capacity, replacing conventional aluminum conductor steel reinforced cables with advanced conductors would cost just 20% more than only building new lines, the modeling found. Replacing old lines with advanced conductors usually costs half as much as building new lines for the same capacity, partly because it uses existing infrastructure, the report noted.

The additional interzonal transmission capacity unlocked with advanced conductors provides access to lower-cost clean energy, reducing wholesale electricity costs by 3% to 4% on average, producing $85 billion in system cost savings by 2035 and $180 billion by 2050, compared to business-as-usual, the modeling found....


What would have been the American pure play, General Cable, was purchased by the Italians in a classic good news/bad news story: The acquisition was done in 2017, years before the next two decades of performance began bubbling up in the average fund manager's consciousness but it was at an 80% premium to market.

Again, the two hot-off-the-press reports:


A companion report to “The 2035 Report: Reconductoring with advanced conductors can accelerate the rapid transmission expansion required for a clean grid”  

And you can visit the far-sighted Italians at Prysmian Group.

Inflation: US producer prices rose 2.1% from last year, most since April, but less than expected so its all good

From the Associated Press who did not have "so its all good" in their headline, that was the stock market reversing early weakness, April 11:

U.S. producer prices rose rose in March from a year earlier at the fastest pace in nearly a year, but the gain was less than economists expected. And wholesale inflation eased on a month to month basis.

The Labor Department said Thursday that its producer price index — which measures inflationary pressure before it reaches consumers — rose 2.1% last month from March 2023 , biggest year-over-year jump since April 2023. But economists had forecast a 2.2% increase, according to a survey of forecasters by the data firm FactSet.

And compared to February, wholesale prices were up just 0.2%, down from a 0.6% gain in February.

Stripping out volatile food and energy prices, so-called core wholesale prices were up 0.2% last month from February, the second straight drop, and 2.4% from March 2023. The year-over-year increase in core producer prices was the most since August. Economists see core inflation as a sign of where overall inflation may be headed....


Here's the BLS with the narrative and tables:

PPI for final demand rises 0.2% in March; services increase 0.3%, goods decline 0.1% 

Aren't There Any Attorneys In Switzerland? This ECHR Judgement On Climate Is Crazy

I kid about the lack of attorneys in Switzerland, they're everywhere. Just not the kind who can do the "Emperor has no Clothes argument" at the Court. Izabella Kaminska thought this was important enough to tweet:

The Swiss Pensioner's case was built on two articles of the European Convention on Human Rights, Articles II and VIII:


Right to respect for private and family life

1. Everyone has the right to respect for his private and family life, his home and his correspondence.

2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.

 Not seeing anything on climate there, let's try the other one:

Article 2 of the Convention
“1. Everyone’s right to life shall be protected by law. No one shall be deprived of his life intentionally save in the execution of a sentence of a court following his conviction of a crime for which this penalty is provided by law.
2. Deprivation of life shall not be regarded as inflicted in contravention of this article when it results from the use of force which is no more than absolutely necessary:
(a) in defence of any person from unlawful violence;
(b) in order to effect a lawful arrest or to prevent the escape of a person lawfully detained;
(c) in action lawfully taken for the purpose of quelling a riot or insurrection.

Not seeing it there either.

Here's the 56 page Guide on Article 2 of the European Convention on Human Rights from the European Court of Human Rights if you want to tease out the meaning of Article 2.

In the meantime I'm going to be looking for the guides on the Ten Suggestions (no, not the “You shall not covet your neighbor’s house. You shall not covet your neighbor’s wife, or his male or female servant, his ox or donkey, or anything that belongs to your neighbor.” bit - they are clear enough to not require 56 page guides) but rather Chairman Ben Bernanke's 2013 speech "The Ten Suggestions".

Here's the story that Ms Kaminska linked to:

How a group of elderly Swiss women could take the UK out of the European Court

Wednesday, April 10, 2024

"Apple’s India iPhone Output Hits $14 Billion in China Shift" (AAPL; MODI)

From Bloomberg, April 9:

  • It now assembles about 1 in 7 of its iPhones from India
  • That ramp-up suggests an accelerating shift from China 

Sign up for the India Edition newsletter by Menaka Doshi – an insider's guide to the emerging economic powerhouse, and the billionaires and businesses behind its rise, delivered weekly.

Apple Inc. assembled $14 billion of iPhones in India last fiscal year, doubling production in a sign it’s accelerating a push to diversify beyond China.

