"‘Dr. Doom’ Nouriel Roubini looks to launch his first ETF"

Why?

From Bloomberg via Canada's Financial Post, July 31:

He's the latest in a long list of prominent economists and investors to attach their names to ETFs

Economist Nouriel Roubini, who earned the Dr. Doom moniker for his warnings of disaster ahead of the 2008 financial crisis, is looking to become the latest high-profile Wall Street veteran to make their mark in the US$9.4-trillion exchange-traded-fund universe. 

The Atlas America Fund, which would count him as one of three portfolio managers, would be actively managed and invest in a variety of assets, including potentially United States government, corporate and municipal bonds, real estate, equities and gold, according to a filing with the U.S. Securities and Exchange Commission.

The fund aims to generate stable returns with low volatility and limited correlation with broader equity markets, protecting against downside risks during periods of financial market stress.

Roubini, who runs Roubini Macro Associates LLC, is the latest in a long list of prominent economists and investors to attach their names to ETFs. Fundstrat Global Advisors LLC’s Tom Lee was listed on a Monday filing for the Fundstrat Granny Shots U.S. Large Cap ETF. Fairlead Strategies LLC’s Katie Stockton launched her ETF, which trades under the ticker TACK, in 2022, while Jim Bianco, of Bianco Research LLC, lent his name to the WisdomTree Bianco Total Return Fund....

....MUCH MORE

Though we wish the good Professor the best, there aren't that many economists you would want running your money. Maybe this guy (October 2015):

New York Fed: "Who Wants to Be the Richest Economist?"
The author, New York Fed research librarian Amy Farber, links to one of our posts on rich economists but not to my favorite, which, if interested, you'll find after the jump....

"Chinese factories poised for 'cruel summer' as PMI surveys raise outlook risks"

 From Reuters, July 31/Aug. 1:

Summary

• Caixin/S&P Global July manufacturing PMI at 49.8 vs 51.8 in June
• Caixin/S&P Global PMI misses analysts' expectations of 51.5
• Official manufacturing PMI on Wednesday also showed decline

BEIJING, Aug 1 (Reuters) - China's sluggish manufacturing sector is poised for a "cruel summer" with two sentiment surveys this week pointing to a new level of gloom among factory owners struggling with poor demand, signalling risks for economic growth in the second half of 2024.

 

A private-sector survey of purchasing managers from 650 private and state-owned manufacturers published on Thursday found that operating conditions in the sector deteriorated for the first time in nine months as new orders tumbled.

 

The Caixin/S&P Global manufacturing Purchasing Managers' Index (PMI) dropped to 49.8 in July - below the 50-mark separating growth from contraction - from 51.8 the previous month. That was the lowest reading since October last year and missed analysts' forecasts of 51.5.

 

The unexpectedly downbeat survey, which mostly tracks export-oriented firms, came on the heels of an official PMI survey covering bigger companies that also showed reduced order flows and weak prices....

....MUCH MORE

 

The Shanghai - Shenzhen CSI 300 index is trading down around a half-percent after a big jump yesterday.  

""The Fed Did Not Tip A September Cut, By Any Stretch": Wall Street Reacts To The FOMC Statement"

From Bloomberg via ZeroHedge, July 31:

As the market tries to digest Fed speak, here are some of the fastest Wall Street commentators and strategists piling on with their initial reactions to the FOMC statement, if not Powell's presser.

UBS trader Leo He:

"The Fed keeps rates unchanged. In the policy statement, the Fed changes its language to "the Committee is attentive to the risks to both sides of its dual mandate," where previously it said "the Committee remains highly attentive to inflation risks". However, the Fed maintains: "The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent." This statement is definitely more dovish than the June statement, as the Fed says they are focusing on dual mandates now. But this is definitely not a complete pivot. Austan D. Goolsbee, the most dovish FOMC member, voted as an alternate member at this meeting, as Mester retired. Beth M. Hammack will take the president office of Cleveland Fed later this month and likely take over the voter role from September."

Derek Tang, economist with LH Meyer/Monetary Policy Analytics:

“Quite balanced, and nicely captures the moderation in inflation and the real side without fueling the flames of adding a November cut too. A September easing should still be a go, barring anything that would stay their hand. It would be hard to see what would do that at this point.”

Win Thin, global head of markets strategy at BBH:

“I think many were hoping for some sort of softening here, along the lines of ‘we have somewhat greater confidence’ but the Fed did not tip a September cut, by any stretch. I think they will cut, but the Fed is playing its cards close to its chest. Marginally less dovish than expected."

Ira Jersey, Bloomberg Intel chief rates strategist:

“Overall, the Fed’s policy statement appears to meet our expectation in that it is balanced. The new phrase ‘risks to both sides of its dual mandate’ doesn’t signal a September cut is imminent. The front end of the curve selling off the knee-jerk bear flattener seems reasonable. Powell’s press conference may be more telling than the incremental shifts in the statement.”

George Catrambone, head of fixed income, DWS Americas:

“The risks are much more two-sided. They’ll be able to get more data to confirm the disinflationary path, but soft landings don’t materialize by waiting too long to cut.”

Neil Dutta, Renaissance Macro

“With language like this, it means the Fed will have to make a more pronounced shift in language in September. I am surprised stocks are holding up on this statement. Perhaps equities are looking ahead to the press conference. The minutes of today’s meeting, along with the Jackson Hole central banking conference in August, will offer further opportunities."....

 ....MUCH MORE

"Rolls-Royce clears key hurdle in race to build mini-nukes"

From The Telegraph, July 30:

Engineering giant becomes first to advance to final stage of regulatory approval  

Rolls-Royce has cleared a key hurdle in the race to build Britain’s first mini-nuclear power plant, as competition across Europe ramps up. 

On Tuesday, the FTSE 100 engineering giant became the first developer to advance a small modular reactor (SMR) design to the final stage of examination by UK regulators. 

Helena Perry, director of safety and regulatory affairs at Rolls-Royce SMR, said the latest approval was “the most important milestone to date in advancing deployment of Rolls-Royce SMRs in the UK”.

She added: “We have built fantastic momentum and the team will move directly into step three of this rigorous independent assessment of our technology – ideally positioning us to deliver low-carbon nuclear power and support the UK’s transition to net zero.”

The Derby-based company wants to build a new generation of lower-cost power plants, made from modular parts that would be produced in factories and then assembled on site.   

SMRs would each generate 470 megawatts of electricity and cost between £2bn and £3bn initially. Rolls-Royce aims to bring that number down gradually through economies of scale.

The Office for Nuclear Regulation (ONR) said Rolls has now been cleared to move into the third and final stage of the UK’s generic design assessment.

That process is expected to conclude by the end of 2026, after which Rolls will be able to apply for site-specific approval to build its first SMR. 

