Baltic
Dry Index. 815 +22
Brent Crude 75.17
Spot Gold 2880 US 2 Year Yield 4.29 +0.08
US Federal Debt. 36.460 trillion!
It's more important to do big things well than to do small things perfectly.
Ray Dalio.
In the stock casinos, a big, if difficult week. More Trump tariffs as early as today, plus China’s retaliatory tariffs on selected US exports start today.
The latest US inflation numbers. The US CPI on Wednesday, followed by the US PPI on Thursday.
All in all, a big but very uncertain week for stocks. Will Trump tariffs kill stocks golden goose?
Asia-Pacific markets fall as tariff worries dent
investor sentiment
Updated Mon, Feb 10 2025 11:16 PM EST
Asia-Pacific markets fell Monday, tracking
U.S. stocks futures that were lower ahead of key economic data, with escalating
trade tensions denting investor sentiment.
U.S. President Donald Trump told reporters
Sunday that he was planning to announce a blanket 25%
tariff on all steel and aluminum imports on Monday, according to
Reuters.
Over in Japan, the benchmark Nikkei 225 was trading flat,
while the broader Topix index fell 0.16%, in choppy trading.
The country reported loan growth of 3% year on year in January, falling slightly
from December’s 3.1%.
South Korea’s Kospi was flat in choppy
trading, while the small-cap Kosdaq advanced 0.83%.
Australia’s S&P/ASX 200 was trading
down 0.4%.
Hong Kong’s Hang Seng index rose 1.43%,
while mainland China’s CSI 300 Index was flat.
Consumer inflation in China rose to a
five-month high in January on the back of higher spending in the lead
up to the Lunar New Year, data released by the National Bureau of
Statistics on Sunday revealed. The consumer price index rose 0.7% month on month and 0.5% annually in January —
more than Reuters’ 0.4% estimate.
Meanwhile, its producer price index, which
captures the wholesale price of goods, fell 2.3% from the previous year in January, more than the 2.1%
drop expected by Reuters.
Investors will also be keeping an eye on
Indian stocks that fell Friday, after the Reserve
Bank of India expectedly cut interest rates for the first time in five
years.
Indian stocks extended previous losses to
open lower. The benchmark Nifty
50 was down 0.54%, while the BSE Sensex index fell 0.34%
Singapore’s benchmark Straits Times Index hit an
all-time high of 3,910.12 points, LSEG data showed, led by gains in the shares
of telecommunications operator Singapore Telecommunications and
well as local banks DBS
Group Holdings, Oversea-Chinese
Banking Corporation and United Overseas Bank.
The STI benchmark was trading up 0.7%.
The three key U.S. indexes fell Friday
after U.S. President Donald Trump’s said he was planning reciprocal tariffs on
trading partners. Markets were further pressured by the release of consumer
sentiment and jobs data which pointed to a pickup in inflation and spiked
the 10-year Treasury yield
above 4.5% at its session high.
The Dow Jones Industrial Average fell
444.23 points, or 0.99%, to close at 44,303.40. The S&P 500 declined 0.95% to
6,025.99, and the Nasdaq
Composite slid 1.36% to end at 19,523.40. Friday’s losses left the
major averages in negative territory on the week.
Asia
markets live updates: Asia markets trade mixed Monday
Trump to announce 25% steel and aluminum tariffs
in latest trade escalation
Published Sun, Feb 9 2025 6:10 PM EST
U.S. President Donald Trump said on Sunday
he will introduce new 25% tariffs on all steel and aluminum imports into the
U.S., on top of existing metals duties, in another major escalation of his
trade policy overhaul.
Trump, speaking to reporters on Air Force
One on his way to the NFL
Super Bowl in New Orleans, said he will announce the new metals tariffs on
Monday.
He also said he will announce reciprocal
tariffs on Tuesday or Wednesday, to take effect almost immediately, applying
them to all countries and matching the tariff rates levied by each country.
