The Buffett (Stock) Indicator At All Time High. More Tariffs. Gold Soars.

 Baltic Dry Index. 2220 -39             Brent Crude 67.53

Spot Gold 3864                  US 2 Year Yield 3.65  -0.02

US Federal Debt. 37.544 trillion

US GDP 30.299 trillion.

“Give me a one-handed Economist. All my economists say 'on ONE hand...', then 'but on the other...”

Harry Truman

With the possible partial shutdown of the US federal government at midnight tonight well covered in mainstream media, today’s LIR will just cover the stock casino bubbles busy looking for a pin.

A prolonged US government shutdown would probably provide that pin, but a prolonged US government shutdown is very unlikely.

Asia-Pacific markets trade mixed as China manufacturing contracts for a sixth straight month

Published Mon, Sep 29 2025 7:41 PM EDT

Asia-Pacific markets traded mixed Tuesday as China’s official reading showed manufacturing activity contracted for a sixth straight month, albeit less than market estimates.

The Manufacturing Purchasing Managers’ Index came in at 49.8, data from the National Bureau of Statistics showed, compared with expectations for 49.6, according to a Reuters poll. While still in contraction, the latest reading was the strongest since March.

Meanwhile, private surveyor RatingDog’s manufacturing purchasing managers’ index came in at 51.2 for September, beating economists’ forecast for 50.2 in a Reuters poll, marking its highest level since May.

Mainland China’s CSI 300 was flat at the open.

Australia’s central bank expectedly held benchmark policy rates at 3.6% Tuesday as inflation in the country stays at its highest level in more than a year.

The move was in line with expectations from economists polled by Reuters, and comes after the country earlier this month reported headline inflation rate of 3% for August — highest since July 2024 — with housing, food and alcohol driving price growth.

“The Reserve Bank of Australia’s policy meeting on Tuesday is the key event in the Asia-Pacific region,” said Shier Lee Lim, lead FX and macro strategist of APAC in Convera.

“Any shift in tone or forward guidance could move AUD crosses, especially after recent volatility in building approvals, with August expected to show a 2.8% rise following July’s 8.2% drop,” she added.

Australia’s S&P/ASX 200 was little changed.

Japan’s Nikkei 225 fell 0.1% and Topix traded flat.

South Korea’s Kospi also traded flat, while the Kosdaq fell 0.34%.

Hong Kong’s Hang Seng index rose 0.45%, while the Hang Seng Tech Index added 1.01%. Shares of China’s Zijin Gold skyrocketed over 60% in their Hong Kong debut.

Overnight stateside, the three major averages closed higher. The S&P 500 rose as Wall Street regained some of its footing after a week in which the artificial intelligence trade lost a bit of steam.

The broad market index climbed 0.26% to finish at 6,661.21, and the Nasdaq Composite advanced 0.48% to close at 22,591.15. The Dow Jones Industrial Average settled up 68.78 points, or 0.15%, at 46,316.07.

Asia-Pacific markets: RBA, Nikkei 225, Kospi, CSI 300

‘Buffett Indicator’ for stock valuation passes 200%, beyond level he once said is ‘playing with fire’

Published Sun, Sep 28 2025 7:40 AM EDT Updated Sun, Sep 28 2025 10:57 AM EDT

Warren Buffett’s one-time favorite yardstick for stock market valuations has climbed to an all-time high, reviving fears that investors are once again testing the limits of market exuberance.

The gauge, dubbed as the Buffett indicator, measures the total value of publicly traded U.S. stocks (Wilshire 5000 index) against the nation’s gross national product. In a 2001 Fortune op-ed, Buffett called the indicator “probably the best single measure of where valuations stand at any given moment.” The indicator has also been referenced by famed investors including Paul Tudor Jones.

“If the percentage relationship falls to the 70% or 80% area, buying stocks is likely to work very well for you,” Buffett said in a 2001 speech excerpted by Fortune magazine after the indicator had neared 150% the year prior during the Dotcom bubble. “If the ratio approaches 200% — as it did in 1999 and a part of 2000 — you are playing with fire.”

At a whopping 217%, it now sits well above the peaks reached during the Dotcom Bubble, as well as the pandemic-era rally in 2021 when it topped 190%.

By that standard, the stock market today is in uncharted waters as equity values are now expanding far faster than the growth of the broader U.S. economy. The market rally has been fueled by megacap technology companies, which have plowed billions of dollars in development of artificial intelligence, as they are rewarded with rich multiples for the promise of this new era.

Other valuation gauges are flashing similar signals. The S&P 500′s price-to-sales ratio recently climbed to 3.33, an all-time high, according to Bespoke Investment Group. For comparison, the Dotcom peak in 2000 topped out at 2.27, and the post-Covid boom reached 3.21 before valuations cooled.