A summary assessment published by the ONR on Tuesday said that the regulator has “not identified any fundamental safety, security or safeguards shortfalls that could prevent permissioning the construction of a power station based on the generic Rolls-Royce SMR design”....

....MUCH MORE 

"Treasury says it won’t have to increase coupon auction sizes for ‘the next several quarters’"

That is, until the next administration takes office. 

...On the other hand, I'm not sure you would want to be President during the next four years, there are so many problems that have been growing and metastasizing just beneath the surface of the daily news that the person in the hot seat could end up just plain reviled.

—me, repeating myself a few times over the last couple months

From MarketWatch, July 31":

U.S. Treasury to auction $125 billion in notes and bonds next week 

The numbers: The Treasury Department said Wednesday it will sell $125 billion in notes and bonds next week at its quarterly refunding auction. That is the same as the size of the auctions last quarter.

In a statement, the Treasury said it does not anticipate the need to increase nominal coupon or floating rate note auction sizes “for at least the next several quarters.”

The department will auction $58 billion in 3-year notes BX:TMUBMUSD03Y on Aug. 6 and $42 billion in 10-year notes BX:TMUBMUSD10Y on Aug. 7. They government will also sell $25 billion in 30-year bonds BX:TMUBMUSD30Y on Aug. 8.

The auctions will refund $111 billion of Treasury debt and raise $14 billion in new cash.

Big picture: There has been growing concern in financial markets that the U.S. has not managed to shrink its deficit when unemployment has been so low.

That means there is a risk the deficit will widen if the economy were to stumble.

The IMF’s chief economist said recently he was worried that the U.S. is relying too much on short-term borrowing to finance its deficit.

In the short run, Treasury has some breathing room to finance its debt as the Federal Reserve has slowed the pace of its quantitative-tightening program. That effectively reduces the amount of debt previously held by the Fed that the Treasury would have to sell to other investors....

....MUCH MORE

First Solar Q2 Conference Call Transcript, July 30, 2024 (FSLR)

Buyers seem a bit more enthusiastic than they did immediately following yesterday's earnings release, FSLR up  $7.22 (+3.42%) at $218.11 and clawing back a chunk of yesterday's regular session loss of $9.51.

From The Motley Fool's Motley Fool Transcribing, July 31:

FSLR earnings call for the period ending June 30, 2024.

First Solar (FSLR -4.32%)
Q2 2024 Earnings Call
Jul 30, 2024, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon, everyone, and welcome to First Solar's second quarter 2024 earnings call. This call is being webcast live on the Investors section of First Solar's website at investor.firstsolar.com. At this time, all participants are in a listen-only mode. As a reminder, today's call is being recorded.

I would now like to turn the call over to Richard Romero from First Solar Investor Relations. Richard, you may begin.

Richard Romero -- Vice President, Investor Relations and Treasurer

Good afternoon, and thank you for joining us. Today, the company issued a press release announcing its second quarter 2024 financial results. A copy of the press release and associated presentation are available on First Solar's website at investor.firstsolar.com. With me today are Mark Widmar, chief executive officer; and Alex Bradley, chief financial officer.

Mark will provide business, strategy, technology, and policy updates, Alex will discuss our bookings, pipeline, quarterly financial results and provide updated guidance. Following their remarks, we will open the call to questions. Please note this call will include forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from management's current expectations. We encourage you to review the safe harbor statements contained in today's press release and presentation for a more complete description.

It is now my pleasure to introduce Mark Widmar, chief executive officer.

Mark R. Widmar -- Chief Executive Officer and Director

Good afternoon, and thank you for joining us today. Reflecting on the first half of 2024, we are pleased with our ongoing efforts to strengthen the fundamentals of our business. With solid operating and financial performance, selective incremental bookings, robust pipeline of demand, including a near -- a recently signed 620-megawatt module supply agreement subject to additional conditions precedent with a new U.S. customer that will be supplying power to a hyperscaler.

And investment in technology, R&D infrastructure, and manufacturing expansions, we continue to solidify our market position through strong execution. Our balanced approach to growth, profitability, and liquidity, combined with multiple technological and business model points of differentiation enable us to deliver value for both our customers and our shareholders. Beginning on Slide 3, I will share some key highlights for the second quarter. From a commercial perspective, we continued our disciplined approach to bookings.

Since our last earnings call, we have secured a net 0.9 gigawatts of bookings with an ASP of $0.316 per watt, excluding adjusters where applicable or $0.334 per watt, assuming the realization of adjusters where applicable and in each case, excluding India domestic sales. This includes a 0.4 gigawatt debooking related to a termination for convenience exercised by one of our European power and utilities customers who are selling a portfolio of U.S. development assets as referenced on our last earnings call and who is obligated to pay the associated contract termination payment. This brings our year-to-date net bookings to 3.6 gigawatts.

Our total contracted backlog now stands at 75.9 gigawatts with orders stretching through 2030. From a technology perspective, since our Q1 earnings call, we have established a new world record CadTel research cell with a conversion efficiency of 23.1%, commissioned new critical R&D infrastructure in Ohio, and remain on track to launch our CuRe program in Q4 of this year. Our CuRe program is expected to increase energy production in real-world conditions through improved module temperature coefficient, bifacial reality, and degradation rate. Additionally, we have announced the ownership of certain issued and pending patents related to the manufacturing of TOPCon crystalline silicon solar cells.

And while Alex will provide a comprehensive overview of our second quarter 2024 results, I would like to highlight our ability to deliver financially with second-quarter earnings per diluted share of $3.25 and a quarter-end net cash balance of $1.2 billion. Despite this strong execution and our success, delivering on the manufacturing technology, customer, and financial commitments, we must acknowledge that our industry faces varying degrees of increasing external uncertainties, particularly related to policy, supply conditions, and evaluations of strategic direction and capital allocation by certain large multinational companies. These will be discussed later during the call. Turning to Slide 4.

Our growth plans remain on track. The expansion of our Ohio manufacturing footprint has been completed and commercial shipments began as scheduled at the end of the second quarter. The completion of this phase expands our manufacturing capacity into the state by almost one gigawatt to nearly seven gigawatts. In Alabama, we expect to complete the installation of tools, complete plant certification, and commence production this quarter with the first commercial shipments from the plan expected in Q4 of 2024.

We are pleased with the speed at which we're able to construct, equip, and commission the 2.4 million square foot facility, achieving this in approximately 24 months from the investment decision. Our new Louisiana facility is also on track with the start of commercial operations expected in the second half of 2025. Furthermore, we commissioned the Jim Nolan Center for Solar Innovation earlier this month. This new research and development innovation center in Ohio is the largest facility of its kind in the Western Hemisphere.

