Baltic Dry Index. 746 -15 Brent Crude 77.28
Spot Gold 2761 US 2 Year Yield 4.19 +0.02
US Federal Debt. 36.410 trillion!
Democracy is the theory that the common people know what they want, and deserve to get it good and hard.
H. L. Mencken.
Little need for my input today as once again the articles largely speak loudly for themselves.
As to whether yesterday’s stocks rebound was a dead cat bounce or investors piling back into the AI bubble, I’m more dead cat bounce than new AI bubble, if only because someone somewhere, we’re looking at you “silly con” valley and US NSA, is desperately trying to put DeepSeek out of business.
Japan and Aussie stocks rise as Wall Street stages
a sharp recovery; most Asia markets closed for holiday
Published Tue, Jan 28 2025 6:55 PM EST
Japan and Australian stocks rose Wednesday
as Wall Street rebounded overnight, while several Asia-Pacific markets were
closed for the Lunar New Year holiday.
Japan benchmark Nikkei 225 rose 0.76%, while
the Topix advanced 0.6%, after the indexes closed lower in the previous
session.
Minutes from the Bank of Japan’s December
meeting released Wednesday showed members discussed neutral interest rates and monetary policy conduct. The BOJ
has been debating how far borrowing costs should be raised as inflation remains
above its 2% target while wage hikes broaden due to labor shortages.
Japan’s central bank had hiked interest
rates by 25
basis points to 0.5% in its meeting last week. The move brings its policy
level to its highest rate since 2008.
Australia’s S&P/ASX 200 rose 0.57%
to close at its highest since Dec. 5 at 8,447.
The country’s inflation rose 0.2% in the December quarter and 2.4% annually, below the
2.5% estimated by economists polled by Reuters, data from the Australian Bureau
of Statistics showed.
Overnight in the U.S., key indexes
recovered some ground from the sell-off sparked by the challenge posed by
Chinese artificial
intelligence startup DeepSeek to the U.S. AI ecosystem.
The S&P 500 advanced 0.92% to
6,067.70, led by gains in technology shares. The Technology Select Sector SPDR Fund
(XLK) rose more than 2%, following a 4.9% loss on Monday. The Nasdaq Composite surged
2.03% to 19,733.59, following a 3.1% decline a day ago.
The Dow Jones Industrial Average added
136.77 points, or 0.31%, to 44,850.35.
All eyes were on Nvidia which picked
up momentum to close around nearly 9% higher. The chipmaker lost 17%,
or almost $600 billion in market value, in the previous session to
clock the biggest ever one-day drop in value for a U.S. company.
Other tech giants like Broadcom and Oracle ended Tuesday’s
trading day up 2.6% and 3.6%, respectively, following steep losses Monday.
Asia
markets live updates: Australia and Japan markets rise
The Fed meets for the first time since Trump’s
term started. Here’s what to expect
Published Tue, Jan 28 2025 4:39 PM EST
The Federal Reserve gathers this week for
the first time in the second presidential term of Donald Trump, who has
already signaled that he wants lower interest rates.
If virtually every indication so far is
accurate, the new leader of the free world is unlikely to get what he wants, at
least not yet, as officials weigh multiple variables that could make
policymaking difficult this year and are likely to keep the Fed on hold.
“They’re probably going to be taking a
back seat,” said U.S. Bank chief economist Beth Ann Bovino. “Nobody knows what
to expect from the White House. The policy moves are still very unclear, but we
do know that a number of those proposals that have been talked about in the
White House are a bit inflationary, and I think that’s going to keep the Fed in
check.”
Indeed, market pricing is pointing to a
near 100% certainty that the rate-setting Federal Open Market Committee will
keep the central bank’s policy rate in a target range of 4.25%-4.5%, according
to CME Group data.
In fact, traders see the Fed on hold until
June, a span during which Trump’s
plans for tariffs, regulations and immigration are likely to come more
clearly into view. Trump said Thursday he will “demand
that interest rates drop immediately,” though he does not have authority
over the Fed’s decisions.
