"The electric car transition unravels slowly, then all at once" (F; TSLA)

We have dozens, if not hundreds, of posts on this topic, stretching back to 2022 or so.

Some that pop up on a quick search of the blog:

January 2024 - "China could be on track to dominate the world’s EV market, even if not in the U.S."
Elon Musk, who seems to have some insight into the industry, says there will be 10 surviving manufacturers, 9 of them Chinese.*

*****

*Here's December 8's [2023] "Western Legacy Automakers Probably Won't Be Long-Term Survivors":

Because their current business is being mandated and legislated out of existence the Western marques, barring some serious breakthroughs in small-scale hydrogen or methanol, will have to pivot to EV's.

And they won't be able to compete.It almost appears that the gifting of the electric vehicle and solar industries to the Chinese was deliberate. 
First up, from Electrical Engineering Times, December 6....

And the headline story from Bloomberg via The Japan Times December 16/17:

The global transition to electric vehicles is beginning to unravel the way major changeovers often do: slowly at first, then all at once.

This week brought a cascade of signals that the EV era is entering a more uncertain, more contested phase. The European Commission backed away from what had been the world’s most aggressive timeline for phasing out internal-combustion engines, granting manufacturers and consumers more time to move off gasoline. A day earlier, Ford announced $19.5 billion in charges tied to the retreat from an electric strategy it vowed to go all in on eight years ago.

The pullback is no longer confined to a few laggards or skeptics. From relative newcomers to legacy giants, the signs of reckoning have been mounting for months.

Take Tesla, the U.S. company that did more than any other in the world to kick-start the EV uprising. The Elon Musk-led manufacturer was never going to keep up the meteoric rise pulled off at the beginning of the decade, but it’s no longer just slowing down — worldwide vehicle deliveries are poised to drop for the second year in a row. Musk’s interests have wandered from pursuing a $25,000 electric car to developing humanoid robots and driverless taxis.

China’s BYD will become the new No. 1 purveyor of battery-electric cars in 2025, though it too is now having growing pains, with total sales falling each of the last three months. The company is still producing one plug-in hybrid with a gas engine under the hood for every battery-only EV, and its momentum is stalling in part because authorities in Beijing are increasingly scrutinizing pricing practices.

Ford has had plenty of company in struggling to catch up with the electric leaders.

Its archrival General Motors recently incurred $1.6 billion in charges tied to paring EV production capacity, and flagged more such moves may be in the offing. Stellantis has scrapped plans for a fully electric Ram pickup and revived gas-guzzling V-8 engines that it will have no trouble selling in a U.S. market that has hollowed out fuel economy and emissions standards.

When Volkswagen — Europe’s carmaker that was once most motivated to chase Tesla — ends output of electric ID.3 hatchbacks this month in Dresden, it will be the first time in 88 years the carmaker will have ceased production at a German assembly plant. VW too has taken substantial financial blows, booking €4.7 billion ($5.5 billion) in charges tied to its subsidiary Porsche reversing from EVs.

For all the challenges the industry is having, the transition isn’t being abandoned....

....MUCH MORE 

Tesla stock just hit its highest level ever and that investor enthusiasm is not based on electric vehicle sales. Musk saw something a bit over three years ago that scared him enough to reorient the company. 

As Intel's Andy Grove famously said:

“Business success contains the seeds of its own destruction. 

Success breeds complacency. Complacency breeds failure. 

Only the paranoid survive.”

Mr. Musk has his blind spots but China sneaking up on Tesla probably isn't one of them. He knows that Western companies will eventually lose the battle for electric vehicle dominance and something that he saw sometime in the last couple years seems to have scared him into action on the fronts where Tesla has a competitive advantage: access to some truly brilliant people; artificial intelligence facilitated by a long history with Nvidia and autonomous vehicles.

So again, we wish him luck, and think he'll succeed but this stuff is serious business.  

Here's the stock price action over the last year:

FinViz

June 2024 - Morgan Stanley Analyst Adam Jonas Writes A Love Letter To Tesla (TSLA)

A confession of bullish bias up front, from April 24's "Tesla Q1 2024 Earnings Call Transcript (TSLA)":

In pre-market action the stock is up $17.47 (+12.07%) at $162.15.

Below are the words that are adding billions ($50+) to the company's valuation. 

Personally I think Musk is going to pull it off, but that's just me—perhaps informed by posting on the company and its stock since before the June 2010 share flotation (which, adjusted for the 5:1 and 3:1 stock splits gives a $1.133 IPO price)—however, there are plenty of other opinions to choose from if one doesn't care for that one....

More from that post after the jump.

As noted July 8 with the stock at $249.07: "Chartology: Tesla Stock Now Has A Very Wide Range To Churn Through (TSLA)". And September 5 A Word Of Caution On Tesla's Stock (TSLA):

Now don't get me wrong, I'm as much into Elon's/Baidu's/Nvidia's vision of flying cars and robotaxis as the next person and haven't changed this opinion on the company from April 24's "Tesla Q1 2024 Earnings Call Transcript (TSLA)":

...In pre-market action the stock is up $17.47 (+12.07%) at $162.15.

....One quibble. The line "Tesla has relied on price cuts since late 2022..." reads like a bad thing but the fact of the matter is that the entire industry has been cutting prices and Tesla getting out in front of that reality has kept them competitive in the battery-electric-vehicle business.

As we've been saying for quite a while now, Mr. Musk saw something a couple years ago that led him to a) the price cuts and production efficiencies that are proving crucial to survival in not just EV's but in the wider automobile market as well. Volkswagen talking about possibly laying off 30,000 of their German employees was inconceivable five years ago. And b) whatever it was he saw also led to the emphasizing of things they been working on for a decade: robotaxis and AI and supercomputers and robots.

So, for patient reader, having read this far, here's my two cents worth: 

Deliveries will be in-line this month and the next few months and the robotaxi unveil will be written up as a bust. The people who write the headlines hate Elon Musk and nothing he does will ever, ever change that. The financial question is: will the self-driving taxis be contributing to sales and earnings in two years?

Based on the fact that Waymo is now booking 100,000 rides per week I think the answer is yes but your mileage may vary. To repeat the comment on the April earnings call transcript:

Personally I think Musk is going to pull it off, but that's just me—perhaps informed by posting on the company and its stock since before the June 2010 share flotation (which, adjusted for the 5:1 and 3:1 stock splits gives a $1.133 IPO price)—however, there are plenty of other opinions to choose from if one doesn't care for that one....

In late pre-market action the stock is trading up $1.17 (+0.45%) at $262.80 after closing Monday at $261.63 also up $1.17 (+0.45%).

And on December 16 2025 the stock set both intraday and closing highs, $491.50 and $489.88 respectively. In pre-market trade the stock is down 39¢  (-0.08%) at $489.49.

Atlanta Fed: U.S. GDP Expanding At 3.5% Annual Rate

That seems hot, we'll have to compare with the next release, December 23.

The last official number came out on September 25:

Real gross domestic product (GDP) increased at an annual rate of 3.8 percent in the second quarter of 2025 (April, May, and June), according to the third estimate released by the U.S. Bureau of Economic Analysis. In the first quarter, real GDP decreased 0.6 percent (revised). The increase in real GDP in the second quarter primarily reflected a decrease in imports, which are a subtraction in the calculation of GDP, and an increase in consumer spending. These movements were partly offset by decreases in investment and exports.