The 1.3 million square foot facility includes a high-tech pilot manufacturing line, which we expect will allow us to produce full-size prototypes of thin-film and tandem PV modules in a manufacturing sandbox, freeing up our commercial production lots. In addition, we are on track to commission our new perovskite development line at our Ohio campus in the second half of 2024. Combined, these new facilities represent an investment of nearly $0.5 billion in American R&D infrastructure. We believe that thin-film research is critical for commercializing multi-junction tandem devices, which are anticipated to be the next disruptive innovation in the solar industry.

While the U.S. leads the world in thin-film PV under First Solar's stewardship, China is racing to close the innovation gap, and we expect that our strategic investment in R&D infrastructure will help us maintain our nation's strategic advantage in thin-film technology and position the next generation of disruptive, transformative solar technologies to be American-made. Turning to Slide 5. We continue to progress our technology road map and during the quarter, established a new world record CadTel research cell conversion efficiency of 23.1%....

....MUCH MORE

The company is sold out of current production through 2026 with a backlog of 78 gigawatts extending into 2030.

July 30: "First Solar Beats On Top and Bottom Lines But Only Maintains Full Year Outlook (FSLR)" 

And as we said in July 2's ""First Solar’s Future Hinges on AI Demand and Election Outcomes" (FSLR)" (following an exquisitely timed overvaluation observation):

...The stock closed down another $5.98 (-2.69%) at $216.73, fully $90.04 below the intraday high less than three weeks ago.

First Solar will report their second quarter numbers in four weeks. We expect beats top and bottom and guidance to match or exceed the street. The Go-Go's are on standby for...

Sometime you get lucky.

Apple Trained Its Large Language Model On Broadcom-Designed TPUs In Google's Cloud, Meh (AVGO, GOOG, AAPL)

From The Street, July 30:

NVIDIA's Stock Almost Crashes Below $100 After Hours - Then It Surges: Here's Why

It was another miserable day for NVIDIA (Nasdaq: NVDA) as the stock fell 7.04% today. After closing at $103.73, the sell-off continued in after-hours trading, with shares of NVIDIA trading hands for little more than $100 per share. 

And then something changed rapidly. NVIDIA shares jumped and are now trading for $109 per share in after-hours trading, a 5% jump from where they closed trading today. Let’s look at why NVIDIA shares lost so much today and then explore why they’re suddenly rebounding so strongly in after-hours trading. 

Key Points in This Article 

• NVIDIA shares dropped more than 7% today. The losses were primarily attributable to continuing sector rotation out of technology stocks and also fears around the company’s competitive position after it was revealed Apple trained their new AI models on Google’s TPUs. 
• In after-hours trading NVIDIA is rebounding due to positive earnings from rival Advanced Micro Devices (NYSE: AMD) and also positive cloud spending comments from Microsoft (Nasdaq: MSFT)....

...Why NVIDIA Shares Sank 7% Today 

NVIDIA shares sank 7% today as technology stocks in general struggled. The Nasdaq-100 fell 1.38%. Each day the Nasdaq falls, the important metric to watch is its relative performance to the Russell 2000. If the Russell 2000 is strongly outperforming, that demonstrates continuing ‘sector rotation’ of investors moving out of strategies like large technology stocks and into other areas like small caps or value stocks. 

The Russell 2000 gained .35% today, so it outperformed the Nasdaq-100 by 1.73 percentage points, a massive divide between the two major indexes. 

However, there was company-specific news that also played into NVIDIA’s decline today. Apple released a large research paper on the creation of their large language models used in the upcoming release of Apple Intelligence. Here’s the relevant section that impacts NVIDIA (emphasis mine):

“The AFM models are pre-trained on v4 and v5p Cloud TPU clusters with the AXLearn framework [Apple, 2023], a JAX [Bradbury et al., 2018] based deep learning library designed for the public cloud. Training is conducted using a combination of tensor, fully-sharded-data-parallel, and sequence parallelism, allowing training to scale to a large number of model parameters and sequence lengths at high utilization. This system allows us to train the AFM models efficiently and scalably, including AFM-on-device, AFM-server, and larger models. AFM-server was trained on 8192 TPUv4 chips provisioned as 8 × 1024 chip slices, where slices are connected together by the data-center network (DCN) [Chowdhery et al., 2022]. Only data-parallelism crosses the slice boundary, other types of state sharding are within-slice only as the within-slice interconnect bandwidth is orders of magnitude higher than the DCN. The sustained model-flop-utilization (MFU) for this training run was approximately 52%. AFM-on-device was trained on one slice of 2048 TPUv5p chips.”

....MUCH MORE

Pre-market NVDA is up $6.68 (+6.44%) at $110.41.

When I want to scare myself I look at the two gaps—February and May—on the chart as possible downside targets:

 

 

TradingView

On the other hand the Tensor Processing Units still haven't achieved their promise of 2017:

Watch Out NVIDIA: "Google Details Tensor Chip Powers" (GOOG; NVDA)
We've said NVIDIA probably has a couple year head start but this bears watching, so to speak....

Or 2018
Ahead of Today's NVIDIA Earnings: A Look at One of the Competitors (GOOG; NVDA)
We'll have much more on Google next week but for today the next-gen Tensor Processing Unit....

Or 2023:
Chips: "Google TPU v5e AI Chip Debuts after Controversial Origins"

Capital Markets: "BOJ Delivers, Sending Greenback to Almost JPY150; Now Over the to Federal Reserve"

From Marc Chandler at Bannockburn Global Forex:

Overview: A 15 bp hike by the BOJ and plans to halve its bond purchases by the end of FY25 (in March 2026), coupled with a hawkish press conference by Governor Ueda sent the dollar to nearly JPY150, its lowest level in four months. A soft-core inflation reading in Australia send the Aussie lower and is the weakest of the G10 currencies. The others are little changed. The focus is now on the Federal Reserve, which is expected to signal that its confidence has grown that inflation is on its way back to the target and that it may be appropriate to reduce the restrictiveness soon. This will likely be understood as validating market expectations of a cut at the next meeting in September. A stronger endorsement by come at the Jackson Hole conference at the end of next month, when another employment and CPI report will be in hand.

Equities are rallying today. Nearly all the bourses in the Asia Pacific region but Taiwan rallied. China and Hong Kong were up by more than 2%. Australia's ASX advanced by 1.75%, while the Nikkei gained nearly 1.5%. The Stoxx 600 is up about 0.8% and US index futures are up around 1%. The 10-year JGB yield jumped 5.5 bp to 1.04%, while Australian 10-year yields tanked by 16 bp (to 4.11%). European yields are mostly 1-2 bp softer. The 10-year US Treasury yield is flat near 4.14%. Gold is firm and trading near a five-day high above $2420. It is the fourth consecutive session of higher lower. Escalating Middle East conflict, falling US inventories, and talk of a Saudi price increase have helped lift September WTI from the below $75 yesterday to near $77 today.