Still, some have argued that the Buffett Indicator may no longer carry the same message it once did. The U.S. economy has shifted dramatically over the past two decades, becoming less asset-intensive and increasingly powered by technology, software and intellectual property.

GDP and GNP may understate the value of an economy built on data networks and innovation rather than physical factories. Therefore, higher equity valuations may be justified for what remains the world’s most productive and innovative economy.

Buffett hasn’t commented on this indicator in years. But he has been building a cash fortress at Berkshire Hathaway the last two years as he gets ready to hand the CEO reins to Greg Abel. Second-quarter earnings showed a cash hoard of $344.1 billion and the conglomerate was a net seller of equities for a 11th quarter in a row.

Even if it is outdated, coupled with the Oracle of Omaha’s current positioning, the indicator at these extreme levels is sure to raise some eyebrows.

Buffett indicator stock market overvalued

In other news.

Donald Trump announces timber and furniture tariffs in national security probe

Latest levies to rise to as high as 50% for countries that do not strike trade deals with US

30 September 2025
Donald Trump has unveiled a new suite of tariffs on timber and wood furniture, as he escalated his trade war in the name of US national security and boosting domestic manufacturing. 

The US will apply levies of 10 per cent on softwood timber and lumber and 25 per cent on kitchen cabinets and upholstered wood furniture, beginning on October 14, according to a presidential notice released by the White House late on Monday. 

The duties are set to escalate from January next year, with furniture tariffs rising to 30 per cent and those on cabinets to 50 per cent, unless countries strike a deal with the US to lower them.

Some countries that have reached trade deals with the US in recent months will avoid the full force of the latest measures. Affected goods from the UK will not face the extra tariffs and will be capped at 10 per cent duties, while the EU and Japan will be capped at 15 per cent.

The tariffs were imposed under a law, known as section 232, that allows the US president to impose duties to counter a national security threat. 

The Trump administration has launched several similar probes to apply sectoral tariffs to imports including steel and aluminium, automobiles and copper. 

The White House statement said that the commerce department, which carried out the investigation, found that “wood products are being imported . . . in such quantities and under such circumstances as to threaten to impair the national security” of the US. The notice said that wood products were essential to the “national defense, critical infrastructure, economic stability, and industrial resilience” of the US.

A reliance on imports, however, has “weakened domestic manufacturing capacity”, the statement said, which in turn endangered “national security and economic stability”.

Wood products are used in “critical functions of the Department of War”, the text read, using the administration’s preferred name for the defence department, including in munitions and thermal-protection systems for nuclear re-entry vehicles.

The statement said the tariffs would “bolster industrial resilience, create high-quality jobs, and increase domestic capacity” as well as encourage investment in US industry.

More

Donald Trump announces timber and furniture tariffs in national security probe

Spain wins hat trick of credit upgrades as economy booms

Published Mon, Sep 29 2025 3:25 AM EDT

Spain’s government has received yet another boost from credit rating agencies, with Fitch and Moody’s joining S&P to raise their respective assessments of the country.

The hat trick of rating upgrades comes as Spain’s economy continues to outpace its European peers, with the country’s government and central bank recently upgrading their 2025 growth forecasts.

Fitch on Friday upwardly revised Spain’s long-term rating to “A,” from “A-,” citing Spain’s favorable growth prospects.

“Recent productivity gains, moderate wage growth and relatively low energy prices have boosted external competitiveness and strengthened private external balance sheets,” Fitch said in a statement.

The ratings agency added that it expects Spain’s economy to remain resilient, “helped by limited exposure to U.S. tariffs and ongoing net external deleveraging.”

Moody’s also raised Spain’s rating last week by one notch, to “A3” from “Baa1,” saying the decision reflects its view that Madrid’s economic strength is improving due to a more balanced growth model, labor market improvements and a more robust banking sector.

Spain’s economy has been going from strength to strength of late, bolstered by foreign investment, tourism and immigration.

The country’s government said earlier this month that it expects gross domestic product (GDP) to expand by 2.7% this year, up from a previous forecast of 2.6%, and significantly above expectations of 1.2% growth seen for the broader euro area.

Earlier this month, S&P Global also gave Spain a rating upgrade, citing “notable improvement” in the country’s balance sheet and an improved resilience to economic shocks.

‘Structural reforms will be the true test’

Judith Arnal, senior fellow at the Elcano Royal Institute, a think tank in Madrid, said Spain has emerged as the clear growth leader among the euro area’s largest economies in recent years.

“Spain’s growth has relied not only on booming tourism but also on dynamic non-tourism services, such as business, telecoms and IT services. This marks a shift in the country’s growth pattern, showing that Spain has competitive firms able to export beyond traditional sectors,” Arnal told CNBC by email.