The US tech giant now makes as much as 14% or about 1 in 7 of its marquee devices from India, people familiar with the matter said, declining to be named as the information isn’t public. 

The ramp-up suggests Apple is accelerating efforts to cut its longstanding reliance on China as geopolitical tensions mount. The country remains its largest iPhone-making hub and biggest overseas market. But that’s also where Apple’s revenues are plunging, hit by ascendant rivals such as Huawei Technologies Co. and an expanding ban on the use of foreign technology in the workplace.

The big jump in Indian activity marks a win for the administration of Prime Minister Narendra Modi, which has plied foreign firms including Apple with financial incentives to try and attract high-end manufacturing. The government says the growth in manufacturing has created 150,000 direct jobs at Apple’s suppliers.

Government policies “have helped companies such as Apple to expand production in India,” technology minister Ashwini Vaishnaw told Bloomberg News after the report. “We will build on this momentum and are committed to a stable and transparent policy regime that’ll turn India into a globally trusted manufacturing hub.”

Foxconn Technology Group assembled nearly 67% and Pegatron Corp. about 17% of the India-made iPhones in the fiscal year ended March 2024, according to the people. The remaining iPhones were made in Wistron Corp.’s plant in southern Karnataka state, which the salt-to-software conglomerate Tata Group took over last year. Tata plans to build one of the country’s biggest iPhone assembly plants.

The dollar figure refers to the devices’ estimated value as they leave the factory, rather than the retail price tags. Representatives for Apple declined to comment.

What Bloomberg Intelligence Says
News that Apple Inc. doubled its production of iPhones in India in the year ended March highlights a powerful trend — India is increasingly becoming a manufacturing base of choice for multinationals looking to diversify away from China. As our analysis has shown, a buildup of its manufacturing capacity and integration into global supply chains are likely to drive growth in the years ahead — and potentially help India take over from China as the world’s strongest growth engine.

- Abhishek Gupta, economist...


China Very Concerned About Strength Of Dollar

From Reuters via The Business Times (Singapore), April 11:

China sets yuan fixing with strongest upward bias since 2018

CHINA’S central bank ramped up support for the yuan in its daily guidance on Thursday (Apr 11) after an overnight surge in the US dollar put authorities on alert for sharp declines in the local currency.

The People’s Bank of China (PBOC) set the midpoint rate for the yuan at 7.0968 per US dollar prior to market open on Thursday, 1,654 pips firmer than a Reuters estimate, the biggest discrepancy since Reuters started its estimations in 2018.

The record discrepancy comes after the offshore yuan dropped the most in three weeks overnight.

The yuan has come under intense pressure recently from a strengthening US dollar and the wide gap between US and Chinese interest rates.

The US dollar rose across the board on Wednesday after data showed US inflation sped up more than forecast in March, pushing out the expected timing of a Federal Reserve rate cut to September from June....


USDCNY 7.2355 last.

"Russia Seizes Over 650,000 Acres Of Farmland And Other Assets From Company With Ties To 'Unfriendly' Country"

Don't be going all Chrystia Freeland there Vlad.

From Benzinga, April 10:

In a significant escalation of its retaliatory measures against “unfriendly” states amid heightened geopolitical tensions, Russia has seized assets of the agricultural holdings company AgroTerra Group. The move, announced on April 8, 2024, has sent shockwaves through the agricultural sector and raised concerns over food security and international trade relations.

President Vladimir Putin’s decree places Dutch-registered firms AgroTerra Investments B.V. and AgroTerra Holdings B.V. under the “temporary management” of Rosimushchestvo, Russia’s federal property management agency. This action follows a series of similar asset seizures targeting Western companies, including multinational brewer Carlsberg and dairy giant Danone, which have sought to divest their Russian operations in response to the ongoing conflict in Ukraine.

AgroTerra, founded in 2008, is a major player in the agricultural industry, specializing in the production and supply of commodities such as soybeans, wheat and sugar beet. The company is recognized as one of the top 20 largest owners of agricultural land in Russia, with a cultivated area of approximately 265,000 hectares (654,829 acres).

The decree’s impact on AgroTerra’s operations remains uncertain. A spokesperson for the company stated, “As of now, the Company has not yet received any further details regarding the decree on the transfer of shares within the authorized capital of the AgroTerra Group to the temporary management of Rosimushchestvo.” Despite the lack of clarity, the company has assured that it is continuing its operations as usual, with a primary focus on the ongoing sowing campaign.

