I'm worried about Hassett becoming the FED chair for 2 reasons. Yes he is a Trump stooge to the choir. But he also lies about everything so FED credibility would be destroyed.
I read about a civil suit against Binance or it's leader for money laundering allowing the Oct.7th attack in Israel. I'd like to see that smelly sock that's been put in the back drawer creeping back out again. To paraphrase Trump on 60 Minutes...I don't really know the guy (whom I pardoned) but my sons have made a lot of money with him.
MAGA is going to try to make hay out of some petty California officials who've been skimming. $250,000 compared to $2,000,000,000 is like going after a traffic cop who's taking a $10 bribe for a parking offence.
After reading about the nationalization of Intel, some mineral companies, nuclear parts manufacturers in NYT yesterday, I thought maybe that's the only way the US can compete with China. Then I see Trump also invested a few million towards some of their corporate debt and with all of the shady financiers in the cabinet, Don Jr will be involved in some private equity funding in these deals. The looting will commence!
Matt Stoller just posted (here on his Big Substack blog) about the FTC decision on Real Page and Gail Slater's comments to him on Twitter regarding his commentary. It seems Pam Bondi and other Trump officials were involved with lobbying for Real Page? The idiot voters are no longer needed...80%+ of our society is going to be fleeced in one way or another.
The GOP totally wrecked any chance of success for Tr's residency when they confirmed obvious incompetents for key roles. It just shows that a lot of them believe their own talking points about government being a Potemkin village that can be struck down without any harm ensuing. It's easy to undermine things that you don't begin to understand, like even the economy itself in today's example.
Apparently the entire Republican Party has no understanding of history. After thirteen years of near anarchy, the colonists, now the United States, realized they needed a strong national government to collect taxes, provide for the national defense and provide for the common welfare. Republicans have lost that knowledge, if this bunch has ever understood it. Some very worthy predecessors, Lincoln, T. Roosevelt and Eisenhower certainly did. Where did all that common sense go?
Southern Democrats took over the party in the 1960's is mainly why it's no longer your genteel grandfather's country club republican golfers anymore. The bad guys from the Civil War switched affiliation.
I put most of the blame for the confirmation of RFK Jr. on that gullible idiot Senator Bill Cassidy, a former doctor who believed he could stop a confirmed RFK Jr. from blocking vaccination and gutting the CDC.
Yes! These Republican Senators are mostly career bureaucrats who have been around long enough to know better. They betrayed their constituents and their country.
Caligula’s horse Incitatus was said to live in a palace with many servants to serve him royal oats, and had jeweled harness, etc. Wikipedia:”Scholars suggest that the treatment of Incitatus by Caligula was an elaborate prank intended to ridicule and provoke the Senate, rather than a sign of insanity, or was perhaps a form of satire with the implication that a horse could perform a senator's duties.” I quite like that allusion.😂
certainly an improvement over the partial horses that Trump has been appointing (and the Senate confirming...) - as some country guy put it, the south end of a north-going horse. (Your directions may vary.)
The Senators fear for their families lives. After the Jan 6 attackers were released any (R) who does not toe the line is only a Truth Social post away from threats.
I agree that they participated in making their bed. Had the Senate not punted the conviction of Trump in January 2021 the picture would look different. Trump 2.0 has acted beautifully as Devil’s Advocate to show the foundational weak spots of the Constitution that need to be fixed. Pardon power, Cargo Cult Democracy vote counting algorithm, emoluments, …
Trump appoints or nominates only flunkies and sycophants who will do his bidding without question. Kevin Hassett is a perfect example, but then, so is every member of his Cabinet. To make it worse, the useless, spineless Senate Republicans have so far confirmed every Trump nominee no matter how questionable or unqualified they are. The Senate looks like jellyfish in Trump’s pool!
And that is why authoritarian states always devolve into kakistocracies. Competent, independent functionaries could try to steer or even <gasp> CONTRADICT Dear Leader, who is, as we all know, an infallible god-king.
Thus appointing the incompetent ensures that the functionaries' loyalty is to the source of all their good fortune, because they sure as hell couldn't get to where they are on their own merit.
You are right. Trump learned his lesson in his first administration. He did not like having competent, experienced Cabinet officers and advisors. Needless to say there is no one, including the Prez, who qualifies as experienced or qualified in his regime.
The net result was the same, one unqualified, incompetent nominee replaced by another unqualified, incompetent nominee. You may be sure that Trump did not want anyone in the AG role who knows what they are doing!
It is truly staggering that a long time and well known hack like Hassett could be even be in the frame for this job at the Fed. Maybe it's just all media hype promoted by Hassett and wiser counsels many prevail. The blow to the Fed's cred in markets would be enormous. Believe me I know of what I speak.
The man said he thought Trump would make an excellent Fed chair who understands monetary policy better than most…inflation would be a near given. That’s one way to handle the debt he keeps adding I suppose. Too bad crypto doesn’t seem to be the end all be all store of value as long touted by the cult. I’ve said it once and I’ll say it again…modern Ceausescu.
Same here. And then we are stuck with him for years beyond the end of Trump 2.0. Even if his term as Chair is not renewed in 4 years, he can be on the Board of Governors for 14 years.
Is that true? I don’t know their schedules so woukdnt know to miss the without someone telling me. Is this just a temporary delay due to the people who produce those being “away from the office” for almost two months or is Trump deliberately avoiding publishing info he won’t like? Or what?
It takes time to manufacture data showing what a 'genius' trump is that can withstand the statistical analysis and immediate mocking it will certainly deserve.
I noticed that Google News has started indexing the Paul Krugman substack as a news site. I've seen it twice in the Business section and once in Headlines. It's Top 40 time.
Gotta be careful with this characterization (next generation newspaper). Substack is a medium for writers with opinions. I suspect most readers—including me—only read what they want to read.
The main difference between old style newspapers and this, is the lack of a mandatory editorial process. In the old days (before the Fox ate the news) you could expect that factual statements had been vetted and verified. It was not a perfect process but good enough that you could expect presented facts to be true (and get disappointed when something was not). Substack is better than Fox but you still have to pick your "journalists" to avoid being mislead.
I only read what I want in the NYT too. What's missing on Substack are natural disaster stories. I have to dig for those unless Google throws them at me.
Pro-Publica is referenced often in links....maybe it's a good thing for it to be somewhat under the radar, as I never think of it until I see a link & read it.
I hadn't heard of Meidas before, but I see there is some important stupidity being reported there. "Energy Secretary wants Walmart backup generators powering US grid" lol.
Trashy vibe with all the popup ads though, unfortunately.
Right?!!! We've paid thru the nose here in Michigan to bring in new, and some green sources and are now being forced to incur the cost of running obsolete system! And just as we head into the winter months.
