AI, Roughly Right Or Precisely Wrong? The Battle of Flamborough Head

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The Battle of Flamborough Head (23 September 1779) was one of the most famous naval engagements of the American Revolutionary War (1775-1783). Fought off the coast of Yorkshire, England, it pitted the USS Bonhomme Richard, commanded by John Paul Jones, against a Royal Navy frigate, HMS Serapis. The engagement was an important victory for the burgeoning Continental Navy.

As the stock casinos bubble ever higher, led by AI mania, dinosaur Graeme wants to know how is AI ever going to recoup all of the hundreds of billions now being thrown into AI mania, let alone return a profit?

Taiwan stocks hit record high amid regional gains tracking Wall Street rally

Published Mon, Sep 22 2025 7:35 PM EDT Updated 42 Min Ago

Taiwan benchmark Taiex rose 1.32% to a record high Tuesday, amid broader gains in Asia, fueled by a tech rally on Wall Street after Nvidia announced a partnership with OpenAI.

Australia’s ASX/S&P 200 rose 0.17%. South Korea’s Kospi climbed 0.69%, while the small-cap Kosdaq added 0.28% at the open.

Hong Kong’s Hang Seng Index slipped 0.34% at the open. Hong Kong is bracing for a severe typhoon. The Hong Kong Observatory warned that conditions will begin to worsen later Tuesday, with Super Typhoon Ragasa expected to make its closest approach to the Pearl River Estuary Wednesday morning. Mainland China’s CSI 300 was up 0.31%.

Japan markets are closed for the holiday.

India tech stocks will continue to be in focus after falling Monday. U.S. President Donald Trump announced late last Friday a $100,000 visa fee for new H-1B visas, which are reserved for high-skilled foreign workers. Of the nearly 400,00 H-1B visas issued in 2024, 71% were for Indian nationals, according to U.S. government data.

Singapore is expected to release its inflation data for August later in the day.

Overnight stateside, the three major averages ended the trading day higher. The S&P 500 reached new heights after Nvidia’s partnership with OpenAI fueled investor optimism about the future of artificial intelligence.

The broad market index ended the day up 0.44% at 6,693.75, while the Nasdaq Composite jumped 0.70% to finish at 22,788.98. The Dow Jones Industrial Average climbed 66.27 points, or 0.14%, to settle at 46,381.54. Along with the S&P 500, the Nasdaq and Dow had hit new all-time intraday highs during the session and closed at record highs.

Asia-Pacific markets: Kospi, Nifty 50, Hang Seng Index, CSI 300

Stock futures are little changed after 3-day win streak for S&P 500: Live updates

Updated Tue, Sep 23 2025 7:20 PM EDT

Stock futures are little changed Monday night as investors monitor the risks of a stock market at all-time highs.

Futures tied to the Dow Jones Industrial Average fell 18 points, or 0.04%. S&P futures slipped 0.04%, while Nasdaq 100 futures also slid 0.04%.

The three major averages closed at all-time highs — marking three consecutive winning sessions for the S&P 500 — and recorded fresh intraday records on Monday. Gains accelerated in the latter half of the trading session after Nvidia shares jumped nearly 4% higher on the back of an announcement from the chipmaker that it will invest $100 billion in OpenAI for the buildout of data centers.

Questions remain on whether the AI trade can continue powering U.S. equities, particularly given the risks tied to elevated market valuations.

Joe Davis, Vanguard chief global economist, noted that the explosive growth and adoption in AI, coupled with the Federal Reserve’s latest interest rate cut, are the two notable factors that have led to higher multiples while “fundamentals are okay.”

“When you’re a little bit at a richer levels, cracks are exposed to bad news,” Davis said on CNBC’s “Closing Bell: Overtime.” “That’s not to say that it’s going to materialize, but I think we need to see acceleration and growth in the back half of the year or some progress on inflation, which remain stubborn. And I think either of those dimensions would help.”

The latest reading of the personal consumption expenditures price index — which is the Fed’s preferred inflation measure — will be released Friday and is expected to give clues on the path of monetary policy for the remainder of the year.

Investors are also watching the increasing chance of a government shutdown ahead of a Sept. 30 deadline after the Senate last week rejected Republican and Democratic proposals to at least temporarily fund the federal government. The stock market has historically brushed off concerns tied to government shutdowns, but this time around could be different as the economic backdrop heading into a shutdown is the weakest in more than two decades.