Asia Pacific....

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"How CrowdStrike, the Company Behind the Global Tech Outage, Keeps the World Running"

From Observer, July 30:

The $90 billion cybersecurity behemoth has shed nearly $30 billion of its market cap since the IT outage incident.

Earlier this month (July 19), a historic computer outage that crashed 8.5 million computer system worldwide made CrowdStrike, a Texas-based cybersecurity company, an overnight household name. The incident was caused by a software update on Crowdstrike’s Falcon platform, which, when used on a Windows device, resulted in “read-out-of-bounds” memory safety errors that forced the device to stop working. The $90 billion cybersecurity behemoth has shed nearly $30 billion of its market cap since. CrowdStrike and its founder have a scarcely discussed meteoric rise to the helm of cybersecurity, quietly becoming responsible for keeping much of our global digital infrastructure safe from attacks.

Who is behind CrowdStrike?

CrowdStrike was founded in 2011 by George Kurtz, currently the CEO, Dmitri Alperovitch and Gregg Marston. Kurtz was already a well-known leader in the space before founding the company, having written a book about hacking that sold more than 600,000 copies globally. In 1999, he founded Foundstone, one of the world’s first security consulting companies. In 2004, the cybersecurity giant McAfee acquired Foundstone for $86 million and Kurtz quickly rose up to the CTO role at McAfee by 2009....

....MUCH MORE

First Solar Beats On Top and Bottom Lines But Only Maintains Full Year Outlook (FSLR)

In early after-market trade the stock is up a couple bucks after dropping $9.51 during the regular session.

From Investor's Business Daily, July 30:

S&P 500 Solar Company Sees Q2 EPS Grow 100% But Stock Adds To Decline Since 2024 Peak

S&P 500 component First Solar (FSLR) reported better-than-expected second-quarter earnings and revenue late Tuesday, with the company's profit growing more than 100%. First Solar also maintained its full-year guidance. FSLR shares angled lower after the market closed Tuesday.

First Solar saw its Q2 EPS grow 104% to $3.25 while sales totaled $1.01 billion, a 25% increase compared to a year ago. Analyst consensus expected earnings of $2.71 per share with revenue coming in at $940 million.

"We are pleased with our financial and operational execution through the first half of this year as we continue to deliver on our commitments," Chief Executive Mark Widmar said in the earnings release Tuesday.

First Solar also kept its full-year outlook steady. In early May, the S&P 500 company forecast 2024 earnings of $13.00-$14.00. That would represent a gain of more than 67% compared to $7.74 per share in 2023.

First Solar also in May projected 2024 revenue of $4.4 billion-$4.6 billion, up more than 30% vs. 2023 levels. First Solar is sold out through 2026 with a backlog of 78 gigawatts extending through 2030.

Last week, Morgan Stanley analyst Andrew Percoco wrote that the perceived risk of a Republican president repealing the Inflation Reduction Act, or IRA, is "overblown." Percoco added that if former President Donald Trump wins the White House in 2024, increased tariffs on China could better position FSLR.

"In a scenario where Trump wins the 2024 election, we would expect FSLR to benefit from greater pricing, enabled by additional tariffs on solar equipment imported into the U.S., or even the perceived risk of incremental tariffs under a potential Trump administration," Percoco said.

Morgan Stanley has a 331 price target on FSLR. Excluding IRA credits, Morgan Stanley has a core equity value of 231 per share.

First Solar Stock Performance....

....MUCH MORE

Here's the company:

July 30, 2024

First Solar Q2 2024 Financial Results

The stock is now up $3.86 (+1.83%) at $214.75 after hours, that's enough to get the GoGo's up on stage. More tomorrow (post conference call).

"Magnificent Seven Stocks: Nvidia Stock Dives, Tesla Slides; Microsoft Earnings Next"

It appears this article was written a couple weeks ago and has been updated. Still a good overview of what's what. Re: Tesla Yesterday Adam Jonas at Morgan Stanley made Tesla his best buy, knocking Ford out of the slot. We didn't post because, well, who cares? The stock was up double digits and is now giving that back.

Re: Nvidia the concern is that MSFT and the rest of the gang that have been buying chips by the containerload might announce they are scaling back, perhaps until the Blackwell chip begins shipping.

From Investor's Business Daily, July 30:

Dubbed the Magnificent Seven stocks, Apple, Microsoft, Google parent Alphabet, Amazon, Nvidia, Meta Platforms and Tesla lived up to their name in 2023 with big gains. But the start of the third quarter of 2024 showed a big divergence of returns. The Magnificent Seven stocks are among the best stocks to watch on the stock market today.

Due to their outsized market capitalizations, Magnificent Seven stocks hold a disproportionate influence on the market-cap weighted Nasdaq composite and S&P 500 indexes.

For an in-depth look at this issue, check out IBD's page on the Magnificent Seven weightings, market capitalizations and the companies' latest news stories. 

Magnificent Seven Stocks Performance

Company Name	Symbol	2024 YTD Performance
Alphabet	(GOOGL)	+24.0%
Amazon	(AMZN)	+28.4%
Apple	(AAPL)	+18.2%
Meta Platforms	(META)	+44.9%
Microsoft	(MSFT)	+20.9%
Nvidia	(NVDA)	+157.3%
Tesla	(TSLA)	-3.0%

Source: IBD Data As Of July 12, 2024

Alphabet Slides On Earnings
Google parent Alphabet (GOOGL) set new highs in recent weeks, sharply above a 153.78 entry. The stock inched higher Tuesday, still sharply below its 50-day line after last week's decline.

Last week, Google-parent Alphabet reported second-quarter earnings and revenue that topped analyst estimates as operating margins improved. Management also signaled higher expenses in the September quarter, curtailing margin growth.

Nvidia Stock Leads Magnificent Seven
Among the Magnificent Seven stocks, Nvidia (NVDA) is the top performer in 2024, with a scorching 157% year-to-date return through July 12.

Nvidia stock tumbled 5.8% Tuesday, further below the 50-day moving average line, a key level to watch. A breach of that level in heavy volume is a sell signal.

In recent weeks, the stock soared after the AI giant beat Wall Street's targets for its fiscal first quarter and guided higher than views for the current period. It also announced a 10-for-1 stock split that took effect on June 10.

The tech titan is an IBD Leaderboard stock. Nvidia stock topped a split-adjusted handle buy point at 92.22, and shares gapped up to all-time highs. Nvidia stock also moved above a split-adjusted entry at 97.40.

Tesla Stock Falls
Tesla (TSLA) dropped 3.9% Tuesday. Shares closed last week at their lowest level since early July following the company's Q2 earnings report.