Meidas is very good at investigating and reporting facts that the GOP doesn't want you to know about. They predicted that the regime would actually conduct live firing over the i5 highway in California, despite even Left-wing media saying that they were being sensationalist because even T. is not that violent. He is.
Their media reach challenges that of Fox News and Rogan (views, downloads etc) which is an amazing achievement for such a new and smaller enterprise. I subscribe to it for that reason.
"How valuable will data centers currently under construction be 5 years from now? Will they be worth anything 10 years from now?" -- Excellent question. While advanced AI chips can last up to ten years, they get less efficient over time, and newer ones are much better. So all the chips will probably need to be replaced every 3-5 years. That's a LOT of money. But by then the revenues will be enough to cover it, right? ....right?...
IIRC, the Cisco servers we used at AT&T had a useful life of five years. That did not mean that they didn't work anymore, but company policy was to replace them at end-of-life. End of life was specified by Cisco; not AT&T. IIRC, each one cost about $8,000. This was about ten years ago. This equipment was used for order processing and Cloud Computing; not AI.
My television is 25 years old. I had it repaired about 18 years ago. The repair guy asked me what I did for a living. I said that I was a professor at the public university in our medium-sized city. He proclaimed: "I knew it!" He said in his experience professors tended to get their televisions repaired, while the vast majority of people just bought new ones and threw out the old ones. He was probably in his 60s and said that he had taught himself how to work on the new televisions. A connection was loose in mine (I could sometimes get it to work by hitting it), and he fixed it, and his repair survived a cross-town move and a move of a thousand miles, and it still works, with a digital antenna added. The picture is excellent, as is the sound.
I had baked espresso hazelnut biscotti dipped in chocolate the day he came to repair the set. (Yes, he made house calls.) His young son from a failed second marriage accompanied him. I sent them away with some biscotti.
I've learned to do some repairs, but it's gotten to the point that parts are hard to find. If not impossible. My grandfather and my dad could both repair almost anything back in the day because parts were easily available.
Appliance companies got legislation to do away with the 'right to repair' laws that made them keep parts for 10 years. Now you can spend $2000 for a refrigerator every 5 years instead of every 20.
Our province and city recently started participating in EPR
“Extended Producer Responsibility (EPR) will come into effect across Nova Scotia. These regulations shift the operational and financial responsibility for recycling packaging and paper products to the companies that produce, import or sell them.”
If there was a similar program for appliances we might see the right to repair reinstated. It is curious that these appliance companies seemed to be successful when appliances lasted a good deal longer. Did we wind up here because of the requirement to make the stock price go up? We had to make several trips to the dump in the last year or so because of a renovation project. It’s a sobering experience.
Sometimes there are options. When my Thermador oven's electrical panel died after ten years, Thermador no longer had the part. I had a great repair guy in the medium-sized city in which I lived at the time. He knew of a place in Illinois that actually might be able to repair the panel. I contacted them, my repair guy pulled out the panel, I packaged it and sent it to the company, which repaired it and sent it back to me. I called my repair guy, he reinstalled it, and I was back to baking. The oven remained with the house when I moved. For my new kitchen, I chose a Wolf, because they say they will support a product for life. We shall see.
I heard a knowledgeable podcast this week about the replacement time of the very high-end chips - suggesting maybe a couple of years.
SO the folks who say that all this investment will be there for the longer term, like the build-out of the electrical system (before a lot of uses of electricity were developed) or of fiber-optic cable (which is still there under the ground and which can be hooked up to today's or tomorrow's uses), are wrong. The investment in chips is very time-limited, unlike previous heavy capital investments.
So the bubble does not have durable sides, or useful leftovers once it pops.
Thanks for the pointer to "podcast Search Engine Colossus" - sad that there isn't a transcript, but so it goes. Zipped through both halves at 2.5x speed, with more than a little backing up and replaying to make sure I got the key points.
A lot of just wrong info in order to make a solid narrative. Hinton's 2012 paper was a breakthrough, but OpenAI wasn't started until 3 years later. Google published "Attention Is All You Need" in 2017, and ChatGPT built on this architecture.
There is a reason Hinton went to Google, not OpenAI.
Anyway, that is a couple of nits but there are quite a few of them.
At a high level, the narrative is that OpenAI created this technology universe and blew the industry away (neither statement is accurate), and this lit a fire under Musk who is quoted breathlessly without technical fact checking about the AI potential and future.
The actual quotes in the podcast about the longevity of the chips are from an industry analyst, a reseller, and a startup that has an incentive to make the lifetime sound short (so as to make their product sound more viable).
The 3-5 year number is the depreciation schedule, which is purely an accounting artifact. The IRS lets you depreciate a car over 6 years, but there are a lot of cars much older than that on the road.
I think the reseller has the best grip with their 6 year number. Their business model relies on knowing the actual life cycle. Notably, Amazon and Google both still have 7 year old GPUs in their cloud offerings.
And the fact is that the pace of advances is slowing. There is a reasonably good chance that GPUs bought today will still be valuable 10 years from now.
The parallel to the fiber plant is actually pretty good. The podcast highlights the simplicity of the fiber and its use. What it misses is that in the 90's these fibers were "lit" with 2.5 Gb/s transceivers. Current technology is 1000 times higher, and happened with numerous upgrades over the last 3 decades.
Worrying about data center obsolescence compared to fiber misses the fact that the buildings and facility level power and cooling are the parallel to the fiber, and the servers and AI systems are analogous to the transceivers.
The podcast is Search Engine, two parts entitled Colossus (what Musk calls his Memphis AI operation). Not the usual area of expertise of that podcast, but it seemed a creditable analysis.
The big question is when will revenues be enough to make massive AI data centers economically worthwhile.... if ever. That is at the core of the "to bubble or not to bubble" debate. Most of that investment appears unlikely to pay off, as it's used for general purpose AI like LLMs. But specialized AI that targets specific problems with a business case is more likely to pay off. Much of that will probably use much smaller infrastructure. Think, for example, robotics.
Take a look at the stock prices of all the internet companies making optical fibre, etc., back in the 2000 period. There were eventually revenues, but not before the absolute massacre of all the companies who predicted that the revenue would show up decades before it actually did.
1. Ultimately the revolution happened and many things were transformed. The absurdity of it was primarily in the short term opinions and money flows.
2. The valuations and hysteria were largely confined to small companies typically rushed to the public markets, the canonical example, Pets.com. But there much bigger and even more tragic/comical examples.
