Baltic Dry Index. 2126 +15 Brent Crude 66.98
Spot
Gold 3643 U S
2 Year Yield 3.56 +0.04
US
Federal Debt. 37.473 trillion
US
GDP 30.353 trillion
For
more on AI’s failings, scroll down to the Technology section. My thanks to
Adrian Nixon for sending it along. How many hundreds of billions will be destroyed
in the stock casinos, wasted in “garbage out”?
More AI, Federal Reserve
interest rate cutting madness.
Nasdaq
closes at record high, S&P 500 notches winning week as Fed decision looms
Updated
Fri, Sep 12 2025 4:24 PM EDT
The Nasdaq Composite notched a
perfect week of closing highs on Friday as investors took signs of weakening
jobs and tame inflation to mean the Federal Reserve will lower interest rates
next week.
The
tech-heavy Nasdaq closed 0.44% higher to settle at 22,141.10, led by a surge
in Tesla shares. The
broad market S&P 500 hovered
around the flatline, down just 0.05% to finish at 6,584.29. The blue-chip Dow Jones Industrial Average lost
273.78 points, or 0.59%, to close at 45,834.22. Having each closed at record
levels Thursday, with the Dow finishing above 46,000 for the first time, the
three major averages rounded out the weekly period with gains.
The
S&P 500, which rose 1.6% week to date, saw its best weekly performance
since early August and its fifth positive week in six. The Nasdaq secured
its second winning week in a row with its 2% advance in the period, and the Dow
posted its first positive week in three after seeing a week-to-date climb
of 1%.
Investors
are now gearing up for the Fed’s decision on whether it will lower its
benchmark interest rate on Sept. 17. Futures markets are pricing in a quarter
percentage point cut with near certainty, according to the CME FedWatch tool.
The
economic data released this week would support such a decision, according to
Bill Northey, investment director at U.S. Bank Wealth Management. The consumer
price index came in slightly
hotter than expected for August on Thursday, but the usually crucial
inflation report was overshadowed by weekly jobless claims, which showed an
unexpected jump to the highest level since October 2021.
Those
reports, as well as the downward
revisions on job growth from the Bureau of Labor Statistics earlier
this week, further confirm a “decelerating labor market” and that inflation
“remains well contained,” which “really sets up for a cut next week,” Northey
told CNBC.
“This
is a Fed that is reluctant to surprise markets, and so as expectations have
cemented around that 25 basis point rate cut, we think that they’ll deliver
against that,” he said.
Northey
added that through the Fed’s press conference and its summary of economic
projections, investors should be given more clarity on the central bank’s
median view regarding its outlook for both economic growth and inflation, along
with what it considers appropriate in terms of monetary policy positioning
against that.
“All
three of those elements really play into what happens further out the interest
rate curve,” he continued. “This should be a very information-rich meeting that
we see [in] the middle of next week.”
Stock
market news for Sept. 12, 2025
In other news, only
in the EUSSR. Maybe I should have been a teacher rather than a Commodities
Trading Advisor gambling in commodity futures on 10:1 leverage.
Teacher
goes on sick leave with full £48k salary for 16 years without her school
noticing
11 September 2025
A teacher who went on sick leave for 16 years was being paid her full
£48,000 salary the whole time - and the school didn't even notice.
The woman, a German biology and geography teacher, went on leave in
August 2009 due to a chronic illness and psychological problems.
After a three-month absence, she should have been assessed by a doctor.
But this never happened, and her sick leave was systematically renewed for
nearly 20 years.
When the state finally found out, it ordered the woman to undergo a
medical examination, but she refused and decided to sue her management.
The woman was paid 100% of her salary the whole time she was away,
despite never returning to the Berufskolleg vocational high school in Wesel,
near Duisburg, where she had worked since 2003.
She managed to go under the radar until a change of management in 2024,
when an internal audit revealed this 'oversight.'
The former director, who took over the establishment in 2015, had never
met the teacher in question and was completely unaware that she was, in theory,
part of his teaching team.
According to Bild, citing the German salary scale, the professor
reportedly earned between €5,051 and €6,174 per month.
She reportedly owns two apartments in Duisburg, in northwest Germany, the
media reports.
The teacher was employed by the federal region of North Rhine-Westphalia.
Alerted to this particular case, the state wanted to subject the teacher to a
medical examination intended to confirm her state of health.