And from the Federal Reserve Bank of Atlanta's GDPNow December 16:

Latest estimate: 3.5 percent — December 16, 2025

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2025 is 3.5 percent on December 16, down from 3.6 percent on December 11. After this morning’s releases from the US Census Bureau and US Bureau of Labor Statistics, the contributions of consumer spending and inventory investment to third-quarter real GDP growth fell slightly to 1.84 and 0.09 percentage points, respectively.

The next GDPNow update, which is subject to change, is Tuesday, December 23. It will also be the first model nowcast for fourth-quarter GDP growth....

....MUCH MORE

"Pax Silica Marks End of Globalization’s Golden Age"

From the electrical engineering wizards at EE Times, December 15:

Last week’s launch of the Pax Silica Initiative marked a significant shift in global geopolitics. Convened by the second Trump administration, this coalition signals a move away from post-Cold War globalization toward a new model of economic statecraft focused on securing artificial intelligence (AI) and semiconductor supply chains.

The Pax Silica Declaration brings together nine core nations—the United States, Japan, South Korea, Singapore, the Netherlands, the United Kingdom, Israel, the United Arab Emirates (UAE), and Australia—to collectively secure the strategic foundations of the digital economy.

The initiative’s name intentionally references past hegemonies, such as Pax Romana and Pax Americana, implying that modern peace and stability will depend on control of silicon and computational power rather than military strength alone.

The end of efficiency
For thirty years, the global semiconductor supply chain prioritized efficiency, relying on just-in-time manufacturing and concentrated production in East Asia. The crises of the 2020s revealed the vulnerabilities of this model. The Pax Silica Initiative reflects a shared belief among allied nations that economic security is national security, a principle strongly supported by the Trump administration.

This urgency arises from the understanding that AI is a transformative force for long-term prosperity and military advantage, not just another industry. Jacob Helberg, the initiative’s chief architect and Under Secretary of State for Economic Affairs, summarized this shift: “If the 20th century ran on oil and steel, the 21st century runs on compute and the minerals that feed it.”

The coalition seeks to eliminate single points of failure by establishing a more resilient economic order. This directly addresses the growing risks of dependency on China, which controls about 90% of rare earth refining needed for advanced semiconductors. By treating compute, silicon, minerals, and energy as shared strategic assets, the alliance aims to secure the physical infrastructure of AI from unauthorized access or control.

Building on the Biden foundation
Although the initiative is a signature policy of the second Trump term, it is built on diplomatic groundwork from the previous administration. The inclusion of the Netherlands and Japan stems from a confidential trilateral agreement reached in January 2023 under the Biden administration, which aligned export controls to restrict advanced immersion Deep Ultraviolet (DUV) lithography tool exports from ASML to China.

Pax Silica formalizes and expands this arrangement into a comprehensive economic security framework, shifting from simple restrictions to active supply chain integration. This continuity demonstrates bipartisan agreement in Washington on limiting Chinese technological ambitions, though the Trump administration has added a more transactional approach.

Departing from the previous strategy of total blockade, President Trump has allowed Nvidia to sell its advanced H200 AI chips to approved customers in China, with a 25% fee paid to the U.S. government. This approach monetizes Chinese demand for compute while maintaining oversight, representing a notable win for Nvidia CEO Jensen Huang, who opposed complete market exclusion.

Corporate and geopolitical winners
The signatories were chosen for their control over key choke points in the semiconductor value chain. The alliance’s “Iron Triangle”—Japan, the Netherlands, and South Korea—forms the industrial core of the initiative....

....MUCH MORE 

"Japan’s Prime Minister Takes on Bond Market Vigilantes"

From Foreign Policy, December 16:

Sanae Takaichi’s massive spending program could be a risky political win. 

Recently elected Japanese Prime Minister Sanae Takaichi has proposed an ambitious 21 trillion yen ($135 billion) spending program that puts new stresses on already heavily overdrawn government coffers and raises the specter of a Liz Truss-style market shock. For international investors, it adds further uncertainty, but for the Japanese bond market, it is déjà vu all over again.

The plan fulfills Takaichi’s campaign promise of a “proactive fiscal policy” that is designed to bring Japan out of its long stupor since the collapse of the bubble economy back in 1990. Taking note of public opinion polls, a major part of the spending will be intended to help people cope with higher prices through various subsidies rather than taking more painful steps to control inflation itself.

While still low by global standards, Japan’s inflation rate of around 3 percent is being felt by consumers, especially since much of the increase comes in higher costs for food, up 6.4 percent in November compared to levels one year ago, including a 40.2 percent increase in the price of the daily staple of rice. Takaichi has proposed measures that include subsidies for electricity and gas bills as well as cash handouts for households with children.

In addition, she wants to make targeted investments in sectors such as semiconductors and shipbuilding, plans that recall the glory days of Japan’s state economy in the 1950s and 1960s, when the powerful Ministry of International Trade and Industry played a key role in the economy—and arguably helped to create the postwar “economic miracle.”

While few would argue with the hopes for a fast-growing Japanese economy, there seems to be little reason to think that Takaichi will succeed where all her predecessors have largely failed. Prior attempts at fiscal stimulus, especially ones attempted in the 1990s with a focus on big infrastructure projects, did little for overall economic growth while pushing the debt load consistently higher.

Despite regular lip service to the idea of “fiscal responsibility,” administrations through the past 30 years have found it easier to spend than to save. The government debt load has soared from just 48 percent of Japan’s annual GDP in 1980 to a peak of more than 258 percent in 2020, according to data from the International Monetary Fund (IMF). By contrast, the much-debated U.S. debt load is at 125 percent of GDP, according to the IMF.

Takaichi has said that her additional spending will not be a problem, since it will create higher growth and therefore higher tax revenues.

“As we build a robust economy and raise our growth rate, we will reduce the government debt-to-GDP ratio, realize fiscal sustainability, and ensure the confidence of the markets,” she confidently predicted when she rolled out the program in late November.

Markets have been skeptical, and analysts have been quick to compare Takaichi’s claims with the debacle that resulted from a similar attempt by British Prime Minister Liz Truss in 2022. Soon after taking office, Truss announced a robust spending package that she claimed would be a cure-all for all that ailed the economy. The market reaction was quick, with a sharp fall in the value of British government bonds and quick market intervention by the Bank of England, followed by Truss being rapidly ejected from office by her own party.

Such talk of a looming Japanese debt crisis is far from new. As the debt burden has steadily marched into ever higher record territory over the past 35 years, there have been regular, well-reasoned forecasts of how a debt burden that is the highest ever recorded by a major economy (Britain came close during the Napoleonic wars and just after World War II) would create a panic in government bonds. The markets are still waiting.

Through this period, Japan also had among the world’s lowest interest rates, making the debt less expensive to service. This dichotomy prompted one of the most memorable comments on Japan, made by a clearly frustrated Willem Buiter, then the chief economist for Citigroup, who mentioned Japan at a New York meeting in 2010, when the debt level had reached 220 percent of GDP. “Japan is the hardest economy in the world to understand,” he said. “If this were physics, then gravity wouldn’t work in Japan.”....

