As always a useful summary from Guy. The report was mixed, not particularly weak especially in the context of such a low trend hiring requirement, UR was noise. More details below:

Don't you love being in an industry celebrating because unemployment went up

Just what the doctor ordered

Friendly reminder

I told Opus I wanted to start using much cheaper open weight models to perform certain automated tasks in my workflow It replied that it didn't think they could handle the tasks (which are very simple btw) AI alignment = alignment with Anthropic's revenues innit

Markets like to push until they find the pressure point Bonds are pushing

My broad equity market capitulation model which fired in March this year and April last year, is active again as of a week ago with index up here. Crazy.

Great advice, especially with social media designed to fuel emotional reactions. It helps me to frequently apply the "will this matter in a week?" filter.

I will say that if there is a US/Iran deal made in the coming weeks, it feels like there is a lot of pent up demand for financial assets given where rates are and the speed of the move, how oversold a good chunk of the stock market is, metals, etc.

Plot twist

quand on sait que tiktok recrute à coup de millions des ingés en neurosciences comportementales et des spécialistes du design persuasif pour hacker nos circuits dopaminergiques, je me félicite chaque jour de n'avoir jamais créé de compte sur cette plateforme mdr regardez ces études scientifiques en IRMF et eeg qui montrent très clairement quele format vidéo court attaque directement le cortex préfrontal et le cortex cingulaire antérieur (pour info ces zones gèrent le contrôle exécutif, la prise de décision et la régulation de l'attention) sachez qu’een bombardant le cerveau de micro stimuli imprévisibles, l'algo altère la densité de matière grise et réduit l'activité du réseau par défaut & cette surstimulation permanente entraîne une incapacité chronique à penser à long terme et détruit la capacité à être focus, 2 facultés qui pour moi sont littéralement indispensables à notre époque pour construire l'avenir  bref je pense que refuser d'entrer dans ce système, c'est simplement préserver son autonomie cognitive et la souveraineté de sa propre attention face à une ingénierie de l'addiction taillée sur mesure

Higher rates will still reduce demand and investment on a large part of the economy, even if AI spend is unaffected. Also the jump to Fed hikes create more inflation is not well defined here, and I don't think is true. 2022-23 is recent evidence of that. Especially some endless spiral of higher rates -> higher inflation -> higher rates, which seems totally unrealistic. Agree that the Fed can't easily address the inflation driven by the administration, but that doesn't mean they shouldn't at least normalize rates and remove the unnecessary accommodation. Not a policy mistake IMHO.

Bond volatility has reached a point that is usually unsustainable, meaning we are likely to see a final crash and local low soon or it's already in progress

It's on days like this that I remember why I lend a lot of my money to highly risky unprofitable private companies instead of the US government

Before you jump to the conclusion that nobody wants US Treasuries as capital flees due to poor fiscal management, check out the dollar. It's rocking today and back near the highs of the year.

Markets have taken the path I noted on Fed day, having shrugged off the hike. 25 bps was negligible, especially given it was already priced in. There is plenty of runway before another hike, and even then it's mostly priced in already (32 bps through EOY). The hiking cycle will bite when rates become high enough to damage investment. Markets can drop for other reasons in the meantime, whether oil spike, earnings disappointment, etc., not the Fed.

Alex Karp said AI labs may need to be nationalized instead of going public, because markets can't underwrite their unbounded liability. It's a good point and one I think of as an investor, and it's true that it would help to address the fundamental conflict between corporate profits and public safety. I'm thinking about parallels to the Cold War, where advancement wasn't driven by private sector initiatives but was carefully managed and regulated by governments due to the existential stakes involved. So if the potential liability from advanced AI systems is large enough (comparable to that of nuclear weapons) that private markets simply cannot underwrite or responsibly manage the risk, is the traditional model of profit driven innovation flawed in this case? That said, I see three challenges. 1. Stifling innovation. The Cold War was about incremental improvements on an existing technology whereas AI is more of a discovery process, requiring a lot of trial and error, failure and efficiency...not well suited for government. 2. The government is impacted by politics, election cycles, budget battles, etc. Basically we'd be replacing profit motives with political ones. 3. Shifting the risk from corporate to government doesn't remove the risk. You could argue that a corporation has more financial incentive to manage liability than a government. It's just not obvious to me. Seems to me a hybrid approach makes more sense, with heavy regulation, oversight, audits, etc.

Above the 2022 peak and the spike is just as rapid. Trucking companies and especially small independents in pain here.