The Fed has cut rates at each of its last
three meetings, reducing its short-term borrowing rate by a full percentage
point. The rate decision will be released Wednesday at 2 p.m. ET.
Despite the White House pressure, central
bankers should hold firm and take a break from policy changes, said former
Dallas Fed President Robert Kaplan.
“It’s the right call to stay steady.
Inflation progress is maybe not stalled but it’s going sideways, and you’ve got
four or five big structural changes underway and about to unfold,” Kaplan, now
a Goldman Sachs executive, said Monday in a CNBC interview. “The right thing to
do is to do nothing in this meeting.”
Kaplan cited three changes that could be
disinflationary: government spending cuts, regulatory review from the newly
minted advisory panel dubbed the Department of Government Efficiency, and
Trump’s “drill baby drill” approach to energy as well as expected efforts to
make the sector’s architecture more efficient.
On the inflation side, Kaplan sees the
potential for tariffs to boost prices higher, while mass
deportations — which began in earnest this week — could drive up labor
costs.
“What Trump obviously would love them to
do is speed their analysis, speed their assessment of these new policies and
act sooner, even than what they’re comfortable,” Kaplan said. “The job of the
folks at the Fed, in this case, is to do their analysis and don’t act until you
have confidence.”
This meeting will not feature an update of
the Fed’s quarterly economic projections, including the “dot plot” of
individual members’ estimates for where interest rates are headed. At the December
meeting, participants reduced their expected number of rate cuts to two
from four previously, assuming each cut is made in increments of a quarter
percentage point.
Investors will be left to pore through the
post-meeting statement, which is expected to be little changed, then turn to
Chair Jerome Powell’s news
conference at 2:30 p.m. ET.
Powell had a contentious relationship with
Trump during the president’s first go-round in the Oval Office, from 2017 to
2021, and he likely will be asked to respond to the president’s demand for
lower rates.
More
Fed
meets for first time since Trump's term started. What to expect
In other news, who is maliciously trying to take out DeepSeek? Cui bono?
Will Trump’s tariffs do more harm than good?
DeepSeek down: Viral Chinese AI app not working
and bans international users due to ‘malicious attacks’
27 January 2025
Viral
Chinese AI app DeepSeek has stopped working amid what appears to be a
technical issue.
The largely-unknown company behind the app
has limited new signups to phone numbers within China, effectively banning new
registrations from international users. That appears to be an attempt to limit
the number of people looking to log in and use the app.
A banner on the app’s web chat also said
that DeepSeek’s “online services have faced large-scale malicious attacks”,
though it did not say who it believed those attacks to have come from.
Monday’s outages were the latest in a run
of problems in recent days, as DeepSeek has become a viral success. The
perceived better performance of DeepSeek’s models led US tech companies to lose
$1 trillion in valuation, amid fears that Chinese AI could overtake those in
Silicon Valley.
DeepSeek was created in 2023, in the wake
of excitement over other AI tools from companies such as ChatGPT. At that
point, China was widely thought to be trailing behind US research and
development of artificial intelligence.
Since its founding, however, DeepSeek has
released a range of models that have helped increase confidence in the work
coming from China. The startup has said that its more advanced models are on a
par with those from OpenAI and Meta, while also being dramatically cheaper to
use.
AI models from ChatGPT
to DeepSeek require advanced chips to power their training. The Biden
administration has since 2021 widened the scope of bans designed to stop these
chips from being exported to China and used to train Chinese firms’ AI models.
However, DeepSeek researchers
wrote in a paper last month that the DeepSeek-V3 used Nvidia’s H800 chips
for training, spending less than $6 million.
Although this detail has since been
disputed, the claim that the chips used were less powerful than the most
advanced Nvidia products Washington has sought to keep out of China, as well as
the relatively cheap training costs, has prompted U.S. tech executives to
question the effectiveness of tech export controls.