“And very simply, it’s, if they charge us,
we charge them,” Trump said of the reciprocal tariff plan.
The largest sources of U.S. steel imports
are Canada, Brazil and Mexico, followed by South Korea and Vietnam, according
to government and American Iron and Steel Institute data.
By a large margin, hydropower-rich Canada
is the largest supplier of primary aluminum metal to the U.S., accounting for
79% of total imports in the first 11 months of 2024.
“Canadian steel and aluminum support key
industries in the U.S. from defense, shipbuilding and auto,” Canadian
Innovation Minister Francois-Philippe Champagne posted on X.
“We will continue to stand up for Canada,
our workers, and our industries.”
Trump also said that while the U.S.
government would allow Japan’s Nippon
Steel to invest in U.S.
Steel, it would not allow this to become a majority stake.
“Tariffs are going to make it very
successful again, and I think it has good management,” Trump said of U.S.
Steel.
Nippon Steel declined to comment on the
latest announcements from Trump.
Quota questions
Trump, during his first term, imposed
tariffs of 25% on steel and 10% on aluminum, but later granted several trading
partners duty-free exemptions, including Canada, Mexico, and Brazil. Mexico is
a major supplier of aluminum scrap and aluminum alloy.
Former President Joe Biden later negotiated
duty-free quota arrangements with Britain, the European Union and Japan. It was
not immediately clear from Trump’s announcement what will happen to those
exemptions and quota arrangements.
“Quebec exports 2.9 million tons of
aluminum to (the U.S.), that is, 60% of their needs. Do they prefer to get
supplies from China?” Francois Legault, premier of Quebec, said on X.
“All this shows that we must begin to
renegotiate our free trade agreement with the United States as soon as possible
and not wait for the review planned for 2026. We must put an end to this
uncertainty.”
Steel mill capacity usage jumped to levels
above 80% in 2019 after Trump’s initial tariffs, but has fallen since then as
China’s global dominance of the sector has pushed down steel prices. A Missouri
aluminum smelter revived by the tariffs was idled last year by Magnitude 7
Metals.
Matching rates
Trump said he would hold a news conference
on Tuesday or Wednesday to provide detailed information on the reciprocal
tariff plan, adding that he first revealed on Friday that he was planning
reciprocal tariffs to ensure “that we’re treated evenly with other countries.”
The new U.S. president has long complained
about the EU’s 10% tariffs on auto imports being much higher than the U.S. car
rate of 2.5%. He frequently states that Europe “won’t take our cars” but ships
millions west across the Atlantic every year.
The U.S., however, enjoys a 25% tariff on
pickup trucks, a vital source of profits for Detroit automakers General Motors, Ford and Stellantis’ U.S. operations.
The U.S. trade-weighted average tariff
rate is about 2.2%, according to World Trade Organization data, compared to 12%
for India, 6.7% for Brazil, 5.1% for Vietnam and 2.7% for European Union
countries.
More
Trump
to announce 25% steel and aluminum tariffs in latest trade escalation
Stock futures edge lower ahead of key economic
data, threat of fresh tariffs: Live updates
Updated Sun, Feb 9 2025 6:18 PM EST
Stock futures were lower on Sunday, as
investors braced for a data-packed week ahead and eyed reports that President
Donald Trump may announce a new round of tariffs on Monday.
Futures tied to the Dow Jones Industrial Average fell
62 points, or 0.14%. S&P
500 futures slipped 0.18%, while Nasdaq 100 futures ticked
down 0.26%.
Trump told reporters on Sunday that he’s
planning to announce a blanket 25% tariff on all steel and aluminum imports on
Monday, according to a Bloomberg report. Trump did not specify when the tariffs
would be imposed and noted that he would also issue retaliatory tariffs on
countries that tax U.S. imports. The news comes as Trump’s previously announced
duties on China are set to go into effect at midnight on Sunday.