....MUCH MORE 

How Serious Is China's Demographic Doom? Almost Beyond Comprehension

A repost from January 2024.

From Asia Times, January 20:

China’s falling population could halve by 2100
Shanghai Academy of Social Science projects China’s working-age population will decline to 210 million in 2100 – a mere one-fifth of its 2014 peak 

China’s population has shrunk for the second year in a row.

The National Bureau of Statistics reports just 9.02 million births in 2023 – only half as many as in 2017. Set alongside China’s 11.1 million deaths in 2023, up 500,000 on 2022, it means China’s population shrank 2.08 million in 2023 after falling 850,000 in 2022. That’s a loss of about 3 million in two years.

The two consecutive declines are the first since the great famine of 1959-1961, and the trend is accelerating.

Updated low-scenario projections from a research team at Shanghai Academy of Social Sciences, one of the first to predict the 2022 turndown, have China’s population shrinking from its present 1.4 billion to just 525 million by 2100.

China’s working-age population is projected to fall to just 210 million by 2100 – a mere one-fifth of its peak in 2014.

Deaths climbing as births falling
The death rate is climbing as an inevitable result of the population aging, and also an upsurge of Covid in the first few months of 2023.

The population is aging mainly because the birth rate is falling.

China’s total fertility rate, the average number of births per woman, was fairly flat at about 1.66 between 1991 and 2017 under China’s one-child policy. But it then fell to 1.28 in 2020, to 1.08 in 2022 and is now around 1, which is way below the level of 2.1 generally thought necessary to sustain a population.

By way of comparison, Australia and the United States have fertility rates of 1.6. In 2023 South Korea has the world’s lowest rate, 0.72....

....MUCH MORE

How does a country lose 80% of their working-age population in 86 years?

"OpenAI in talks with Amazon about investment that could exceed $10 billion" (AMZN; SAM)

From CNBC, December 16:

• OpenAI is in discussions with Amazon about a potential investment of $10 billion or more, though that number isn’t set, CNBC confirmed.
• The agreement would also include use of Amazon’s chips. 

OpenAI is in discussions with Amazon about a potential investment and an agreement to use its artificial intelligence chips, CNBC confirmed on Tuesday.

The details are fluid and still subject to change but the investment could exceed $10 billion, according to a person familiar with the matter who asked not to be named because the talks are confidential. The Information first reported on the potential deal.

The discussions come after OpenAI completed a restructuring in October and formally outlined the details of its partnership with Microsoft, giving it more freedom to raise capital and partner with companies across the broader AI ecosystem.

Microsoft has invested more than $13 billion in OpenAI and backed the company since 2019, but it no longer has a right of first refusal to be OpenAI’s compute provider, according to an October release. OpenAI can now also develop some products with third parties.

Amazon has invested at least $8 billion into OpenAI rival Anthropic, but the e-commerce giant could be looking to expand its exposure to the booming generative AI market. Microsoft has taken a similar step and announced last month that it will invest up to $5 billion into Anthropic, while Nvidia will invest up to $10 billion in the startup....

....MUCH MORE 

As can be seen in the simplified flowchart from "Reformatting flow diagrams for explaining complex processes," it all boils down to money:

 

Related: 

March 2011 - The computer model that once explained the British economy (and the new one that explains the world)

....Genius.
Here's the original Phillips (he of the curve) Machine:

From the headline article at the Guardian.

Here's the schematic, from the New York Times:

Two weeks ago, while visiting Cambridge University, I arranged to have lunch with my friend Allan McRobie. He’s a professor of engineering, so it seemed a bit strange that he kept insisting we meet at the department of applied economics. “There’s something there you’ve really got to see,” he said in his Liverpudlian lilt. “It’s utterly fab. Just brilliant. The Phillips machine — it uses water to predict the economy.”...MORE

 

Schematic diagram of the Phillips machine. (Click to enlarge.)

And here's the latest incarnation:

Genius squared.

The second schematic is from a post on GE's Mark I nuclear reactor at ZeroHedge! 

Uber CEO Says Robotaxis Are A Trillion-Dollar Business (Asia is the key)

From Business Insider, December 11:

Uber CEO says robotaxis are a 'trillion-dollar-plus' business — and one market will drive the boom 

• Uber CEO says one market will lead the robotaxi boom.
• Dara Khosrowshahi said robotaxis are a "trillion-dollar-plus" industry and Asia has major potential.
• The ride-hailing giant has been leaning hard into autonomous driving.

Uber is preparing for a robotaxi surge, and its CEO says one market will drive it.

Dara Khosrowshahi said in an interview with Bloomberg Television published Friday that robotaxis are a "trillion-dollar-plus" opportunity and Asia is a huge growth market for the ride-hailing giant.

"I expect to be in 10-plus markets by next year. And we want those markets to be in the Asia-Pacific region as well," Khosrowshahi said. Uber has self-driving vehicles in the US and the Middle East.

Analysts have long touted autonomous mobility as one of the biggest bets in the transportation industry. In 2023, McKinsey estimated that if robotaxis and roboshuttles scale, the shared-mobility market could reach $1 trillion by 2030.

Khosrowshahi said Japan has "great potential" for its robotaxi push, despite being behind in regulation.

"With an aging population, there's a real need for transportation, not just in the large cities but in the rural areas," he added. He also pointed to Hong Kong and Australia as potential key markets for its robotaxi services.

Khosrowshahi said Uber now works with more than 20 autonomous-vehicle partners — including China's Baidu, WeRide, and Pony.ai, as well as Waymo in the US.

"We will have access to autonomous technologies in the large cities and markets that really count," he added....

....MUCH MORE 

February 2015 - The End Of Mass Car Ownership Is Coming Mr. Ford 

May 2015 - Big Money: Uber Guts Carnegie Mellon Robotics Lab To Hire Autonomous Car Developers
Raising money at a $600 illion zillion fafillion valuation allows you to buy pretty much anything.
The way this is going to pan out is: you won't be able to own the vehicle but its use will be mandated. The car is autonomous but the people aren't.... 

Which led to June 2016's "Uber Is Stealing Scientists, But Only So It Can Lay Off Drivers":
Ain’t no partnership like an Uber partnership, cuz… an Uber partnership will leave your previously elite research institution bereft of researchers....

August 2015 - Understanding The Future Of Mobility: On-Demand Driverless Cars  

March 2017 - Remember that time Uber's Kalanick said having autonomous was crucial to the company's very survival? (a deep dive) 

 

September 2025 - "The economics of self-driving taxis" (GOOG; UBER)

You want economics? Here's a nasty person on the economics:

"When there's no other dude in the car, the cost of taking an Uber anywhere becomes 
cheaper than owning a vehicle. So the magic there is, you basically bring the cost below 
the cost of ownership for everybody, and then car ownership goes away."

—Former Uber CEO Travis Kalanick, May 28, 2014

 

And a few hundred more posts between the bookends. 