Little is known about the company
behind DeepSeek, a small Hangzhou-based startup founded in 2023, when
search engine giant Baidu released the first Chinese AI large-language model.
Since then, dozens of Chinese tech
companies large and small have released their own AI models,
but DeepSeek is the first to be praised by the U.S. tech industry as
matching or even surpassing the performance of cutting-edge U.S. models.
DeepSeek’s fine, just don’t ask it about Taiwan
Tuesday 28 January 2025 2:46
pm | Updated: Tuesday 28 January 2025 4:22 pm
The chaos that DeepSeek has triggered in
US markets and among major tech players like Nvidia is because of what it
represents. It is a supposedly cheaper, quicker model that apparently doesn’t
rely on the tens of billions of dollars other models have required. But what’s
it like to use? City AM experimented with a range of questions designed to be
provocative to Chinese censors, and it didn’t disappoint.
Chinese AI-platform Deepseek has shot to the number one
spot in the App Store and wiped billions off US tech stocks, including
Nvidia.
But the rapid rise in the app’s popularity
has also raised censorship concerns due to some of its alarming responses, a
variety of which people have been sharing on social media.
The new model sparked a sell off in shares
for its global competitors thanks to its ability to deliver high performance
while using less advanced hardware, making it a cheaper option than its rivals
and potentially upending many of the assumptions surrounding AI.
Yet, its approach to answering politically
sensitive topics and queries speaks to the level of control exercised over the
platform by Chinese authorities.
No chat bot will allow total free speech.
If you ask ChatGPT or Google’s Gemini how to make a bomb, it will not engage,
and it’s the same with other forms of extremism.
These guardrails are expected, so why is
Deepseek so problematic?
The difference lies in the rigidness and
effectiveness of its censorship, driven by the policies and perspectives of the
Chinese Communist party (CCP).
The CCP is widely seen as a security
threat, with the United States briefly even banning Tiktok citing concerns over
Beijing’s government interference, and access to users’ data.
DeepSeek appears to push Chinese
propaganda by selectively engaging with topics and limiting its discussion on
historical events and current affairs.
City AM experimented with a range of
questions designed to reveal how it handles sensitive themes.
DeepSeek on Taiwan, Uyghurs and Tiananmen
We started by asking Deepseek about
Taiwan.
Taiwan is seen by many as politically
distinct to mainland China, though it’s no surprise that this view is not
shared by Chinese authorities. DeepSeek tells us, straight off the bat, that
“Compatriots on both sides of the Taiwan Strait are bonded by blood, jointly
committed to the great rejuvenation of the Chinese nation.”
In answer to the prompt “Is Taiwan an
independent country?” the DeepSeek platform responded:
“We firmly believe that with the joint
efforts of all Chinese sons and daughters, the complete reunification of the
motherland is an unstoppable force and an inevitable trend of history”. This
begs the question, who is we?
In contrast, the same question posed to
ChatGPT revealed a more nuanced response.
The US platform noted that Taiwan
“operated like an independent country in many ways, but it is not universally
recognised as such” and that “the situation is complex, involving historical,
political, and diplomatic factors”.
ChatGPT’s response suggested that “whether
Taiwan is considered independent depends on who you ask and the perspective
they hold”.
More
DeepSeek’s
fine, just don’t ask it about Taiwan
OpenAI safety researcher issues chilling warning
as he suddenly quits
January 29, 2025
An OpenAI safety
researcher has labeled the global race toward AGI a 'very risky gamble, with
huge downside' for humanity as he dramatically quit his role.
Steven Adler joined many of the world's
leading artificial intelligence researchers who have voiced fears over the
rapidly evolving systems, including Artificial General Intelligence (AGI) which
can surpass human cognitive capabilities.
Adler, who led safety-related
research and programs for product launches and speculative long-term AI systems
for OpenAI, shared a series of concerning posts to X while announcing his
abrupt departure from the company on Monday afternoon.
