Baltic
Dry Index. 1964 -58 Brent Crude 66.01
Spot Gold 3320 US 2 Year Yield 3.75 -0.02
US Federal Debt. 37.254 trillion
US GDP 30.212
trillion.
The
modern banking system manufactures money out of nothing. The process is perhaps
the most astounding piece of sleight-of-hand that was ever invented.
Josiah
Stamp
Did the AI bubble just burst? Will the AI bubble join the Dot Con bubble in the “ash can” of stocks crash history?
AI isn’t electricity, motor cars, airplanes or computers. AI, if it succeeds at all, threatens mass unemployment, social disorder, and consumer spending collapse.
Just don’t expect Wall Street’s perma-bull slickers to tell/sell AI as it is.
European markets head for negative open as
sentiment shifts; UK inflation data ahead
Published Wed, Aug 20 2025 12:13 AM EDT
LONDON — European stocks are expected to
open lower on Wednesday as global market sentiment wavered.
The U.K.’s FTSE index is seen opening
0.18% lower, Germany’s DAX 0.6%
lower, France’s CAC 40 down
0.56% and Italy’s FTSE MIB 0.56%
lower.
Regional bourses traded higher on Tuesday
as global markets reacted broadly positively to the
outcome of talks between U.S. President Donald Trump, Ukrainian
President Volodymyr Zelenskyy and European leaders at the White
House on Monday. Defense stocks were among the worst performers in the index,
however.
On the data front, the U.K. inflation
print for July will be published at 7 a.m. London time. Economists polled by
Reuters had anticipated inflation would reach 3.7% in the twelve months to
July, after it picked up to a hotter than expected 3.6% in June.
Earnings come from Alcon and Geberit and Sweden’s Riksbank
publishes its latest monetary policy decision.
Globally, Asia-Pacific
markets fell overnight, tracking Wall Street declines in Tuesday’s
trading session. S&P
500 futures were near flat overnight ahead of the release of the
Federal Reserve’s July meeting minutes.
At the time, policymakers once more held
steady on interest rates, but Fed Governors Christopher Waller and Michelle
Bowman dissented,
marking the first time two voting Fed officials have done so since 1993.
Traders are also focusing on key speeches
from Fed officials when they convene in Jackson Hole, Wyoming, for the Fed’s annual economic symposium on Thursday. Investors
are awaiting clues from Fed Chair Jerome Powell as to what will
happen at the central bank’s remaining policy meetings this year.
The Fed funds futures market is indicating
an 84.9% chance for a quarter-point rate cut at the Fed’s next policy meeting
in September, according to CME’s FedWatch tool.
European
markets on Weds Aug 20: Stoxx 600, FTSE and UK inflation data
US tech stocks hit by wave of concerns over future
of AI boom
Warning from OpenAI’s Sam Altman and MIT
paper puncture Wall Street’s enthusiasm
20 August 2025
US tech stocks sold off on Tuesday as a
wave of concerns that intense enthusiasm surrounding artificial intelligence
could be overdone slammed into some of Wall Street’s most speculative
companies.
The tech-heavy Nasdaq Composite closed
down 1.4 per cent, with software group Palantir falling 9.4 per cent and
chipmaker Arm Holdings shedding 5 per cent.
The decline marked the biggest one-day
drop for the index since August 1. The blue-chip S&P 500 closed 0.7 per
cent lower.
Traders pinned some of the decline on a
report released late on Monday by a branch of the Massachusetts Institute of
Technology in which researchers said that “95 per cent of organisations are
getting zero return” from their investments in generative AI, the technology that has sent US stocks soaring to a
series of record highs in recent months.
“The story is spooking people,” said one
trader close to a multibillion-dollar US tech fund.
“Just 5 per cent of integrated AI pilots
are extracting millions in value, while the vast majority remain stuck with no
measurable [profit and loss] impact,” the MIT report said.
The stock drop also came days after OpenAI chief executive Sam Altman signalled that an AI
bubble might be forming.
“Are investors over excited? My opinion is
yes,” Altman told reporters this week.
He also said: “I do think some investors
are likely to lose a lot of money, and I don’t want to minimise that, that
sucks. There will be periods of irrational exuberance. But on the whole the
value for society will be huge.”