"Why many Asian megacities are miserable places And why Shanghai and Tokyo are not "

From The Economist, December 11:

FOR SEVEN decades Tokyo was considered the world’s most populous city. That was 15 years too long, according to data released last month by the UN. Until recently the organisation’s statisticians accepted national governments’ definitions of where their cities began and ended; their latest report accepts the reality of urban sprawl. By their new measures, Jakarta (pictured), Indonesia’s capital, jumps to the top of the board with 42m people, about as many as Canada. Dhaka, capital of Bangladesh, with 37m, has also pulled ahead of Tokyo, with 33m. Delhi and Shanghai, with around 30m people each, fill out the top five.

The UN’s latest figures highlight tremendous urbanisation. These days 45% of humanity lives in cities (with at least 50,000 people); another 36% inhabit towns (with at least 5,000). The data also show that much of the growth is happening in middle-income Asia. Only one of the world’s ten biggest cities lies outside that continent. And only seven of the world’s 33 “megacities” (boasting over 10m people) are in rich countries. By 2050 Jakarta and Dhaka will between them add another 25m people, nearly as many as live in Australia.

These migrations should help make people better off. “Dhaka changed my life and secured my kids’ education,” says Clinton Chakma, who found a job as a waiter after migrating from a farm in 2022. Yet there is also a huge risk: that as Asia’s cities expand, squalor, pollution and gridlock increasingly undercut the economic boost they provide. “People move to cities to be part of the labour market,” says Alain Bertaud of New York University. But if the labour market does not work “you build a poverty trap”.

Jakarta, Dhaka and Delhi already rank among the world’s worst cities to live in, according to the Economist Intelligence Unit, our sister company. Jakarta ranks 132nd out of 173 cities; Delhi is 145th. Dhaka comes third from last, with only Damascus and Libya’s Tripoli behind. If Asian countries are to break out of the middle-income trap, they must solve the problems that plague their cities. The best way of doing that is not through piecemeal projects, but by taking a hard look at the dysfunctional ways urban areas are governed.

Jakarta—nobody’s idea of a lovely city—is as good a place as any to see all this on the ground. After years of expansion it now encompasses the neighbouring cities of Bogor, Depok, Tangerang and Bekasi (see map). Yet there is far too little co-ordination among these neighbouring authorities. A settlement as populous as some countries is governed as coherently as a clowder of cats.

The cost of this fragmented governance is perhaps best seen in Jakarta’s notorious traffic. It is the world’s 12th-most congested place (Dhaka ranks third and Delhi seventh). Unable to afford housing near their workplaces, many Jakartans live in far-flung suburbs. A vastly inadequate public transport system encourages them to travel by two-wheelers or in cars, which jams up the roads and causes air pollution. All this cuts productivity. The government of Jakarta reckons traffic jams cost its economy $6bn each year.

In 2019 Jakarta got its first metro line. But it stops abruptly at the city’s official administrative boundary, short of commuter neighbourhoods. There is an urgent need for co-ordination within the agglomeration, says Adhika Ajie, the head of research and innovation at Jakarta’s city government. “Otherwise it’s useless.” Good luck with that. “Throughout my time there was very little conversation with other mayors of surrounding cities,” says a former official in the city administration.

Similar problems affect megacities elsewhere in Asia. Dhaka has enveloped satellite cites with which it has little co-ordination. But it also suffers from being run by two municipal corporations, a national development authority, several ministries and dozens of different agencies which are individually responsible for things such as water, sewage and transport. A mayor of Dhaka North City Corporation once complained that he lacked the authority to deal with 80% of the problems that affect his city, including traffic and flooding.

Parts of India, now home to five “megacities”, are in the same boat. Governance in Delhi is split between municipal bodies, a state government, the national government and several bodies created to oversee matters such as housing, planning and the metro rail. The Kolkata metropolitan area (the world’s ninth-largest) contains no fewer than 423 different governing entities, according to the World Bank.

How do successful cities do it? One model is Shanghai, which is run by the central government as a province rather than a city. It exercises strong, centralised authority over all major urban functions, from planning to transport. But China’s governance model is unique: pressure on leaders comes not from voters but from bosses in Beijing. Party leaders cannot afford to let areas of the city grow unruly.

A better model is Tokyo. The Tokyo Metropolitan Government (TMG) is responsible for big-ticket public services such as water, sewage and public hospitals. Beneath it sit 23 wards and a host of peripheral cities and towns. Each municipality has its own elected mayor and assembly, responsible for services such as schools, waste management and community planning. The TMG co-ordinates between them. It is a sensible split that clearly delineates authority while also making sure that decision-making is joined up.....

....MORE 

Economist home. 

Possibly also of interest:

November 2025 -  "Jakarta becomes world’s most populous city while Tokyo shrinks"

March 2011 - Most Populous Cities Through the Centuries (and diagrams of the principle high buildings of the world, 1884)

April 2018 - "Population: 'Future Hubs of Africa and Asia'" on where to focus efforts and resources:

...This demographic boom could, under the right conditions, result in a regional or even a global economic boom. These conditions are first and foremost 1) an increase in literacy and 2) an improvement in governance, in the poorest countries where the population is growing rapidly. Higher literacy, in particular among young women, sets off a chain reaction that drives down infant mortality rates and total fertility rates. In time, this evolution leads to a falling dependency ratio and creates an opportunity for the economy to realize a demographic dividend. This was in large part the dynamic that created the China boom in the past three decades....

 

December 2019 - Did Kinshasa Just Pass Paris As the World's Most Populous French-Speaking City?

November 2021 - "Cities that grow themselves: They are spreading like branching plants across the globe. Should we rein cities in or embrace their biomorphic potential?"

I for one, look forward to experiencing the mega-cities* of the year 2100.

Frankly, I look forward to experiencing anything in the year 2100.....

*The estimated seven most populous cities in 2100 via the construction mavens at B1M:

1. LAGOS, NIGERIA - 88.3 MILLION
2. KINSHASA, DEMOCRATIC REPUBLIC OF THE CONGO - 83.5 MILLION
3. DAR ES SALAAM, TANZANIA - 73.7 MILLION
4. MUMBAI, INDIA - 67.2 MILLION
5. DELHI, INDIA - 57.3 MILLION
6. KHARTOUM, SUDAN – 56.6 MILLION
7. NIAMEY, NIGER – 56.1 MILLION

....MUCH MORE

None of the Chinese mega-cities makes the year 2100 top ten, nor does the current population champ, Tokyo.  

November 2022 - "Megalopolis: how coastal west Africa will shape the coming century"

As the old-timers used to say, "Pay attention or pay the offer."

And many, many more.  

"Departing SEC official warns of coming “winter” for US capital markets"

So no repeal of SEC Rule 10b-18?*

From the World Socialist Website, December 15:

The rise of Trump to the presidency of the US and his efforts to construct a fascistic dictatorship represent the violent realignment of the political superstructure to more openly and directly express the domination of the American economy and increasingly all aspects of life by a financial oligarchy.

In its mode of existence, its social being, this oligarchy, based on the endless accumulation of wealth through stock market speculation, financial market operations and parasitism, demands the abolition of all remaining restrictions on its activity.

One of the expressions of this process, which derives not from the personal characteristics of the individuals involved but from the objective logic of the system they head, is the evisceration of the Securities and Exchange Commission (SEC), the regulatory authority of the stock market.