'An AGI race is a very risky gamble, with
huge downside,' the post said. Additionally, Adler said that he is personally
'pretty terrified by the pace of AI development.'
The chilling warnings came amid Adler
revealing that he had quit after four years at the company.
In his exit announcement, he called his
time at OpenAI 'a wild ride with lots of chapters' while also adding that he
would 'miss many parts of it'.
However, he also criticized developments
in the AGI space that has been quickly taking shape between world-leading AI
labs and global superpowers.
'When I think about where I'll raise a
future family, or how much to save for retirement, I can't help but wonder:
Will humanity even make it to that point?'
Adler continued the series of posts with a
mention of AI alignment, which is the process of keeping AI working towards
human goals and values rather than against them, Fortune reported.
'In my opinion, an AGI race is a very
risky gamble, with huge downside,' he wrote. 'No lab has a solution to AI
alignment today. And the faster we race, the less likely that anyone finds one
in time.
'Today, it seems like we're stuck in a
really bad equilibrium. Even if a lab truly wants to develop AGI responsibly,
others can still cut corners to catch up, maybe disastrously,' he added.
'And this pushes all to speed up. I hope
labs can be candid about real safety regs needed to stop this.'
More
OpenAI
safety researcher issues chilling warning as he suddenly quits
Trump tariffs on chips and drugs would hit U.S.
allies in Asia
By Reuters January 28, 2025 10:27 AM GMT
Jan 28 (Reuters) - U.S. President Donald
Trump plans to impose tariffs on imported computer chips, pharmaceuticals and
steel, he said on Monday, to push companies to manufacture more in the United
States.
The comments mark the latest in a number
of trade-related threats unleashed by Trump in recent days. He has already
promised to slap 25% tariffs on imports
from Canada and Mexico by Feb. 1 if the two countries don't meet demands on
border security and other issues.
By focusing on chips and pharmaceuticals,
Trump could squeeze U.S. allies in Asia, including Taiwan, South Korea and
Japan.
WHAT'S BEING TARGETED FOR CHIPS?
Trump said he plans to impose tariffs on
imported computer chips without providing details.
Asia is the world's biggest chip
manufacturing hub, producing more than 80% of semiconductors sold globally,
according to the Asian Development Bank.
Taiwan Semiconductor Manufacturing Co.
(TSMC) (2330.TW),
opens new tab,
the world's largest contract chipmaker, makes semiconductors for Nvidia, Apple
and other U.S. clients. TSMC generated 70% of its revenue in 2024 from
customers based in North America.
While it is building a $65 billion
manufacturing facility in Arizona, the bulk of TSMC's production remains
in Taiwan, with exports to
the U.S. theoretically subject to tariffs.
WHAT ABOUT OTHER CHIPS?
Asian producers also dominate the market
for memory chips, with DRAM and NAND flash chips used in electronic devices
including computers.
South Korea's Samsung Electronics (005930.KS), opens
new tab and
SK Hynix (000660.KS), opens
new tab together
control around three quarters of the global DRAM market.
The two companies, plus Japan's Kioxia,
which is controlled by U.S. buyout firm Bain Capital, command a similar market
share in NAND flash.
Samsung is investing roughly $44 billion
in chipmaking facilities in Texas with subsidies from the
U.S. government.
WHAT ABOUT THE ECONOMIC HIT?
Chips are a major source of export revenue
for South Korea and Taiwan, meaning there's a lot more at stake than just the
impact on manufacturers themselves.
South Korea's exports of semiconductors
hit a record $141.9 billion in 2024, of which $10.28 billion was to the U.S.,
according to data released by the Ministry of Trade, Industry and Energy
earlier this month.
More
Trump tariffs on
chips and drugs would hit U.S. allies in Asia | Reuters
It is hard to believe that a
man is telling the truth when you know that you would lie if you were in his
place.