Stock market today: Live updates

Bitcoin falls while gold reaches new highs. Why that may not bode well for stocks. 

Published: Sept. 22, 2025 at 4:37 p.m. ET

Bitcoin fell while gold rallied to a fresh record high on Monday. That combination might not bode well for the U.S. stock market, where the major indexes scored another round of record closes after posting three straight weeks of gains.

That was the takeaway from Eric Teal, chief investment officer at Comerica Wealth Management, who said that Monday’s moves potentially point to a risk-off turn in market sentiment.

“We’ve had several weeks of risk-on approach,” Teal said in a phone interview. “And now we’re entering the late September and early October [period], historically some very volatile sessions,” he said. “We’re inclined to take pause, here,” he said, adding that after the recent rally the market looks likely to shift into more of a risk-off mode.

Bitcoin  has increasingly been seen by bulls as a risk-on asset in the past few years, while gold  has been perceived as a risk-off play. While the two assets traded in tandem on several occasions this year and both were seeing impressive gains, the trend wasn’t expected to continue over a longer time frame, Teal noted.

Bitcoin fell 2.4% Monday afternoon to around $112,820, roughly 9.4% away from its record high at $124,496 reached on Aug. 14, while it was up 20.8% year to date, according to the Dow Jones Market Data. Meanwhile, gold for December delivery on Monday rose $69.30, or 1.9%, to settle at $3,775.10 an ounce on Comex, the highest finish for a most active contract on record.

U.S. stocks ended higher on Monday, with the Dow Jones Industrial Average, S&P 500 and the Nasdaq Composite  all notching record highs.

Bitcoin liquidations

On the other hand, bitcoin fell as technical factors and investor sentiment worsened, said Joel Kruger, market strategist at LMAX Group, operator of a foreign exchange and crypto trading venue.

Notably, a series of large sell orders hit major crypto exchanges such as Binance and Deribit early Monday, said Koen Hoorelbeke, investment and options strategist at Saxo Bank. It later triggered $1.5 billion in forced liquidations, which means that some traders’ positions were automatically sold off as they couldn’t meet margin or collateral requirements.

“The setup was already fragile: leverage had built up aggressively after the Fed’s rate cut, and last Friday’s $4.3 billion options expiry on Deribit had removed a layer of hedging. So when the first sell orders hit, there was nothing to absorb the shock,” Hoorelbeke wrote in emailed comments to MarketWatch.

It means that before the Fed’s meeting concluded last Wednesday, traders had borrowed heavily to make big bets, rendering the market vulnerable to big swings. Then the options expiry on Deribit last Friday led to the vanishing of traders’ hedging positions tied to them.

Gold’s rally 

Gold rallied on Monday partly due to geopolitical jitters between North Atlantic Treaty Organization nations and Russia, after three Russian fighter jets entered the NATO airspace last week, according to Mark Hackett, chief market strategist at Nationwide.

The precious metal’s gains also partly resulted from some concerns that Federal Reserve rate cuts may potentially accelerate inflationary pressures, Hackett wrote in emailed comments to MarketWatch. Some investors also worry about a potential government shutdown, contributing to gold’s strength as well, Hackett noted.

Bitcoin falls while gold reaches new highs. Why that may not bode well for stocks.  - MarketWatch

Nvidia to Invest $100 Billion in OpenAI in Data Center Push

September 22, 2025 at 10:10 PM GMT+1

Nvidia will invest as much as $100 billion in OpenAI to support new data centers and other artificial intelligence infrastructure, a blockbuster deal that underscores booming demand for AI tools like ChatGPT and the computing power needed to make them run. The companies announced the agreement on Monday, saying they’d signed a letter of intent for a strategic deal. The investment is meant to help OpenAI build data centers with a capacity of at least 10 gigawatts of power — equipped with Nvidia’s advanced chips to train and deploy AI models. The money will be provided in stages, with the first $10 billion coming when the deal is signed, according to people familiar with the matter. Nvidia is making the investment in cash and will receive OpenAI equity as part of the deal, said the people, who asked not to be identified because the talks were private. Further increments will follow when each gigawatt of computing power is deployed. Investors applauded the tie-up, sending Nvidia shares up 3.9% in New York trading. The stock has now gained about 37% this year, cementing the company’s status as the most valuable business on Earth.—Natasha Solo-Lyons

Nvidia to Invest $100 Billion in OpenAI in Data Center Push - Bloomberg

In other news, how to make enemies out of friends.