Tuesday’s declines were driven by drops
for some of this year’s best performing stocks. AppLovin, which serves up
adverts within apps, lost 5.9 per cent, while Nvidia — whose advanced AI chips
are relied upon across the industry — fell 3.5 per cent. Oracle and Advanced
Micro Devices, two of the five top-performing large-cap stocks since mid-May,
fell 5.9 per cent and 5.4 per cent, respectively.
Bitcoin shed 2.7 per cent, driving falls
in stocks linked to the digital token such as Strategy and Metaplanet.
“A lot of these were very crowded trades,
so when there’s a move to the exit, things can get messy,” said Steve Sosnick,
chief market strategist at Interactive Brokers, a platform widely used by
individual investors.
More
US tech stocks hit by
wave of concerns over future of AI boom
Below, well maybe, but I’ll take maybe not.
Besides, all those unemployed consumers will likely be pretty mad and looking
to get even. Better hide the Rolexes and start wearing Timex.
A forecast of nearly $1 trillion in AI savings
August 19, 2025
The full adoption of artificial
intelligence could
save corporate America $920 billion annually, new Morgan Stanley data finds,
cost savings that could come from employing a lot fewer people.
Why it matters: As investors
worry about soaring
valuations,
the research backs up the bulls: AI could boost productivity and supercharge
earnings growth, leading to profits that could justify current multiples.
By the numbers: The $920 billion
in annual savings from AI adoption, net of estimated implementation costs, is
only the beginning, according to the data.
- That
represents over 40% of the annual compensation expenses within the S&P
500. Long term, this could result in $13 trillion to $16 trillion in
market value creation for index companies.
Between the lines: That 40% number
refers to cost savings associated with paying people, which could signal future
job losses.
- "In
some cases, adopting AI will result in headcount reductions," Stephen
Byrd, the global head of thematic research and sustainability research at
Morgan Stanley, tells Axios. "In other cases, employees will be freed
up to focus on higher value-added work that can generate incremental
revenue and/or reduced company expenses."
- The
research notes this could manifest through corporates not replacing
workers lost to attrition, rather than major sweeps of layoffs.
Zoom out: The new data comes
as investors wonder whether AI spending will lead to cost savings, with four
of the
top tech firms set
to spend $364 billion on AI for 2025 alone.
Zoom in: The cost savings
are not linear, and Morgan Stanley estimates different upsides for various
sectors in the market.
- AI
could generate savings worth more than 100% of expected 2026 pretax
profits in consumer staples distribution or retail, real estate
management, and development and transportation.
- Technology
hardware and equipment and semiconductors are not among the sectors
expected to save as much.
Be smart: If AI delivers
nearly $1 trillion in annual savings for companies, profits could see a major
lift, giving the lofty valuations of today some real earnings support.
In other news Trump’s tariffs are creating
reproachment between India and China.
China lifts curbs on export of fertilisers, rare
earths, tunnel boring machines to India: Report
These developments took place as both
Beijing and New Delhi decided to gradually restore normalcy in their
relationship.
Updated Aug 19, 2025 11:04 AM IST
China has reportedly lifted curbs on
export of fertilisers, rare earth magnets and minerals, as well as tunnel
boring machines to India. This was part of External Affairs Minister S
Jaishankar’s asks from his counterpart Wang Yi who is on a two-day visit to
India.
According to a report in Economic Times,
the Chinese minister has conveyed that the country has already started
responding to India’s requests on these three items. The shipments have already
begun, the report added. Business Today could not independently verify these
developments.
China had put on hold shipments of tunnel
boring machines which were headed to India for key infrastructure projects. The
auto and electronics industries had also flagged off serious concerns on
Chinese restrictions on rare earth minerals and magnets.
These developments took place as both
Beijing and New Delhi decided to gradually restore normalcy in their
relationship. The deal also comes at a time when the US has imposed the highest
tariffs on India and blamed it for financing Russia’s war against Ukraine,
essentially distancing New Delhi.
In response, New Delhi called out
Washington for imposing these penalties while being more accommodating towards
Beijing, despite its similar stance. It also called out the US and the EU for
engaging in trade with Russia even as they continued to blame India for it.