Last week, electric-vehicle giant Tesla announced mixed second-quarter earnings and revenue. Earnings plummeted by more than 40% while sales came in above expectations.

Dow Jones Stocks In Magnificent 7: Apple, Microsoft
Two Dow Jones names among the Magnificent Seven stocks, Apple (AAPL) and Microsoft (MSFT), traded lower on the stock market today.

Apple stock moved down 0.3% Tuesday, still out of buy range above a 199.62 entry. Apple hit a record high on July 15....

....MORE

"AI trained on AI garbage spits out AI garbage"

This is a really big problem.

From MIT's Technology Review, July 24:

As junk web pages written by AI proliferate, the models that rely on that data will suffer.

AI models work by training on huge swaths of data from the internet. But as AI is increasingly being used to pump out web pages filled with junk content, that process is in danger of being undermined.

New research published in Nature shows that the quality of the model’s output gradually degrades when AI trains on AI-generated data. As subsequent models produce output that is then used as training data for future models, the effect gets worse.  

Ilia Shumailov, a computer scientist from the University of Oxford, who led the study, likens the process to taking photos of photos. “If you take a picture and you scan it, and then you print it, and you repeat this process over time, basically the noise overwhelms the whole process,” he says. “You’re left with a dark square.” The equivalent of the dark square for AI is called “model collapse,” he says, meaning the model just produces incoherent garbage. 

This research may have serious implications for the largest AI models of today, because they use the internet as their database. GPT-3, for example, was trained in part on data from Common Crawl, an online repository of over 3 billion web pages. And the problem is likely to get worse as an increasing number of AI-generated junk websites start cluttering up the internet. 

Current AI models aren’t just going to collapse, says Shumailov, but there may still be substantive effects: The improvements will slow down, and performance might suffer. 

To determine the potential effect on performance, Shumailov and his colleagues fine-tuned a large language model (LLM) on a set of data from Wikipedia, then fine-tuned the new model on its own output over nine generations. The team measured how nonsensical the output was using a “perplexity score,” which measures an AI model’s confidence in its ability to predict the next part of a sequence; a higher score translates to a less accurate model.

The models trained on other models’ outputs had higher perplexity scores. For example, for each generation, the team asked the model for the next sentence after the following input:

“some started before 1360—was typically accomplished by a master mason and a small team of itinerant masons, supplemented by local parish labourers, according to Poyntz Wright. But other authors reject this model, suggesting instead that leading architects designed the parish church towers based on early examples of Perpendicular.”

On the ninth and final generation, the model returned the following:

“architecture. In addition to being home to some of the world’s largest populations of black @-@ tailed jackrabbits, white @-@ tailed jackrabbits, blue @-@ tailed jackrabbits, red @-@ tailed jackrabbits, yellow @-.”

Shumailov explains what he thinks is going on using this analogy:...

....MUCH MORE

If interested see also: 

"What Grok’s recent OpenAI snafu teaches us about LLM model collapse"

Previously:

• "When AI Is Trained on AI-Generated Data, Strange Things Start to Happen"

Yeah, like self-referential doom loops.

Also:

• Artificial Data To Train Artificial intelligence
• "ChatGPT Isn’t ‘Hallucinating.’ It’s Bullshitting."
• Embrace Your Hallucinating ChatBot: "Sundar Pichai Opens Up About Google Bard's Trippy Troubles: 'No One In The Field Has Yet Solved Hallucination Problems'"

Somewhat related:

• Do Your AI Training In The Cloud: Google and Nvidia Team Up (GOOG; NVDA) 
• "Experts expect major companies are developing chatbots trained on internal data for company use." (META)  
• Teach Your Robot Comedic Timing
• AI, Training Data, and Output (plus a dominatrix) 

It will all slowly grind to a halt unless a solution to the training data problem is found. Bringing to mind a recursive, self-referential 2019 post:  

Whatever Happened to Nanotechnology? The Same Thing That Is Happening to Tech Right Now ....

*****

....This was forseeable.
From a December 2010 post:

"Top Investment Trends For Futurists" (PXN; TINY)

...The reason for highlighting nano is two-fold.

1) Since Feynman coined the word there has been a misconception among investors that there would be a nano-technology "industry". This has proven not to be the case and won't be in the future. Rather nano is a tool, an approach toward problem solving.

There will be some breakthroughs that make their discoverers instantly (after 10 years of research) wealthy but the real beneficiaries will be companies like Kyocera and 3M and Siemens. They will use the technology to do what they are already doing, just better, faster, cheaper, more.

2) In spite of the fact that there will be few pure plays we are convinced that nano combined with advances in materials science and manufacturing technology is what will spur the next secular bull market....

When it becomes ubiquitous, the distinctions blur, the drive for creativity recedes, stasis, then death.
Wait what? Entropy! I meant to co-opt the physically precise  concept of entropy to metaphorically describe the trend. Not death.
No, death bad, Sand Hill Road good.

We are still of the opinion that death bad, Sand Hill Road good, but the two concepts seem more difficult to distinguish as they head toward their own fusion and then stasis. However! That 2019 post ended on a somewhat optimistic note:

So in both definitional and awareness terms, it's over.
The one area of debate that is left is whether things like AI and 5G/IoT and biology/life sciences will step up to fill the void.
For that discussion you have to check-out the articles' comments. 

Superyacht abandoned by a Russian fertilizer billionaire has a new secret owner, who got it for a huge discount

From Fortune, July 22:

The Alfa Nero superyacht, which has been abandoned in the Caribbean for more than two years, has a new owner.

The 267-foot (81-meter) vessel, complete with a baby grand piano and a swimming pool that turns into a helipad, sold for $40 million last week, said Ronald Sanders, Antigua and Barbuda’s ambassador to the US. He declined to name the buyer, citing a confidentiality agreement.

The sale marks the latest attempt to end the years-long Alfa Nero saga. A Russian oligarch abandoned the luxury yacht in Antigua in March 2022, after being sanctioned by the US Treasury. Then tech billionaire Eric Schmidt tried buying it at auction, only to give up when the sale became a legal quagmire. 

Meanwhile, the vessel sat in Antigua’s Falmouth Harbour being tended to by a skeleton crew and costing over a $100,000 a month to maintain.

At $40 million, the new Alfa Nero owner will end up paying far less than the $67.6 million that Schmidt, a former Google CEO, had offered last year. Sanctioned Russian fertilizer billionaire Andrey Guryev had originally bought the Alfa Nero in 2014 for $120 million, the US Treasury Department said — which Guryev denies....

....MUCH MORE

It's a big boat.

Singapore data center upstart Is Raising $950 Million

From Bloomberg via Data Center Knowledge, July 28:

Nvidia Partner SMC Raising $950M to Tap AI Server Boom
SMC is among data center companies targeting Asia as global tech conglomerates and AI startups seek computing capacity for their services.