The threat of more tariffs comes ahead of
a slew of economic data this week. The January consumer price index report is
due out Wednesday at 8:30 a.m. ET, followed by initial weekly jobless claims
and the producer price index on Thursday. Federal Reserve Chair Jerome Powell
will also speak before Congress on Monday morning.
“Steep tariffs and heightened policy
uncertainty could push businesses to increasingly adopt wait-and-see behaviors
and pull back on hiring,” said Lydia Boussour, senior economist at
EY-Parthenon. “This could lead to a more severe job slowdown, weaker income and
restrained consumer spending amidst much higher inflation.”
The market remains
jittery on a mix of inflation worry coupled with concern over how
Trump’s plan for tariffs could adversely affect the U.S. economy. Investors
will also look toward more major corporate earnings, including McDonald’s on
Monday and Coca-Cola on
Tuesday.
Stock
futures edge lower ahead of economic data, threat of fresh tariffs
Stuck stock market is worried about economic
growth as Trump’s tariffs dominate headlines
Published Sat, Feb 8 2025 7:21 AM EST
The stock market is rather calm but can’t
seem to relax.
In a noisy and fast-shifting news
environment, stocks were quietly flattish last week from point to point, even
after Friday’s almost 1% drop, which extends a sideways three-month range
during which the S&P 500 has
traded no more than 3% above or below its closing level from the day after the
U.S. election.
The index has been sticky near the 6,000
level, caught between the opposing currents of a deeply split market, in which
stocks and sectors are moving their own way rather than as a bloc. Helps
explain why the CBOE S&P
500 Volatility Index (VIX) has been testing its recent floor near 15
in recent weeks.
Is this action best understood as
resilience, fatigue or confusion?
A bit of each, most likely. The market
action suggests investors are comforted by a sturdy economic starting point and
the consensus will not easily surrender their faith in a “growth-friendly”
policy mix to come.
Yet day to day, the many-forked path of
policy-setting involving tariffs, immigration crackdowns, executive-branch
program curbs and, eventually, a tax-and-spending package has sapped market
confidence in an imminent economic acceleration.
Many of the textbook “Trump trades”
pricing in a strong growth impulse driving a higher-nominal-growth economy have
largely unwound. The small-cap Russell 2000 has rolled back to mid-October
levels. And as shown here, the beloved industrial sector has also slid back
relative to the broader market.
The selective nature of the tape is also
visible in the waning proportion of large stocks that remain in a technical
uptrend. This chart from Strategas Research shows the percentage of such stocks
slipped just below 60%, lowest in more than a year.
It’s a testament to the market’s recent
knack for clockwork rotations and the constant aggression of small retail
traders (detailed
here last week) that the index has stayed within a couple of percent of
record highs even as broad momentum is lacking and so many individual stocks
consolidate.
It’s tough to deny that the
clench-and-release of tariff threats is the proximate mover of tactical trading
flows and the public mood. The S&P 500 low for last week came less than an
hour after Monday’s opening bell, when 25% tariffs on Canada and Mexico were
freshly imposed. A 3% multi-day relief rally from there eventually took the
S&P 500 to a high right at 6,100 – upside resistance unless and until
proven otherwise – on Friday morning.
That was just before the University
of Michigan consumer survey showed a big jump in one-year inflation
expectations, almost certainly tied to tariff fears, with stocks legging lower
still after President Trump vowed “reciprocal tariffs” on countries now
imposing duties on U.S. goods. Stocks fell 1% from there into the weekly close.
More
Stuck stock market is worried about economic growth as Trump's tariffs dominate headlines
Japan PM Ishiba, after meeting Trump, voices
optimism over averting tariffs
Published Sun, Feb 9 2025 2:53 AM EST
Japanese Prime Minister Shigeru Ishiba
expressed optimism on Sunday that his country could avoid higher U.S. tariffs,
saying President Donald Trump had “recognised” Japan’s huge investment in the
U.S. and the American jobs that it creates.
At his first White House summit on Friday,
Ishiba told public broadcaster NHK, he explained to Trump how many Japanese
automakers were creating jobs in the United States.