The extent of this gutting operation was highlighted in a speech last week by Caroline Crenshaw upon her impending exit from the SEC. She first referred to the dismantling of the SEC block by block back in May and expanded on this assessment in her latest remarks.

Summing up what she called the “chaos” of the past year, Crenshaw said: “The appetite to deregulate has been rapacious; the analysis of the costs and benefits of our policies has been non-existent; and the repercussions… could be dire.”....

....MUCH MORE 

Also at the WSWS:

How can GM workers at Factory Zero in the US oppose layoffs? Answers from Socialism AI 

Since its launch on December 12, Socialism AI has provided thousands of users throughout the world with access to the revolutionary perspective of Marxism, drawing from more than 175 years of historical material and nearly three decades of WSWS coverage. With each interaction, it is helping workers and young people understand the world and how to change it.

This new feature will highlight selected questions and answers from Socialism AI—concise, clear and politically insightful responses to some of the most pressing issues of our time. If you come across an answer that you think should be featured in a future installment, use the form at the bottom of this article to submit it for consideration....

....MUCH MORE
*December 1, 2020:
Taibbi: "The S.E.C. Rule That Destroyed The Universe"

I've mentioned SEC Rule 10b-18 a few times, some links after the jump.

A lifetime of looking at this stuff has led me to the conclusion that in the U.S. stock buybacks are nothing more than a tax-avoidance scam with the added benefit of rewarding managers for things they didn't do by, well, managing the company rather than the stock price....

*****

...the answer is pretty straightforward, go back to the pre-1982 rules on share repurchases:

...II. Overview of Current Rule 10b-18
A. Rule 10b-18 as a "Safe Harbor"
In 1982, the Commission adopted Rule 10b-18,4 which provides that an issuer will not be deemed to have violated Sections 9(a)(2) and 10(b) of the Exchange Act, and Rule 10b-5 under the Exchange Act, solely by reason of the manner, timing, price, or volume of its repurchases, if the issuer repurchases its common stock in the market in accordance with the safe harbor conditions.5 Rule 10b-18's safe harbor conditions are designed to minimize the market impact of the issuer's repurchases, thereby allowing the market to establish a security's price based on independent market forces without undue influence by the issuer....

—In U.S. Securities and Exchange Commission—Final Rule—Purchases of Certain Equity Securities by the Issuer and Others,  Effective Date: December 17, 2003

The old rule considered it stock manipulation.

Gigajoules: "Meet the biggest heat pumps in the world"

From the BBC, December 15:

The pipe that will supply the heat pump, drawing water from the River Rhine in Germany, is so big that you could walk through it, fully upright, I'm told.

"We plan to take 10,000 litres per second," says Felix Hack, project manager at MVV Environment, an energy company, as he describes the 2m diameter pipes that will suck up river water in Mannheim, and then return it once heat from the water has been harvested.

In October, parent firm MVV Energie announced its plan to build what could be the most powerful heat pump modules ever. Two units, each with a capacity of 82.5 megawatts.

That's enough to supply around 40,000 homes, in total, via a district heating system. MVV Energie aims to build the system on the site of a coal power plant that is converting to cleaner technologies.

The scale of the heat pumps was determined partly by limits on the size of machinery that could be transported through the streets of Mannheim, or potentially via barges along the Rhine. "We're not sure about that yet," says Mr Hack. "It might come via the river."

One person well aware of the project is Alexandre de Rougemont, at Everllence (formerly MAN Energy Solutions), another German company that also makes extremely large heat pumps. "It is a competition, yeah," he says. "We're open about it."

Heat pumps soak up heat from the air, ground or, in these cases, bodies of water. Refrigerants inside the heat pumps evaporate when they are warmed even slightly.

By compressing the refrigerant, you boost that heat further. This same process occurs in heat pumps designed to supply single homes, it just happens on a much larger scale in giant heat pumps that serve entire city districts.

As towns and cities around the world seek to decarbonise, many are deciding to purchase large heat pumps, which can attach to district heating networks.

These networks allow hot water or steam to reach multiple buildings, all connected up with many kilometres of pipe. Ever bigger models of heat pump are emerging to meet demand.

"There was a lot of pressure on us to change the heat generation to new sources, especially renewable sources," explains Mr Hack as he discusses the decommissioning of coal-fired units at the Mannheim plant. The site is right by the Rhine, already has a hefty electricity grid connection, and is plugged in to the district heating network, so it makes sense to install the heat pumps here, he says.

He notes that the technology is possible partly thanks to the availability of very large compressors in the oil and gas industry – where they are used to compress fossil fuels for storage or transportation, for example.

Work on the Mannheim project is due to start next year. The heat pumps – with a combined capacity of 162MW – are set to become fully operational in the winter of 2028-29. Mr Hack adds that a multi-step filter system will prevent the heat pumps sucking up fish from the river, and that modelling suggests the system will affect the average temperature of the river by less than 0.1C.

Installations such as this are not cheap. The Mannheim heat pump setup will cost €200m ($235m; £176m). Mr de Rougemont at Everllence says that, at his company, heat-pump equipment costs roughly €500,000 per megawatt of installed capacity – this does not include the additional cost of buildings, associated infrastructure and so on.

Everllence is currently working on a project in Aalborg, Denmark that will be even more powerful than the system in Mannheim, with a total capacity of 176MW....

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"McKinsey Plots Thousands of Job Cuts in Slowdown for Consulting Industry"

From Bloomberg, December 15:

As McKinsey & Co. partners gathered in the consulting giant’s birthplace in late October, Bob Sternfels delivered a rallying cry. “We will kick some ass as we start our second century,” the firm’s top executive told the thousands of attendees.

But away from the 100-year festivities in Chicago, McKinsey bosses have been conveying a more pragmatic message: It’s time to get leaner.

The firm’s leadership has discussed with managers in non-client-facing departments the need to cut about 10% of headcount across their business, according to people with knowledge of the matter. That could amount to a few thousand job cuts that McKinsey would stagger over the next 18 to 24 months, the people said, asking not to be identified because the details are private.

For McKinsey, the go-to adviser for companies and countries, it’s the type of cost-cutting approach that its consultants often prescribe to clients. The firm’s revenue growth has flatlined in the last five years, leading to a reset after rapid hiring over the prior decade.

“As our firm marks its 100th year, we’re operating in a moment shaped by rapid advances in AI that are transforming business and society,” a McKinsey spokesman said. “Just as we’re partnering with clients to strengthen their organizations, we’re on our own journey to improve the effectiveness and efficiency of our support functions.”

It’s early to gauge the net impact on headcount, the spokesman said. From 2012 to 2022, the firm’s employee count climbed from 17,000 to as high as 45,000. Since then, it has slid to around 40,000.

Firmwide revenue has hovered around $15 billion to $16 billion in the last five years, though Sternfels told partners that the company is seeing improving growth....

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Possibly related:

• "The Bull Market for Economists Is Over. It’s an Ominous Sign for the Economy."
• OpenAI Says Legal Services; Consulting; And Government Services Are Seeing Productivity Gains
• "AI Is Coming for the Consultants. Inside McKinsey, ‘This Is Existential.’"