Singapore data center upstart Sustainable Metal Cloud is raising about $950 million in fresh funds, seeking to tap the global artificial intelligence boom to spur its growth.

The company, an affiliate of Australia’s Firmus Technologies, is finalizing an initial equity round of about $400 million, people familiar with the matter said. The six-year-old firm is also in the process of raising $550 million in debt, the people said, asking not to be identified as the plans are private.

SMC is among data center companies targeting Asia as global tech conglomerates and AI startups seek computing capacity for their services. It offers companies use of advanced Nvidia Corp. chips, crucial for developing and running AI applications....

....MUCH MORE

Shipping: "Busiest Ports In The World..."

Lifted in toto from Slope of Hope, July 28:

Pretty much all in Asia………

Slope blog home

Shipping: "When This Supply-Chain Essential Goes Missing, It’s Time to Bring in the ‘Pallet Detectives’"

We too have heard the siren song of pallets,

From the Wall Street Journal, July 25:

Wooden pallets turn up inside homes, on roadsides and in bonfires. Tracking them down is a full-time job; just watch out for the dogs.

SYDNEY—When the world’s biggest supplier of wooden pallets tries to recover its lost property from junkyards and hard-to-find lots, things can get ugly.

“If you’re in Europe, it goes relatively easily. If you’re in Alabama, unfortunately sometimes a guy comes out with two dogs and a shotgun,” said Graham Chipchase, chief executive of Brambles, which owns and rents reusable pallets to companies including manufacturers, suppliers and retailers.

Wooden pallets keep global supply chains humming, carrying everything from soda cans to washing machines. Yet millions of these portable platforms go missing every month, either lost, stolen or broken.

Finding them is an additional load for the multibillion-dollar industry. While the product costs only around $20 each and is typically made of sawed wooden planks held together with nails, suppliers like Brambles own hundreds of millions of pallets. Replacement costs can quickly run to millions of dollars each year.

Enter the “pallet detectives”—former law-enforcement personnel on Brambles’ payroll. Their job is to track down leads and hunt out stray pallets so they can be returned to the Australian company, which has a market value of about $14 billion, making it about the same size as Campbell Soup.

A few pallets resurface as makeshift shelving or wall art. Some are repurposed as coffee tables. For thrifty households wanting to introduce a bit of industrial chic to their boudoirs, the humble pallet’s versatility lends itself to a bed base.

Still more pile up on the side of the road, creating eyesores and irking neighborhoods. Others are targeted by thieves or used by organized crime gangs to move drugs.

For such simple, coarsely constructed items, pallets can be surprisingly highly valued. Susana Márquez Pedrouso was working for Nike in the early 2000s when a colleague realized a manager was stealing something from a stockroom filled with top-of-the-range sneakers. The colleague hid near the backdoor to find out what it was.

“He caught the manager bringing a pallet out from the store into his van. I couldn’t believe it. I thought we were talking about Nike shoes,” said Pedrouso, a Madrid-based security consultant. Her colleague told her the pallets were in demand and could be sold.  

Following the trail of a lost pallet often resembles police casework, with detectives leaning on a mix of new technology, old-fashioned shoe leather and human ingenuity.

“They’re very good at collecting evidence and times and photographs,” Chipcase, the CEO, said of detectives. “To do that, you don’t necessarily want to be in a Brambles-branded vehicle.” 

To help employees in the field, Brambles has screwed around 450,000 GPS trackers onto the blue-painted pallets leased by its CHEP business. The trackers, which cost $60 each, ping every hour or two to provide near real-time location data.  

It can still be difficult for detectives, who include former local police and highway-patrol officers, to locate the pallets and bring them home. On one occasion, a Brambles employee resorted to flying a drone-mounted camera over a yard when the owner denied hoarding pallets that trackers showed were nearby. 

“We found all the blue pallets in the middle and the white ones placed around the side so you couldn’t see them from the road,” said Chipchase....

....MUCH MORE

Previously:
"The Single Most Important Object in the Global Economy"

Logistics: And Now There's A Shortage Of Pallets: Prices Up 400%
We've been here before, see after the jump...

Supply chain 'stretched' for cardboard boxes, wood pallets: Thomas

Logistics: "On Stretch Wrap"
Following on the hubbub our linkfests "Pallets" and "Pallets: The Sequel" created, it is time for Stretch Wrap....

One Year On Fom His Prediction: "Elon Musk Wants More Power"

From the wall Street Journal, July 29, 2023: 

‘My biggest concern is that there’s insufficient urgency,’ the billionaire tells energy executives

Elon Musk wants more power—literally.

The man behind the race to replace gasoline-fueled cars with electric ones is worried about having enough juice.

In recent days he has reiterated those concerns, predicting U.S. consumption of electricity, driven in part by battery-powered vehicles, will triple by around 2045. That followed his saying earlier this month that he anticipates an electricity shortage in two years that could stunt the energy-hungry development of artificial intelligence.

“You really need to bring the time scale of projects in sooner and have a high sense of urgency,” Musk told energy executives Tuesday at a conference held by PG&E, one of the nation’s largest utilities. “My biggest concern is that there’s insufficient urgency.”

Musk’s participation with PG&E Chief Executive Patti Poppe at the power company’s conference marked the third major energy event the billionaire has appeared at in the past 12 months. He has played the part of Cassandra, trying to spark more industry attention on the infrastructure required for his EV and AI futures as he advocates for a fully electric economy.

 “I can’t emphasize enough: we need more electricity,” Musk said last month at an energy conference in Austin. “However much electricity you think you need, more than that is needed.”

The U.S. energy industry in recent years already has struggled at times to keep up with demand, resorting to threats of rolling blackouts amid heat waves and other demand spikes. Those stresses have rattled an industry undergoing an upheaval as old, polluting plants are being replaced by renewable energy. Utilities are spending big to retool their systems to be greener and make them more resilient. Deloitte estimates the largest U.S. electric companies together will spend as much as $1.8 trillion by 2030 on those efforts. 

Adding to the challenge is an industry historically accustomed to moving slowly, partly because of regulators aiming to protect consumers from price increases. 

And that has been mostly OK. For the past 20 years, U.S. electricity demand has grown at an average rate of 1% each year, according to a Deloitte study.

“If you have a fairly static electricity demand, which has been the case in the U.S. for a while, it hasn’t changed a lot, then having projects take a long time is OK,” Musk said Tuesday. “But in a rapidly changing scenario, where electricity demand is increasing, we have to move much faster.”

Executives and consultants do see stark change coming—but not as dramatic as what Musk predicts. 

PG&E expects electricity demand will rise 70% in the next 20 years, which, the California company notes, would be unprecedented. Similarly, McKinsey expects U.S. demand will double by 2050.