The current AI techno-tulip mania is similar and different:
1. It is focused either on big public (and profitable) companies or a few fantastically capitalized privates.
2. As an AI person, I believe that it is a transformative technology. The reality though is that SO FAR its economic value (especially to corporations) is not there. Everyone in the industry knows that this is a really hard problem - most of the experiments are failing.
In my view, the core tech problems need to be solved before the payoff will start to become congruent to the investment. Nothing to do with interest rates.
So far, everything AI appears to be either not actually useful, or actively harmful. It's used for deceit, for cheating in school (see, e.g., every middle and high school teacher tearing their hair out), and more cheating (see numerous lawyers who have been sanctioned for submitting briefs written by AI to the courts. [The reason we know the briefs were written by AI is that AI blithely makes up and mis-cites case authorities in ways comically transparent for the other side to see and call out.) Oh, and to create aggravation by appearing on our devices with no way to remove.
I quite agree with your last comment. I'm in the field and I've gotten enraged at the invasive way it is being deployed. Confession: I even wrote one of the companies excoriating them. That did a lot of good and they responded so kindly and with consideration. That last sentence is my own human lying hallucination. So, yes, it's got to do better.
I've got to really disagree with you, however, that AI is just useless or bad, even in the fields you mention). Yes, I have a personal stake in it (intellectually and financially) but there are lots of promising and real accomplishments. Some are quite foundational like protein folding (Nobel Prize) and many are humanistically intended (I happen to work on AI for aging and memory. No, not a revolting companion bot)
We live in a hyper-polarized world. AI isn't going to save us and bring about the final awakening (at least not this year...) but it's really not the devil either.
In this context, most relevant is your first point, that the realization of adequate revenue in near term looks to be...doubtful (to put it mildly). Meaning, yes, bubble, whatever use cases may eventually be developed.
I agree that AI may become a transfromative technology but I am skeptical that the transformation will be positive. The questions that nag me are: 1. Who trains the AI, that is to ask, who shapes its biases, and 2. From whence the ROI on investments this massive? The obvious answers to 1 are invariably troubling and the answer to 2 is either speculative (innovations that otherwise wouldn't have happened as quickly) or job elimination. Job elimination is the low-hanging fruit. Consider the disruptions caused by offshoring manufacturing, then consider job losses across a much broader range. Not too troubling for those in the top few percentiles but disastrous for everyone else and political nitroglycerine as well.
Capitalism does 'could' very well, 'should' not so much. The latter is part of why government is so necessary. Sadly, government has been largely captured by industry. So we are left to hope for Oz but the clever among us will plan for something quite different.
I agree with a lot of what you say here. My bet is that like all transformative technologies it will have both good and bad consequences (like all transformative technologies). I very much support getting through this with caution and humanity. The transformative potential is a complicated discussion. I don't find lots of the public discussion of this very informed or imaginative. There are exceptions like the NYTimes article about the way AI is actually affecting radiology (it's not replacing radiologists). In general, we need better frameworks.
I'm one of those capitalist AI people but I could not agree more with your point about the importance of government. I've never understood dogmatic neoliberalism and its reflexive hostility towards government. My whole field exists because of the government and enlightened science policy. We have no right to privatize the gains while leaving the costs and damages to the public to sort out.
IMHO, neoliberalism is all about reducing government oversight so much that the hyper-rich capitalists can plunder the economy. They can do whatever they want to with no regard for anyone or anything else. Am I too cynical? Look around right now.
Thank you. I'm not even sure why I participated here. I often want to stay out of the fray. On the one side, there are the singularity folks who are all about the rapture that will come and make them quadrillionaires (even better than a cloud with a harp). There is plenty of venom even in that community. Then most of the public dismisses and reviles the effort. I have no interest in getting in the middle.
PK is exactly right, even more than the economic arguments, that interest rates are really beside the point. The simple fact of the matter from my point of view is that AI hysteria has cut both ways. I know precisely why AI projects fail 95% of the time (recent MIT study) in enterprises. There are reasons for that and the economic value won't be tapped until fundamental issues are solved.
Job replacement is an old fear and I get it. Check out the doorman's fallacy and look at the history of ATMs and lots of other tech. The story is complicated and we live in simplistic rage times.
A number of years ago I was mis-diagnosed with a terminal cancer. I was shuffled off to hospice. The radiologists who diagnosed me via a brain scan were tremendously smart well-intentioned people. In studying this, I discovered various kinds of statistical anomalies that could have put brakes on this diagnostic rush (it was a weird case). I think AI integrated into radiology in a valuable way might have been able to save me from a month thinking about exercising my right to physician assisted suicide.
Absolutely AI will be beneficial in diagnosis, especially in scans. It can be trained on millions of scans, analyze minute differences and see patterns over large, large data sets. The training data can be made on relevant and correct information and won't be contaminated by ruminations from crazy people on the internet.
Yes: I also think that there are a lot of very targeted use cases for AI that involve medicine, pharmacology, and probably most other other scientific research fields. What about weather forecasting, for example? (Oh wait, the Regime is no longer supplying satellite data for weather forecasting.)
I don't delve into what's actually happening with AI investment, but my impression is that venture capitalists are all flocking to the LLMs, the language-based AI that offers the sparkling promise of getting rid of all your human employees in business firms.
A smart person has noted lately that large language models do not answer questions they are asked. Instead, they respond with *what an answer to the question would look like.* They are very good at that, so the language used is often correct, and the examples are often correct - often, but not always, because that's not how they work. They don't connect to the real world of the questioner, they connect to the masses of available text about the subject of the question.
So if they have to make up legal case names or historical events to complete the answer (of what an answer might look like), that's just part of their function, not an error. It's a feature, not a bug, and can't be fixed.
I know people who have looked themselves up on LLMs and discovered that they had died some years previously - because they *might* have!
This is a different function from scanning scientific or medical data for patterns and anomalies. When I ask for an answer to a direct question, I am not looking for patterns - but that's what I get.
Thanks for comment. I’ve been wary of comparing AI situation with dot.com. The latter burst as it became obvious most dot.coms did not possess intellectual property they could defend. AI situation seems unsettled for other reasons. Not sure the difference is taken into account by Krugman.
IMHO humanity should focus on becoming sustainable first, see if AI is useful for our society, and move carefully. Small chance that this happens where Bitcoins are trillions in valuation. Here an AI created video how Bitcoin looks to ET in the year 2140.
Trump as Iago would be -- YOU PICKED A BLACK MAN TO HEAD VENICE'S MILITARY INSTEAD OF ME, THE BESTEST EVER!!! DEI, DEI, DEI. I'LL SUE THE CITY. THIS IS TREASON! AND THAT DESEMONA, WOMEN AM I RIGHT? THEY ARE SO STUPID; THEY DON'T KNOW WHAT'S BEST FOR THEM. FIX THIS NOW!!! THANK YOU FOR YOUR ATTENTION TO THIS MATTER.