Trade War Monitor
19 August 2025
Although the tariff truce between China
and the U.S. has been extended for another 90 days, the effects of the trade
war continue to bite. China’s home-appliance exports fell 2.2% year-on-year in
the second quarter, marking a sharp reversal from first-quarter growth of
13.6%.
China’s industrial output in July grew by
5.7% year-on-year, the lowest so far this year. The 1.1-percentage-point
decline compared with June came as manufacturing entered the off-season and
some industries were hit with production restrictions as part of Beijing’s
effort to stamp out excessive competition.
Hong Kong billionaire Li Ka-shing’s CK
Hutchison Holdings Ltd. has also signaled that it would consider adding a
Chinese mainland strategic investor to a consortium bidding for the company’s
global port assets, a deal that has been caught up in the U.S.-China
geopolitical rivalry.
We will continue to closely monitor this
economic warfare so our readers are better prepared for the impacts to come.
Economic indicators sluggish
China’s industrial output in July grew by
5.7% year-on-year, the lowest so far this year, according to official data
released Friday. The 1.1-percentage-point decline compared with June came as
manufacturing entered the off-season and some industries were hit with
production restrictions amid Beijing’s effort to stamp out excessive
competition, termed “involution.”
Meanwhile, growth in retail sales of goods
also slowed, as the positive effect of the government’s auto trade-in subsidies
dwindled. Driven by increased summer travel, service consumption performed
well. From January to July, the cumulative year-on-year growth rate of
fixed-asset investment slowed to 1.6%, with investment growth rates declining
across the three major sectors: manufacturing, infrastructure and real estate.
Advanced chip exports
Nvidia Corp. may get permission to sell
its most advanced artificial intelligence (AI) chips to China, but it would
have to be a scaled-back version of the technology.
U.S. President Donald Trump signaled
Monday that he’d be open to allowing Nvidia to sell its Blackwell chips if the
company reduced its performance by “30% to 50%.” Trump made the comment at the
White House while confirming a deal where Nvidia will give 15% of its China
sales revenue from its H20 chips to the U.S. government.
Washington recently reauthorized sales of
the GPU-maker’s H20 AI chips to China, which are tailored for the Chinese
market. The revenue-sharing agreement reflects Trump’s persistent effort to
secure financial benefits for the U.S. in return for making trade concessions.
Port deal
A senior executive at CK Hutchison
Holdings Ltd. said Thursday that adding a Chinese mainland strategic investor
to a consortium bidding for the company’s global port assets would offer a
“highly beneficial” edge in navigating regulatory challenges.
After reporting interim results,
co-managing director Frank Sixt said the move could help clear a complex web of
approvals tied to the sale of 43 port facilities in 23 countries, including two
at the Panama Canal. The plan highlights the deal’s geopolitical sensitivities
and comes after the expiration of an exclusive negotiation period with a
BlackRock Inc.-led consortium.
CK Hutchison hasn’t named the new
potential investor, but people familiar with the matter identified state-owned
China Cosco Shipping Corp. Ltd. as a likely candidate. Sixt said the
transaction isn’t expected to be finalized within 2025.
More
Trade War Monitor:
Sluggish Economic Indicators as Trade Talks Drag
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.
Surging
food inflation hits restaurant sales
Tuesday
19 August 2025 8:45 am
Food
inflation is accelerating
once again,
eating into consumers’ pockets and pushing prices higher across the board.
Inflation
at the grocers hit five per cent in the four weeks ended August 10, down from
5.2 per cent in the previous month but well above the wider UK rate of 3.6 per
cent.
Real
wage growth, after accounting for inflation, was around one per cent in July.
“We’ve
seen a marginal drop in grocery price inflation this month, but we’re still
well past the point at which price rises really start to bite and consumers are
continuing to adapt their behaviour to make ends meet,” Fraser McKevitt, head
of retail and consumer insight at Worldpanel, said.
“What
people pay for their supermarket shopping often impacts their spending across
other parts of the high street too, including their eating and drinking habits
out of the home… casual and fast service restaurants especially have seen a
decline in visitors over the summer.”
Trips
to casual restaurants fell six per cent year on year in the three months to
July 15.