“This is an opportunity of the century for the power sector, and they could blow it if they don’t get it right,” Michael Webber, an energy resources professor at the University of Texas, Austin, said of the industry. “This demand growth is partly from EVs, but also heat pumps, data centers, AI, home devices…you name it.”

PG&E’s Poppe seemed receptive to Musk’s warning, if not exactly leaping to update her plans. “We are definitely taking notes here,” she told Musk. “I’m going to be the last person to doubt your predictions for the future.”

Part of the differing views of growth may boil down to how Musk wants the world to change. He wants cars and heating systems running on electricity.

His push for tripling output is part of his advocacy for a transition to a fully electric economy, a more ambitious step than many in the industry are pursuing.

Beyond seeking a greener future, Musk is also warning that a lack of electricity could be crippling, much like the recent chips shortage that damaged the tech and auto industries. This time, it might stunt the burgeoning development of AI.

“My prediction is that we will go from…an extreme silicon shortage today to…an electricity shortage in two years,” Musk said during an event earlier this month to discuss his new startup, xAI, which aims to develop advanced intelligence. “That’s roughly where things are trending.”....

....MUCH MORE

What's Up With Erdoğan? "Somaliland warns against Turkey's naval deployment off Somalia's coast"

Following on last night's "Erdogan says Turkey might enter Israel to help Palestinians".

From Al-Monitor, July

The Turkish parliament will soon vote on a two-year mandate allowing the Turkish army to dispatch troops to Somali waters. 

ANKARA — Somalia’s breakaway region of Somaliland warned on Wednesday against any deployment of Turkish forces in its maritime zones ahead of a Turkish parliament vote that would authorize sending naval forces to the coast of Somalia.

“The Government of the Republic of Somaliland vehemently rejects any potential deployment of Turkish naval forces within Somaliland’s recognized maritime zones,” an official statement by Somaliland said. Somaliland declared itself independent from Somalia in 1991 but doesn’t enjoy international recognition. 

“The reported intention of Turkish naval forces to operate in Somaliland maritime zones constitutes a grave violation of international law and Somaliland’s sovereign rights,” the statement added. 

The statement came after Turkish President Recep Tayyip Erdogan last Friday asked the parliament to vote on a two-year mandate allowing the government to deploy Turkish military forces to Somali regions “to be jointly determined by the two countries, including Somalia's maritime zones,” Turkey’s state-run Anadolu news agency reported. 

The mandate aims to support “the efforts to ensure Somalia's security against terrorism, piracy, illegal fishing, all kinds of smuggling and other threats,” according to Anadolu.

The Turkish parliament, originally scheduled to recess on July 1, postponed its break to an unspecified date last month and is now expected to vote on the mandate before it goes to summer recess. 

Turkey’s main opposition Republican People’s Party announced it was having reservations about the mandate on the grounds that the deployment of Turkish troops in Somali waters could pit Turkey against other regional countries. But the mandate is expected to pass with the support of Erdogan’s ruling Justice and Development Party members and their allies....

....MUCH MORE

If he makes a move on Bulgaria and points west we may have to send up the Bat Signal for John III Sobieski. 

USDA Forecasts 2025 Grocery Store Prices To Rise At Slowest Pace Since 2018

From Supermarket News, July 26:

Grocery food prices are expected to fall [sic] in 2024 and 2025

However, certain groups will experience increases 

A new report by the U.S. Department of Agriculture indicates that the price of food will continue to decelerate throughout the year.

In 2024, prices for all food are predicted to increase 2.2%, with food-at-home prices projected to go up just 1%.

Looking beyond this year, the U.S. Department of Agriculture is forecasting the price for all food to increase 2% in 2025. Food-at-home prices could increase 0.7%.

The agency’s Food Price Outlet tracks and forecasts the annual percentage change in prices by averaging observed and forecast prices for all months in the current year compared to all months in the previous year.

The Food Price Outlook forecasting methods are based entirely on statistical models that are fitted to recent trends in the data.

The Consumer Price Index for food at home from May 2024 to June 2024 was up 3% compared to June 2023....

....MUCH MORE

Here's the U.S. Department of Agriculture's "Summary Findings: Food Price Outlook, 2024 and 2025" 

"No longer rare: China's overproduction sends rare-earth prices tanking"

As most of our long-suffering readers (I tend to repeat myself) know, they've never been that rare. From 2022's "Huge rare earth reserve discovered in Turkey, but experts caution that ‘grade is king’"

Not just grade. The composition of a deposit, the amounts of the 17 rare earth elements is critical. As one example, the Mountain Pass mine in the U.S. despite its relatively high grade (8% REEs) is actually not as valuable as some lower grade mines with a more profitable mix.

Additionally, exploitation of a REE resource is highly dependent on processing and supply chain factors that can not quickly be brought into being, it's one thing to have the deposit, quite another to have, for example, the end product, a neodymium magnet....

From Nikkei Asia, July 19:

Beijing's new restrictions on industry fail to reverse trend

International prices of rare-earth elements have plunged 20% over the past year as overproduction in China has caused a supply glut.

Seeking to tighten its grip on the industry, China in June put out a list of regulations to protect supplies of these economically important metals. The regulations, issued by the State Council and taking effect on Oct. 1, say rare-earth resources belong to the state.

But despite Beijing's attempt at tighter controls on the industry, the market has remained in the doldrums.

Neodymium was priced 23% lower on July 11 than in late July 2023, according to Argus Media. Dysprosium was down 24%.

A price index published by the Association of China Rare Earth Industry shows the same pattern. Based on transaction data from rare-earth companies, it had fallen roughly 20% from late July 2023 as of Thursday.

The 17 metals collectively known as rare-earth elements have been called the "vitamins of industry," since they improve the performance of materials when added in small amounts....

....MUCH MORE 

Most recently on the price moves, June 4's "Prices for rare earth magnetic materials fall on low demand":
Interesting both for the elements themselves and their miners and possibly more important for the insight into end-uses and users....

There's a reason China leads the world in that value chain infrastructure, in no small part because a) most rare earth deposits come out of the ground slightly radioactive—because they are usually found in proximity to uranium and thorium, that's the reason Greenland won't even allow exploration and b) we've been tracking the doings of the big dog since 2009's "With a Name Like Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., it has to be good (600111:Shanghai)". Unfortunately in Inner Mongolia they actually named this muck Baotou Toxic Lake:

The BBC calls it The Worst Place On Earth.

"Yellen says $3 trillion needed annually for climate financing, far more than current level"

Don't look at me, I don't have that kind of money.

From Reuters, July 27:

U.S. Treasury Secretary Janet Yellen said on Saturday that the global transition to a low-carbon economy requires $3 trillion in new capital each year through 2050, far above current annual financing, but that filling the gap is the biggest economic opportunity of the 21st century.