This seizure is part of a broader trend of Russia targeting foreign-owned assets in retaliation for sanctions and other measures taken against Russian companies abroad. In April 2023, Putin signed an executive order allowing Russia to take over real estate, securities, property rights and other assets from foreign companies with ties to “unfriendly countries.”....


Putin has made his own bed and is going to die in it. Canada has a choice but time is running out.

In addition to the story linked in the intro where the Canadian Vice-Premier and Finance Minister implemented the government's plan to freeze-n-seize bank accounts of the protesting Canadian citizens, Ms Freeland has been at the forefront of efforts to do the same with Russian assets, e.g.

May 20, 2022: Financial Post, "Ottawa is currently creating a legal framework for the seizure of Russian assets" 

November 9, 2023: WaPo, "Canada wants to give a Russian plane it seized to Ukraine. Is that legal? "

Feb 28, 2024: Reuters, "Canada agreed on the urgent need to move forward with confiscating frozen Russian sovereign assets to help Ukraine, Finance Minister Chrystia Freeland said on Tuesday."

March 17, 2024: "The Canadian behind the West’s massive sanctions on Russia says it’s time for Round 2"

Someday I'll get around to the story of her grandfather seizing "some Jew's" printing business so he could write propaganda for the Nazis.

Anyhoo, the Canadian Government's actions in February 2022 caught the eye of quite a few people who took note of the Government's attitude toward other people's property

CBC, February 17, 2022
Banks have started to freeze accounts linked to the protests, Freeland says
In a final warning, finance minister says truckers at the protest will be stripped of their insurance...

And February 18, 2022:

Short of War, What Just Happened In Canada May Be The Biggest Story Of The Covid Era

...Even though we had been following the story closer than many folks, at that point we really had no idea how big and how important the the unfolding events were....

And a couple day's later, February 20, 2022:

 "Canada wants to make financial aspects of Emergencies Act permanent"

The financial aspect of the Canadian government's power grab is part of what that The Blind Spot's Izabella Kaminska was looking at and the reason it is such a big story. The fact a government thinks it can take your money because you disagree with it's policy proposals is breathtaking in its audacity. Who the hell do these people think they are? And since Izzy's post the totalitarian claws have really come out.
Have I ever mentioned Hitler's Enabling Act of 1933?*

From the truly awesome watchdogs at Reclaim the Net, February 19....


Once you get a reputation as having a situational ethics approach to property rights, folks will think twice before sending their money to Bay Street.

Inflation, Higher Than Expected, Analysts React

 Via ZeroHedge, April 10, skipping past the intro:

....With that in mind, here is a snapshot of kneejerk reactions by various other Wall Street economists and strategists to today's print courtesy of Bloomberg.

Morgan Stanley economist Ellen Zentner is the first sellside to warn her June rate-cut call is in jeopardy:

“The upside surprise in core CPI is moving the inflation data further away from the convincing evidence the Fed needs to start cutting in June. Dependent on the PPI data tomorrow, this print tilts the Fed toward a later start to the cutting cycle than our current forecast for June.”

Brian Coulton, chief economist at Fitch:

“The so-called ‘Super-core’ CPI  measure – services excluding rents – jumped from 3.9% y/y in February to 4.8% in March. This latter metric is heading the wrong way and quite quickly at that.”

David Kelly, Chief Global Strategist at JPMorgan asset management:

“I wish the Federal Reserve would pay more attention to what they do to financial markets with their manipulation of interest rates and not worry too much about what they are doing to the economy. Last decade, we mispriced housing terribly and now a large chunk of younger Americans can’t buy a house.”

Anna Wong, Bloomberg economist:

“March is a month where the CPI enters a seasonal window that’s favorable for disinflation. The fact that core CPI remained the same in March as February — even if it maps to about 0.3% in core PCE inflation terms – is not a good development. This report, more than February’s, is likely to feed Fed concern that progress on disinflation is stalling — even though the core print for the two months was the same.”

Marvin Loh, State Street economist:

“While the rent component shows a strong disinflationary trend, the more important owner’s occupied component is stubbornly unchanged and well above what is needed to get towards a stable 2% level.”

