US Government Still Shutdown. Bubbles Galore. More Lunacy.

Baltic Dry Index. 1901 -08             Brent Crude 65.54

Spot Gold 3938                 US 2 Year Yield 3.58 +0.03

US Federal Debt. 37.829 trillion

US GDP 30.311 trillion.

I can calculate the motion of heavenly bodies, but not the madness of people.

Sir Isaac Newton

With America, China and South Korea’s stock casinos closed today for holidays, Japan’s stock markets are busy reacting to their new conservative Prime Minister, committed to a “high-pressure economy.”

Elsewhere, is the GREAT AI BUBBLE getting ready to burst?

Look away from that soaring US Federal debt now.

Japan stocks hit record highs as Sanae Takaichi's LDP victory drives yen past 150

Published Sun, Oct 5 2025 7:38 PM EDT

Japan’s Nikkei 225 index jumped over 4% to hit a record high Monday after the country’s ruling Liberal Democratic Party elected staunch conservative Sanae Takaichi as its new leader Saturday, positioning her to become the country’s first female prime minister.

The early surge was led by gains in real estate, technology and consumer cyclical stocks. Yaskawa Electric Corp jumped over 20%, while Japan Steel Works was up 14%. Mitsubishi Heavy Industries and Kawasaki Heavy Industries added 13% and 12% respectively.

Given the government’s economic policy of a “high-pressure economy,” Takaichi is likely to ask the Bank of Japan to maintain its accommodative monetary policy, Crédit Agricole CIB wrote in a note over the weekend following the results, adding that she would be open to a 25-basis-point rate hike by the BOJ by January 2026.

“A Takaichi administration, recognising that the current economy is still weak, is expected to completely shift policy direction to a new approach (complete overhaul) that seeks to expand investment and demand through public-private partnerships,” CA-CIB’s note said.

Similarly, the Topix rose as much as 3% to hit an all-time high.

The yen weakened by over 1.72% to briefly hit the psychological mark of 150 against the greenback, before going to 149.97 per dollar.

The last time the yen weakened to the 150-level was in August, according to data from LSEG, raising concerns from Japan’s finance minister Katsunobu Kato. In October 2022, the yen briefly weakened beyond the 151 mark against the dollar, which prompted an intervention by the country’s Ministry of Finance.

“Our base case is for near-term losses in the JPY towards 150 as the market adjusts to the surprise, but not material weakness beyond,” Deutsche Bank wrote in a note published Monday.

While the probability of a hike by the Bank of Japan in October should fall, the market has only been pricing a terminal rate around 1%, which may still be achievable under Takaichi’s leadership.

“A weak yen has been contributing to domestic concerns from overtourism to property price, so further weakness from already depressed levels could be unwelcome even for the government,” the analysts added.

Japan’s 30-year bond yield rose over 10 basis points to 3.263%, while the yield on the 20-year debt added over six basis points to 2.674%. The benchmark 10-year bond yield is little changed at around 1.659%.

Australia’s ASX/S&P 200 rose 0.19%.

Hong Kong’s Hang Seng Index fell 0.22%, while the Hang Seng Tech Index declined 0.66%.

Chinese and South Korean markets were closed for holidays.

Last Friday in the U.S., the three major averages closed higher. The S&P 500 retreated from a record on Friday but held on to solid weekly gains despite a U.S. government shutdown dragging on for a third day, ticking up just 0.01% at 6,715.79.

The Nasdaq Composite declined 0.28% to settle at 22,780.51. The Dow Jones Industrial Average outperformed, trading higher by 238.56 points, or 0.51%, to finish at 46,758.28. The Russell 2000 also popped 0.72% to close at 2,476.18.

Asia-Pacific markets: Nikkei 225, Kospi, Nifty 50

Wall Street Week Ahead

Oct. 05, 2025 6:01 AM ET

Wall Street's focus this week will be on a scheduled speech from Federal Reserve Chair Jerome Powell and on earnings, with economic data taking a backseat due to being delayed by the U.S. government shutdown.

Powell is set to speak at a banking conference in Washington, D.C., on Thursday. Traders will be hearing from several other Fed policymakers, including Vice Chair for Supervision Michelle Bowman and Governor Stephen Miran.

This week also marks the final one before the third quarter earnings season begins. Number one U.S. carrier Delta Air Lines (DAL) and the world's third-largest soft drinks company, PepsiCo (PEP), highlight this week's reports.