Some might dispute that consulting firms are paid to help clients improve their business, instead being paid a few million per contract to stroke the egos of the upper management that hires the consultant, praising said upper management for recognizing they had an issue, hiring the consultant and by the way the golf tournament is on us, no billables.

Some prior thoughts on consultants:

October 2013 - Clayton Christensen: The Next Industry Headed Toward Disruption--Consulting 

October 2014 - Johnson Controls Fires Consultant After Affair With CEO (JCI)

October 2020 - "Killing Strategy: The Disruption Of Management Consulting"

April 2022 - "How did McKinsey advise CNN+ so badly*?"

An oldie but goodie:

The Devil tells a Consultant, "OK, I can make you richer, more successful and more famous than any Consultant alive. In fact, I can make you the greatest Consultant that ever walked the planet."

"Great" says the Consultant, "What do I have to do in return?"

The Devil smiles, "Well, of course you have to give me your soul," he says, "but you also have to give me the souls of your children, the souls of your children's children and, just for good measure, you have to give me the souls of all your descendants throughout eternity."

"Wait a minute," the Consultant says cautiously, "What's the catch?" 

August 2024 - Consultant 

October 2024 - "Consultants Keep Winning the AI Wars"

A few weeks ago Bain and Co. published a report that created some hubbub. Here's Bloomberg, September 24: "AI Market Will Surge to Near $1 Trillion by 2027, Bain Says".

I was asked why we didn't link to or reference the story and the simple answer is, the report reads like an advertisement for Bain's services.  Here's Bain's press release announcing the publication, September 25: "Market for AI products and services could reach up to $990 billion by 2027, finds Bain & Company's 5th annual Global Technology Report".

February 28 - "Elon Musk spells danger for Accenture, McKinsey and their rivals"

Mugabe launches Robert Mugabe intelligence academy; Chicago Economists to Aid Inflation-Weary Zimbabwe

..."We were hoping for Bono," says Nkende Masvingo, referring to the rock singer who has made sub-Saharan poverty his personal crusade, "but they sent us Gary Becker because U2 was on tour."

Becker, the winner of the 1992 Nobel Prize in Economics, will lead a "dream team" including Steven Levitt, co-author of the best-selling pop economics book "Freakonomics", that will set up camp in this city, the nation's capital. "First, we need to understand the situation," said Becker ...

Real Estate: "New York’s Coming Developer Bailout"

From the Wall Street Journal, November 30: 

Rent control is killing landlords, who may need a $1 billion rescue.

New York City Mayor-elect Zohran Mamdani wants to tighten rent control, but how’s this for a little socialist irony: He may first have to bail out the city’s landlords who are losing money because they are already limited in the rent they can charge. 

The New York Housing Conference, a nonprofit that promotes so-called affordable housing, warns in a new report that landlords will need $1 billion in government aid to avoid default. “A significant number of affordable housing buildings in New York City are experiencing operating deficits, where rents are not covering expenses,” the report says.

These are publicly financed buildings with rent-restricted units set aside for lower-income tenants. The problem is that allowable rent increases in recent years have averaged less than 2% annually, which hasn’t kept pace with landlords’ surging costs for insurance, maintenance and utilities.

Insurance costs increased by more than 25% annually between 2019 and 2023 to $1,770 per apartment per year. That’s more than the rent on some apartments. New York’s prolonged Covid eviction moratorium also led to more tenants not paying rent, which the report says “continues to be a challenge.” Perhaps that’s because state and city laws make it difficult to evict deadbeats.

The result: About half of affordable housing buildings are not “collecting enough rent to pay their bills,” the report says. Yet “most expenses related to housing are fixed or nonnegotiable, including mortgage payments, water & sewer charges, insurance, fuel, and electricity, leaving maintenance as the largest single category of discretionary operating costs.”

That means landlords will have to stop repairing leaks—or default on loans, which are backed by the city government. The report warns the latter could increase borrowing costs for the city. This could reduce its ability to finance more low-income housing and other public works, though elected leaders would likely respond by raising taxes.

The report also notably warns that Mr. Mamdani’s proposed rent freeze will exacerbate these problems. Yet its recommendations largely entail more government subsidies and regulation: A $1 billion financing program to restructure distressed loans, government funding for insurance, and restrictions on water and sewer rate increases....

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"A lot of the capital spent developing all-electric vehicles for the U.S. market is going to money heaven." (F)

In the words of Larry the Cable Guy: "I don't care who you are, that's funny right there".  

From Barron's, December 16: 

Ford Stock Rises After It Takes a Huge EV Charge. Here Is the Good News. 

A lot of the capital spent developing all-electric vehicles for the U.S. market is going to money heaven. It will never produce the returns that companies and investors once hoped for.

Ford Motor is the latest example. On Monday, it announced a major pivot toward hybrids and away from all-electric cars. “Ford is following the customer,” said Andrew Frick, president of Ford Blue and Ford Model e.

Blue is Ford’s traditional gasoline-powered business, while Model e makes EVs.

Consumers want the benefits of electrification, but also want affordability and to be confident about how far a vehicle will be able to travel, he said. Looking ahead, Ford expects electrified vehicles to account for 50% of sales by 2050.

That includes “extended range electric vehicles,” battery-powered cars that have an onboard generator, running on gas, that recharges batteries on the fly. There will be an EREV F-150 truck in the future, but Ford isn’t planning to make a battery-only version of its best-selling vehicle.

The pivot will have some pain. Ford is also taking $19.5 billion in one-time charges. That is a lot, considering the company typically spends about $9 billion a year on new plants and equipment and another $8 billion on engineering, research, and development.

The $19.5 billion in charges includes $8.5 billion in EV asset write-downs, $6 billion in charges related to the Blue Oval SK battery joint venture, and $5 billion in “additional program-related expenses.”

Those figures include $5.5 billion in cash that the company plans to spend in the future on the JV and program expenses.

The charges are necessary, according to Frick. Large EVs have “no path to profitability,” he said, adding Ford is focused on developing “affordable” all-electric cars. Ford still plans to launch a midsize electric truck in 2027.

Ford’s Model e division is expected to be profitable by 2029. The division lost $1.2 billion in the third quarter.

Along with the EV decision, Ford updated its 2025 financial forecasts. The company expects to earn about $7 billion in operating profit in 2025, up from a prior call of between $6 billion and $6.5 billion. The new figure implies a fourth-quarter profit of about $1.3 billion, compared with the $662 million forecast by analysts, according to FactSet.

That is a silver lining for investors....

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"Is Europe ready to pull the trigger? Officials whisper about dumping US treasuries if Trump cuts Ukraine deal"

From India's Economic Times via MSN, December 10: 

Europe US debt sell-off: European governments are quietly debating an extraordinary economic countermeasure as fears grow that US president Donald Trump may strike a deal with Russia that sidelines Ukraine and threatens continental security. According to internal assessments shared within Europe, officials are considering a drastic response: dumping vast holdings of US government debt to destabilize the American economy if Washington abandons its commitments to Ukraine. 