My wife ran bookstores till she retired. Bookstores sell more than books. They usually sell trinkets of all sorts including toys, science kits and so on. Most small retail depends on small items that help boost sales in the Fall as the holidays come. Almost all are imported from low wage countries also from China which is now middle class.
My niece sells bar ware to restaurants and bars. Most of their goods are imported. (Maybe all). The tariffs have made the business untenable.
Small business can't talk to Donald Trump in a private meeting at the White House. so they can't tell him how bad things are. But it is bad.
It is rare that a president promulgates policy so completely ridiculous that it does not need debate. It is just STUPID.
It's not as if Trump would care about those small business owners' plights. It's the big dudes that he cares about - the ones who can donate millions to him...
He has driven many small businesses into bankruptcy because his company did not pay them. I do not understand why owners and employees of small businesses voted for him either time.
AI and crypto are an anathema . I have AI on my phone and computer. Did I put them there? No, they are like viruses and leeches that are forced on us by the tech industry. Really drives me crazy that they have the ability to latch on where ever it please.
Not only that, but now some organizations I work for are having to put a header on their emails telling everyone not to read the AI summary above that header because it's often wrong.
It’s the unholy alliance of business and government. Government is meant to be a watchdog, not an enabler. This time, if there is a bail out (and there always is) let’s bail out the people whose retirement accounts have plummeted, their life savings disappeared, and while we are at it, asset forfeiture of the CEO billions. (My musical coda is, “Ah yes, I remember it well.” )
Thank you, Professor for the article! I hope for the sake of America, Mr. Powell stays at the helm of the Fed he stands in control! My concern is will America continue the slash according to economic figures! Depression ahead!
Something about the market staying irrational longer than you can stay solvent?
What we need resurrected from the old dot-com boom days is something like Phillip Kaplan's "F*ckedCompany dot com. It was brilliant and pointed out both the rampant stupidity of the day and all the signs of the coming crash. Maybe I can program Chat GPT to run such a site!
I have often thought of Pud's site! We do need it back, or another one! Fun fact: the main webpage as of 9/11/2001 has been archived by the Library of Congress as part of the 9/11 archive. https://www.loc.gov/item/lcwaN0020126/
"Shizoid" is the wrong diagnosis. The market has a mood disorder and is resistant to therapeutic intervention by chemicals or therapists because it does not think there is anything wrong with its thought processes.
The simple solution to the problem of AI investment paying off - and it’s so obvious I can’t believe no one has done it yet - is to ask the AI directly (Grok, ChatGPT, etc) to develop a profitable business model.
Why has no one done this yet? Just ask the infallible AI what to do next. Simple!
How much of the obsession with Fed rates is tied to the fact that many of these AI companies (including increasingly the Mag7 hyperscalers) are now shifting from free cash flow to debt to finance their CapEx?
They're essentially loaning money to each other incestually to pump it all up. Eventually (IMHO soon) the house of cards will fall and do serious damage to the world economy. There have been several good articles by respected economists and financial experts about it.
The caveat here: AI is not a product. It's a feature. Ultimately AI tech will be an important part of the other products we use and pay for, but as a value-add, not as the core product. Take that to heart when looking at valuations and the bubble.
AI has ruined editing in Microsoft Photos. I used to use Photos for very quick edits, like cropping and erasing a small part of an image. Now AI "knows better" what I want to erase and it makes everything a giant mess. I, too, scream at my computer.
I'm worried about Hassett becoming the FED chair for 2 reasons. Yes he is a Trump stooge to the choir. But he also lies about everything so FED credibility would be destroyed.
Pam Bondi, Pete Hegseth, Lindsey Halligan, Caligula's horse...
Note that all of these clowns were confirmed by the Republican Senate. I blame the Senate nearly as much as I blame Trump himself
Dems should use this as a club to beat R Senators with.
Are enough voters actually aware of the fraud and finagling of Trump's admin?
Not yet, but it's growing.
I read about a civil suit against Binance or it's leader for money laundering allowing the Oct.7th attack in Israel. I'd like to see that smelly sock that's been put in the back drawer creeping back out again. To paraphrase Trump on 60 Minutes...I don't really know the guy (whom I pardoned) but my sons have made a lot of money with him.
MAGA is going to try to make hay out of some petty California officials who've been skimming. $250,000 compared to $2,000,000,000 is like going after a traffic cop who's taking a $10 bribe for a parking offence.
If FOX News doesn't report on GOP corruption, conservative America will never even know about it.
After reading about the nationalization of Intel, some mineral companies, nuclear parts manufacturers in NYT yesterday, I thought maybe that's the only way the US can compete with China. Then I see Trump also invested a few million towards some of their corporate debt and with all of the shady financiers in the cabinet, Don Jr will be involved in some private equity funding in these deals. The looting will commence!
Matt Stoller just posted (here on his Big Substack blog) about the FTC decision on Real Page and Gail Slater's comments to him on Twitter regarding his commentary. It seems Pam Bondi and other Trump officials were involved with lobbying for Real Page? The idiot voters are no longer needed...80%+ of our society is going to be fleeced in one way or another.
It won't help if the people who vote for the R Senators don't have media that cover what Democrats say.
I'm sure they'll try. We'll see how successful they'll be.
Yes. Every single GOP senator who
decided that bowing down to Trump was more important than the welfare of our democracy is to blame.
The GOP totally wrecked any chance of success for Tr's residency when they confirmed obvious incompetents for key roles. It just shows that a lot of them believe their own talking points about government being a Potemkin village that can be struck down without any harm ensuing. It's easy to undermine things that you don't begin to understand, like even the economy itself in today's example.
Apparently the entire Republican Party has no understanding of history. After thirteen years of near anarchy, the colonists, now the United States, realized they needed a strong national government to collect taxes, provide for the national defense and provide for the common welfare. Republicans have lost that knowledge, if this bunch has ever understood it. Some very worthy predecessors, Lincoln, T. Roosevelt and Eisenhower certainly did. Where did all that common sense go?
Southern Democrats took over the party in the 1960's is mainly why it's no longer your genteel grandfather's country club republican golfers anymore. The bad guys from the Civil War switched affiliation.
Nominal affiliation, to be sure
I put most of the blame for the confirmation of RFK Jr. on that gullible idiot Senator Bill Cassidy, a former doctor who believed he could stop a confirmed RFK Jr. from blocking vaccination and gutting the CDC.
Agreed. We must hold the Republican Senate accountable.
Halligan was an interim appointment. Not confirmed.