New H-1B Fee Rattles Tech Industry

Sep. 22, 2025 7:30 AM ET

The Trump administration has announced a new $100,000 application fee for H-1B visas, in the latest move to crack down on immigration and protect U.S. workers. The move has rattled the tech sector, with top companies urging their employees holding the visa not to leave the U.S.

The impact: India has been the largest beneficiary of H-1B visas, accounting for 71% of the visa holders in the U.S. last year. Most of these visas go to STEM professionals, and Amazon (AMZN) has seen the most H-1B approvals yearly since 2020. News of the H-1B application fee dragged top Indian tech stocks like TCS, Infosys and Wipro lower on Monday.

Jefferies analysts called the $100,000 fee a "curveball" for the Indian IT sector, saying companies will likely reduce H-1B usage as the fee offsets the EBIT generated per employee over the visa period. "The H-1B fee will constrain talent supply in the U.S., which in turn will drive up demand for locals/green card holders," they added. "IT firms will have to pay these employees more or risk losing them."

Bigger picture: It remains to be seen what the long-term impact would be. David Bier, director of immigration studies at Cato Institute, said the fee would effectively end the H‑1B program and force leading tech companies out of the U.S. Meanwhile, SA analyst Brett Ashcroft Green doubts that the move will force Big Tech to start their own trade schools for U.S. workers. "I would also not expect the Trump administration to stop their moves on H-1B employment here," he added.

New H-1B Fee Rattles Tech Industry | Seeking Alpha

‘Afraid of our talent’: India hits back against Trump’s H1-B visa fee hike

Mon 22 September 2025 at 6:53 am BST

India has hit back at Donald Trump’s decision to impose a $100,000 fee on H1-B visas for skilled foreign workers in the US, sparking warnings by the Indian government that it would have “humanitarian consequences” and one minister claiming they were “afraid of our talent”.

On Friday, the US president announced new rules around the H1-B visas, which allows companies to hire foreign workers in skilled occupations like IT, healthcare and engineering, to work in the US for up to six years.

The H1-B visas are designed to allow US companies to hire skilled foreign workers in areas where there have been shortages in the domestic work market. India had become by far the largest beneficiary of H-1B visas, accounting for 71% of approved visas in 2024.

---- A statement from India’s external affairs ministry over the weekend said the fee would have humanitarian consequences “by way of the disruption caused for families”.

The Indian government said it “hopes that these disruptions can be addressed suitably by the US authorities and emphasised that the exchange of skilled workers has “contributed enormously” to both nations.

In comments on Sunday, India’s commerce minister Piyush Goyal said: “They are also a little afraid of our talent. We have no objection to that.”

The new $100,000 fee, which is 60 times the current cost, came into effect on Sunday. It immediately sent ripples across the IT and tech industries, which are the biggest beneficiaries of H1-B scheme.

IT firms with clients such as Apple, JPMorgan Chase, Walmart, Microsoft, Meta and Alphabet’s Google are among those reported to be impacted.

On Monday morning, the share prices of India’s biggest IT companies such as Infosys and Tata Consulting Services slumped in response to the H-1B visa fee hike.

Nasscom, India’s IT trade body, said the move would “potentially have ripple effects on America’s innovation ecosystem” and create “considerable uncertainty for businesses, professionals, and students across the world”.

The chief minister of the southern state of Telangana, Revanth Reddy, which sends a high number skilled IT workers to the US on H1-B visas urged Indian prime minister Narendra Modi to treat the issue on a “war footing”, warning that the suffering of Indian IT workers in America would be “unimaginable”.

Immigration lawyers in India reported receiving frantic calls over the weekend as confusion reigned over how the scheme would be implemented.

Before the White House clarified that the order applied only to new applicants and not holders of existing visas or those seeking renewals, companies including Tata Consultancy Services, Eli Lilly, Microsoft, JPMorgan, and Amazon advised employees on H-1B visas to stay put or return to the US before 21 September, forcing many workers from India and China to abandon travel plans and rush back.