Yellen said in Belem, Brazil's Amazon gateway city, that reaching net-zero emissions goals remained a top priority for the Biden-Harris administration and this would require leadership far beyond U.S. borders.

 

"Neglecting to address climate change and the loss of nature and biodiversity is not just bad environmental policy. It is bad economic policy," Yellen said in a speech after attending a G20 finance leaders meeting on Thursday and Friday in Rio de Janeiro.

Wealthy economies provided and mobilized a record $116 billion for climate finance for developing countries in 2022, 40% of which came from multilateral development banks (MDBs). Yellen said the banks, including the World Bank and the Inter-American Development Bank (IDB) were setting new targets.

 

The financing need is "the single-greatest economic opportunity of the 21st century" and can be leveraged to support sustainable and more inclusive growth, including for investment-starved countries, she said....

....MUCH MORE 

"Interest Rates Are a Sideshow in the Fed Drama"

The writer, Kevin Warsh, is a former member of the Federal Reserve Board of Governors and was Bernanke's emissary to C-suite Wall Street during the Great Financial Crisis. He's pretty connected.

From the Wall Street Journal, July 28:

Expect inflation to rise if the central bank doesn’t keep reducing the size of its balance sheet.

Markets are buzzing about whether the Federal Reserve’s rate-cutting cycle will begin in earnest this week or at the Fed meeting in September or November. Few economic decisions are of such misplaced importance.

The Fed has already cut rates, in effect, from its official policy stance of 5.375%. That’s what the Fed’s communications strategy was designed to accomplish. Chairman Jerome Powell has promised substantial rate cuts in 2024 since late last year. And the U.S. stock market has subsequently increased in value by $12 trillion. Broad financial conditions are considerably easier today than when rates were at zero in March 2022.

The Fed’s other monetary-policy tool—asset purchases—is conspicuously absent from the public discussion. It works differently from the conventional interest-rate tool. The Fed’s giant, unwieldy financial holdings amount to about $7.3 trillion. That’s where the real money is found.

When I joined the Fed in 2006, the central bank’s assets were about $800 billion, representing around 6% of gross domestic product. The Fed was an important government institution, but the scale of its operations was limited and the scope of its responsibility circumscribed. It did its best work without applause and without the audience at the edge of its seats. The Treasury Department was on the front lines of policymaking, debt funding and bill paying. Congress decided the level and allocation of spending.

The 2008 financial meltdown and the 2020 pandemic caused a fundamental, persistent and I fear permanent change. When the crises hit, the Fed expanded its power and influence mightily. Interest rates were rightfully cut to zero to lessen the economic hit. But more economic support was required. At the height of the 2008 shock, the Fed created a new monetary-policy instrument, quantitative easing, to cushion the economy and restart financial markets. The Fed bought hundreds of billions of Treasurys and mortgages on the open market for years.

When the pandemic struck a decade later, the central bank went even bigger and bolder, buying trillions of new assets, including risky private corporate bonds whose acquisition had never previously been countenanced. In a break from past practice, the Fed also called for massive new fiscal spending. The Biden administration and Congress happily obliged. Conveniently, the Fed bought much of the new outstanding debt issued by the Treasury.

The Fed, however, has proved a fickle master. At the height of each shock, it promised to unwind its emergency-era policies when the crisis abated. The economy recovered, employment strengthened, and financial markets boomed. But the Fed never quite got around to disposing of most of its added heft. Today, the Fed’s holdings equal about 26% of gross domestic product, an order of magnitude larger than 2008.

The Fed rationalizes its bloated balance sheet as a simple matter of financial management. In another ahistorical decision, its leaders say that monetary policy requires large excess reserves, since, otherwise, lending and credit markets would go astray. The Fed’s sway over the stock and bond markets, power over the largest banks, and influence over the dollar are hard to overstate. The Fed is no longer the backstop to the financial system on a dark day. It’s the dominant player day in and day out.

The Fed’s policy regime matters, importantly, to the path of inflation. The Fed’s asset purchases significantly expanded the money supply. The high priests of central bank dogma might consider it blasphemy, but monetary policy has something to do with money. It’s hard to measure money, especially given changes in credit intermediation. And simple rules that track money with inflation are inadequate. But outsize changes in the monetary base and the quantity and velocity of money have an important bearing on the ultimate price level.

The surge in federal spending and concomitant central-bank asset purchases in 2021 and 2022 contributed to the harmful surge in inflation. The monetary base is up 60% since the pandemic. Another measure of money, M2, is up 36% in the past four years. The inflation surge over the same period—cumulatively about 22%—shouldn’t have been a surprise. The American people are still paying a high price for the central bank’s policy error.

The Fed shrank its balance sheet in the past few quarters, down 7 percentage points from its peak as a share of GDP. M2 is down about 3%. Lo and behold: less money printing, less inflation....

....MORE

"Chinese EVs and the race for autonomous AI "

A very smart piece from Asia Times, July 29:

China is moving into the autonomous AI lead via its world-leading EV industry, paving the way for global technical and economic dominance 

In 2015, the Chinese government announced the strategic industrial development policy known as Made in China 2025. Of the ten key industries targeted, new energy vehicles (NEVs) have arguably achieved the greatest success, changing the dynamics of the global auto industry and thoroughly alarming US and European governments.

They have also attracted the attention of US scientist and Pattern Computer CEO Mark Anderson, who sees an unprecedented challenge to Western supremacy in the technologies that support China’s hyper-competitive electric vehicle (EV) industry. Pattern Computer is a machine learning and AI company headquartered in the state of Washington.

In an essay entitled “THE RACE FOR AUTONOMOUS AI: The Key to Global Technical and Economic Dominance,” which appeared in the July 7 edition of his Strategic News Service Global Report on Technology and the Economy, Anderson identified the EV as an enabler for critically important technologies.

In his view, the winner of the race to lead the global EV market “will, in one product, gain leverage or domination in:

• autonomous AI
• light-weighting new materials
• advanced manufacturing
• lidar/radar
• computer vision
• advanced computing software and hardware
• advanced chips
• batteries
• energy grid redesign
• charging-station design and control
• 
  
• broadband realtime networking
• data collection/management technologies
• (and of course) the data itself collected around the world
• oh yeah, and money – lots of it.”

Electric vehicles, therefore, are not just a “like to have” but a “must have” industry.

Autonomous AI is at the top of the list because it could deliver what OpenAI/ChatGPT promises to deliver but can’t – advanced general intelligence (AGI). ChatGPT and models like it are “for tasks that are language-related – only.”....

....MUCH MORE

That last point is sometimes lost in all the chatter—so to speak—about ChatGPT.

Chatbots are not the be-all and end-all of artificial intelligence.