Earnings

Earnings spotlight: Monday, October 6: Constellation Brands (STZ), Aehr Test Systems (AEHR). See the full earnings calendar.

Earnings spotlight: Tuesday, October 7: McCormick & Company (MKC), Saratoga Investment Corp (SAR). See the full earnings calendar.

Earnings spotlight: Wednesday, October 8: Richardson Electronics (RELL). See the full earnings calendar.

Earnings spotlight: Thursday, October 9: PepsiCo (PEP), Delta Air Lines (DAL), Levi Strauss (LEVI), Tilray (TLRY). See the full earnings calendar.

Wall Street Week Ahead | Seeking Alpha

Global week ahead: Bull markets, bubbles and ‘Swiftonomics’

Published Sat, Oct 4 2025 9:18 PM EDT Updated Sat, Oct 4 2025 10:01 PM EDT

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness,” Charles Dickens famously wrote. That aptly captures the dislocation between political events and market action as we go into the next week.

The U.S. government shutdown has stoked worries about its adverse impact globally, but it does not seem to have dampened the risk-on sentiment across major equity markets. The political deadlock in Washington, D.C. looks set to continue into next week, with concerns the Trump administration could use the funding freeze to permanently slash roles and cancel certain projects.

While there has been much research on what an extended shutdown could mean for stocks, major U.S. and European indexes have been notching record highs. That comes as fund flows data from the Bank of America shows $26 billion moved into global equities during the week ended Oct. 1, with a record $9.3 billion going into the technology sector.

But amid this optimism, another narrative is growing. An increasing number of market participants are warning that bubbles are forming in parts of the market, with some saying this could lead to a larger market correction.

Saxo’s warning is “don’t predict, prepare.” In a recent note, the bank said “the mood could hardly be more conflicted. Equity indices hover near record highs ... yet consumer sentiment remains close to historic lows,” encouraging investors to diversify to protect against instability.

There are red flags in the credit markets in particular. Barnaby Martin from Bank of America told “Squawk Box Europe” their recent survey showed credit investors have one of the “biggest overweights ever in the 20-year history” of that survey, warning there were increasing concerns about market bubbles.

Last week, U.S. car parts manufacturer First Brands filed for bankruptcy after revealing a $12 billion debt pile through the use of off-balance sheet financing. Famed short-seller Jim Chanos told the Financial Times he “suspects we are going to see more of these things,” warning the increasingly expansive private credit market has echoes of the subprime crisis.

A bubble that does not seem at risk of bursting is the one formed around multi-award-winning pop star Taylor Swift. Her latest album “The Life of a Showgirl” was released worldwide on Friday following months of anticipation for fans. It follows her record-breaking Eras Tour that topped $2 billion in ticket sales alone.

Global week ahead: Bull markets, bubbles and Swiftonomics

Why Fears of a Trillion-Dollar AI Bubble Are Growing

Investors have parted with unprecedented sums of money to help AI fulfil its lofty promise. But no one really knows how it will all pay off

October 4, 2025 at 1:00 PM UTC

For almost as long as the artificial intelligence boom has been in full swing, there have been warnings of a speculative bubble that could rival the dot-com craze of the late 1990s that ended in a spectacular crash and a wave of bankruptcies.

Tech firms are spending hundreds of billions of dollars on advanced chips and data centers, not just to keep pace with a surge in the use of chatbots such as ChatGPT, Gemini and Claude, but to make sure they’re ready to handle a more fundamental and disruptive shift of economic activity from humans to machines. The final bill may run into the trillions. The financing is coming from venture capital, debt and, lately, some more unconventional arrangements that have raised eyebrows on Wall Street.

Even some of AI’s biggest cheerleaders acknowledge the market is frothy, while still professing their belief in the technology’s long-term potential. AI, they say, is poised to reshape multiple industries, cure diseases and generally accelerate human progress.

Yet never before has so much money been spent so rapidly on a technology that, for all its potential, remains somewhat unproven as a profit-making business model. Tech industry executives who privately doubt the most effusive assessments of AI’s revolutionary potential — or at least struggle to see how to monetize it — may feel they have little choice but to keep pace with their rivals’ investments or risk being out-scaled and sidelined in the future AI marketplace.

What are the warning signs for AI?

