One of AI's many challenges to potential regulation: its capability is doubling every 4-5 months. Compare to CPUs (Moore's Law) of 24 months, or nuclear warhead yields from 1945-61 of 17 months. From my column: wsj.com/tech/ai/ai-is-a-regu…

Deja Vu. I recall the same argument to @BIllAckman's here being made in 1999: as the Fed raised rates, Silicon Valley claimed it would have no effect because dot-coms didn't borrow. As that episode showed, raise rates enough & you can deflate any investment boom and bring inflation down.

Here's the problem with energy export bans... Countries that import energy prioritize sources based on price, reliability and security. The lower price, the better, obviously. But importers don't just choose on price. Reliability is whether the system can meet peak needs. Energy demand fluctuates, sometimes significantly. Winter Storm Uri was an extreme event in the US. Countries place high value on creating a system of suppliers and built infrastructure that can flex to meet those events. Security is broader. It asks whether a country has dependable access to supplies at reasonable costs despite geopolitical, infrastructure, or economic turmoil. One way to reduce that vulnerability is to secure supplies through long-term agreements with allies, even if they are somewhat more expensive. After Russia invaded Ukraine, and also during tariff negotiations, the US raised its hand. We said: 'Buy from us. You can trust us to deliver the combination of affordability, reliability, and security that others can't.' And they did. Europe and East Asia increased their purchases. The US has become a trusted supplier of energy to many countries. At least it has been. Calls for a domestic ban on diesel exports in response to high prices threaten that. The US can't claim to offer reliable and secure supplies if we change the rules stop delivering supplies they rely on when markets become stressed. Will countries still buy our energy if we price it low? yes. But they won’t buy the same quantities or pay the same premiums for American products if that supply becomes effectively interruptible whenever domestic politics become uncomfortable. The US isn’t the lowest-cost producer. The American energy industry prospers by offering the combination of price, reliability, and security that importers value. That reputation took years to build. Even discussing whether we will honor it during periods of stress risks diminishing its value.

The presumption that the Fed raising short-term rates reduces inflation is predicated on the belief that higher rates reduce demand and investment. But what if higher rates don’t reduce demand and investment because the demand for intelligence and energy is unaffected by higher rates because winning the race for super intelligence has a near infinite ROI and the demand for compute will remain incalculable. Why won’t higher rates at this unique moment in history therefore lead to more inflation as interest costs are embedded in everything? And the problem is compounded as the more the Fed raises rates, the more inflation we will have and the more the Fed will need to raise rates further and so on. But what if the old models don’t apply to the current paradigm and the Fed is wrong? I think the Fed might have just made a mistake. Am I right or am I wrong?

The whole U.S. energy industry plus two key businesses associations (the U.S. Chamber of Commerce and the National Association of Manufacturers) have sent a joint letter to President Trump urging him against limits of diesels exports. Unprecedented for a Republican White House.

It’s crazy how offside the sell side was to this hiking cycle. These weren’t from three months ago, they’re from three weeks ago.

JUST IN: Trump said Canada is destroying itself. This morning’s Trump post is less a policy brief than a warning shot. He frames Canada as a country unraveling in real time, open doors, weak screening, and a Liberal government he says is inviting a crisis it cannot control. The argument is blunt: mass, unvetted immigration is already showing up in the unemployment numbers, and the damage will soon be too large to reverse. Trump casts it as a political takeover, not just a border problem, and ends with a sarcastic “Oh Canada!”.

Carney pushes idea of making Canada 'associate member' of EU, WSJ reports reut.rs/4yAWSOQ reut.rs/4yAWSOQ

I just fixed my dishwasher with the help of ChatGPT. A trivial task. I had been about to order a new one. So this software has increased the country's real wealth yet decreased the measured GDP. The main economic indicator is structurally incapable of registering the thing that actually makes people better off, namely the growth of knowledge