Ira Jersey, Bloomberg rates strategist:

“The 3-month annualized core CPI climbing to 4.5% is going to keep early Fed-cut calls muted coming up. 50 bps of cuts in 2024 currently being priced may not occur until later in the year. The yield curve flattening isn’t surprising as we continue to price out early and deep cuts.”

* * *
“The timing of 2024 rate-cut expectations are front of mind for market participants, with linear markets pricing just below even odds of a first cut in July. Still, the stickiness of ‘supercore’ inflation, now north of 8% on a 3-month annualized basis, may continue to put upward pressure on expectations of the Fed’s terminal floor.”

* * *

“A retest of 4.51% is nearly assured with the higher-than-expected CPI. If that doesn’t hold, 4.7% is the next stopping spot for the 10-year yield.”

Seema Shah, economist at Principal Asset Management:

"Today’s print sealed the fate for the June FOMC meeting with a hike now very unlikely. In fact, even if inflation were to cool next month to a more comfortable reading, there is likely sufficient caution within the Fed now to mean that a July cut may also be a stretch, by which point the US election will begin to heavily intrude with Fed decision making.”

Priya Misra, JPM rates strategist:

”This was a pivotal report for the market since the last 2 reports were a little high (0.4% mom) and the Fed viewed those readings as a ‘bump in the road’ rather than a change in the trend towards inflation moderation.Rates have risen in the last few weeks as cuts have been priced out but there is more room to go. I also think risk assets will be sensitive to rates if the 10y moves above 4.5%. So far risk assets could ignore the high inflation prints since the Fed was dismissing it. But I think that changes now... Most of the strength in the core explained by firmer motor vehicle insurance costs and medical care -- both of these do not feed into the core PCE deflator in the same way. So incoming Fedspeak will be very important”....


"CPI for all items rose 0.4% in March; shelter and gasoline up"

From the Bureau of Labor Statistics, April 10:


The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in March on a seasonally adjusted basis, the same increase as in February, the U.S. Bureau of Labor Statistics reported today.
Over the last 12 months, the all items index increased 3.5 percent before seasonal adjustment.

The index for shelter rose in March, as did the index for gasoline. Combined, these two indexes contributed over half of the monthly increase in the index for all items. The energy index rose 1.1 percent over the month. The food index rose 0.1 percent in March. The food at home index was unchanged, while the food away from home index rose 0.3 percent over the month.

The index for all items less food and energy rose 0.4 percent in March, as it did in each of the 2 preceding months. Indexes which increased in March include shelter, motor vehicle insurance, medical care, apparel, and personal care. The indexes for used cars and trucks, recreation, and new vehicles were among those that decreased over the month.

The all items index rose 3.5 percent for the 12 months ending March, a larger increase than the 3.2-percent increase for the 12 months ending February. The all items less food and energy index rose 3.8 percent over the last 12 months. The energy index increased 2.1 percent for the 12 months ending March, the first 12-month increase in that index since the period ending February 2023. The food index increased 2.2 percent over the last year.

Table A. Percent changes in CPI for All Urban Consumers (CPI-U): U.S. city average....


And more to come.

Food is beginning to get more expensive at the commodity level, something that will be exacerbated by the increased price of diesel and gasoline. 

Wheat Chart DailyCorn Chart Daily

And a reminder, the Fed believes food inflation is a leading indicator of general inflation:

From the Federal Reserve Bank of St. Louis, January 1, 2002:
Predicting Inflation: Food For Thought

U.S. Senator Rand Paul, M.D.: Anthony Fauci, M.D. Belongs In Prison and Shame On The Employees At 15 Agencies Who Lied To Cover For Him

It looks as though, with the latest revelations, the Senator has had enough.

His opinion piece carried by Fox, April 9:

The Great COVID Cover-up: Shocking truth about Wuhan and 15 federal agencies
Shame on all the federal employees who covered up these facts about COVID-19

How vast was the Great COVID Cover-up? Well, my investigation has recently discovered government officials from 15 federal agencies knew in 2018 that the Wuhan Institute of Virology was trying to create a coronavirus like COVID-19.   

These officials knew that the Chinese lab was proposing to create a COVID 19-like virus and not one of these officials revealed this scheme to the public. In fact, 15 agencies with knowledge of this project have continuously refused to release any information concerning this alarming and dangerous research.

Government officials representing at least 15 federal agencies were briefed on a project proposed by Peter Daszak’s EcoHealth Alliance and the Wuhan Institute of Virology.