Europe Weighs Drastic Financial Response as Trump-Russia Deal Fears Grow

The discussions come as American and Ukrainian representatives met on November 30 in Miami to continue working toward a potential peace agreement, as per a report. Secretary of State Marco Rubio, Trump’s Russia envoy Steve Witkoff, and the President’s son-in-law Jared Kushner participated in the negotiations, as per The Express report. After what was described as a “fragile” session, Trump told reporters aboard Air Force One that there was “a good chance we can make a deal.”

But European leaders remain deeply uneasy, wary that Trump may be moving toward a geopolitical arrangement with Vladimir Putin that ignores NATO allies’ security interests.

Could Europe Trigger a US Treasury Sell-Off? Inside the ‘Nuclear Option’ Debate

A European intelligence agency has reportedly circulated internal evaluations outlining “commercial and economic plans” the Trump administration has been exploring with Russia behind closed doors, as per The Express report. This has intensified concerns that the White House could sacrifice European security in pursuit of American advantage.

According to officials who spoke to the WSJ, European leadership has begun weighing what some describe as a “nuclear option”: the mass liquidation of US Treasury securities held by European governments.

How a Coordinated European Sell-Off Could Shock the US Economy

A coordinated sell-off of this magnitude could shake the American financial system, hammer the value of the US dollar, and trigger a liquidity crisis. Economists warn the impact could be more severe than the 2008 financial crash, potentially sending borrowing costs soaring and freezing large parts of the banking sector.

A prominent European economist reportedly said that such an action could represent one of the most significant external economic shocks in modern US history, as per The Express report....

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It wouldn't work. From the introduction to May 2019's "Alhambra: On China's Empty Treasury 'Nuke' Threats":

Being fans of the low-IQ approach to markets we've looked at various options the U.S. government and the Federal Reserve could employ in the event China wants to dump their treasuries. Here's one version from September 2018:
New York Fed: "Do You Know How Your Treasury Trades Are Cleared and Settled?"

My first thought was "this is a (very) subtle reminder to China that should they decide to dump U.S. Treasuries the clearing and settling of the trade is really, really important."

Delaying or refusing transfer and settlement is sometimes argued as an action the U.S. government could take if China raises the stakes in the trade dispute.The downside is such a move would shock other players in the govvy markets, perhaps to the point they would reconsider their participation.

So, the Fed probably isn't warning, subtly or otherwise.

Besides, if China wanted to dump their holdings, the ultimate end-game action for the U.S. is to have the Federal Reserve go bid for a trillion or so and ask the Chinese "What else ya got?"

On to Liberty Street Economics, not coincidentally housed in the same 33 Liberty Street, NYC NY building as the Fed's open market operations desk....

And here, with a more reasoned argument is Alhambra Investments....

"As China tightens grip, German wind majors look to India for rare earth magnets"

From Delhi's Mint news, December 16:

NEW DELHI : Germany’s offshore wind industry, rattled by China’s grip over rare earth magnets, is beginning to look beyond Beijing—and India has emerged as a possible alternative. As geopolitical risks mount and supply chains come under strain, German companies are exploring whether India can help diversify sourcing of a critical input for Europe’s clean energy push, according to two people aware of the discussions.

The interest is still at an early, exploratory stage. Last month, during a visit by a German delegation led by Johann Saathoff, parliamentary state secretary to Germany’s federal minister for economic cooperation and development, the possibility of collaborating with India on manufacturing rare earth magnets was discussed with the Indian government, the people said.

The talks matter because rare earth magnets are essential for offshore wind turbines, and China controls about 90% of global processing capacity, making Europe heavily dependent on a single supplier. India, which has one of the world’s largest rare earth reserves and is building domestic magnet-making capacity that could exceed its own demand, is positioning itself as a potential alternative supplier.

“Germany is completely reliant on China for supply of rare earth magnets. The offshore wind players are now looking at diversifying their supply chain and want to explore if India could meet their demand," said one of the two people cited above....

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Europe in general and Germany in particular have to move much, much faster than they have in the last decade if they are to maintain any sort of manufacturing base and avoid the fate seen in the outro from December 9's "JPMorgan CEO Jamie Dimon says Europe has a ‘real problem’": 

There are early indications that the EU could become a Chinese satrapy.

And then? It appears that one of Beijing's options is to let Europe die on the vine and wither away as a business center, with Shenzhen, Shanghai and even Hainan island assuming some of the various roles that Europe has played over the years.

And if Europe is no longer independent of China it faces the possibility of becoming a colonial backwater but one that is so overbuilt it ends up as an urban hellscape. 

Which, of course, would be ironic as all get out, the quintessential (in popular imagination) colonizer becoming a colony. For some reason I think of those South American outposts of industry that served their extractive purpose and were left to be reclaimed by nature....

Or worse, become a a Teutonic Belarus.
But without the charm.

"Hong Kong stocks slump to 3-month low as China growth jitters dampen sentiment"

From the South China Morning Post, December 16:

Caution prevails as investors weigh China’s growth prospects after key economic data showed a deceleration across the board 

Concerns about China’s deteriorating growth prospects dragged Hong Kong stocks to their lowest level in three months, while investors refrained from fresh bets before a US jobs report that could sway the Federal Reserve’s interest-rate policy.

The Hang Seng Index dropped 1.9 per cent to 25,139.16 at the noon break, heading for a level not seen since September 4. The decline was broad-based, with all but five stocks on the 89-member benchmark falling. The Hang Seng Tech Index slumped 2.4 per cent.

On the mainland, the CSI 300 Index slid 1.4 per cent and the Shanghai Composite Index retreated 1.3 per cent.

Alibaba Group Holding slumped 3.6 per cent to HK$143.30 and Tencent Holdings lost 1.4 per cent to HK$594.50. Aluminium maker China Hongqiao Group sank 5.8 per cent to HK$30.08 and gold producer Zijin Mining Group shed 4.6 per cent to HK$32.88. Chinese chipmaker Semiconductor Manufacturing International Corp declined 3.6 per cent to HK$62.35....

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These are not trivial declines and will soon be approaching a reverse wealth effect. Despite being up 14% over the last year the CSI300 index is down around 4% over the last month, and flat since late August. Throw in some recency bias and retail investors could slowly begin affecting the wider economy with their caution. Here's the last month of the big index's price action, from TradingView:

 

"Our Brains Can Still Outsmart AI Using One Clever Trick"

From ScienceAlert, December 15:

Despite the rapid advances in artificial intelligence in recent years, the humble human brain still has the edge over computers in its ability to transfer skills and learn across tasks. A new study reveals how we likely do this.

Led by a team from Princeton University, the researchers behind the new study didn't actually run tests on humans, but instead used animals that are very close to us in terms of biology and brain function: rhesus macaques (Macaca mulatta).

These monkeys were asked to identify shapes and colors on a screen, and to look in particular directions to give their answers. While this was happening, brain scans were used to check for overlapping patterns and shared areas of activity in the animals' brains.

Related: Computers Made From Human Brain Tissue Are Coming. Are We Prepared?

Those scans showed the monkey brains using different blocks of neurons – 'cognitive Legos', in the words of the researchers – across tasks. Existing blocks can be repurposed and recombined across new tasks, showing a neural flexibility that even the best AI models can't compete with.

"State-of-the-art AI models can reach human, or even super-human, performance on individual tasks," says neuroscientist Tim Buschman, from Princeton University. "But they struggle to learn and perform many different tasks."