“Growth has also been closely linked to demographic dynamics and job creation. More than half of the jobs created since 2020 have been taken up by immigrants, which has supported overall GDP expansion but meant that GDP per capita has advanced less strongly. This reflects a more extensive than intensive growth model,” she added.

Looking ahead, Arnal said that while political uncertainty has not prevented Spain from leading euro area growth, the country’s economic performance could be even better with stronger stability.

“The government of Spain is keen to showcase this period of high growth, but fiscal consolidation and structural reforms will be the true test over the medium term,” Arnal said.

Spain wins triple credit rating boost on improving economic outlook

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.

Cleveland Fed’s Hammack warns of ‘challenging time’ amid inflation worries

Published Mon, Sep 29 2025 4:03 AM EDT

Cleveland Federal Reserve President Beth Hammack on Monday said the U.S. central bank faces challenges as it attempts to balance fighting stubborn inflation or protecting jobs.

“On the inflation side right now, I continue to be worried about where we are from an inflation perspective,” Hammack told CNBC’s “Squawk Box Europe.”

“We have been missing our mandate on the inflation side, our objective of 2%, for more than four-and-a-half years and I continue to see that we have pressure in inflation both in the headline, in the core, and particularly, where I am worried about it, is I’m seeing it in the services,” she added.

Asked whether it is mistake for the Federal Reserve to be cutting interest rates given the economic backdrop, Hammack described it as “a challenging time for monetary policy,” saying the U.S. central bank was facing pressure on both sides of its mandate.

Her comments come shortly after stronger-than-expected economic data appear to have dented Wall Street’s hopes for sharp monetary easing.

The Fed approved a widely anticipated rate cut earlier this month, lowering its benchmark overnight lending rate by a quarter percentage point to a range of 4.00%-4.25%, and signaled two more were on the way before the end of the year.

A robust batch of economic data since, however, has prompted investors to dial back their expectations for rapid rate cuts.

U.S. core inflation was little changed in August, according to data published Friday. The personal consumption expenditures price index posted a 0.3% gain for the month, putting the annual headline inflation rate at 2.7%, the Commerce Department reported late last week.

Excluding food and energy, the more closely followed core PCE price level was 2.9% on an annual basis after rising 0.2% for the month.

Hammack has previously suggested she would be hesitant about lowering interest rates as long as inflation remains a threat.

Indeed, more recently, Federal Reserve Chair Jerome Powell warned of a tricky path ahead on interest rates.

“Near-term risks to inflation are tilted to the upside and risks to employment to the downside — a challenging situation,” Powell said on Sept. 23 during a speech to business leaders in Providence, Rhode Island.

“Two-sided risks mean that there is no risk-free path,” he added.

Cleveland Fed's Beth Hammack on interest rates, inflation and tariffs

UK job postings fall, firms downbeat about outlook, surveys show

29 September 2025

LONDON (Reuters) -Britain's labour market is showing more signs of cooling and businesses remain negative about their prospects in the coming months, according to surveys published on Monday.

Job search website Adzuna said online job adverts fell by 1.3% in the 12 months to August - the first such drop since February - and by 2.1% in month-on-month terms.

However, vacancies remained higher than in January, typically a peak hiring month, which suggested the jobs market is "cooling, not collapsing," Adzuna said.

Advertised salaries rose 0.2% in monthly terms in August to 42,367 pounds ($56,589.60), and by 8.9% from a year earlier, underscoring the dilemma facing the Bank of England which is worried about a hiring slowdown but also inflation pressures.

"Salary growth remains one of the few constants, still outpacing inflation, but hiring appetite is uneven and increasingly shaped by a mix of sector-specific swings and the growing role of AI within the UK labour market," Andrew Hunter, co-founder of Adzuna, said.

The BoE held interest rates this month and investors are fully pricing only one 25 basis-point reduction in borrowing costs by the end of 2026 as the central bank worries about inflation pressures from the jobs market.

Employers have reduced their hiring after an increase in April in their social security contributions, announced in finance minister Rachel Reeves' first budget last October, and a rise in the minimum wage.

Businesses are concerned about further tax rises in Reeves' next fiscal statement on November 26.

Official data published earlier this month showed vacancies rose in the three months to August and wage growth cooled slightly in the May-to-July period.

A survey published on Monday by the Confederation of British Industry showed British companies expect a drop in activity over the coming three months, partly reflecting the impact of the higher social security contributions for employers.

The CBI said expectations measures in its surveys of manufacturers, retailers and other services industries fell to -20 for the three months to December. The CBI's gauge of business activity was -32 in the three months to September.

"A persistent climate of global economic uncertainty is further hampering decision-making," CBI chief deputy economist Alpesh Paleja said.

"This is now accompanied by renewed nervousness around the November budget, with businesses concerned about being asked to again shoulder the burden of fixing the public finances."