This project, the DEFUSE project, proposed to insert a furin cleavage site into a coronavirus to create a novel chimeric virus that would have been shockingly similar to the COVID-19 virus. 


For years, I have been fighting to obtain records from dozens of federal agencies relating to the origins of COVID-19 and the DEFUSE project. Under duress, the administration finally released documents that show that the DEFUSE project was pitched to at least 15 agencies in January 2018.

What does this mean?

It means that at least 15 federal agencies knew from the beginning of the pandemic that EcoHealth Alliance and the Wuhan Institute of Virology were seeking federal funding in 2018 to create a virus genetically very similar if not identical to COVID-19.


Disturbingly, not one of these 15 agencies spoke up to warn us that the Wuhan Institute of Virology had been pitching this research. Not one of these agencies warned anyone that this Chinese lab had already put together plans to create such a virus.

Peter Daszak concealed this proposal. University of North Carolina scientist Ralph Baric, a named collaborator on the DEFUSE project, failed to reveal that the Wuhan Institute of Virology had already proposed to create a virus similar to COVID-19.

And now we know that 15 agencies heard the proposal and when each agency discovered that COVID-19 was strangely similar to DEFUSE’s proposed virus creation, not one agency head stepped forward to warn the public that the virus might be man-made and therefore already adapted to transmit freely among humans.


Not surprising to some of us, Dr. Anthony Fauci’s National Institute of Allergy and Infectious Diseases (NIAID) was not only briefed on Wuhan’s desire to create this virus, NIAID was actually listed as a participant in the initial DEFUSE pitch. Fauci’s Rocky Mountain Lab was named as a partner alongside the Wuhan Institute of Virology in the proposal.

These documents also reveal that a scientist whose lab has received millions of dollars from EcoHealth was also part of the original plan to create these chimeric coronaviruses. This researcher, Ian Lipkin, also later became one of the authors of "Proximal Origins," a journal paper commissioned by Fauci and National Institutes of Health head Francis Collins to throw shade on anyone arguing that the virus might have come from the lab. Yet, Ian Lipkin never revealed to the public the DEFUSE proposal.

Did NIAID warn us? Did Anthony Fauci warn us? No! All lips remained sealed.

Millions of people died from COVID-19. We now know that over 15 government agencies, as well as the investigators Peter Daszak, Ralph Baric, Ian Lipkin and scientists at NIAID’s Rocky Mountain Lab, all knew of the Wuhan Institute of Virology’s desire to create a coronavirus with a furin cleavage site, a virus pre-adapted for human transmission.

And no one spoke up. We only know of this DEFUSE proposal because a whistleblower, one brave Marine, Lt. Col. Joseph Murphy, came forward with the truth.

Likely, hundreds of people in the government knew of this proposal to create a COVID-19-like virus and virtually every one of these people chose to keep quiet, to obscure, and ultimately to conceal information that might have saved lives by letting the world know this was no sleepy animal virus with poor transmission.

No, all evidence suggests COVID-19 was a laboratory-enhanced virus purposefully adapted for human transmission.

Shame on all those who covered up the DEFUSE project! Of course, they all should be punished but likely won’t. At the very least, though, the perpetrators should be made to admit the truth and Congress should finally put in place sufficient oversight to make sure dangerous gain of function experiments are sufficiently vetted and, if necessary, prevented....

"Bond Trader Places Record Futures Bet on Eve of Inflation Data"

As always we don't know what else is in the trader's portfolio that may be offsetting or alternatively Texas hedging, the trade. Either way, it's a big bet.

From Bloomberg, April 9: 

  • 75,000 block trade in December SOFR futures is biggest ever
  • Wager helped drive gains for front-end Treasuries Tuesday

A block trade in US short-term interest-rate futures Tuesday was the biggest on record and helped drive gains for the Treasury market.

The trade involved futures on the Secured Overnight Financing Rate, the successor product to eurodollar futures, which were retired last year. Launched in May 2018, SOFR futures have taken over as the principal tool for wagers on the interest rate set by the Federal Reserve.

Shortly after 9 a.m. New York time, 75,000 December 2024 SOFR futures contract changed hands via a block trade, which CME Group Inc. confirmed was the largest in the product to date. Prices subsequently rose

, suggesting the trade was buyer-initiated, and Treasury yields slid further toward session lows. Block trades are privately negotiated, single-price transactions that meet a minimum size threshold.