Yes! These Republican Senators are mostly career bureaucrats who have been around long enough to know better. They betrayed their constituents and their country.
I like the implied application to Caligula's horse, though I don't know enough about Roman history to be sure of it.
Caligula’s horse Incitatus was said to live in a palace with many servants to serve him royal oats, and had jeweled harness, etc. Wikipedia:”Scholars suggest that the treatment of Incitatus by Caligula was an elaborate prank intended to ridicule and provoke the Senate, rather than a sign of insanity, or was perhaps a form of satire with the implication that a horse could perform a senator's duties.” I quite like that allusion.😂
Caligula's horse would be an improvement.
The neighs have it
Willlllber!
You stole my comment before I could say it... ;)
Agreed!
Sorry, but not sorry.
I think we only got part of the horse. It's the south end of a northbound horse.
Do you mean what we have is mostly an ass?
I recall a presentation of The Golden Ass in London, which has the dialogue:
...turned himself into an ass.
A donkey.
An ass.
Ass, my arse!
I've waited a long time for the opportunity to quote this. Thank you.
certainly an improvement over the partial horses that Trump has been appointing (and the Senate confirming...) - as some country guy put it, the south end of a north-going horse. (Your directions may vary.)
🤣
I would go with the horse..
The speed at which the orange one finds the least qualified and most dangerous appointments is astounding.
And, Paul - another great musical coda.
Also astounding is that those dangerous appointments are ratified by a majority of senators.
The Senators fear for their families lives. After the Jan 6 attackers were released any (R) who does not toe the line is only a Truth Social post away from threats.
Hey, they ran for the job & the threats are coming from THEIR base. I feel for the judges, but not for the GOP in Congress.
I agree that they participated in making their bed. Had the Senate not punted the conviction of Trump in January 2021 the picture would look different. Trump 2.0 has acted beautifully as Devil’s Advocate to show the foundational weak spots of the Constitution that need to be fixed. Pardon power, Cargo Cult Democracy vote counting algorithm, emoluments, …
https://www.trashwalker.org/blog/cargo-cult-democracy/
Trump appoints or nominates only flunkies and sycophants who will do his bidding without question. Kevin Hassett is a perfect example, but then, so is every member of his Cabinet. To make it worse, the useless, spineless Senate Republicans have so far confirmed every Trump nominee no matter how questionable or unqualified they are. The Senate looks like jellyfish in Trump’s pool!
He doesn't have a cabinet. He has a junk drawer.
And that is why authoritarian states always devolve into kakistocracies. Competent, independent functionaries could try to steer or even <gasp> CONTRADICT Dear Leader, who is, as we all know, an infallible god-king.
Thus appointing the incompetent ensures that the functionaries' loyalty is to the source of all their good fortune, because they sure as hell couldn't get to where they are on their own merit.
You are right. Trump learned his lesson in his first administration. He did not like having competent, experienced Cabinet officers and advisors. Needless to say there is no one, including the Prez, who qualifies as experienced or qualified in his regime.
In other words, being surrounded only by lackey “yes men,“ there’s no one to say “no” or push back on bad ideas.
Meaning, we get… lots of bad ideas.
The emperor has no clothes.
but excellent fashion consultants...
Oh, but they failed to confirm Matt Gaetz as AG. But of course cancelled that "win" by confirming Pam Bondi
The net result was the same, one unqualified, incompetent nominee replaced by another unqualified, incompetent nominee. You may be sure that Trump did not want anyone in the AG role who knows what they are doing!
the music AND the video itself - both sooooh classic
Right? Was just thinking how ironic to be dancing in my chair facing impending recession and AI burst.
It is truly staggering that a long time and well known hack like Hassett could be even be in the frame for this job at the Fed. Maybe it's just all media hype promoted by Hassett and wiser counsels many prevail. The blow to the Fed's cred in markets would be enormous. Believe me I know of what I speak.
Put him under oath, let him commit perjury, impeach his ass.
Agree but when data missing from last month finally comes out…
Will we ever see the data for last month? Maybe!
Only after it's been thoroughly massaged, if not outright made up out of thin air .
The man said he thought Trump would make an excellent Fed chair who understands monetary policy better than most…inflation would be a near given. That’s one way to handle the debt he keeps adding I suppose. Too bad crypto doesn’t seem to be the end all be all store of value as long touted by the cult. I’ve said it once and I’ll say it again…modern Ceausescu.
Same here. And then we are stuck with him for years beyond the end of Trump 2.0. Even if his term as Chair is not renewed in 4 years, he can be on the Board of Governors for 14 years.
I think that will be the case no matter who Trumpkopf installs.
Dr Krugman please comment on the Trump regime not publishing GDP, inflation, and jobs reports.
Is that true? I don’t know their schedules so woukdnt know to miss the without someone telling me. Is this just a temporary delay due to the people who produce those being “away from the office” for almost two months or is Trump deliberately avoiding publishing info he won’t like? Or what?
Both.
It takes time to manufacture data showing what a 'genius' trump is that can withstand the statistical analysis and immediate mocking it will certainly deserve.
Marlon Weems has an excellent analysis
FWIW, part of it is due to the shutdown stopping that work from happening.
Yes, please
Blatant ostriching
Come for the wonk, stay for the music.
I noticed that Google News has started indexing the Paul Krugman substack as a news site. I've seen it twice in the Business section and once in Headlines. It's Top 40 time.
Substack is a next generation newspaper.
Gotta be careful with this characterization (next generation newspaper). Substack is a medium for writers with opinions. I suspect most readers—including me—only read what they want to read.
The main difference between old style newspapers and this, is the lack of a mandatory editorial process. In the old days (before the Fox ate the news) you could expect that factual statements had been vetted and verified. It was not a perfect process but good enough that you could expect presented facts to be true (and get disappointed when something was not). Substack is better than Fox but you still have to pick your "journalists" to avoid being mislead.
Some stacks are the yellow journalism, some are small town news, some are reputable.
I only read what I want in the NYT too. What's missing on Substack are natural disaster stories. I have to dig for those unless Google throws them at me.
I agree. I find i consult it and believe it more often than any other news service, except The Atlantic.
Pro-Publica is referenced often in links....maybe it's a good thing for it to be somewhat under the radar, as I never think of it until I see a link & read it.
The Atlantic is doing a lot of sane-washing these days.
They sane washed RFK Jr to some extent just the other day.
I don’t think we know what is really going on from looking into our PADs! (Personal Anxiety Dispenser)
Deserves it.
I've seen his posts referenced in "legacy media" news articles, and now I'm starting to see Meidas referenced as well.
I hadn't heard of Meidas before, but I see there is some important stupidity being reported there. "Energy Secretary wants Walmart backup generators powering US grid" lol.
