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 1st.
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.
More
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.
More
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
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