The two did not specifically discuss auto
tariffs, Ishiba said, although he said he did not know whether Japan would be
subject to the reciprocal tariffs that Trump has said he plans to impose on
imports.
Tokyo has so far escaped the trade war
Trump unleashed in his first weeks in office. He has announced tariffs on goods
from Canada, Mexico and China, although he postponed the 25% duties on his
North American neighbours to allow for talks.
The escalating trade tensions since Trump
returned to the White House on January 20 threaten to rupture the global
economy.
Ishiba said he believes Trump “recognised
the fact Japan has been the world’s largest investor in the United States for
five straight years, and is therefore different from other countries.”
“Japan is creating many U.S. jobs. I
believe (Washington) won’t go straight to the idea of higher tariffs,” he said.
Ishiba voiced optimism that Japan and the
U.S. can avoid a tit-for-tat tariff war, stressing that tariffs should be put
in place in a way that “benefits both sides”.
“Any action that exploits or excludes the
other side won’t last,” Ishiba said. “The question is whether there is any
problem between Japan and the United States that warrants imposing higher
tariffs,” he added.
Japan had the highest foreign direct
investment in the United States in 2023 at $783.3 billion, followed by Canada
and Germany, according to the most recent U.S. Commerce Department data.
Trump pressed Ishiba to close Japan’s
$68.5 billion annual trade surplus with Washington but expressed optimism this
could be done quickly, given a promise by Ishiba to bring Japanese investment
in the U.S. to $1 trillion.
On Sunday, Ishiba identified liquefied
natural gas, steel, AI and autos as areas that Japanese companies could invest
in.
More
Japan PM Ishiba, after meeting Trump, optimistic over averting tariffs
In other news, more EV battery fire news from Poland. Approx. 4 minutes.
Massive E-Bike Fire in Poland: Danger of
Stockpiled Batteries
Massive E-Bike Fire in Poland: Danger of Stockpiled Batteries - YouTube
Top Biden EV Bus Maker Nears Bankruptcy, Leaving
School Districts and Tens of Millions of Taxpayer Dollars in Limbo
EPA administrator Lee Zeldin tells the
Free Beacon he is 'committed to delivering' answers on green spending
February 7, 2025
The Biden administration awarded Canadian
electric bus company Lion Electric nearly $160 million to manufacture hundreds
of battery-powered buses for school districts nationwide as part of its sweeping
climate agenda. In recent weeks, Lion has initiated bankruptcy
proceedings, laid
off all employees tasked
with building its buses, and paused manufacturing operations.
Lion's financial demise leaves dozens of
school districts—including those in California, Montana, North Dakota, Iowa,
Alabama, and Maryland—questioning whether they will receive the buses the Biden
administration promised them. Lion has yet to deliver $95 million worth of
electric buses to 55 districts across the country, according to federal
data reviewed by
the Washington Free Beacon.
"At this time we are working through
the proper channels and keeping our attorneys abreast of the situation,"
Dawn Wallace, the superintendent of Ohio Valley School District in Adams
County, Ohio, which ordered buses from Lion, told the Free Beacon.
"No buses have been delivered to our district. We are on hold."
"The district has been in contact
with both Lion Electric and the EPA to gather details on the situation and
explore available options moving forward," added Jason Stabler, the
superintendent of Bureau Valley School District in Manlius, Illinois, another
district promised buses.
The situation puts a renewed spotlight on
the Biden administration's behemoth climate programs, raising questions about
whether the recipients of billions of dollars in green spending were properly
vetted—or whether federal officials looked the other way when doling out funds
to Lion, which had financially struggled for years.
It also underscores a familiar dynamic
surrounding such programs—green energy companies like Lion are dependent on
government funding and often
fail even
after winning lucrative
government contracts.
In the case of electric school buses, 67 percent of the planned electric school
buses in the United States have been funded by the federal government, according
to an analysis conducted
by the World Resources Institute.