Trashy vibe with all the popup ads though, unfortunately.
Meidas is a very credible site, well reported by smart people. One of the big successes of the Trump-era substack phenomenon.
They even outperform Rogan in media reach!
https://newrepublic.com/article/194187/meidastouch-ben-meiselas-liberal-media-bigger-rogan
Another “Emergency” Order to Keep Obsolete Coal Plant Running
https://thinc.blog/2025/11/23/another-emergency-order-to-keep-obsolete-coal-plant-running/
Right?!!! We've paid thru the nose here in Michigan to bring in new, and some green sources and are now being forced to incur the cost of running obsolete system! And just as we head into the winter months.
Meidas is very good at investigating and reporting facts that the GOP doesn't want you to know about. They predicted that the regime would actually conduct live firing over the i5 highway in California, despite even Left-wing media saying that they were being sensationalist because even T. is not that violent. He is.
Their media reach challenges that of Fox News and Rogan (views, downloads etc) which is an amazing achievement for such a new and smaller enterprise. I subscribe to it for that reason.
Google News feeds *you* sources it thinks you'll like. MAGAts aren't being shown PK's substack, I guarantee.
Amen!
"How valuable will data centers currently under construction be 5 years from now? Will they be worth anything 10 years from now?" -- Excellent question. While advanced AI chips can last up to ten years, they get less efficient over time, and newer ones are much better. So all the chips will probably need to be replaced every 3-5 years. That's a LOT of money. But by then the revenues will be enough to cover it, right? ....right?...
IIRC, the Cisco servers we used at AT&T had a useful life of five years. That did not mean that they didn't work anymore, but company policy was to replace them at end-of-life. End of life was specified by Cisco; not AT&T. IIRC, each one cost about $8,000. This was about ten years ago. This equipment was used for order processing and Cloud Computing; not AI.
Even adide from technological advances, it is sadly cheaper to replace than to repair - has been for many decades. Not very environmentally friendly.
My father never adjusted to the fact that he couldn't get a television repaired anymore.
My television is 25 years old. I had it repaired about 18 years ago. The repair guy asked me what I did for a living. I said that I was a professor at the public university in our medium-sized city. He proclaimed: "I knew it!" He said in his experience professors tended to get their televisions repaired, while the vast majority of people just bought new ones and threw out the old ones. He was probably in his 60s and said that he had taught himself how to work on the new televisions. A connection was loose in mine (I could sometimes get it to work by hitting it), and he fixed it, and his repair survived a cross-town move and a move of a thousand miles, and it still works, with a digital antenna added. The picture is excellent, as is the sound.
I had baked espresso hazelnut biscotti dipped in chocolate the day he came to repair the set. (Yes, he made house calls.) His young son from a failed second marriage accompanied him. I sent them away with some biscotti.
Thanks for that nice story!
My dishwasher is 35 years old! I lost my last car in Hurricane Helene. It was 22 years old and was just like a new car.
I've learned to do some repairs, but it's gotten to the point that parts are hard to find. If not impossible. My grandfather and my dad could both repair almost anything back in the day because parts were easily available.
Appliance companies got legislation to do away with the 'right to repair' laws that made them keep parts for 10 years. Now you can spend $2000 for a refrigerator every 5 years instead of every 20.
Our province and city recently started participating in EPR
“Extended Producer Responsibility (EPR) will come into effect across Nova Scotia. These regulations shift the operational and financial responsibility for recycling packaging and paper products to the companies that produce, import or sell them.”
If there was a similar program for appliances we might see the right to repair reinstated. It is curious that these appliance companies seemed to be successful when appliances lasted a good deal longer. Did we wind up here because of the requirement to make the stock price go up? We had to make several trips to the dump in the last year or so because of a renovation project. It’s a sobering experience.
Sometimes there are options. When my Thermador oven's electrical panel died after ten years, Thermador no longer had the part. I had a great repair guy in the medium-sized city in which I lived at the time. He knew of a place in Illinois that actually might be able to repair the panel. I contacted them, my repair guy pulled out the panel, I packaged it and sent it to the company, which repaired it and sent it back to me. I called my repair guy, he reinstalled it, and I was back to baking. The oven remained with the house when I moved. For my new kitchen, I chose a Wolf, because they say they will support a product for life. We shall see.
I heard a knowledgeable podcast this week about the replacement time of the very high-end chips - suggesting maybe a couple of years.
SO the folks who say that all this investment will be there for the longer term, like the build-out of the electrical system (before a lot of uses of electricity were developed) or of fiber-optic cable (which is still there under the ground and which can be hooked up to today's or tomorrow's uses), are wrong. The investment in chips is very time-limited, unlike previous heavy capital investments.
So the bubble does not have durable sides, or useful leftovers once it pops.
Thanks for the pointer to "podcast Search Engine Colossus" - sad that there isn't a transcript, but so it goes. Zipped through both halves at 2.5x speed, with more than a little backing up and replaying to make sure I got the key points.
A lot of just wrong info in order to make a solid narrative. Hinton's 2012 paper was a breakthrough, but OpenAI wasn't started until 3 years later. Google published "Attention Is All You Need" in 2017, and ChatGPT built on this architecture.
There is a reason Hinton went to Google, not OpenAI.
Anyway, that is a couple of nits but there are quite a few of them.
At a high level, the narrative is that OpenAI created this technology universe and blew the industry away (neither statement is accurate), and this lit a fire under Musk who is quoted breathlessly without technical fact checking about the AI potential and future.
The actual quotes in the podcast about the longevity of the chips are from an industry analyst, a reseller, and a startup that has an incentive to make the lifetime sound short (so as to make their product sound more viable).
The 3-5 year number is the depreciation schedule, which is purely an accounting artifact. The IRS lets you depreciate a car over 6 years, but there are a lot of cars much older than that on the road.
I think the reseller has the best grip with their 6 year number. Their business model relies on knowing the actual life cycle. Notably, Amazon and Google both still have 7 year old GPUs in their cloud offerings.
And the fact is that the pace of advances is slowing. There is a reasonably good chance that GPUs bought today will still be valuable 10 years from now.
The parallel to the fiber plant is actually pretty good. The podcast highlights the simplicity of the fiber and its use. What it misses is that in the 90's these fibers were "lit" with 2.5 Gb/s transceivers. Current technology is 1000 times higher, and happened with numerous upgrades over the last 3 decades.
Worrying about data center obsolescence compared to fiber misses the fact that the buildings and facility level power and cooling are the parallel to the fiber, and the servers and AI systems are analogous to the transceivers.
Can you mention the podcast name? I would like to check out the argument.