UK job postings fall, firms downbeat about outlook, surveys show

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.

More government subsidies for “green” energy.

‘Super battery’ schemes will store green power and save consumers money – Ofgem

Tue 23 September 2025 at 11:48 am BST

Dozens of “super battery” projects to store green power and save consumers money have progressed to the final stage of a financial support scheme.

Energy regulator Ofgem said 77 long duration electricity storage schemes had entered the final assessment stage of a Government-driven support programme to stop green energy going to waste and boost growth.

Long duration energy storage technology captures excess renewable power when wind and solar are generating more than is needed and then releases it back to the grid when there is not enough to meet demand.

This saves consumers money, as there is less need to pay wind and solar farm operators to stop generating on particularly windy or sunny days when there is more power than the grid needs, or pay gas power stations to switch on when there are not enough renewables to meet demand, Ofgem said.

It will support the transition to clean energy as more solar and wind farms are added to the grid and are powering green technologies such as electric vehicles and heat pumps.

Lithium ion battery storage projects lead the way among the 77 schemes – out of 171 which applied – progressing to final assessment for support under a “cap and floor” scheme.

The list includes other battery technologies, compressed air energy storage and pumped hydro schemes, with a capacity totalling 28.7 gigawatts.

Britain currently has 2.8 gigawatts of long duration energy storage across four pumped hydro schemes in Scotland and Wales, using excess power to pump water uphill where it is stored and released to flow down through turbines and quickly generate electricity when needed.

Successful schemes will secure support under a cap and floor arrangement in which they will be assured a minimum revenue from consumers from the project, to deliver a return on investment, and will have to pay money back to bill payers if they make more than a set maximum revenue.

Beatrice Filkin, director of major projects infrastructure for Ofgem, said renewables were “the key” to taking control of the energy system and ending a costly reliance on the turbulent wholesale gas market.

“That’s why we need to boost our ability to store as much homegrown energy as we can to let the turbines keep turning when the wind is at its strongest – and on the days when the gusts drop and the sun doesn’t shine that reserve of excess clean power can be called upon.

“There’s lots of different ways you can do this – with batteries, compressed air or pumped hydro storage – and we’ll consider them all, as this technology is vital for a modern energy system.

“Through Ofgem’s cap and floor process we are beginning to identify the projects that we think are best placed to capture and make the most of our precious natural resources, so that we can have safe, secure and good value-for-money power,” she said.

The scheme is driven by the Government, which pledged to build major new long duration energy storage schemes for the first time in 40 years.

Energy minister Michael Shanks said storage was a “technology that will see Britain take back control of its energy supply and protect bill payers for good”.

“By scaling this up, we can transform the way electricity is supplied in this country when demand is high – using stored up low-cost, homegrown solar and wind power to help end our reliance on costly fossil fuel markets once and for all,” he said.

Successful projects will be confirmed in summer 2026.

‘Super battery’ schemes will store green power and save consumers money – Ofgem

Next, the world global debt clock. Nations debts to GDP compared.

World Debt Clocks (usdebtclock.org)

I remember when I first came to Washington. For the first six months you wonder how the hell you ever got here. For the next six months you wonder how the hell the rest of them ever got here.

Harry S. Truman

US Jobs Week. US Federal Firings Week. When AI Goes Wrong.

Baltic Dry Index. 2259 -07             Brent Crude 69.27

Spot Gold 3812                 US 2 Year Yield 3.67  -0.01

US Federal Debt. 37.540 trillion

US GDP 30.297 trillion.

For every complex problem there is an answer that is clear, simple, and wrong.

H. L. Mencken

It is almost month end. Normally a time to dress up stocks and stock indexes. But this is a difficult week ahead.

The US Federal government may be forced to largely close down on Wednesday October 1^st.

On Friday we get the latest official US jobs update.

AI mania seems to be fading, as at long last accounting realism seems to be occurring in the world of hundreds of billions already poured into the iffy prospects of AI profits.

In Europe, France, Germany and Great Britain stumble from crisis to crisis.

In America, China has stopped buying US soybeans just as the latest harvest is flooding in unsold.

Meanwhile, US Federal debt piles up daily, twice as fast as US GDP rises. A dollar reserve standard lies shortly ahead.

But no one for now, on either side of the Atlantic seems remotely aware of a fiat money disaster lurking ahead, let alone working on a monetary fix.

While Noah built his Ark, everyone else partied on.

Look away from that rising gold price now.

Sony Financial Group shares soar 36% in trading debut as Asia markets mostly rise

Published Sun, Sep 28 2025 7:48 PM EDT

Shares in Sony Financial Group rose 36% on market debut Monday after parent company Sony Group spun off the unit, while Asia markets traded mostly higher as investors looked past the latest tariff developments.