----Between
October 2022 and May 2024, the Biden administration awarded Lion a total of
$159 million to manufacture 435 buses under the EPA's $5 billion Clean School
Bus program. That makes Lion the third-largest beneficiary of the program,
which was created by Democrats' 2021 infrastructure bill and later emerged as
a hallmark climate initiative of both Joe Biden's
presidency and Kamala Harris's vice presidency.
Lion received the funding and became a
Biden administration favorite even as it struggled to turn a profit and took on
millions of dollars in loans. In fact, less than two weeks before the EPA gave
Lion $82.7 million in October 2022 as part of the first tranche of Clean School
Bus program awards, the company reported
to investors that
it had lost $17.2 million during the prior three months.
Since 2020, Lion has reported staggering net
losses totaling $301.6
million and, since January 2021, its stock price has
plummeted from
$33.48 per share to $0.08 per share. The company abruptly stopped
reporting its share price on its website in December.
More
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.
China’s
consumer inflation at 5-month high, producer deflation persists
Published
Sun, Feb 9 2025 3:02 AM EST
China’s
consumer inflation accelerated to its fastest in five months in January while
producer price deflation persisted, reflecting mixed consumer spending and weak
factory activity.
Deflationary
pressures are likely to persist in China this year, analysts say, unless
policymakers can rekindle sluggish domestic demand, with tariffs by U.S.
President Donald Trump on Chinese goods adding pressure on Beijing to spur
growth in the world’s second-largest economy.
The
consumer price index rose 0.5% last month from a year earlier, quickening from
December’s 0.1% gain, data from the National Bureau of Statistics showed on
Sunday, above the 0.4% rise estimate in a Reuters poll of economists.
Core
inflation, excluding volatile prices for food and fuel, sped up to 0.6% in
January from 0.4% the previous month.
Although
consumer prices are expected to rise gradually, producer prices are unlikely to
return to positive territory in the short term as overcapacity in industrial
goods persists, said Xu Tianchen, senior economist at the Economist
Intelligence Unit.
“If
measured by the GDP deflator, it will still take a few quarters to get out of
deflation, ” Xu said.
The
numbers were skewed by seasonal factors, as the Lunar New Year, China’s biggest
annual holiday, began in January this year versus February last year.
Typically, prices rise as consumers stockpile goods, particularly food for big
family gatherings.
Prices
of airplane tickets rose 8.9% from a year earlier, tourism inflation was 7.0%
and movie and performance ticket prices rose 11.0%.
Consumer
spending reports over the holidays were mixed, reflecting worries over wage and
job security.
While
Chinese flocked to movie theatres and spent more on shopping, catering and
domestic travel, per capita spending during the holidays grew by only 1.2% from
a year earlier, versus a 9.4% rise in 2024, analysts at ANZ estimated.
CPI
edged up 0.7% in January from the previous month, below the forecast 0.8% rise
and compared with an unchanged outcome in December.
For
2024, CPI rose 0.2%, in line with the previous year’s pace and well below the
official target of around 3% for last year, suggesting inflation missed annual
targets for the 13th straight year.
More
China's consumer
inflation at 5-month high, producer deflation persists
Jobs report shows a hiring slowdown as companies are acting like ‘they’re in a recession’
7
February 2025
The
US economy kicked off 2025 by adding 143,000 jobs in January, fewer than
expected; but the unemployment rate dipped to 4%, according to data released
Friday by the Bureau of Labor Statistics.
Economists
were projecting the
unemployment rate would stay at 4.1% and 170,000 jobs would be added, according
to FactSet estimates.
Friday’s
report — which also featured some significant data adjustments that happen at
the start of every year — also provided more clarity on recent labor market
trends, indicating that job growth last year was weaker than previously
estimated.
The
latest benchmark revision — an annual process that squares up estimates —
showed there were 589,000 fewer jobs added to the economy in 2024 (more on that
below).