The podcast is Search Engine, two parts entitled Colossus (what Musk calls his Memphis AI operation). Not the usual area of expertise of that podcast, but it seemed a creditable analysis.
Wow. Pretty amazing that Cisco was in charge of that decision for AT&T.
Most likely a support issue that was driven by the book value of the fully depreciated server instead of the actual support costs.
And so much water and land will have been appropriated for these data centers that will become mausoleum for the promises of AI...
The ultimate in planned obsolescence.
The big question is when will revenues be enough to make massive AI data centers economically worthwhile.... if ever. That is at the core of the "to bubble or not to bubble" debate. Most of that investment appears unlikely to pay off, as it's used for general purpose AI like LLMs. But specialized AI that targets specific problems with a business case is more likely to pay off. Much of that will probably use much smaller infrastructure. Think, for example, robotics.
Take a look at the stock prices of all the internet companies making optical fibre, etc., back in the 2000 period. There were eventually revenues, but not before the absolute massacre of all the companies who predicted that the revenue would show up decades before it actually did.
Right, definitely, most likely...
7 year old Nvidia GPUs are available at Google Cloud and Amazon AWS.
They are pretty cheap and perfectly fine for relatively complex inference work.
I was part of the dot com boom:
1. Ultimately the revolution happened and many things were transformed. The absurdity of it was primarily in the short term opinions and money flows.
2. The valuations and hysteria were largely confined to small companies typically rushed to the public markets, the canonical example, Pets.com. But there much bigger and even more tragic/comical examples.
The current AI techno-tulip mania is similar and different:
1. It is focused either on big public (and profitable) companies or a few fantastically capitalized privates.
2. As an AI person, I believe that it is a transformative technology. The reality though is that SO FAR its economic value (especially to corporations) is not there. Everyone in the industry knows that this is a really hard problem - most of the experiments are failing.
In my view, the core tech problems need to be solved before the payoff will start to become congruent to the investment. Nothing to do with interest rates.
So far, everything AI appears to be either not actually useful, or actively harmful. It's used for deceit, for cheating in school (see, e.g., every middle and high school teacher tearing their hair out), and more cheating (see numerous lawyers who have been sanctioned for submitting briefs written by AI to the courts. [The reason we know the briefs were written by AI is that AI blithely makes up and mis-cites case authorities in ways comically transparent for the other side to see and call out.) Oh, and to create aggravation by appearing on our devices with no way to remove.
I quite agree with your last comment. I'm in the field and I've gotten enraged at the invasive way it is being deployed. Confession: I even wrote one of the companies excoriating them. That did a lot of good and they responded so kindly and with consideration. That last sentence is my own human lying hallucination. So, yes, it's got to do better.
I've got to really disagree with you, however, that AI is just useless or bad, even in the fields you mention). Yes, I have a personal stake in it (intellectually and financially) but there are lots of promising and real accomplishments. Some are quite foundational like protein folding (Nobel Prize) and many are humanistically intended (I happen to work on AI for aging and memory. No, not a revolting companion bot)
We live in a hyper-polarized world. AI isn't going to save us and bring about the final awakening (at least not this year...) but it's really not the devil either.
In this context, most relevant is your first point, that the realization of adequate revenue in near term looks to be...doubtful (to put it mildly). Meaning, yes, bubble, whatever use cases may eventually be developed.
I agree that AI may become a transfromative technology but I am skeptical that the transformation will be positive. The questions that nag me are: 1. Who trains the AI, that is to ask, who shapes its biases, and 2. From whence the ROI on investments this massive? The obvious answers to 1 are invariably troubling and the answer to 2 is either speculative (innovations that otherwise wouldn't have happened as quickly) or job elimination. Job elimination is the low-hanging fruit. Consider the disruptions caused by offshoring manufacturing, then consider job losses across a much broader range. Not too troubling for those in the top few percentiles but disastrous for everyone else and political nitroglycerine as well.
Capitalism does 'could' very well, 'should' not so much. The latter is part of why government is so necessary. Sadly, government has been largely captured by industry. So we are left to hope for Oz but the clever among us will plan for something quite different.
I agree with a lot of what you say here. My bet is that like all transformative technologies it will have both good and bad consequences (like all transformative technologies). I very much support getting through this with caution and humanity. The transformative potential is a complicated discussion. I don't find lots of the public discussion of this very informed or imaginative. There are exceptions like the NYTimes article about the way AI is actually affecting radiology (it's not replacing radiologists). In general, we need better frameworks.
I'm one of those capitalist AI people but I could not agree more with your point about the importance of government. I've never understood dogmatic neoliberalism and its reflexive hostility towards government. My whole field exists because of the government and enlightened science policy. We have no right to privatize the gains while leaving the costs and damages to the public to sort out.
IMHO, neoliberalism is all about reducing government oversight so much that the hyper-rich capitalists can plunder the economy. They can do whatever they want to with no regard for anyone or anything else. Am I too cynical? Look around right now.
You make great points from an insider's viewpoint. I hope you start writing about them on your Substack page.
Thank you. I'm not even sure why I participated here. I often want to stay out of the fray. On the one side, there are the singularity folks who are all about the rapture that will come and make them quadrillionaires (even better than a cloud with a harp). There is plenty of venom even in that community. Then most of the public dismisses and reviles the effort. I have no interest in getting in the middle.
PK is exactly right, even more than the economic arguments, that interest rates are really beside the point. The simple fact of the matter from my point of view is that AI hysteria has cut both ways. I know precisely why AI projects fail 95% of the time (recent MIT study) in enterprises. There are reasons for that and the economic value won't be tapped until fundamental issues are solved.
Job replacement is an old fear and I get it. Check out the doorman's fallacy and look at the history of ATMs and lots of other tech. The story is complicated and we live in simplistic rage times.
A number of years ago I was mis-diagnosed with a terminal cancer. I was shuffled off to hospice. The radiologists who diagnosed me via a brain scan were tremendously smart well-intentioned people. In studying this, I discovered various kinds of statistical anomalies that could have put brakes on this diagnostic rush (it was a weird case). I think AI integrated into radiology in a valuable way might have been able to save me from a month thinking about exercising my right to physician assisted suicide.
Absolutely AI will be beneficial in diagnosis, especially in scans. It can be trained on millions of scans, analyze minute differences and see patterns over large, large data sets. The training data can be made on relevant and correct information and won't be contaminated by ruminations from crazy people on the internet.
Yes: I also think that there are a lot of very targeted use cases for AI that involve medicine, pharmacology, and probably most other other scientific research fields. What about weather forecasting, for example? (Oh wait, the Regime is no longer supplying satellite data for weather forecasting.)