An outright long position in the contract stands to increase in value if March consumer price index data to be released Wednesday is benign, leading to a revival in expectations the Fed may cut rates three times this year. It’s also possible the purchase was done to cover a short position, thereby reducing risk ahead of the data....


Capital Markets: "US CPI, New Security Initiatives with Tokyo and Manila, Bank of Canada Meeting"

 From Marc to Market:

Overview: The dollar has been confined to narrow ranges ahead of the US CPI report. Given the backup of US rates and the stronger-than-expected jobs growth, the greenback's performance has been unimpressive. The Reserve Bank of New Zealand signaled that it was in no hurry to cut rates and it helped underpin the New Zealand dollar. Up about 0.2% today, it is leading the G10 currencies higher. Strong earnings from TSMC may have helped underpin the Taiwanese dollar (~0.3%), which is trailing the Mexican peso (~0.35%) to lead the emerging market currencies.

Many Southeast Asian markets are closed to the holiday today, including South Korea, where the parliament election is taking place. Exit polls suggest a strong showing by the opposition Democratic Party. The Hang Seng (1.85%) and the mainland companies that trade there (2.06%) were the led the region. Europe's Stoxx 600 is recouping yesterday's 0.6% decline, while US index futures are firm. Benchmark 10-year yields are mostly slightly softer in Europe. The 10-year US Treasury yield is hovering near 4.35%. Gold is consolidating in about $2345-$2360 range. It peaked yesterday slightly above $2365. May WTI peaked at the end of last week around $87.65 and fell to a low near $84.70 on Monday. It is consolidating in a narrow range today above $85.

Asia Pacific...


Tuesday, April 9, 2024

"France buckles to 'Big Frying Pan'"

Izabella Kaminska directs our attention toward one of the bigs:

(Italian country-western synth-pop with a hint of aromatics)

"Microsoft's Copilot image tool generates ugly Jewish stereotypes, anti-Semitic tropes"

Again, as with the output from Google's Gemini, the AI is producing exactly what it is programmed to produce.*

From Tom's Hardware, April 7:

Neutral prompts such as "Jewish boss" output offensive images.

The Verge’s Mia Sato reported last week about the Meta Image generator’s inability to produce an image of an Asian man with a white woman, a story that was picked up by many outlets. But what Sato experienced – the image generator repeatedly ignoring her prompt and generating an Asian man with an Asian partner – is really just the tip of the iceberg when it comes to bias in image generators. 

For months, I’ve been testing to see what kind of imagery the major AI bots offer when you ask them to generate images of Jewish people. While most aren’t great – often only presenting Jews as old white men in black hats – Copilot Designer is unique in the amount of times it gives life to the worst stereotypes of Jews as greedy or mean. A seemingly neutral prompt such as “jewish boss” or “jewish banker” can give horrifyingly offensive outputs. 

Every LLM (large language model) is subject to picking up biases from its training data, and in most cases, the training data is taken from the entire Internet (usually without consent), which is obviously filled with negative images. AI vendors are embarrassed when their software outputs stereotypes or hate speech so they implement guard rails. While the negative outputs I talk about below involve prompts that refer to Jewish people, because that's what I tested for, they prove that all kinds of negative biases against all kinds of groups may be present in the model....

(Image credit: Tom's Hardware (Copilot AI Generated))


The bagels are an interesting reflection of either the choice of training material or the AI creator's vision of what to produce.
*And from April 5's "Why AI bias is a systemic rather than a technological problem":

Chartology: Another Potential Double Top, This Time In The DJI Futures

 As the outro from a March 27 post we noted:

....Now the question is: Is the double top for real (implying a fall to the last major unfilled gap at 660-ish) or is it the start of a series of bounces against resistance before breaking through to the upside?

NVDA NVIDIA Corporation daily Stock Chart

A reminder, that February decline-then-gap-up was the lead-up and reaction to the earnings release that everyone knew would be very good but was an absolute blowout. Everyone knows the next report is going to be very good but....

That one still hasn't resolved the question.