Accounting
for the revisions, there were just shy of 2 million jobs added last year,
amounting to roughly 166,000 jobs per month — a pace practically equal to the
165,000 average monthly gains seen in 2019.
“The
foundation of the labor market remains incredibly sturdy,” Cory Stahle, an
economist at the Indeed Hiring Lab, wrote in a statement on Friday. “Revisions
to the past year’s data may have rearranged a few rooms in the house, but they
did not fundamentally change the structure.”
In
the years following the economy-upheaving pandemic, the labor market has
slowed, but it has not collapsed. Growth has
remained solid enough to
fuel consumer spending and put the economy on track for a “soft landing” of
reining in inflation without triggering a recession.
It’s
also been historic. Through January, the US economy has posted monthly job
gains for 49 months, marking the second-longest period of employment expansion
on record, according to BLS data that goes back to 1939. (The longest was a
113-month streak from October 2010 to February 2020).
The
effects of wildfires and weather
In
January, health care and social assistance continued to lead the way,
accounting for nearly half of the month’s gains by posting net job growth of
66,000. The retail sector and government (which spans federal, state and local
hiring) recorded employment growth of 34,300 and 32,000 respectively.
Most
major industries added jobs, although some of the gains were quite modest.
Cold
and severe weather, illnesses as well as the wildfires
in Los Angeles likely
weighed on the month’s job growth, Diane Swonk, chief economist at KPMG, told
CNN in an interview.
She
noted shifts in key underlying data points: a loss in leisure and hospitality
jobs; increases in people who missed work due to illness or weather; and a
decrease in the participation rate of prime working age women.
“We
tend to see that during disaster, because women with small children no longer
have help,” she said.
BLS
officials did include a notation about the wildfires and weather in Friday’s
report, but noted that there was “no discernible effect.”
More
Jobs report shows a hiring slowdown as companies are acting like ‘they’re in a recession’
Covid-19
Corner
This section will continue until it becomes unneeded.
Covid-19:
in hindsight, which countries responded best during the pandemic?
Published
by Adrien, February 08, 2025 at 07:00 AM
By
Arnaud Fontanet - Physician, Director of the Epidemiology of Emerging Diseases
Unit at the Institut Pasteur, Professor of the Health and Development Chair at
CNAM, Conservatoire national des arts et métiers (CNAM)
A recent study compares the different strategies implemented to combat the
Covid-19 pandemic in 13 Western European countries and the results they
achieved. Its findings indicate, among other things, that countries that
restricted social contacts early on managed to save more lives than others,
while also better preserving their economies.
During
the Covid-19 pandemic, the strategies implemented to contain the spread of the
SARS-CoV-2 coronavirus, which causes the disease, varied from one country to
another, even among countries with similarities in terms of population, living
standards, healthcare systems, governance models, seasonality of respiratory
diseases, etc.
In September 2023, representatives from 13 Western European countries involved
in managing the Covid-19 pandemic (including the author of this article) chose
to compare the strategies used in each country to counter the pandemic. Five
years after the start of the pandemic, here is what these findings, published
in the journal BMC Global and Public Health, teach us.
For
this study, it was decided that the main indicator for evaluating the
strategies used would be the excess mortality from all causes during the period
from January 27, 2020, to July 3, 2022.
Certainly, the impact of the pandemic on our societies extends far beyond just
the mortality associated with the virus. For example, we can cite the morbidity
due to long Covid, the deterioration of the population's mental health caused
by the pandemic, its effects on education, the economy, etc. Each of these
aspects would deserve a separate analysis.
However, this indicator has many advantages for assessing the relevance of the
strategies implemented. It allows:
- the use of data available in all countries by sex, age group, and week
(except for Ireland, where data were available by month);
- to avoid the debate: death "from" Covid-19 or death
"with" Covid-19;
- not to worry about the completeness of Covid-19 testing among deceased
individuals, which could have varied between countries;
- to account for delayed mortality related to the aftereffects of
Covid-19, such
as cardiovascular damage;
- to include indirect mortality related to the disruption of the healthcare
system during the pandemic;
- to account for the decrease in mortality due to the absence of flu epidemics
for two years, and the reduction of some other causes of mortality (such as
road accidents during lockdown);
- to use methods already developed to calculate excess mortality during
seasonal flu epidemics or flu pandemics.