But the teacher refused and tried to take her management to
court. However, since her appeals were rejected, the examination will
still take place.
'I have a lot of questions because I've never been confronted with a case
like this before,' Dorothee Feller, the education minister of North
Rhine-Westphalia, Germany, told Bild.
Now, all these years later it will be difficult to demand that the
professor repay the sums she received as it will be hard to prove that she lied
about her health.
However, suspicions have been raised over the teacher's apparent
inability to work as she may have been practicing as a naturopath during her
sick leave.
Teacher goes on sick leave with full £48k salary for 16 years without her
school noticing
In
only in Britain news, “phoenixing”. Only mugs and muppets pay taxes in 2025.
HMRC
loses over £800m to small business ‘phoenixing’
Friday
12 September 2025 8:47 am | Updated: Friday
12 September 2025 9:22 am
HM
Revenue & Customs (HMRC) has lost more than £800m – more than
previously estimated – through a tax
loophole open
to abuse by small businesses in the UK.
The
practice, known as ‘phoenixing‘, is where companies are repeatedly liquidate
then set up as a new, identical, debt-free business.
The
tax authority lost £836m to this practice in the 2022-23 tax year, the latest
for which data is available, 45 per cent higher than the £570m estimated in
previous reports.
HMRC
put the loss down to pandemic-era delays in companies declaring insolvency.
Phoenixing
accounted for around a fifth of HMRC’s tax losses i.e. money owed but unable to
be collected, for 2022-23.
HMRC
seeking to tackle ‘phoenixism’
The
practice, which is particularly prevalent among retail firms, is illegal when
used to avoid paying tax and other debts.
“If
I have a building company and I go bust and I set up another building company,
that is not a scam . But when someone does it deliberately to engineer an
escape from their creditors, be it HMRCHMR or
anyone else, that is a scam,” Dan Neidle, founder of Tax Policy Associates,
told the FT.
A
National Audit Office (NAO) report on tax evasion last year found HMRC
estimated a total of £5.5bn in losses from tax evasion between 2022 and 2023,
with 81 per cent of the loss attributed to small
businesses –
a 66 per surge since 2019 to 2020.
Head
of the audit office Gareth Davies, said at the time that HMRC have “too little
emphasis” on fixing “widely used methods of evasion” like phoenixism.
In
the spring statement in March, Chancellor Rachel Reeves vowed to “tackle
‘phoenixism’” and set out a joint campaign between HMRC, corporate registry
Companies House and the Insolvency Service.
Measures
being implemented by the group include increased demands for payments upfront,
greater use of enforcement sanctions and making more directors liable for their
company’s taxes.
An HMRC spokesperson
said: “As the Chancellor announced in her Spring Statement, the government is
taking action to improve collaboration between HMRC, Companies House, and
the Insolvency Service to tackle those using contrived corporate insolvencies
and dissolutions – so-called ‘phoenixism’ – to evade tax.”
HMRC loses over
£800m to small business ‘phoenixing’
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.
To
celebrate my 76th birthday on the 26th, Britain’s far
left socialist Chancellor is going to raise everyone’s taxes. Just don’t blame
me.
Economy grinds to a halt
ahead of Budget
12 September 2025
Britain’s economy has ground to a halt as businesses
and households tighten their belts ahead of Rachel Reeves’s tax-raising Budget.
Economic growth flatlined at 0pc in July, down from
0.4pc in June, data from the Office for National Statistics (ONS) shows.
The sluggish economic growth economy paints a grim
picture for the Chancellor as she prepares for her autumn Budget on November
26.
In the three months to July the UK recorded economic
growth of 0.2pc, slowing from 0.3pc in the three months to June.
Liz McKeown, from the ONS, said: “Growth in the
economy as a whole continued to slow over the last three months. While services
growth held up, production fell back further.
“Within services, health, computer programming and
office support services all performed well, while the falls in production were
driven by broad based weakness across manufacturing industries.”
The slump in growth can be largely attributed to a
1.3pc fall in production during July as the UK’s manufacturing sector declined.
A decline in electronics production and a slump in the pharmaceutical sector
weighed on the manufacturing industry.
Yael Selfin, Chief Economist at KPMG UK, said: “A
reversal in fortune appears unlikely for the sector with global headwinds set
to persist.”