Sony Financial Group stock was assigned a reference price of 150 Japanese yen per share, valuing the company at around 1 trillion yen (over $6.7 billion). Sony said the separation allows the financial arm, which includes Sony Life Insurance, Sony Assurance and Sony Bank, to raise its own growth capital while maintaining brand ties with the wider Sony ecosystem, according to a filing translated by Google.

The parent company cited competing demands for investment in entertainment and semiconductors as a key reason for the financial unit to operate independently.

Japan broader markets fell, with the Nikkei 225 down 0.84%, and the Topix declining 1.57%, after hitting a record high Friday.

Meanwhile, Australia’s S&P/ASX 200 rose 0.71%.

The Reserve Bank of Australia was set to kickstart its two-day policy meeting where it is expected to hold its cash rate steady at 3.6%, according to a Reuters poll.

“The RBA are likely to find themselves in a tougher position than recent meetings. There is real tension building in the data flow,” the Commonwealth Bank of Australia wrote in a note, citing how the country’s August CPI indicates “material upside risks to Q3 inflation” as well as a a cyclical upswing in the activity data. However, CBA’s economists also pointed to signs of softer employment and moderating wages growth.

South Korea’s Kospi added 1.25%, recovering from its steep fall Friday on uncertainty over trade talks with Washington. The small-cap Kosdaq was 1.29% higher.

Hong Kong’s Hang Seng index jumped 1.19% at the open, while the Hang Seng Tech Index advanced 1.5%. Mainland’s CSI 300 was flat.

On Friday stateside, the three major averages climbed following the release of crucial U.S. inflation data.

The Dow Jones Industrial Average advanced 299.97 points, or 0.65%, to close at 46,247.29. The S&P 500 added 0.59% to close at 6,643.70, while the Nasdaq Composite rose 0.44% to settle at 22,484.07.

Friday’s rally snapped a three-day losing streak for the major indexes, but still ended the week down. The Nasdaq Composite and S&P 500 slid 0.7% and 0.3%, marking each index’s first losing week in four. The Dow shed 0.2%.

Asia-Pacific markets: Nikkei 225, Kospi, ASX 200

Stocks close higher Friday after in-line inflation data, but S&P 500 snaps 3-week winning streak

Updated Fri, Sep 26 2025 4:18 PM EDT

Stocks climbed on Friday, but still finished the week lower following the release of crucial inflation data.

The Dow Jones Industrial Average advanced 299.97 points, or 0.65%, to close at 46,247.29. The S&P 500 added 0.59% to close at 6,643.70, while the Nasdaq Composite rose 0.44% to settle at 22,484.07.

Friday’s rally snapped a three-day losing streak for the major indexes, but still ended the week down. The Nasdaq Composite and S&P 500 slid 0.7% and 0.3%, marking each index’s first losing week in four. The Dow shed 0.2%.

August’s personal consumption expenditures price index, the Federal Reserve’s preferred inflation measure, showed that core inflation – a measure excluding food and energy costs – ran at a 2.9% seasonally adjusted annual rate. That was in line with what economists polled by Dow Jones were expecting.

The all-items index showed an annual rate of 2.7% as well as a monthly gain of 0.3%, in line with expectations as well. Markets continue to price in two quarter-point rate cuts at the Fed’s upcoming meetings, per the CME FedWatch tool, which is what the central bank has projected.

The outcome swayed market reaction a bit, with stock futures ticking higher, and came on the heels of solid jobs data released Thursday and a strong upward revision in second-quarter gross domestic product to 3.8% that slightly dampened bullish sentiment. Investors fear fewer jobless claims could mean that the economy is in decent shape and therefore will give the Fed less reason to cut interest rates.

“Following a three-day pullback in the broader market, this is good enough to pull buyers off the sidelines,” said David Russell, global head of market strategy at TradeStation. “Yesterday’s claims and GDP revision undermined the dovish narrative, but today’s PCE calms some of those worries. No news is good news.”

Consumer sentiment in September was also practically in line with expectations, with the University of Michigan reading only coming in slightly lower than expected. Notably, sentiment for the month especially held steady among those with bigger stock holdings.

But the market was hampered by continued losses in software giant Oracle and other artificial intelligence players amid questions over the strength of the AI trade. Notably, Oracle fell more than 8% this week.

Stock market news for Sept. 26, 2025

Trump threatens mass firings of federal workers if government shutdown isn’t averted, NBC News reports

Published Sun, Sep 28 2025 3:58 PM EDT Updated Sun, Sep 28 2025 4:10 PM EDT

President Donald Trump warned Sunday of widespread layoffs if the federal government shuts down this week, telling NBC News that “we are going to cut a lot of the people that ... we’re able to cut on a permanent basis.”