"We found that the brain is flexible because it can reuse components of cognition in many different tasks. By snapping together these 'cognitive Legos', the brain is able to build new tasks."....

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With the caveat that actual "multitasking" decreases performance.

And regarding the "related" article: 

September 2018 - Lab Grown Mini-Brains Raise Some Ethical Questions

June 2024 - Another Way To Beat AI's Power Consumption Problem: Brain Organoids

Which also has some outro links:

Previously in organoids and such:

"Lab-Grown Mini Kidneys 'Go Rogue,' Sprout Brain and Muscle Cells"
Getting into a weird area here.

Ah, the Swiss: "Nestle Finds a Reliable Supply of Brain Cells"

ICYMI: "Researchers Teach Human Brain Cells in a Dish to Play 'Pong'"

"Cyborg computer with living brain organoid aces machine learning tests"

The Act of Thinking Can Accelerate Brain Tumor Growth
Yikes. Shut it down, shut it down, Ōm shanti shanti shanti, Ōm.

Updated—It Looks Like Depository Trust (DTCC) Is Getting Into Tokenization

Update below. 

From The Trade, December:

DTCC receives SEC no-action relief to launch tokenisation service 

The SEC authorisation covers an initial three-year period, spanning instruments including securities within the Russell 1000 index, ETFs linked to major benchmarks, and US Treasury bills, notes and bonds.

The Depository Trust & Clearing Corporation (DTCC) has been cleared by the US Securities and Exchange Commission (SEC) to move ahead with a new tokenisation service, following the issuance of a no-action letter.   

The letter allows its subsidiary DTC to tokenise its real-world assets and make those digital representations available on pre-approved blockchains.  

The SEC authorisation spans an initial three-year period and covers a defined range of highly liquid instruments, including securities within the Russell 1000 index, ETFs linked to major benchmarks, and US Treasury bills, notes and bonds.  

The service is expected to go live in the second half of 2026 and will initially operate in a controlled production environment for DTC Participants and their clients. 

Digital versions of these assets will carry the same investor protections, rights and entitlements as their traditional forms, with the same operational safeguards applied across DTC’s existing infrastructure. 

Frank La Salla, president and chief executive of DTCC, said: “I want to thank the SEC for its trust in us. Tokenising the US securities market has the potential to yield transformational benefits such as collateral mobility, new trading modalities, 24/7 access and programmable assets, but this will only be achievable if market infrastructure provides a robust foundation to usher in this new digital era.”....

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If I recall correctly, in the event of a major market dislocation, DTCC would be considered the actual owner of the assets, which would surprise quite a few people.

I should probably look it up.

UPDATE: it appears I mis-remembered. It is the creditors of a clearing company that end up with the asset. UCC:

(c )If a clearing corporation does not have sufficient financial assets to satisfy both its obligations to entitlement holders who have security entitlements with respect to a financial asset and its obligation to a creditor of the clearing corporation who has a security interest in that financial asset, the claim of the creditor has priority over the claims of entitlement holders.

—Uniform Commercial Code Law Section 8-511
Priority Among Security Interests and Entitlement Holders

As of the last balance sheet (March 31, 2025) net assets of DTCC were $4,460,400,000.

So if one of DTCCs Central Clearing Counterparties gets stuck guaranteeing a big fail, that's it, that's what the whole system rests upon.

I only bring this up because I can't get the image of an upside-down pyramid out of my head.

And we'll just pile more/faster on top (bottom). 

It's probably nothing to worry about. 

Deflation: "Oil Trading Giant Warns Of Looming 'Super Glut' Due To Supply Surge"

If only the refiners would pass some of that decrease along to gasoline buyers, but they aren't really. So maybe the trade is to buy the Valero, Marathon, Phillips 66 triad of doom refining triumvirate and make enough to pay the gasoline bill. Or trade the crack spread.

From ZeroHedge, December 9:

Echoing what has become a now daily refrain by commodity bears everywhere, Saad Rahim, chief economist of commodity-trading giant, Trafigura, said that the oil market faces a “super glut” next year as a burst of new supply collides with weakness in the global economy. According to Rahim, new drilling projects and slowing demand growth would weigh further on already depressed crude prices next year.

“Whether it’s a glut, or a super glut, it’s hard to get away from that,” Rahim said in remarks alongside the company’s annual results.

Brent crude has fallen 16% this year, on track for its worst year since 2020. Prices are expected to be further damped by major projects coming online next year, including in Brazil and Guyana. 

The glut thesis is hardly new, and has been popularized by banks such as Citi and Goldman for the past year. As Goldman analyst Daan Struyven wrote in his latest oil tracker note, "global visible oil stocks have built by nearly 2mb/d over the past 30 days." The banks expects them to grow significantly more in the coming years.

 

Meanwhile demand from China, which is widely seen as aggressively stocking its strategic petroleum reserve by 500kb/d (and as much as 1 mm/d according to some estimates) and is the world’s biggest oil importer, is expected to grow more slowly next year due to its huge fleet of electric vehicles, which have sharply reduced petrol demand. Low prices this year have prompted China to buy more crude to fill its strategic stockpile.

“China needs to keep buying at this rate, for that super glut to not show up even earlier,” Rahim added.

The US government has also been trying to keep oil prices low, and President Donald Trump has pledged to “drill, baby, drill” in a push to increase American production. There has also been speculation that the US will also refill its SPR which was largely emptied by Biden but since that will promptly drive prices higher, so far this has been nothing but speculation, and meanwhile the US barely has any reserves for a true emergency. 

Ben Luckock, head of oil trading at Trafigura, said in October that he expected oil prices could fall below $60 a barrel before rallying. “I suspect we’ll go into the $50s at some point across Christmas and the new year,” he said at the time....

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"Microsoft Scales Back AI Goals Because Almost Nobody Is Using Copilot" (MSFT)

Fortunately for Mr. Softee they have other AI irons in the fire.

From ExtremeTech, December 10:

Google's Gemini is on pace to push Copilot into third place 

Microsoft has cut its sales targets for its agentic AI software after struggling to find buyers interested in using it. In some cases, targets have been slashed by up to 50%, suggesting Microsoft overestimated the potential of its new AI tools. Indeed, compared with ChatGPT and Google's Gemini, Copilot is falling behind, raising concerns about Microsoft's substantial AI investment.

Microsoft was an early investor in many of the latest AI companies. It ended up with a serious stake in OpenAI and benefited from early access to its models, creating Bing Chat and Copilot when Google, Meta, and Anthropic were just getting started. But now its momentum has stalled, and like everyone else, it's not making much money from its AI products. That's because no one is buying them, and that is because very few people actually find them useful, The Information reports.

"The Information’s story inaccurately combines the concepts of growth and sales quotas," Microsoft said in a very defensive statement (via Futurism), adding that "aggregate sales quotas for AI products have not been lowered."

Petulance aside, tests from earlier this year found that AI agents failed to complete tasks up to 70% of the time, making them almost entirely redundant as a workforce replacement tool. At best, they're a way for skilled employees to be more productive and save time on low-level tasks, but those tasks were already being handed off to lower-level employees. Having an AI do it and fail half the time isn't exactly a winning alternative....

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