The UK’s pharmaceutical sector has struggled in
recent months amid a slump in demand from overseas and concerns about tariff
rates.The manufacture of basic pharmaceutical products and pharmaceutical
preparations dropped 4.5pc July, following a 1.1pc decline in June, figures
from the ONS show.
The lack of economic growth in July comes after the
economy recorded 1pc growth in the first six months of the year. However, some
economists fear that Britain’s economy will slow in the second half of 2025 as
households tighten their purse strings and businesses cut back on investment
and hiring decisions.
Fergus Jimenez-England, an associate economist at
the National Institute of Economic and Social Research, said: “Economic
activity in the third quarter will be constrained by fiscal uncertainty
weighing on household and business sentiments. Growth at this pace will do
little to ease the fiscal challenges confronting the Chancellor this Autumn.”
More
Economy grinds to a halt ahead of Budget
Starmer faces MPs’ fury
over Mandelson scandal
Friday, 12 September 2025
Sir Keir Starmer has certainly carried out a “reset”
of his Government – but perhaps not quite as he planned. A very difficult few
weeks for the Prime Minister are in the offing.
Less than a fortnight after he declared the beginning of “phase two” of his
premiership, he has lost two of his most senior colleagues and embroiled
himself in yet another sleaze scandal. This time, it involves the world’s most
notorious paedophile.
On Thursday morning, Sir Keir met Yvette Cooper in Downing Street and they
decided to sack Lord Mandelson, who was revealed to have supported Jeffrey
Epstein through his legal battle over child sex offences.
The departure appeared inevitable to some in Westminster. Mandelson is, after
all, a man who has twice been forced to resign from previous governments in
disgrace.
Sir Keir is therefore facing questions from his own party about his judgment –
and why he decided to appoint a man who appears to have more skeletons in his
closet than business suits.
Morgan McSweeney, Sir Keir’s powerful chief of staff, encouraged him to appoint
Lord Mandelson while Downing Street figures also involved in the decision were
aware of the Epstein relationship. Two senior members of Donald Trump’s cabinet
are understood to have expressed concerns about Lord Mandelson’s ties to
Epstein.
With many of his own MPs demanding answers as we report today, the Prime
Minister must put on a brave face and welcome Mr Trump to the UK next week for
a state visit.
The famously freewheeling US president is unlikely to let the trip pass without
a swipe at the departure of Lord Mandelson, whom he has come to admire.
More
Why Mandelson will haunt Starmer
Global
Inflation/Stagflation/Recession Watch.
Given our Magic Money
Tree central banksters and our spendthrift politicians, inflation/recession now needs an entire
section of its own.
UK economy makes weak start to second half of the
year
12 September 2025
LONDON (Reuters) -
Britain's economy recorded zero monthly growth in July after a sharp drop in
factory output, matching expectations for a slower start to the second half of
2025 but still disappointing for the government ahead of November's budget.
After a strong first half
to the year, economists expect growth to slow over the second half as a whole
as U.S. tariffs continue to weigh on the global economy and Britain faces
headwinds from rising inflation and uncertainty over who will be hit by likely
tax rises later this year.
Finance minister Rachel
Reeves said on Thursday that the economy "isn't broken, but it does feel
stuck" as she set out measures to streamline part of the tax system.
Friday's data showed that
manufacturing output - which makes up 9% of the economy - dropped by a hefty
1.3% on the month in July, its biggest fall in a year led by computers,
electronics and pharmaceuticals, the Office for National Statistics said.
But the much larger
services sector edged up 0.1% on the month, slightly ahead of expectations in a
Reuters poll.
GDP had risen 0.4%
month-on-month in June and on a three-monthly basis - now the ONS' preferred
way of presenting the figures - growth slowed to 0.2% in the three months to
July from 0.3% in the second quarter.
"July's slowdown is
probably the start of a more restrained period for the economy with higher
inflation and rising job losses likely to have stifled activity in August,
despite an expected uplift from the warm weather," said Suren Thiru, economics
director at the ICAEW accountancy body.
Sterling weakened
slightly after the data before recovering and financial markets continued to
price in only around a 40% chance of another BoE rate cut this year, with
inflation this month expected to hit double the BoE's 2% target.