″[I’d] rather not do that,” he told NBC News in an exclusive interview.

The White House is doubling down on warnings that thousands of government jobs could be on the line if the government shuts down at midnight on Tuesday.

The Trump administration last week told federal agencies to begin preparing for mass firings if Congress does not agree to a deal to avert a shutdown. If the White House follows through on its threat, it would mark a break from precedent, as federal employees are typically furloughed in such cases.

When there was a full government shutdown in 2013, for instance, about 850,000 employees were furloughed, according to the Committee for a Responsible Federal Budget.

The warning of potential mass firings — which was made via a memo released by the Office of Management and Budget — marked a significant escalation of pressure on congressional lawmakers to head off a shutdown.

Still, with less than three days until the government funding deadline, lawmakers remain far apart on negotiations, increasing the chances of a shutdown.

Trump threatens firings of federal workers if government shuts down

In other news, when AI goes wrong.

California issues historic fine over lawyer’s ChatGPT fabrications

 September 22, 2025

In summary

The court of appeals said 21 of 23 quotes in an opening brief were fake. State authorities are scrambling to grapple with widespread use of artificial intelligence.

A California attorney must pay a $10,000 fine for filing a state court appeal full of fake quotations generated by the artificial intelligence tool ChatGPT.

The fine appears to be the largest issued over AI fabrications by a California court and came with a blistering opinion stating that 21 of 23 quotes from cases cited in the attorney’s opening brief were made up. It also noted that numerous out-of-state and federal courts have confronted attorneys for citing fake legal authority.

“We therefore publish this opinion as a warning,” it continued. “Simply stated, no brief, pleading, motion, or any other paper filed in any court should contain any citations— whether provided by generative AI or any other source—that the attorney responsible for submitting the pleading has not personally read and verified.”

The opinion, issued 10 days ago in California’s 2nd District Court of Appeal, is a clear example of why the state’s legal authorities are scrambling to regulate the use of AI in the judiciary. The state’s Judicial Council two weeks ago issued guidelines requiring judges and court staff to either ban generative AI or adopt a generative AI use policy by Dec. 15. Meanwhile, the California Bar Association is considering whether to strengthen its code of conduct to account for various forms of AI following a request by the California Supreme Court last month.

The Los Angeles-area attorney fined last week, Amir Mostafavi, told the court that he did not read text generated by the AI model before submitting the appeal in July 2023, months after OpenAI marketed ChatGPT as capable of passing the bar exam. A three-judge panel fined him for filing a frivolous appeal, violating court rules, citing fake cases, and wasting the court’s time and the taxpayers money, according to the opinion.

Mostafavi told CalMatters he wrote the appeal and then used ChatGPT to try and improve it. He said that he didn’t know it would add case citations or make things up. 

He thinks it is unrealistic to expect lawyers to stop using AI. It’s become an important tool just as online databases largely replaced law libraries and, until AI systems stop hallucinating fake information, he suggests lawyers who use AI to proceed with caution.

“In the meantime we’re going to have some victims, we’re going to have some damages, we’re going to have some wreckages,” he said. “I hope this example will help others not fall into the hole. I’m paying the price.”

The fine issued to Mostafavi is the most costly penalty issued to an attorney by a California state court and one of the highest fines ever issued over attorney use of  AI, according to Damien Charlotin, who teaches a class on AI and the law at a business school in Paris. He tracks instances of attorneys citing fake cases, primarily in Australia, Canada, the United States, and the United Kingdom.

In a widely-publicized case in May, a U.S. district court judge in California ordered two law firms to pay $31,100 in fees to defense counsel and the court for costs associated with using “bogus AI-generated research.” In that ruling, the judge described feeling misled, said they almost cited fake material in a judicial order and said “Strong deterrence is needed to make sure that attorneys don’t succumb to this easy shortcut.”

Charlotin thinks courts and the public should expect to see an exponential rise in these cases in the future. When he started tracking court filings involving AI and fake cases earlier this year, he encountered a few cases a month. Now he sees a few cases a day. Large language models confidently state falsehoods as facts, particularly when there are no supporting facts.

“The harder your legal argument is to make, the more the model will tend to hallucinate, because they will try to please you,” he said. “That’s where the confirmation bias kicks in.”

More

California lawyer's ChatGPT use is why courts want AI regulation

Trump admin to use Elon Musk's Grok chatbot for government business

Sep 25, 2025 

The Trump administration has approved Elon Musk's artificial intelligence chatbot Grok for official government use for every agency, according to the General Services Administration.

Why it matters: The chatbot has faced criticism for being ideologically biased and lacking proper safety testing.

Driving the news: "Thanks to President Trump and his administration, xAI's frontier AI is now unlocked for every federal agency," xAI cofounder and CEO Elon Musk said in a press release announcing the move.