And now we see:

DJIA Chart Daily

Tomorrow's inflation number should give us some clarity on a market that seems to be holding its collective breath. For what it's worth the Cleveland Fed Inflation NowCast is looking for headline CPI at 0.34%, which, if the exponent button on my abacus is working correctly annualizes out to 4.16%

Hurricane Watch: CSU Forecasts Not Just More Hurricanes But More Landfalling Hurricanes This Season

One of the saving graces of last season was that a couple of strong storms got trapped by the steering winds and ended up meandering around the North Atlantic before heading off the Iceland or Ireland.*

From Colorado State University via Artemis, April 4:

CSU forecasts well-above average major hurricane landfall probability for 2024 season

Colorado State University’s tropical meteorology team led by Phil Klotzbach have issued their first forecast for the 2024 Atlantic hurricane season, estimating that 23 named storms, 11 hurricanes and 5 major hurricanes will be seen, while landfall probabilities are also forecast to be elevated.

Released just minutes ago, the Colorado State University (CSU) tropical meteorology team is the latest to call for a particularly busy hurricane season in 2024.

Phil Klotzbach said in announcing the forecast that it anticipates a “very active hurricane season.”

The forecast from CSU calls for 23 named tropical storms to form in the Atlantic during the season from June 1st to November 30th.

11 of those named storms are forecast as likely to become hurricanes, with 5 of those forecast to become major hurricanes with Category 3 sustained wind speeds of 111 mph or greater.

In addition, the CSU team forecasts that accumulated cyclone energy (ACE) for the 2024 hurricane season will reach 210.

Perhaps more pertinent to the insurance, reinsurance, catastrophe bond and insurance-linked securities (ILS) community, the CSU forecast team calls for an ACE Index score of 125 to the west of 60 degrees longitude, so closer to the United States coast and Gulf of Mexico.

They explain, “ACE generated west of 60 degrees west correlates better with landfalling storms in the Atlantic basin than basin-wide ACE, since virtually all hurricane-prone landmasses in the Atlantic Ocean are located west of 60 degrees west.

“Generally, a slightly lower percentage of basinwide ACE occurs west of 60 degrees west in El Niño years relative to La Niña years. Since the team anticipates La Niña as the most likely outcome in 2024, the percentage of basinwide ACE occurring west of 60 degrees west is predicted to be higher than last year.”

In total, there are forecast to be 115 days with named storms in the water, 45 days with hurricanes and 13 days with major hurricanes over the course of the coming season.

Describing the meteorological conditions, the CSU team states, “Current El Niño conditions are likely to transition to La Niña conditions this summer/fall, leading to hurricane-favorable wind shear conditions....

In July 2023 we had Hurricane Watch: ...DON LOSING ORGANIZATION... Now, Depression wherein I got so bored I began regaling long-suffering reader with:

Don is a lost boy.

Hurricane Watch: Subtropical Storm Don
From the National Hurricane Center, July 15, the cone of uncertainty:...

...Don may have been drinking.
Speaking of drinking, I once had a very learned gentleman tell me there are four types of drunks.
His categories were:


Don is at present somewhere between two and three

Followed by: Hurricane Watch: Don Makes A Feint Toward Newfoundland, Sets Sights On (checks map) Iceland

And in August: Tropical Storm Franklin Forecast To Become A Hurricane By The Weekend - Not That Anyone Cares....

"San Francisco's light rail to upgrade from floppy disks"

From The Register, April 9:

What is it with Fog City and ancient transport tech?

Those taking public transport in the tech hub of San Francisco may be reassured to know that their rides will soon no longer be dependent on floppy disks.

San Francisco Municipal Transportation Agency's director of transportation Jeffrey Tumlin told ABC that the city's automatic light-rail control system is running on outdated tech and "relies on three five-inch floppy disks" to boot up. The reporter was holding a 3.5-inch disk in the broadcast, so may have just skipped the word "point"....


Also at The Register, September 2022:

'Last man standing in the floppy disk business' reckons his company has 4 years left

The owner of the company, Tom Persky was quoted elsewhere as saying:

"The joke is, is that when a six-year-old girl runs up to her father with a floppy disk that she found somewhere, she said, 'Oh, look, Daddy, somebody 3D-printed the save icon"

I had actually forgotten what the save icon was representing.

"Tesla's Musk predicts AI will be smarter than the smartest human next year" (NVDA)

From Reuters, April 8:

Tesla CEO Elon Musk on Monday predicted development of artificial intelligence that was smarter than the smartest human probably by next year, or by 2026.