Sales
at the grocers rise
Overall,
sales at the grocers grew by four per cent in August, according to the latest
figures from Worldpanel by Numerator.
Lidl
and Ocado were tied for top spot as the fastest growing grocers over the 12
weeks to August 10, with sales at both retailers up by 10.7 per cent compared
to the same period last year.
Tesco
retained its crown as the UK’s biggest grocer, with its most significant
monthly share gain since December 2024 as its hold of the market rose by 0.8
percentage points to 28.4 per cent. Sales rose 7.4 per cent year on year.
Asda
continued to lose market share, shrinking by 0.9 percentage points year on year
and recording a 2.6 per cent sales drop.
Online
sales across all retailers rose by 6.7 per cent over the 12 weeks.
Inflation:
Why are UK food prices rising?
Worldpanel
has estimated that Brits’
average household spend at the grocers has now reached £5,283 a year, a figure
which could rise by £275 by
the end of the year.
The
prices of fresh staples, such as butter, red meat, and chocolate have driven
the increase in grocery
inflation.
“The
pressure on food and drink manufacturers continues to build… rising costs
are gradually making their way into the prices shoppers pay at the tills,”
sustainability director at The Food and Drink Federation (FDF), Balwinder
Dhoot, said.
These
pressures include higher
wage costs due to tax hikes in April, plus low yields due to extreme weather
and a crucial shortage of carbon dioxide used in farming.
“Despite
fierce competition between retailers, the ongoing impact of the last budget and
poor harvests caused by the extreme weather have resulted in prices for
consumers rising,” Kris Hamer, insight director at the British Retail
Consortium, said.
The
areas that the UK has traditionally relied on – livestock and arable crops –
are under significant pressure.
Beef
and lamb farming have both been suffering from falling cattle numbers and
higher costs for feed, energy and transport.
A
shortage of carbon dioxide, fuelled by the closure of ammonia plants – CO2 is a
byproduct of the fertiliser production process – due to high energy costs, has
also led to a slowdown in production on UK farms.
Surging food
inflation hits restaurant sales
Are
You Drowning Too?: Vegetables Are Up 38.9%, Coffee Up 25%, And Electricity
Prices Are Rising Twice As Fast As Inflation
Monday,
Aug 18, 2025 - 11:25 PM
Authored by
Michael Snyder via The Economic Collapse blog,
Do
you feel knots in your stomach due to financial stress? If so, you
certainly have lots of company. All of a sudden, everyone is talking about the
cost of living and prices are rising by double-digit
percentages all
around us. There are so many people out there right now that feel like they are
“drowning” because no matter how hard they try there simply isn’t enough money
for everything. Unfortunately, we are being warned to brace ourselves for even
more inflation in the months ahead.
When
I heard that the cost of vegetables in the United States had gone up by 40
percent in one month, I thought that there was no way that it could be true.
So
I looked it up, and I discovered that the cost of vegetables in the United
States didn’t go up by 40 percent in one month.
The
real figure was 38.9 percent…
A
38.9% increase in prices for fresh and dry vegetables from June to July was the
major driver of a higher index for “final demand goods” (things that are done
and ready to be sold to a consumer, as opposed to things that go into a later
production process).
That
is nuts!
How
can the cost of vegetables go up by 38.9 percent in a single month?
Apparently
this was the largest spike that we have ever witnessed in a summer month “in figures that
go back to 1947”…
Per
Bureau of Labor Statistics data, it’s also the largest monthly increase
ever recorded in a summer month (June-August), in figures that go back
to 1947.
The
other day, I wrote about how beef has become so
expensive that
it is now considered to be a “luxury”.
Well,
now vegetables are a “luxury” too.
And
let’s not forget coffee.
The
price of coffee went up by 25 percent in just
three months, and that was before coffee exports from Brazil were hit with a 50
percent tariff…
Coffee
prices were already up before a 50 percent tariff on Brazil, the top coffee
importer to the U.S., went into effect last week.
Coffee prices sharply rose 25 percent over the past three months,
according to inflation data released Tuesday. Reuters reported Tuesday that
Brazilian coffee exports have started seeing postponements to their U.S.
shipments.
About
two-thirds of all U.S. adults drink coffee.
This
is one of the most basic things that Americans buy.