• Federal Acquisition Service commissioner Josh Gruenbaum said adopting Grok is "essential to building the efficient, accountable government that taxpayers deserve—and to fulfilling President Trump's promise that America will win the global AI race."

State of play: A coalition of over 30 consumer-focused groups in August called on Office of Management and Budget Director Russell Vought to block Grok from being authorized for government business.

• The group said that Grok was unfit for government use because it doesn't align with Trump's AI Action plan, which requires federal AI systems to be objective and be "neutral, nonpartisan tools that do not manipulate responses in favor of ideological dogmas.'"
• Grok has faced criticism multiple times this year, including for adding comments about a "white genocide" in South Africa in unrelated conversations and antisemitic memes.
• Last year, it was caught spreading election misinformation during the 2024 campaign.

More

Trump admin to use Elon Musk's Grok chatbot for government business

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.

US set for largest mass resignation in history as Trump continues deep cuts

Federal workers say they have little choice but to depart, with 100,000 leaving under deferred resignation program

Sun 28 Sep 2025 12.00 BST

The Trump administration is set to oversee the largest mass resignation in US history on Tuesday, with more than 100,000 federal workers set to formally quit as part of the latest wave of its deferred resignation program.

With Congress facing a deadline of Tuesday to authorize more funding or spark a government shutdown, the White House has also ordered federal agencies to draw up plans for large-scale firings of workers if the partisan fight fails to yield a deal.

Workers preparing to leave government as part of the resignation program – one of several pillars of Donald Trump’s sweeping cuts to the federal workforce – have described how months of “fear and intimidation” left them feeling like they had no choice but to depart.

“Federal workers stay for the mission. When that mission is taken away, when they’re scapegoated, when their job security is uncertain, and when their tiny semblance of work-life balance is stripped away, they leave,” a longtime employee at the Federal Emergency Management Agency (Fema) told the Guardian. “That’s why I left.”

The total resignation program is set to cost $14.8bn, with 200,000 workers paid their full salary and benefits while on administrative leave for up to eight months, according to a Senate Democrats’ report in July.

Trump officials argue this outlay is worth it. The Office of Personnel Management claimed the one-time costs lower longer-term spending by the federal government. It also criticized job protections of federal civil servants, claiming the government should have a “modern, at-will employment framework like most employers”.

A spokesperson for the White House claimed there was “no additional cost to the government” as employees would have received their salaries regardless of the program. “In fact, this is the largest and most effective workforce reduction plan in history and will save the government $28bn annually,” they added.

The total number of expected departures through the delayed resignation and voluntary separation programs, attrition, and early retirement programs is about 275,000 employees, the spokesman said.

Several thousands of additional federal workers have been fired as part of reduction in force mandates ordered by the administration. The mass exodus is the largest single-year decline in civilian federal employment since the second world war.

Federal employees who took the deferred resignation offer requested to speak anonymously in hopes of returning to the federal government in the future and to protect future job prospects.

They are entering a lagging job market as the unemployment rate in August 2025 ticked up to 4.3%, the highest since 2021, and only 22,000 jobs were added amid disruptions and uncertainty caused by Trump’s tariffs.

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US set for largest mass resignation in history as Trump continues deep cuts | Trump administration | The Guardian

Fed's favored inflation gauge shows consumer prices remained elevated in August

Fri, September 26, 2025 at 1:33 PM GMT+1

The Federal Reserve's preferred inflation gauge showed that inflationary pressures remained elevated in August, as policymakers seek to balance the need to restore price stability against a weakening labor market following last week's interest rate cut.

The Commerce Department on Friday reported that the personal consumption expenditures (PCE) index rose 0.3% in August from a month ago and is up 2.7% from last year. Those figures were in line with the estimate of LSEG economists.

Core PCE, which excludes volatile measurements of food and energy prices, was up 0.2% on a monthly basis and 2.9% year-over-year. Both were in line with economists' expectations.

Federal Reserve policymakers are focusing on the PCE headline figure as they try to bring inflation back to their long-run target of 2%, though they view core data as a better indicator of inflation. Headline PCE ticked higher from 2.6% in July to 2.7% in August, while core PCE held steady at 2.9% over that period.

Services prices were up 3.6% in August compared with a year ago, which was slightly higher than the 3.5% reading in July.

The personal savings rate as a percentage of disposable personal income was 4.6% in August, down slightly from a 4.8% reading in the prior month.

Prices for goods were up 0.9% in August from a year ago, an acceleration from the 0.6% readings in both June and July. Durable goods prices were 1.2% higher in August compared with last year, while nondurable goods rose 1.2% in that period.

The Commerce Department's PCE report comes after the Federal Reserve cut interest rates last week for the first time this year, lowering the benchmark federal funds rate by 25-basis-points despite inflation remaining well above the central bank's 2% target rate.