SECOND-HALF SLOWDOWN
Britain's economy grew
robustly by its recent standards in the first half of 2025, expanding by 0.7%
in the first quarter of the year and 0.3% in the second - partly due to higher
government spending and exporters trying to ship goods before the imposition of
U.S. tariffs.
Friday's figures showed
Britain's goods trade deficit widened in July to its largest since January 2022
at 22.244 billion pounds ($30.2 billion), up from 22.156 billion pounds in
June.
British goods exports to
the United States remain below pre-tariff levels, although the widening in the
deficit from June to July mostly reflected higher imports from the European
Union.
On an annual basis, gross
domestic product in July was 1.4% higher than a year earlier - unchanged from
June's annual growth rate but a shade lower than the 1.5% growth forecast in a
Reuters poll, official figures showed.
Last month, before the
release of second-quarter data, the Bank of England forecast annual growth of
1.25% for this year - well below the average of 2% between 2010 and 2019.
More
UK economy makes weak start to second half of
the year
Technology
Update.
With events happening
fast in the development of solar power and graphene, I’ve added this section.
This weekend, thanks
to Adrian an expert in the field and an occasional LIR reader, a realistic look
and assessment of the AI/disaster bubble looming.
AI on the Brink: The
Coming Collapse of Some Intelligent Models
By Adrian Nixon
Regular readers of this journal will know that we
focus on developments in the world of graphene and two dimensional (2D)
materials. You may also be aware that we have been experimenting with
artificial intelligence (AI) to help with the literature search and provide a
starting point for some of the images we use. We have learned to use AIs as
assistants, improving our efficiency, but not delegating the thinking and
writing to them. Creating the insight and making the illustrations ourselves is
too valuable a learning process to outsource to a machine. Our experience with
AIs has helped us understand something of their operation and we have paid
attention to the rapidly developing ecosystem. It is time to share our
insights. Read on to find out more… Trillions of dollars are being directed to
building ever more powerful artificial intelligence (AI) models that will
transform our lives in unexpected ways. We are living in a boom period.
Experience tells us that many boom periods are followed by a bust. Boom bust
cycles are a well-documented and recurring feature of modern capitalist
economies [1]. If the bust part of the cycle is coming, how might this happen?
A rational person approaches the topic of forecasting with some caution. The
physicist Neils Bohr once said “Prediction is very difficult, especially if
it’s about the future” [2]. However, we can glimpse the seeds of collapse in
the foundations of this new technology. This view tells us that not all AIs
will be successful and some, if not many, AIs will fail.
How can we tell we are in an AI boom? Let’s start
from where we are now. AI data centres are big business, they are being built
as fast as possible, particularly in the Middle East where it is said that data
is the new oil, and AI is the refinery [3,4]. The global AI industry is valued
at approximately $391 billion in mid-2025 and is forecast to expand with an
annual compound growth rate (CAGR) of 35.9% [5]. Nvidia is the leading company
that makes the graphics processing units (GPUs) that are particularly suited to
perform the calculations essential for AI deep learning. Reuters reports that
Nvidia became the first company to reach $4 trillion market capitalisation on
the 9th July 2025. This one company is now worth more than the combined value
of all the publicly listed companies in the UK [6].
McKinsey tracks what they call compute power. They
define this as the hardware, processors, memory, storage, and energy needed to
operate AI data centres. The company’s research shows that by 2030 data centres
will consume nearly $7 trillion of capital outlays. A staggering number for
just five years [7]. During Q2 2025, venture capital (VC) funding for AI
accounted for 49.2% of the total value of all VC deals. $50 billion out of
$101.5 billion was invested in AI startups. By comparison, in Q2 2020, AI deals
represented just 21% of total VC investment value, amounting to $16.7 billion
out of $79 billion [8]. Whether all this money, time and resources will
generate a return on investment is something for the future and out of scope of
this article.
In summary so far: Staggering investments and a huge
focus of venture capital in the sector. At the time of writing, we are most
certainly in an AI boom. To understand how this AI boom might ultimately play
out, we now need an appreciation of how the technology operates. How do AI
models work?