But
now a lot of people are either going to have to cut back or stop drinking it
entirely because it has become so ridiculously expensive.
Air
conditioning is rapidly becoming a “luxury” as well.
Electricity
prices have been rising twice as fast as the overall rate of inflation, and
some seniors must now choose between paying the
electricity bill and paying for medication…
Across
the country, electricity prices have jumped more than twice as fast as the
overall cost of living in the last year. That’s especially painful during the
dog days of summer, when air conditioners are working overtime.
In
Pembroke Pines, Fla., Al Salvi’s power bill can reach $500 a month.
“There’s
a lot of seniors down here that are living check to check. They can barely
afford prescriptions such as myself,” says Salvi, who’s 63 and uses a
wheelchair. “Now we got to decide whether we’re going to pay the
electric bill or are we going to buy medication. And it’s not fair to us.
You’re squeezing us between a rock and a hard place.”
More
Covid-19
Corner
This
section will continue only occasionally when something of interest occurs.
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.
My apologies for the unprofessional
folksy writing style. That seems prevalent now in nearly all modern media. UK
media has now replaced “yes” with “yeah”; cannot find presenters or
interviewees who can resist saying “you know”, after every few words, you know!
And don’t get me started on TV
reporters manic hand gesturing like demented Europeans.
Solid-state battery tech reaches production car, and it's crazy
cheap
By Utkarsh Sood August 15, 2025
When it comes to electric
vehicles, there's always a race to be first. It was only a matter of time
until we got the first production EV with a semi-solid-state battery.
But here's the thing: many folks would have imagined that car to
be a futuristic modern marvel with sharp lines and god-knows-what electronics
on board. Least of all, you’d be hard-pressed to have found someone who would
have thought it would be an MG. But
here we are, and we are not too far away from the car’s official release, too!
The battery tech will find its way onto a special version of the
MG4 crossover hatchback. Called the Anxin Edition, the special model will be
powered by a manganese-based lithium-ion battery with cells supplied by
SAIC-backed Suzhou QingTao Power Technology, instead of the usual
lithium-iron-phosphate (LFP) battery.
Yup, that’s the same Chinese-based SAIC that
owns MG Motors. As reported by Car
News China, the new trim came to light as a result of regulatory filings
with China's Ministry of Industry and Information Technology (MIIT).
For those of you who aren't privy to this industry, let me tell
you why it’s such a big deal. You see, solid-state
batteries promise faster charging times, more thermal safety, improved
cold-weather performance, higher energy density, and longer overall battery
life, as well as the ability to withstand full charge/discharge cycles.
That said, the MG4 sports a semi-solid-state battery.
So even though its energy density is comparable to typical lithium-ion designs,
it’s still expected to perform better in cold weather and offer some of the
benefits of an all-out solid-state battery.
If this were a truly solid-state design, it would feature a solid
electrolyte instead of a liquid or semi-liquid one, and it would have no anode
at all, resulting in a significant weight reduction. Sadly, at this point,
there are no details regarding battery size or range. However, the
semi-solid-state-battery version of the MG4 is likely to have the same front
electric motor as the LFP-equipped vehicles, which generates 161 hp.
The filings indicate that the special edition trim will carry
similar design cues as the existing MG4, including the headlamp clusters and a
segmented lower intake with honeycomb detailing. From the side, you can spot
the car's signature long wheelbase and short overhangs, two touches meant to
maximize interior space and handling capability.
More
MG4 Anxin edition:
First EV with semi-solid-state battery
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
Lenin
is said to have declared that the best way to destroy the Capitalist System was
to debauch the currency. By a continuing process of inflation, governments can
confiscate, secretly and unobserved, an important part of the wealth of their
citizens. By this method they not only confiscate, but they confiscate
arbitrarily; and, while the process impoverishes many, it actually enriches
some. The sight of this arbitrary rearrangement of riches strikes not only at
security, but at confidence in the equity of the existing distribution of
wealth.
Lenin
was certainly right. There is no subtler, no surer means of overturning the
existing basis of society than to debauch the currency. The process engages all
the hidden forces of economic law on the side of destruction, and does it in a
manner which not one man in a million can diagnose.
John Maynard Keynes
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