One Indian worker on a H1-B visa told Indian news agency PTI there was “absolute panic”. “This is a travel ban,” they said, requesting anonymity for fear of losing their visa. “Even if a person has a valid H-1B visa stamped on their passport, if they are travelling, or are on holiday, you cannot enter the US unless they have proof of the $100,000 payment. No one knows what the process is, what the fine print is.”

Another India worker said the new policies by the Trump administration were making many already on H1-B visas reconsider staying in the US.

“People are really starting to question if they can continue to build their lives in the US because there’s such a high level of uncertainty around everything now,” they said.

In China, which accounts for the 11.7% of all H1-B visas – the second highest after India – the Chinese government has not yet responded to the news, but online there was a sense of confusion and panic.

Some social media users accused the US of “maliciously crafting policies purely to torment H-1B holders”.

“Even if Trump had outright banned H-1B entry with a single decree, it wouldn’t have been this insulting,” said one person on the video app, Xiahongshu.

“We have endured the hardships of studying abroad and struggling to find work in a foreign country,” said another. “No matter how capable or hardworking we are, in an era of constantly changing immigration policies, we are just tiny specks of dust.”

‘Afraid of our talent’: India hits back against Trump’s H1-B visa fee hike

For want of doubt, here is another measure of the massive inflation in the nation’s financial markets. The NASDAQ capitalization relative to GDP has literally shot the moon. It has risen from 10% of GDP in the late 1980s to 60% of GDP at the dotcom peak, but has now soared into an altogether different universe: Driven by the AI craze the market capitalization of NASDAQ now stands at 120% of GDP.

david stockman from David Stockmans Contra Corner<davidstockman@substack.com>

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.

It is better to be roughly right than precisely wrong.

John Maynard Keynes

This Recession-Forecasting Algorithm Hasn't Been Wrong in 65 Years -- and It Has an Ominous Message for Wall Street

September 20, 2025

---- This predictive algorithm has a flawless track record of forecasting U.S. recessions

At any given moment, there's always a metric or historical event that's a threat to drag Wall Street's major stock indexes lower. For example, the S&P 500's Shiller Price-to-Earnings (P/E) Ratio is knocking on the door of its second-priciest valuation when back-tested more than 150 years. Throughout history, extended stock valuations of this magnitude have been a harbinger of disaster.

But an even more nefarious predictive tool, courtesy of Moody's (NYSE: MCO) Analytics, portends trouble for the U.S. economy and stock market.

In mid-July, Moody's Analytics released its findings from a newly developed model that relies on machine learning (ML) to estimate the probability of a U.S. recession within the next 12 months. Its model leans on a laundry list of economic inputs and back-tested findings from 1960 to 2025 to come up with historic recession probabilities.

When back-tested to 1960, any recession probability near or above 50% has eventually (keyword!) been followed by a recession. Moody's ML model identified eight such instances from 1960 to 2020 when the recession probability surpassed 50%, and a U.S. recession followed every time.

As you'll note in the post above on social media platform X (formerly Twitter) from Mark Zandi, chief economist at Moody's Analytics, his company's ML-driven model is currently projecting a 48% chance of a U.S. recession over the next year. Though it's not quite at the 50% threshold that has guaranteed a recession over the last 65 years, any figure well above 40% has also been a surefire indicator of an economic downturn.

In particular, Zandi pointed to the model homing in on building permits as a key predictor of the U.S. economy shifting into reverse: "The algorithm has identified building permits as the most critical economic variable for predicting recessions. And while permits had been holding up reasonably well, as builders supported sales through interest rate buydowns and other incentives, inventories of unsold homes are now high and on the rise."

Residential building permits have tapered to their lowest level since the height of the pandemic.

Although the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite aren't tied at the hip to the U.S. economy, a recession would be expected to negatively impact corporate earnings. With the S&P 500's Shiller P/E already pushing to quite the premium, it probably wouldn't take much to tip the stock market into a correction, or perhaps an even steeper decline.

Wall Street's newest algorithm has nothing on historical precedent

While the above forecast isn't exactly encouraging, especially considering the flawless track record of Moody's newly minted ML model over a 65-year period, it doesn't hold a candle to historical precedent that extends well beyond 1960.