In a wide-ranging interview on X spaces that suffered multiple technology glitches, Musk also told Norway wealth fund CEO Nicolai Tangen that AI was constrained by the availability of electricity and that the next version of Grok, the AI chatbot from his xAI startup, was expected to be trained by May.
"If you define AGI (artificial general intelligence) as smarter than the smartest human, I think it's probably next year, within two years," Musk said when asked about the timeline for development of AGI.
The billionaire, who also co-founded OpenAI, said a lack of advanced chips was hampering the training of Grok's version 2 model.
Musk founded xAI last year as a challenger to OpenAI, which he has sued for abandoning its original mission to develop AI for the benefit of humanity and not for profit. OpenAI denies the allegations.
Musk said training the Grok 2 model took about 20,000 Nvidia H100 GPUs, adding that the Grok 3 model and beyond will require 100,000 Nvidia H100 chips.
, opens ne
But he added that while a shortage of chips were a big constraint for the development of AI so far, electricity supply will be crucial in the next year or two.
Speaking about electric-vehicles, Musk reiterated Chinese carmakers are "the most competitive in the world" and pose "the most toughest competitive challenges" to Tesla.
He has previously warned that Chinese rivals will demolish global rivals without trade barriers....
It really is starting to seem that Musk is willing to risk Tesla's Chinese supply chains. 
If interested see: "Musk plots $3bn Tesla factory in India as Modi races to overtake China on electric cars" (TSLA).

"Houthis Back to Attacking Ships After Brief Pause"

 Whatever happened to "Oderint, dum metuant" (Let them hate so long as they fear)?

From The Loadstar via gCaptain, April 8:

The past week has seen an increase in attacks on shipping in the Red Sea, and a Houthi spokesperson has sparked fears of the ‘danger area’ expanding into the Arabian Sea.  

Eight consecutive days of attack-free shipping in the Red Sea, between 23 March and 1 April, marked the longest quiet streak since December, when containerships began diverting around the Cape of Good Hope.  

However, in the past week, UK Maritime Trade Operations (UKMTO) has confirmed two attacks on vessels, the most recent yesterday, 111km south-west of Al Hudaydah, Yemen.  

UKMTO said: “The master of a vessel has reported two missiles in the vicinity. The first was intercepted by coalition forces, the second impacted the water a distance from the vessel. The vessel reports no damage, and the crew is reported safe. The vessel is proceeding to next port of call.” 

Meanwhile, Houthi spokesperson Yahya Saree said on TV yesterday that during the past 72 hours, Houthis had targeted a British ship and several US frigates in the Red Sea. He also said they had attacked two Israeli vessels in the Arabian Sea and Indian Ocean that were heading to Israeli ports.  

The Times of Israel reported that, according to Mr Saree, the attacks included a missile strike against British ship Hope Island, and what Mr Saree described as “two Israeli ships”, MSC Grace and MSC Gina....


"Houthi spokesperson"? Reminiscent of "Piracy 2012: Now With Form Letters, P.R." 

Capital Markets: "Dollar Consolidates Softer Ahead of Tomorrow's CPI"

From Marc Chandler at Bannockburn Global Forex:

Overview: The dollar is trading with a softer bias in mostly narrow ranges against the G10 currencies. It did not rally much ahead of the US jobs data, and it was not able to sustain the upside momentum afterwards, despite the jump in US yields. For St. Louis Fed President Bullard, who still has a strong reputation in the market, told Bloomberg TV yesterday that three cuts were his base case this year. The Scandis and Antipodeans are the strongest today, up about 0.25%-0.33%. The dollar continues to hold below JPY152 barely. Most emerging market currencies are also firmer today. The dollar continues to trade just inside its band against the onshore yuan. 

Most of the large Asia Pacific equity markets rallied, led by a 1.85% gain in Taiwan and a 1.1% advance by the Nikkei. South Korea was a notable exception and the won traded lower too. Europe's Stoxx 600 is trading a little heavier after gaining almost 0.5% yesterday. US index futures are slightly firmer. Benchmark 10-year yield are 3-4 bp lower in Europe, and the 10-year US Treasury is off three basis points to about 4.39%. The year's high was set yesterday closer to 4.46%. Gold continues to march higher. A new record was reached today, a little more than $2365.35. In the last 11 sessions coming into today, gold has fallen once. It is up more than 1% today, which if sustained would be the fourth such gain in eight sessions. After recovering strongly from around $84.70 yesterday to settle near $86.60, May WTI has struggled to sustain the upside momentum and stalled near $87 today and is consolidating ahead of the North American session....