When Sam Altman, the chief executive of ChatGPT maker OpenAI, announced a $500 billion AI infrastructure plan known as Stargate alongside other executives at the White House in January, the price tag triggered some disbelief. Since then, other tech rivals have ramped up spending, including Meta’s Mark Zuckerberg, who has pledged to invest hundreds of billions in data centers. Not to be outdone, Altman has since said he expects OpenAI to spend “trillions” on AI infrastructure.

To finance those projects, OpenAI is entering into new territory. In September, chipmaker Nvidia Corp. announced an agreement to invest up to $100 billion in OpenAI’s data center buildout, a deal that some analysts say raises questions about whether the chipmaker is trying to prop up its customers so that they keep spending on its own products.

The concerns have followed Nvidia, to varying degrees, for much of the boom. The dominant maker of AI accelerator chips has backed dozens of companies in recent years, including AI model makers and cloud computing providers. Some of them then use that capital to buy Nvidia’s expensive semiconductors. The OpenAI deal was far larger in scale.

OpenAI has also indicated it could pursue debt financing, rather than leaning on partners such as Microsoft Corp. and Oracle Corp. The difference is that those companies have rock-solid, established businesses that have been profitable for many years. OpenAI expects to burn through $115 billion of cash through 2029, The Information has reported.

Other large tech companies are also relying increasingly on debt to support their unprecedented spending. Meta, for example, turned to lenders to secure $26 billion in financing for a planned data center complex in Louisiana that it says will eventually approach the size of Manhattan. JPMorgan Chase & Co. and Mitsubishi UFJ Financial Group are also leading a loan of more than $22 billion to support Vantage Data Centers’ plan to build a massive data-center campus, Bloomberg News has reported.

So how about the payback?

By 2030, AI companies will need $2 trillion in combined annual revenue to fund the computing power needed to meet projected demand, Bain & Co. said in a report released in September. Yet their revenue is likely to fall $800 billion short of that mark, Bain predicted.

“The numbers that are being thrown around are so extreme that it’s really, really hard to understand them,” said David Einhorn, a prominent hedge fund manager and founder of Greenlight Capital. “I’m sure it’s not zero, but there’s a reasonable chance that a tremendous amount of capital destruction is going to come through this cycle.”

In a sign of the times, there’s also a growing number of less proven firms trying to capitalize on the data center goldrush. Nebius, an Amsterdam-based cloud provider that split off from Russian internet giant Yandex in 2024, recently inked an infrastructure deal with Microsoft worth up to $19.4 billion. And Nscale, a little-known British data center company, is working with Nvidia, OpenAI and Microsoft on build-outs in Europe. Like some other AI infrastructure providers, Nscale previously focused on another frothy sector: cryptocurrency mining.

More

Why AI Bubble Concerns Loom as OpenAI, Microsoft, Meta Ramp Up Spending - Bloomberg

Next, lunacy during the harvest full moon.

Jeff Bezos makes wild prediction about data centers as energy demand grows

 Updated Oct. 3, 2025, 12:52 p.m. ET

Amazon founder and executive chair Jeff Bezos predicted on Friday gigawatt-scale data centers will be built in space within the next 10 to 20 years and that continuously available solar energy meant they would eventually outperform those based on Earth.

Speaking at the Italian Tech Week in Turin, Bezos also compared the surge in artificial intelligence to the internet boom of the early 2000s, urging optimism despite the risk of speculative bubbles.

The concept of orbital data centers has gained traction among tech giants as those on Earth have driven up demand for electricity and water to cool their servers.

“These giant training clusters, those will be better built in space, because we have solar power there, 24/7. There are no clouds and no rain, no weather,” Bezos said in a public conversation with Ferrari and Stellantis Chairman John Elkann.

“We will be able to beat the cost of terrestrial data centers in space in the next couple of decades.”

Bezos said the shift to space infrastructure is part of a broader trend of using space to improve life on Earth.

“It already has happened with weather satellites. It has already happened with communication satellites. The next step is going to be data centers and then other kinds of manufacturing,” he said.

Hosting data centers in space has its own challenges, including the difficulty of maintenance and carrying out upgrades and the cost of launching rockets, as well as the risk the launches may fail.

The executive chair of Amazon said the AI wave shares traits with the dot-com era, when massive hype was followed by a crash.