---- An alternative future for AI: Model collapse
What if most AIs become irrelevant to us? We began
this article by thinking about the bust that often follows a boom and how this
might happen to AIs. There is something called model collapse. This is very
real and represents a foundational risk for the entire AI ecosystem. The seeds
of destruction of AI models are rooted in the unsupervised methods of their
learning. This is a successful strategy as long as there is enough human
created content to feed the models. They consume vast amounts of data as we have
seen. The entire digitised content of the human race seems not to be enough for
the voracious appetite of AIs. Elon Musk went on the record recently speaking
at the 2025 Consumer Electronics Show (CES 2025). He said that “the world had
already run out of human-made data for AI training since last year”. He was not
alone. OpenAI's researcher, Ilya Sutskever, predicted that the artificial
intelligence industry has already reached "peak data" for AI
training, and is one of the growing problems of ramping up AI space [14]. Mr
Musk has a mindset that identifies the way forward whenever problems appear.
His view is the solution to this shortage is the use of synthetic data. This is
data generated by AI models themselves. This synthetic data would allow an AI to
augment its training material through a process of self-learning and
self-grading.
Synthetic data
sounds like a great idea.
Think about it. AIs are already generating new
content that we have trouble distinguishing from machine generated. Cybernews
reports that companies such as Microsoft, Meta, OpenAI, and Anthropic have
publicly acknowledged the issue and suggested they were already generating new
data in unconventional ways [15]. So, using synthetic data must work, surely?
Jackrabbits A recent paper in nature by an international team from Oxford,
Cambridge, Imperial and Toronto Universities looked at what happens to the performance
of a generative AI when it is trained on datasets that primarily consist of
content generated by earlier AI models rather than original human-created data.
---- The model began
well, but its performance degraded every time a new generation of model was
created using synthetic training data created from the previous generation. The
team discovered a degenerative process where errors accumulated over
generations of models trained on data generated by their predecessors. This led
to loss of important data characteristics—especially the rare or
"tail" events of the original data distribution— and ultimately
caused the model to converge on a narrower, less diverse output, sometimes to a
near single-mode (delta function) distribution with low variance. In this case,
Jackrabbits.
More
https://www.nixenepublishing.com/product/ai-on-the-brink-open-access-special-feature/
Nvidia
and OpenAI to back major investment in UK AI infrastructure
Published
Fri, Sep 12 2025 7:14 AM EDT
Nvidia and OpenAI are in
discussions about backing a major investment in Britain focused on boosting
artificial intelligence infrastructure in the country.
The
two tech firms are discussing a sizable deal to support data center development
in the country which could ultimately be worth billions of dollars, a person
familiar with the matter told CNBC, confirming earlier reporting from the
Financial Times.
The
companies are still working through various processes at the moment with Nvidia
and cloud computing firm Nscale, said the person, who did not want to be
named due to the sensitivity of the issue.
They
added that an investment agreement has not yet been finalized. It is expected
to be unveiled next week during U.S. President Donald Trump’s state visit to
the U.K.
More
Nvidia
and OpenAI to back major investment in UK AI infrastructure
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt Clocks (usdebtclock.org)
Exponent
Calculator
Enter
values into any two of the input fields to solve for the third.
This
weekend’s music diversion. 1749 Fireworks from Handel, when part of the fireworks pavilion in Green Park burnt down. Approx. 8 minutes.
Handel: Music for the Royal Fireworks,
Overture.
Handel: Music for
the Royal Fireworks, Overture. - YouTube
Fire And 18th Century Traffic Jams: Handel
And The Royal Fireworks
----According to another account from the
Derby Mercury, the night itself started well. At about 8.30pm a few rockets
were sent up, followed by the firing of 101 cannon along Constitution Hill.
Then the fireworks began in earnest, watched by people crowding wherever they
could, including on roofs and boats. At 9.30pm, the wooden building that was
being used to launch the fireworks, somewhat inevitably, caught fire. Quick
thinking by carpenters pulling down some timbers stopped the flames spreading
across the whole edifice, but what was already alight burned until around 2am.
Fire And 18th
Century Traffic Jams: Handel And The Royal Fireworks | Londonist
Next, when shipping goes wrong. Approx. 16 minutes.
It
is Raining Container Boxes into the Port of Long Beach | MV Mississippi
September 9, 2025
Finally,
more EV failure. Approx. 4 minutes.
Lion
Electric School Buses Still Catching Fire
Lion Electric
School Buses Still Catching Fire - YouTube
With age comes wisdom, but sometimes age comes alone.
Oscar Wilde.
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