I don't delve into what's actually happening with AI investment, but my impression is that venture capitalists are all flocking to the LLMs, the language-based AI that offers the sparkling promise of getting rid of all your human employees in business firms.
A smart person has noted lately that large language models do not answer questions they are asked. Instead, they respond with *what an answer to the question would look like.* They are very good at that, so the language used is often correct, and the examples are often correct - often, but not always, because that's not how they work. They don't connect to the real world of the questioner, they connect to the masses of available text about the subject of the question.
So if they have to make up legal case names or historical events to complete the answer (of what an answer might look like), that's just part of their function, not an error. It's a feature, not a bug, and can't be fixed.
I know people who have looked themselves up on LLMs and discovered that they had died some years previously - because they *might* have!
This is a different function from scanning scientific or medical data for patterns and anomalies. When I ask for an answer to a direct question, I am not looking for patterns - but that's what I get.
Thanks for comment. I’ve been wary of comparing AI situation with dot.com. The latter burst as it became obvious most dot.coms did not possess intellectual property they could defend. AI situation seems unsettled for other reasons. Not sure the difference is taken into account by Krugman.
IMHO humanity should focus on becoming sustainable first, see if AI is useful for our society, and move carefully. Small chance that this happens where Bitcoins are trillions in valuation. Here an AI created video how Bitcoin looks to ET in the year 2140.
https://youtu.be/4WNjXNnE2yc?si=cTFMo8uIwf3QH2N0
"Double, double, toil and trouble;
Fire burn and cauldron bubble."
Is Trump Macbeth?
You all give him too much credit. Try Cloten.
Maybe King Lear?
Iago
Trump as Iago would be -- YOU PICKED A BLACK MAN TO HEAD VENICE'S MILITARY INSTEAD OF ME, THE BESTEST EVER!!! DEI, DEI, DEI. I'LL SUE THE CITY. THIS IS TREASON! AND THAT DESEMONA, WOMEN AM I RIGHT? THEY ARE SO STUPID; THEY DON'T KNOW WHAT'S BEST FOR THEM. FIX THIS NOW!!! THANK YOU FOR YOUR ATTENTION TO THIS MATTER.
Iago had some intelligence
More like a Bottom, but with rabies.
He can’t even do Hitler! He’s just manure with orange powder.
Manure is very useful, so I dispute this analogy.
He's not that eloquent.
A malignant Falstaff impersonating Henry IV
Except that Falstaff had only a little borrowed power, which he used to get the poor men in his regiment massacred in battle.
My wife ran bookstores till she retired. Bookstores sell more than books. They usually sell trinkets of all sorts including toys, science kits and so on. Most small retail depends on small items that help boost sales in the Fall as the holidays come. Almost all are imported from low wage countries also from China which is now middle class.
My niece sells bar ware to restaurants and bars. Most of their goods are imported. (Maybe all). The tariffs have made the business untenable.
Small business can't talk to Donald Trump in a private meeting at the White House. so they can't tell him how bad things are. But it is bad.
It is rare that a president promulgates policy so completely ridiculous that it does not need debate. It is just STUPID.
It's not as if Trump would care about those small business owners' plights. It's the big dudes that he cares about - the ones who can donate millions to him...
He has driven many small businesses into bankruptcy because his company did not pay them. I do not understand why owners and employees of small businesses voted for him either time.
If a Democrat had done this they would be denounced as communists by Republicans.
As the good professor has long said, "IOKIYAR!!" (The corollary is, "IACIYAD.")
Please don't post obscure acronyms without translation.
For those who don't care to do the research, here is a link to the archived NYT article in which Prof. Krugman used/defined the terms:
https://archive.nytimes.com/krugman.blogs.nytimes.com/2007/10/11/iokiyar-and-iaciyad/
And for those who just want to know:
IOKIYAR is "It's OK If You're A Republican" and IACIYAD is "It's A Crime If You're A Democrat."
AI and crypto are an anathema . I have AI on my phone and computer. Did I put them there? No, they are like viruses and leeches that are forced on us by the tech industry. Really drives me crazy that they have the ability to latch on where ever it please.
100%!
The first time I heard about crypto, I just laughed and walked away. What a scam.
Not only that, but now some organizations I work for are having to put a header on their emails telling everyone not to read the AI summary above that header because it's often wrong.
It’s the unholy alliance of business and government. Government is meant to be a watchdog, not an enabler. This time, if there is a bail out (and there always is) let’s bail out the people whose retirement accounts have plummeted, their life savings disappeared, and while we are at it, asset forfeiture of the CEO billions. (My musical coda is, “Ah yes, I remember it well.” )
Thank you, Professor for the article! I hope for the sake of America, Mr. Powell stays at the helm of the Fed he stands in control! My concern is will America continue the slash according to economic figures! Depression ahead!
Something about the market staying irrational longer than you can stay solvent?
What we need resurrected from the old dot-com boom days is something like Phillip Kaplan's "F*ckedCompany dot com. It was brilliant and pointed out both the rampant stupidity of the day and all the signs of the coming crash. Maybe I can program Chat GPT to run such a site!
I have often thought of Pud's site! We do need it back, or another one! Fun fact: the main webpage as of 9/11/2001 has been archived by the Library of Congress as part of the 9/11 archive. https://www.loc.gov/item/lcwaN0020126/
"Shizoid" is the wrong diagnosis. The market has a mood disorder and is resistant to therapeutic intervention by chemicals or therapists because it does not think there is anything wrong with its thought processes.
Ah, anosognosia strikes again. :)
The simple solution to the problem of AI investment paying off - and it’s so obvious I can’t believe no one has done it yet - is to ask the AI directly (Grok, ChatGPT, etc) to develop a profitable business model.
Why has no one done this yet? Just ask the infallible AI what to do next. Simple!
LOL, silly us!
love the oldies dance video -
those were the days that made sense.
who are you calling oldies?
How much of the obsession with Fed rates is tied to the fact that many of these AI companies (including increasingly the Mag7 hyperscalers) are now shifting from free cash flow to debt to finance their CapEx?
They're essentially loaning money to each other incestually to pump it all up. Eventually (IMHO soon) the house of cards will fall and do serious damage to the world economy. There have been several good articles by respected economists and financial experts about it.
The caveat here: AI is not a product. It's a feature. Ultimately AI tech will be an important part of the other products we use and pay for, but as a value-add, not as the core product. Take that to heart when looking at valuations and the bubble.
What's frustrating is that they add it on and then don't give you any way of taking it off. I spend a lot of time screaming at my devices these days.
AI has ruined editing in Microsoft Photos. I used to use Photos for very quick edits, like cropping and erasing a small part of an image. Now AI "knows better" what I want to erase and it makes everything a giant mess. I, too, scream at my computer.