“We should be extremely optimistic that the societal and beneficial consequences of AI, like we had with internet 25 years ago, are for real and there to stay,” he said.

“It is important to decorrelate the potential bubbles and their bursting consequences that might or might not happen from the actual reality,” Bezos said, adding that the benefits of AI were expected “to be broadly diffused and it will go everywhere.”

Jeff Bezos expects data centers will be built in space in 10 to 20 years

In other news, GPT-5s not wrong, you are.

Sam Altman Says the GPT-5 Haters Got It All Wrong

OpenAI's CEO explains that its large language model has been misunderstood—and that he's changed his attitude to AGI.

Oct 3, 2025 11:00 AM

OpenAI’s August launch of its GPT-5 large language model was somewhat of a disaster. There were glitches during the livestream, with the model generating charts with obviously inaccurate numbers. In a Reddit AMA with OpenAI employees, users complained that the new model wasn’t friendly, and called for the company to restore the previous version. Most of all, critics griped that GPT-5 fell short of the stratospheric expectations that OpenAI has been juicing for years. Promised as a game changer, GPT-5 might have indeed played the game better. But it was still the same game.

Skeptics seized on the moment to proclaim the end of the AI boom. Some even predicted the beginning of another AI Winter. “GPT-5 was the most hyped AI system of all time,” full-time bubble-popper Gary Marcus told me during his packed schedule of victory laps. “It was supposed to deliver two things, AGI and PhD-level cognition, and it didn't deliver either of those.” What’s more, he says, the seemingly lackluster new model is proof that OpenAI’s ticket to AGI—massively scaling up data and chip sets to make its systems exponentially smarter—can no longer be punched. For once, Marcus’ views were echoed by a sizable portion of the AI community. In the days following launch, GPT-5 was looking like AI’s version of New Coke.

Sam Altman isn’t having it. A month after the launch he strolls into a conference room at the company’s newish headquarters in San Francisco’s Mission Bay neighborhood, eager to explain to me and my colleague Kylie Robison that GPT-5 is everything that he’d been touting, and that all is well in his epic quest for AGI. “The vibes were kind of bad at launch,” he admits. “But now they’re great.” Yes, great. It’s true the criticism has died down. Indeed, the company’s recent release of a mind-bending tool to generate impressive AI video slop has diverted the narrative from the disappointing GPT-5 debut. The message from Altman, though, is that naysayers are on the wrong side of history. The journey to AGI, he insists, is still on track.

More, subscription required.

Sam Altman Says the GPT-5 Haters Got It All Wrong | WIRED

OPEC+ opts for modest oil output hike as supply glut fears mount

Published Sun, Oct 5 2025 10:19 AM EDT Updated Sun, Oct 5 2025 10:38 AM EDT

OPEC+ will raise oil output from November by 137,000 barrels per day (bpd), it said on Sunday, opting for the same fairly modest monthly increase as in October amid persistent worries over a looming supply glut.

The group comprising the Organization of the Petroleum Exporting Countries plus Russia and some smaller producers has increased its oil output targets by more than 2.7 million bpd this year, equating to about 2.5% of global demand.

The shift in policy after years of cuts is designed to regain market share from rivals such as U.S. shale producers.

Supply glut seen in fourth quarter

Oil prices settled higher on Friday but posted a weekly loss of 8.1% after news of potential increases to OPEC+ supply.

Brent crude futures closed up 42 cents, or 0.7%, at $64.53 a barrel by, while U.S. West Texas Intermediate crude was up 40 cents, or 0.7%, at $60.88.

For the week, Brent fell 8.1%, the largest weekly loss in over three months. WTI tumbled 7.4% in the week.

Prices are trading below this year’s peaks of $82 per barrel but above $60 per barrel seen in May.

In the run-up to the meeting, Russia and Saudi Arabia, the two biggest producers in the OPEC+ group, had different views, sources have said.

Russia was advocating for a modest output increase, the same as in October, to avoid pressuring oil prices and because it would struggle to raise output owing to sanctions over its war in Ukraine, two sources said this week.

Saudi Arabia would have preferred double, triple or even quadruple that figure — 274,000 bpd, 411,000 bpd or 548,000 bpd, respectively — because it has spare capacity and wants to regain market share more quickly, sources said ahead of the meeting.

OPEC views the global economic outlook as steady and market fundamentals as healthy because of low oil inventories, it said in a statement on Sunday.