We limited our study to the period between January 2020 and July 2022, as the
occurrence of a heatwave during the summer of that year, followed by the return
of the flu during the winter of 2022-2023, made it impossible to attribute the
observed excess mortality solely to the effects of Covid-19.
Finally, compared to most previously
published articles,
we made two methodological changes: we extended the reference period used to
calculate the trend from which excess mortality would be estimated (2010-2019
instead of 2015-2019) and we standardized excess mortality by age and sex to
account for differences in the age distribution of the populations in the
selected countries, which can be very significant.
Italy, for example, has the highest proportion of people over 80 in Europe (it
was 7.5% in 2020), while in Ireland it was half that (3.5%). However, we know
that the oldest segments of the population were particularly vulnerable to the
SARS-CoV-2 coronavirus.
Over
the entire study period, from January 27, 2020, to July 3, 2022, it appears
that the Scandinavian countries (Norway, Denmark, and Sweden) and Ireland fared
the best: cumulative excess mortality was 0.5 to 1 per 1,000 inhabitants. The
next three countries are Germany, Switzerland, and France, with cumulative
excess mortality between 1.4 and 1.5. Then come Spain, Portugal, the
Netherlands, the United Kingdom, and Belgium (between 1.7 and 2.0). Finally,
Italy brings up the rear, with cumulative excess mortality of 2.7.
More
Covid-19: in hindsight, which countries responded best during the pandemic? 😷
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.
China’s DeepSeek is already changing
AI.
OpenAI changes
ChatGPT o3-mini to work more like DeepSeek-R1, but faces backlash from users
7
February 2025
OpenAI
has changed the way that its new ChatGPT o3-mini model displays its chain of
thought (Cot) to “make it easier for people to understand how the model
thinks," however it has faced an almost immediate backlash from users and
accusations that it is copying the way that DeepSeek's R1 model displays its
reasoning.
Speaking
to TechRadar, OpenAI said: “Users have told us that understanding how the model
reasons through a response not only supports more informed decision-making but
also helps build trust in its answers."
"While
the model’s raw CoT remains hidden as it’s hard to understand, we’ve found a
balance: the model can think freely, and then it organises those thoughts so
that they are easy to read. To improve clarity and safety, we’ve added an
additional post-processing step where the model reviews the raw chain of
thought, removing any unsafe content and then simplifies any complex ideas.
Additionally, this post-processing step enables non-English users to receive
the CoT in their native language, creating a more accessible and friendly
experience.”
The
new approach effectively provides summaries of the model’s reasoning instead of
showing you the raw data. However, despite the new approach being available in
both the o3-mini for free and paid users and o3-mini-high for paid users, the
response on X to its changes was not entirely positive.
Mayo Oshin responded
on X, posting: “We'd appreciate if you showed the full chain of thought, not
just summarised version....thank you”, and Conor responded
with, “its still a summary and not real CoT, which is disappointing."
Some
other users responded by suggesting that OpenAI was simply responding to the
threat offered by the new DeepSeek by copying the way it presented the
reasoning chain in its R1 model. “Finally DeepSeek changing the O-World for
us,” replied Hamza. “So
OpenAI copied Deepseek's Chain of Thought feature?” said Ignis Rex, and
“That moment when China is the one innovating, and US is the copycat,”
said Josip Tomo Licardo.
More
OpenAI changes
ChatGPT o3-mini to work more like DeepSeek-R1, but faces backlash from users
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
In
China anything less than 6% growth is a recession meaning that it also causes
financial problems and it's disruptive and it's a problem.
Ray Dalio.
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