Let's address the obvious: Recessions are normal, healthy, and inevitable events. No amount of well-wishing or monetary policy maneuvering can prevent these downturns from taking shape every now and then.

Even if Moody's Analytics' model isn't spot on about a recession taking shape over the next 12 months, there's a good probability of one ensuing sooner than later. 

But the other side to this coin is equally important. Namely, recessions are typically short-lived. Since the end of World War II, the average recession has lasted just 10 months, with none surpassing 18 months.

More

This Recession-Forecasting Algorithm Hasn't Been Wrong in 65 Years -- and It Has an Ominous Message for Wall Street

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.

5 lessons from a house that generates more energy than it uses

September 20, 2025 6:30 AM ET

HERMOSA BEACH, Calif. — With utility bills rising faster than inflation, a house that produces more energy than it consumes might sound appealing.

Robert Fortunato's "Green Idea House" has been doing that for over a decade. He remodeled his family's 1959 house into a 2150 square foot environmentally friendly home, and he says he did it for less than the cost of a traditional remodel.

"It's one of the first net-zero energy, zero carbon case study houses that was built for less cost than standard construction," he says, and the remodel involved "standard construction materials and off-the-shelf technologies that anyone can use."

Shepherding such a project requires a lot of time and energy from the homeowner. There's research and planning, some stubbornness when it comes to working with contractors and suppliers and now some updates for a climate that's warming faster than expected.

Still, Fortunato's family ended up with a stylish, contemporary, four bedroom, two bath home. While a project like this is not for everyone, Fortunato hopes others will learn from his family's experience and take on similar projects. In that spirit, here are five lessons from the Green Idea House.

You'll need to get into the power business

In planning for the remodel, Fortunato wanted to stop using climate-warming fossil fuels as much as possible.

---- Disconnecting from the local gas company saved some money during the remodel because he didn't have to reinstall gas pipes throughout the house. And in replacing appliances they chose electric ones, including an induction stove.

To replace gas and to supply electricity in his home, Fortunato got into the power generation business. He installed 26 solar panels on the roof that generate all the electricity the house uses, plus enough for two electric cars.

"We really haven't had an electric bill or a gas bill in the last 13 years," Fortunato says. He did have to pay $18,000 upfront to install the panels. He estimates his family saves about $4,800 a year in utility bills, so it took four years to recover that initial expense before the electricity became almost free (there are still utility connection charges, since he remains connected to the grid).

Spending money on rooftop solar is not affordable for everyone, and the industry has gained a reputation for high-pressure sales tactics. NPR has reported on ways to protect yourself.

There's lots of research and planning

From the street, Fortunato's three-story, modern house fits in with the neighborhood of expensive modern and Mission-style homes.

One of the features is the flat roof, which extends five feet over the front of the house. It hides the solar panels, which some consider ugly, so they can't be seen from the street. The extended roof has another purpose that saves energy.

---- "Sixty percent of the energy that is saved, in terms of heating and cooling, is through that overhang alone," Fortunato says. In the summer, it shades the southwest-facing house when the sun is higher in the sky. "And then in the wintertime, the sun rises low in the sky across the horizon. And the sun goes into the windows and actually heats up the house for free."

More

This California house generates more energy than it uses : NPR

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Battle of Flamborough Head

----The makeshift fleet was under the overall command of Captain John Paul Jones, a Scottish-born officer of the Continental Navy, who had recently won international fame for his daring raid on the English port town of Whitehaven in April 1778.

---- Bonhomme Richard was armed with 6 18-pounder guns, 14 12-pounders, 14 9-pounders, and 4 6-pounders. It was crewed by about 380 men and boys, mostly Americans, with 20 French marines stationed at the poop deck. There were also close to 100 prisoners onboard, seven of whom accepted Jones' offer to fight. Serapis, meanwhile, was armed with fifty guns despite being rated as a 42-gun ship; these included 20 18-pounders, 20 9-pounders, and 10 6-pounders. It was crewed by 305 officers and men (Norton).

---- As the ships circled around one another, the bow of Bonhomme Richard struck Serapis' stern. It was at this point that Pearson called out to Jones, asking if he wanted to surrender; according to an eyewitness, Jones responded with his famous words, "I have not yet begun to fight!"

more

Battle of Flamborough Head - World History Encyclopedia