More

OPEC+ opts for modest oil output hike as supply glut fears mount

Finally, Gaza. Will peace finally come to the mostly destroyed starving Gaza Ghetto?

Many American Jews sharply critical of Israel on Gaza, Post poll finds

Most Jews say Israel is committing war crimes — and 39 percent say genocide — while often distinguishing between the country and its leadership.

October 4, 2025

Many American Jews sharply disapprove of Israel’s conduct of the war in Gaza, with 61 percent saying Israel has committed war crimes and about 4 in 10 saying the country is guilty of genocide against the Palestinians, according to a Washington Post poll.

The findings are striking given the long-standing ties between the U.S. Jewish community and Israel, suggesting the potential for a historic breach over the Gaza war. Two years after Hamas militants poured into Israel on Oct. 7, 2023, killing some 1,200 people and taking 250 hostage, Israel’s retaliatory incursion has killed more than 67,000 Palestinians, according to the Gaza Health Ministry — which does not distinguish between combatants and civilians but says the majority of the dead are women and children — displaced many more, and led to widespread hunger in the territory.

American Jews are particularly unhappy with the current Israeli government. Sixty-eight percent give negative marks to Prime Minister Benjamin Netanyahu’s leadership of Israel, with 48 percent rating it “poor” — a 20-percentage-point jump from a Pew Research Center poll five years ago. But Jews also overwhelmingly blame Hamas, with 94 percent saying Hamas has committed war crimes against Israelis.

Jews in the poll are almost evenly divided over Israel’s actions in Gaza, with 46 percent approving and 48 percent opposing. That remains more supportive than many other groups: Among all Americans, 32 percent approved of Israel’s actions and 60 percent disapproved, according to a July Gallup poll.

Many of those who spoke to The Post in follow-up interviews said they supported Israel’s military incursion at first, given the brutality of the Hamas attack and the need to respond. But as the war has dragged on, with reports of atrocities accumulating and little evident progress, they have recoiled at Israel’s actions.

More

Many American Jews sharply critical of Israel on Gaza, Post poll finds - The Washington Post

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.

More tomorrow.

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.

MIT's concrete battery just got 10 times more powerful

October 02, 2025

Scientists have been working for the last few years on enhancing concrete – arguably the most common construction material on the planet – to store energy. That includes researchers at Massachusetts Institute of Technology (MIT), who found a way to combine cement, water, and carbon black to create a 'supercapacitor' for this purpose back in 2023.

They've now expanded the storage capacity by nearly 10 times, which means we're inching closer to concrete doubling as building-sized batteries.

This electron-conducting carbon concrete, or ec3 (pronounced "e-c-cubed") can hold enough energy to meet the daily needs of an average home in just 5 cubic meters, or about the volume of a typical basement wall.

That's down from 45 cubic meters that the previous version of this multifunctional material would have occupied to store the same amount of energy in 2023. Another way to look at it is, a cubic meter of this updated ec3 – roughly the size of a refrigerator – can store over 2 kWh of energy, which is enough to run an actual refrigerator for a day.

Previously, the MIT team created ec3 by first curing a concrete mixture with highly conductive carbon black, cement powder, and water; this material is then soaked in an electrolyte like potassium chloride that provides the charged particles that accumulate on the carbon structures. Two electrodes made of this special concrete, separated by a thin space or an insulating layer, form a supercapacitor that can store energy.

To improve the energy density of ec3, the team applied a high-resolution 3D imaging method called FIB-SEM tomography to first understand the workings of the nanocarbon black network inside the material. The researchers then experimented with a number of different electrolytes to find viable candidates for ec3, as well as with thicker electrodes that could store more energy than before and don't require post-curing steps. They landed on organic electrolytes that combined quaternary ammonium salts with a common conductive liquid called.

---- Creating larger and more diverse types of batteries is important for a future that's reliant on clean energy, as we need different ways to capture and release energy that's produced only when the sun shines or winds blow.

The team acknowledges that while most commercial batteries are much more energy dense than ec3, this feels like the first steps towards re-engineering a ubiquitous material and making it vastly more useful.

Source: MIT News

Concrete supercapacitors could power homes efficiently

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

World Debt Clocks (usdebtclock.org)

A body (stock casino) in motion tends to stay in motion unless acted on by an outside force.

With apologies to Sir Isaac Newton