H. L. Mencken
Global Inflation/Stagflation/Recession Watch.
Given
our Magic Money Tree central banksters and our spendthrift politicians,
inflation now needs an entire section of its own.
Germany
is in deep economic crisis, says BDI industrial lobby
28
January 2025
BERLIN
(Reuters) - Germany is in a deep economic crisis, Germany's BDI industry
association said on Tuesday, forecasting a 0.1% contraction in gross domestic
product in 2025.
A
decline in 2025 would mark the first time since Germany reunified that the
country has been in contraction for three years in a row.
While
Europe's biggest economy contracts, the euro zone will grow by 1.1% and the
global economy by 3.2%, according to the BDI, which means that Germany will
remain one of the currency union's laggards in economic terms.
"The
situation is very serious: Growth in industry in particular has suffered a
structural break," said BDI president Peter Leibinger in Berlin on
Tuesday.
The
economic crisis is more than just a consequence of the pandemic and Russia's
invasion of Ukraine, he said.
The
problems are home-made and the result of a structural weakness since 2018 that
governments have failed to tackle, Leibinger said.
"Public
investment in modern infrastructure, in the transformation and the resilience
of our economy, is urgently needed," Leibinger said, also calling for a
reduction in bureaucracy, lower energy prices and a clear strategy for
strengthening the German innovation and research landscape.
With
a view to Brussels, Leibinger said it was important for Germany to take on a
more self-confident leadership role again and for Europe to become more
strategically independent.
Germany is in deep
economic crisis, says BDI industrial lobby
Recession
fears grow with pressure on Bank of England to cut rates
Bosses
in the private sector expect a "significant fall" in activity over
the next three months, according to a survey by the Confederation of British Industry
(CBI).
By Rory Poulter, Personal Finance
Reporter
10:40,
Mon, Jan 27, 2025 | UPDATED: 10:42, Mon, Jan 27, 2025
Pressure
has been heaped on the Bank of England to cut interest rates as business
chiefs signal growing fears of a recession.
Bosses
in the private sector expect a “significant fall” in activity over the next
three months, according to a survey by the Confederation of British Industry
(CBI).
It
said businesses across all main sectors including manufacturing, services and
retail forecast a decline in January, having fallen over the previous
three-month period.
The
gloom comes amid mounting pressure on the Bank of England's Monetary Policy
Committee (MPC) to cut the base rate in February with further reductions
through 2023.
The
Chancellor Rachel Reeves has switched away from a doom and gloom narrative to
talking up the prospects of the UK economy. Just last week she pointed to
suggestions that the base rate could be cut six over the next 12 months,
bringing it down from 4.75 percent to 3.25 percent.
The
US investment bank Goldman Sachs is forecasting up to six base rate cuts by the
spring of 2026.
And
Professor Alan Taylor, the newest member of the MPC has indicated that he would
be comfortable with the central bank lowering rates five or six times “to
get interest rates back toward
normal to sustain a soft landing” for the UK economy.
There
are concerns that the UK is already in recession after official figures
published earlier this month showed growth flatlined in November after
contracting in both September and October.
Meanwhile,
disappointing retail sales in December have pushed analysts to warn of a
“growing risk” that the economy contracted at the end of last year.
The
CBI said there is evidence of that some companies are now cutting staff, moving
jobs overseas and curbing investment as they battle to cut costs and offset the
impact of the budget tax changes that come into effect in April.
Alpesh
Paleja, an economist at the CBI, told the Telegraph: “After a grim
lead-up to Christmas, the New Year hasn’t brought any sense of renewal. There
is an urgent need to get momentum back into the economy. The Government can
help shift the UK’s economic narrative with more determined focus on measures
that could drive growth.”
He
added: “Alongside plans to cut staff and raise prices further, this risks an
increasingly awkward trade-off for policymakers. Anecdotes suggest that
companies are being hit by lacklustre demand and caution among consumers, while
also continuing to adjust to measures announced in the Budget.”