Federal Reserve Chair Jerome Powell said at his post-announcement press conference that tariff-induced price hikes could represent a one-time shift in the price level, or they could be a more persistent inflationary challenge. Powell added that tariffs are beginning to impact inflation data.

"We have begun to see goods prices showing through into higher inflation and actually, the increase in goods prices accounts for most of the increase in inflation or perhaps all of the increase in inflation over the course of this year," Powell explained. "Those are not very large effects at this point, and we do expect them to continue to build over the course of this year and into next year."

Powell said that while the Fed believes the upward trend in inflation will be because of one-time price hikes from tariffs, the central bank can't take that for granted.

"We can't just assume that though. Our job is literally to make sure that that is what happens, and we will do that job," he said.

Michael Pearce, deputy chief economist at Oxford Economics, said in a note that the inflation data shows the "resilience of the U.S. consumer" but noted the "strength is being driven by households at the top of the income distribution, with the consumer becoming increasingly bifurcated."

"The drag on real incomes from rising tariffs and a slowing labor market has had less of an impact than we though, in part because the incomes data were revised sharply higher, driven by strong dividend and other asset income, which is concentrated among high-income households," Pearce said.

"The PCE price indexes show inflation creeping higher as tariffs push up a range of goods prices. We estimate around two-thirds of the burden of tariffs have been passed through to consumers, though the range of new sectoral tariffs announced overnight mean further price pressures are likely on the way," he added.

Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management, said that the data will likely keep the Fed on track for another rate cut barring a surprise in the data.

"Inflation may not be reversing, but it's not reaccelerating. The economy is percolating but not overheating. Barring a major upside surprise from next week's jobs report, the Fed should remain on course to deliver another rate cut in late October," Zentner said.

The market's expectations for an October rate cut were unmoved by the PCE release, with the probability of 25-basis-point cut holding steady at 85.5%, according to the CME FedWatch tool.

Fed's favored inflation gauge shows consumer prices remained elevated in August

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.

China sends 2,000 workers to build battery power in Europe

27 September 2025

China is locking in European dependence on its technology by sending thousands of workers to build cutting-edge car battery factories that the continent needs to breathe new life into its auto industry.

The large-scale movement of labour, which has echoes of the dispatch of Chinese workers to construct infrastructure in Africa, underscores big gaps in Europe’s skills and knowhow in electric vehicle batteries.

The starkest example is a lifeline from China’s CATL, one of the world’s most advanced battery makers, which plans to send 2,000 workers to build and fit out a €4bn battery plant in Spain in a joint venture with Stellantis.

The factory aligns with Chinese President Xi Jinping’s strategy of fostering foreign dependence on China’s high-end manufacturing, which Beijing sees as a source of strategic leverage in an era of geopolitical turbulence.

But it has raised questions about CATL’s willingness to share its industrial secrets to the benefit of local people and businesses — and about Europe’s future vulnerability to China.

In two decades building dams, railways and ports across Africa, Chinese companies brought in tens of thousands of Chinese workers but learnt they needed to provide local employment to foster goodwill.

CATL says it is committed to recruiting and training local workers to run the Spanish factory once it is built, as it did at a battery plant in Germany that began production in 2022. It is also constructing a larger €7bn factory in Hungary, which is also using an unspecified number of specialist workers from outside the country.

Joris Teer, economic security analyst at the European Union Institute for Security Studies, said Chinese companies guarded their intellectual property closely in part so the country’s economy could stay afloat even in “extreme scenarios” such as a war over Taiwan.

“Xi is seeking to transform China into a self-sufficient fortress, while making the rest of the world even more dependent on Chinese manufacturing,” Teer said. “Chinese companies including battery manufacturers have a strong incentive to not ship their crown jewel technologies abroad.”

CATL was added to a Pentagon blacklist of companies believed to have ties to the Chinese military in January, although it has denied any such links. Scott Bessent, US Treasury secretary, warned Madrid earlier this year that aligning more closely with China “would be cutting your own throat”.

The battery project near Zaragoza, capital of the north-eastern Aragón region, is nonetheless cementing Spain’s status as one of Beijing’s closest allies in western Europe.

To build the plant CATL has told local officials it will bring in a total of 2,000 of its own workers on a rotating basis — a number without precedent among Chinese industrial projects in Europe’s biggest economies.

It will be constructed on a dirt plot owned by Stellantis next to one of the Euro-American group’s car factories, an ageing facility founded by General Motors in the 1980s. Today the factory, in the municipality of Figueruelas, produces Opel, Peugeot and Lancia vehicles.

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China sends 2,000 workers to build battery power in Europe

Next, the world global debt clock. Nations debts to GDP compared.

World Debt Clocks (usdebtclock.org)

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