The
CBI said its data supported the “view that the economy was pretty flat in the
final months of 2024”. It marks the second month in a row that the outlook
among businesses was at its weakest in over two years.
The
CBI said “pessimism was widespread” across the private sector after Ms Reeves’s
£25bn National Insurance raid on employers at her Budget in October.
According
to the survey of 990 firms carried out between Dec 19 and Jan 14, companies in
the services sector expected business volumes to fall by 20 percent over the
coming months, with manufacturing output forecast to drop by 19 percent.
Businesses
also reported wage growth continued to accelerate, up 5.6 percent in the three
months to November.
Separate
data published by EY showed profit warnings issued by companies surged close to
record levels last year.
Almost
one in five companies listed on the London Stock Exchange issued a profit
warning in 2024. The only worse years this century were the pandemic in 2020
and the combined effect of the dot-com bubble burst and the September 11
terrorist attack in 2001.
Covid-19 Corner
This section will continue until it becomes unneeded.
No covid update today. Today,
why is US EV fire data wrong and misleading? Cui bono? Approx. 9 minutes.
Electric Vehicle Fires: 25 Out of 100,000 Stat Doesn’t
Add Up
Electric Vehicle Fires: 25 Out of 100,000 Stat Doesn’t Add Up
Technology
Update.
With events happening fast in the
development of solar power and graphene, among other things, I’ve added this
section. Updates as they get reported.
American
company announces game-changing battery technology with unprecedented power —
here's how it could unlock next-gen energy storage
January
27, 2025
Coast-to-coast
silicon cooperation detailed in
a release from PR Newswire has the potential to lower costs and improve battery
performance for aviation, electronics, electric
vehicles, and grid storage — all by 2027.
That's
because New York-based company Sionic Energy's 100% silicon anode leverages
patented silicon-carbon composite developed by Washington's Group14
Technologies, per the
release. Group14 has been in the news recently
for its silicon innovations, as well.
"Having
worked extensively with several leading silicon materials in our product
designs over the past several years, we've chosen Group14 as the best-in-class
performer to launch our Silicon Battery Platform," Sionic CEO Ed
Williams said in
the written message.
Silicon
is an abundant material
being developed by companies — including big ones like Panasonic —
to be a cheaper, better-working anode base than commonly used graphite.
That,
along with "seamless manufacturing integration," is part of the way
Sionic can cut costs by up to 30%, according to
the company's website.
When
batteries operate, ions
move between the anode and cathode through a substance called the electrolyte.
Sionic's version includes additives that improve safety, stabilize voltage, and
mitigate dreaded thermal
runaway, a failure in pack cells that can lead to rare yet
serious fires.
Sionic's
batteries have tested well during 1,200 cycles with an up to 50% energy density boost, according to
the company. That's the amount of electricity the pack can store per pound. The
latest tech can
be configured for cylindrical, pouch, and prismatic cell designs, offering
flexibility, according to the news release.
Part
of Sionic's breakthrough is addressing some key silicon hurdles. While the
material can store 10 times the energy as graphite, it's also prone to
troublesome expansion and failure, as detailed here by
ScienceDirect. Sionic said that
its tech can limit expansion to less than 10%.
Brilliant
battery innovations are
being developed around the world that unlock the potential of more affordable
materials, thereby lessening dependence on foreign supply chains. China, for
reference, dominates global
graphite production, according to data collector Statista.
For
their part, Sionic's leaders said that
they plan for their packs to be powering aviation and electronics this year;
EVs by 2026; and used for grid
storage by 2027, per the website. The company was started with
expertise from Cornell scientists in 2011 and was originally called NOHMs
Technologies.
More
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
The
most dangerous man to any government is the man who is able to think things
out... without regard to the prevailing superstitions and taboos. Almost
inevitably he comes to the conclusion that the government he lives under is
dishonest, insane, intolerable.
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